Hold cash or leverage up?

This article in the Globe and Mail asks ‘where is the smart money going‘?

Is a drop in oil prices good for the Canadian economy? Will interest rates stay low forever? Nobody knows, but that doesn’t keep us from asking.

Today’s situation amounts to a near total inversion of the markets of a generation ago. “If you look back to, say, 1981, stocks, bonds and real estate were all cheap,” says Jim Giles, chief investment officer at Foresters, a Toronto-based financial services provider with more than $20-billion in assets under management. “Now, the exact opposite is true.”

For investors, this poses a daunting challenge: What do you buy when there’s nothing left to buy – or at least nothing that appears to be a bargain?

For somepeople cash is trash, for others it’s king:

Tim McElvaine, one of Canada’s best-known value investors, has a similar viewpoint. The head of McElvaine Investment Management Ltd. in Victoria is holding about 25 per cent of his fund’s assets in cash, considerably higher than the normal level, as he awaits buying opportunities.

“People will tell you they don’t want to hold cash because it doesn’t yield anything,” he said in an interview. “But the real value of cash is its ability to buy things when prices become attractive.”

Among the reasons to worry about today’s market is that near-zero interest rates have failed to spark any widespread global recovery. The Organization for Economic Co-operation and Development trimmed its global growth forecast this week to 3.3 per cent for this year, reflecting the euro zone’s continuing woes and a slowing Chinese economy.

Read the full article here.

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Priced out by choice
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Priced out by choice

Speaking of Whistler: Rents justify current values unlike Vancouver. If you want to work at it you can make a decent return doing nightly and weekly rentals. Check out what a house goes for over Christmas.

Nimbyman
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Nimbyman
Thom Swift
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Thom Swift

Whistler is showing strong signs of improvement? I should hope so, man thats been a long slide down. People who invested in real estate there before the winter games sure got burned!

After some units dropped up to 65% I sure hope that market is looking better and not worse.

http://vancouvercondo.info/2012/05/whistlers-nasty-collapse.html

kabloona
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kabloona
“Sweden to tackle soaring household debt with new mortgage rule” https://ca.finance.yahoo.com/news/sweden-tackle-soaring-household-debt-mortgage-rule-181420308–sector.html Reuters By By Daniel Dickson and Johan Ahlander – 3 hours ago “STOCKHOLM (Reuters) – Sweden plans to tighten rules on mortgages to try to chip away at mountains of household debt that threatens the stability of one of Europe’s best-performing economies. Falling interest rates, a housing shortage and tax cuts have fuelled a credit boom and sent property prices soaring, exposing Sweden to the risk of the kind of real estate crash that Ireland and Spain suffered in 2008. Under the rules, new mortgage-holders who borrow more than 50 percent of the value of their property will have to pay back a proportion of the capital in addition to interest every year. Four in 10 Swedes have interest-only loans, the central bank says, and on average will take… Read more »
Doomcouver
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Doomcouver

Minus the Australian accent I would have thought this was in Richmond:
https://www.youtube.com/watch?v=DJh1tUsYhNg

Cbm999
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Cbm999

@ George

I was one of those undecideds, but I voted ALL NPA the other day. Hopefully goodbye Gregor.

Marco
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Marco

Beautiful day today in Vancouver on Remembrance Day.

1981 when things were cheap. Great for the baby boomers who feel entitled to their massive gains. Not much for the rest of us. Would be very foolish to buy into this market right now. Better to diversify your portfolio and stay clear from the housing market in Vancouver. Boomers downloading to other baby boomers or foreign investors. It’s their game they created it. They will break it.

Lest we forget, happy Remembrance Day.

Cheers.

West Coast Woman
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West Coast Woman
Many Franks @19: I have spent many hours over the past 10 years observing City Council meetings and hearings. I agree with you that Sam Sullivan was a terrible Mayor in that he didn’t listen to the public and forced policies like “EcoDensity” through to benefit developers. But Sam Sullivan was nowhere near as bad as Gregor Robertson has been during the past 6 years. Gregor Robertson is probably even worse than Tom Campbell – until now the most reviled Mayor in Vancouver’s history. Gregor Robertson only comes out for the cameras when he wants positive PR and a pretty picture of him in the paper looking “green”. But he hides when things go wrong: he has NEVER taken responsibility for the many failures under his watch (eg., Stanley Cup riot anyone??). Furthermore under his administration – and BECAUSE of… Read more »
Bo Xilai
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Bo Xilai
Ray
Member
Ray

I’m as far right as they come and I voted for Meena and all non-Vision solely because of the wealthy absentee owner proposed tax. Enough is enough. When Vision called my home and explained how I’d be splitting the vote in favour of LaPointe, I said “I don’t care!”. Wake up Canada and tackle this problem at municipal, provincial and federal levels, or you’ll wish you had soon enough.

Girlbear
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Girlbear
@Marco
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@Marco

Today it’s called remembrance day. Soon it’ll be known as “singles day”.

Alibaba’s Singles’ Day sales exceed predictions at $9.3bn
http://www.bbc.com/news/business-29999289

Oracle
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Oracle

Apple is worth $750 Billion CDN.

Wow. Approaching $1 Trillion.

World is awash in money at the top.

Poor are clueless

Joe Mainalnder
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Joe Mainalnder

@#37
Still worth less than the $1.2 trillion that Ottawa released into the housing market in the last decade.
Canada is awash with debt.
Poor house buyers are clueless.

Westside Realtor
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Westside Realtor

Morning sales meeting outcome:

Must work on changing client expectations for pricing (to the downside).

Suggestion: places listed at $1,888,800 should be reduced by $200,000…must target (increasingly) local buyers, as the onslaught of HAM has diminished (this is an understatement) .

Also, going into the new year, the new wire transfer rules were highlighted as a rationale for pushing for price reductions now to bear that..that said they are always pushing us for volume as that is the name of the game…but I believe that the issues that are driving upper end prices lower will only magnify as we roll into the new year.

JMHO

WSR

Oracle
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Oracle

This blogs days are numbered.

The powers that be are going go get rid of net neutrality. All the REST cartel has to do is pay off rogers bell and telus to get blogs like this off the air.

It is coming. The sheep are clueless as usual.

Oracle
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Oracle

*RE cartel

The Man
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The Man

@#36
Singles Day? Hell, why not? Remembrance Day is already now part of Pride Week.
http://metronews.ca/news/vancouver/1207740/vancouver-councillor-pays-tribute-to-gay-soldiers-with-remembrance-day-wreath/

Needed to watch John Wayne in The Longest Day a few times just to bring myself back to reality.

West Coast Woman
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West Coast Woman

Admin – Why is my comment from November 11 @7:39 pm (#33) still awaiting moderation???