Skip navigation

 Login or Register | Member Centre

Canadians sitting on $45-billion of cash

JOHN PARTRIDGE

Globe and Mail Update

Latest comment posted at 8:10 AM EDT 07/05/08

Investors are not in a happy mood, says CIBC World Markets ...Read the full article

This conversation is closed

  1. C. M. from London, Canada writes: Jeez Mr. Bank Economist, your banks just wiped out hundreds upon hundreds of Billions of dollars of investments due to unrestrained recklessness in things they still can't even figure out today and you wonder why people don't want to go back swimming in the stock market yet.
  2. Craig Scott from Republic of Newfoundland, Canada writes: If people are sitting on cash then they are more likely to spend it and spur the economy. When you invest your money like these economist want then the only ones making money are the brokers and investers.

    I have to get my driveway paved, build a deck, do some landscaping and put up a fence.......all of this is likely going to cost me 20,000 over the next few months.

    That money will be put directly in the pockets of the businesses I hire to do my work.....I think that is good for the economy.

    I could take that cash and invest it but then how would I get my work done? I guess I could put it on Credit.....Isn't that the problem, too many people maxxed out on credit?
  3. Richard Soley from writes: The inescapeable fact is that the money Mr. Tal wants injected into the stock market belongs to individuals. With banks playing in the subprime losses to the tune of hundreds of billions in losses and Government Ministers like Mr. J. Flaherty breaking promises like the Trust promise then it would appear that the investers are much smarter than either the Bank spokesperson or the Minister of Finance for Canada. It's about breech of promise and trust. Did I forget that Banks and government are not your friends!
  4. Mr. Reilly from canukistan, writes: Yup: we should invest all this hard earned money so someone else can make obscene profits( banks?????, insurance companies??? etc. ) and kick back a pittance to the people who actually own the money.
  5. D McAnn from Canada writes: Did anyone notice that while many investors have been nervously parking their money for the past six months, the TSX is at near-record highs? I have been a financial planner for the better part of two decades, and it never ceases to amaze me the propensity that people have to want to buy high and sell low. They will have more confidence in the market if it hits 16,000 by the end of the year, and then they will likely buy (at a point much higher than they could have bought if they hadn't tried to time the market). People redeeeming long-term equity funds to park their money because markets are volatile just don't get it. Most of the time they simply lock in losses, when patience and a little time would allow full recovery with reasonable growth. Oh, and just as an aside, if you have never heard Ben Tal speak, he is propbably one of the most insightful economists I have ever heard.
  6. Ob Server from Canada writes: Mr. Tal has some good points but just the same, we're not out of the woods yet. I'm waiting for the CDO, ABCP and the credit swap mess to be fully disgested before I'm fully invested (hey that even rhymes..!) and according to my calculations, we've got a ways to go yet.
  7. Jim Somerville from Ottawa, Canada writes: Well, we have a banking system/investment environment where risk has been intentionally obfuscated by things like ABCP. To many of us, it has become a trust issue. Until that gets cleaned up and the trust restored, expect cash to be king. Also, the 'opportunity cost' argument against sitting on the sidelines just isn't cutting it anymore. The market is at an all time high and has had such a great run that a contraction is inevitable and expected.

    http://himmicane.blogspot.com
  8. The NeoCynic from Cayman Islands writes: Oh, yet more words of wisdom from the same bank that won't honour its ABCP?
  9. Mitch Sprague from Ottawa, Canada writes: Funny stuff. People are being careful with their money and the 'smart' people complain. Wasn't it the 'smart' people that caused the mess in the first place?
  10. Doug Edwards from Rural, Canada writes: It's OK to defend the safety minded investors.

    Just don't complain when people from other parts of the world buy up Canadian companies while Canadians sit on the side lines.
  11. Globe Insider subscriber content
    Doug Hooper from Canada writes: D Mcan is correct. The stock market is at or near its highest point. It has a long way to go down, and not much potential to go up.

    I can sleep at night with my money in cash, because the recession in the states is only beginning.

    The last time the stock market crashed, everyone lost a lot and it took a long time to get that back. This time I got out on top.

    When inflation starts becoming more of a factor, then I may require higher returns, but for now I can wait.

    Was there not a article the other day provingthat if they recommend you buy it is better to sell. We are not all sheep.
  12. Globe Insider subscriber content
    Doug Hooper from Canada writes: D Mcan is correct. The stock market is at or near its highest point. It has a long way to go down, and not much potential to go up.

    I can sleep at night with my money in cash, because the recession in the states is only beginning.

    The last time the stock market crashed, everyone lost a lot and it took a long time to get that back. This time I got out on top.

    When inflation starts becoming more of a factor, then I may require higher returns, but for now I can wait.

    Was there not a article the other day provingthat if they recommend you buy it is better to sell. We are not all sheep.
  13. David Gehring from Ottawa, Canada writes: I also have a large chunk of my portfolio in lower-interest cash investments. Part of it is risk-aversion... the extra few percentage points on my return aren't worth the extra risk. Part of it is also cost... mutual funds have management expenses that eat into the return and stocks have trading fees/commissions, plus whatever extra I actually earn after all of this ends up getting taxed heavily. Can anyone tell me why these stocks and mutual funds are better investments than owning my own home, attending graduate school or simply living better by spending more on travel?
  14. Mark S Noel from NT, Canada writes: I must have read a different article than most of you. In the article I read the economist was staying that historically after a market crash is one of the best times to buy in. As well, historically and it seems this time as well, Canadians sit on the sidelines earning 2% on a savings account only to invest after the market has had its strongest increases. Dollar cost averaging for me, and my cash isn't sitting on the sidelines.
  15. Yves Farges from Canada writes: Banks that have taken financial haircuts due to thier risky investments that went sour have some nerve criticizing investors that that have made a decision to park their capital in cash.

    Once banks in Canada make money with sound policies* instead of sky-high user fees & stop *over-compensating executives*, then maybe all that cash will be re-invested. The cash pool in Canada is a correct consumer reaction to investment incompetence by banks and the investment community. The Globe & Mail article bringing to light this fiscal prudence of Canadians is great reporting, congrats. Instead of criticizing the parked cash, the financial community should regain the trust it has lost, rather than whining about it.

    The money belongs to the investors. The banks want to manage it? *Earn* the priviledge. *Work     for it. Stop overcharging with bloated commissions and dubious investments.
  16. j wilson from vancouver, Canada writes: BTal is comparing the markets right now to the bottoms experienced in 1987 and 2001. I think his optimism is commendable though curious.

    Think I'll wait to see how many more Yanks lose their homes as their mortages become due before putting new cash into markets, rather than fixing the house. Or heating it.
  17. North of the Border from Canada writes: Craig Scott : exactly. If they are so desperate and want us to 'do the right thing' then lower those ridiculous brokerage charges. It's really the one main reason I'm not buying stock right now. Make it more attractive to buy stock. Everyone else has to lower their rates/prices or provide better service yet these guys think they can fall in with Microsoft.
  18. j wilson from vancouver, Canada writes: Investment advisors.

    You can't beat selling people on 'dollar cost averaging' for making profits without working.
  19. Globe Insider subscriber content
    Ken DeLuca from Canada writes: In capitalism, you need money to make money. You need work to make value. The stock market crooks want our money just as the owners want people to work. Money, work.. nothing wrong with that. Entrusting it to the greediest in society, that's a problem.
  20. Todd Sparrow from Canada writes: Even their terminology shows their sense of entitlement...

    -The $45 billion in “extra” cash they are withholding from the market adds up to 10 per cent of total personal liquid assets in Canada.

    'withholding', I'll give them something to withhold
  21. David McKenna from Canada writes: So much bitterness in one little forum.

    If you hate user fees switch brokerages. I have etrade which is $10 per trade flat rate. That's pretty resonable. If you want mutual funds with low fees there are some exchange traded funds that are also very resonable.

    Tax wise, investments have never been better. With RRSP, dividend tax credit and the new tax free harper $5000 investment account, things are pretty decent.

    As for timing, how good is your crystal ball? Remember that the market prices already are discounted for a recession and the market is not a reflection of current economic state but what everyone estimates the future economic state will be.
  22. C. M. from London, Canada writes: Mark S Noel wrote : I read the economist was staying that historically after a market crash is one of the best times to buy in.

    _____________________________________________
    When is 'after the crash' ? All the other economists are saying the worst is yet to come. Good luck to you.
  23. Gopal Bhattacharyya from Canada writes: CIBC is recommending us to invest in their shares I think. Where are these 45 billions $ coming from. Probably from Harper and Flaherty's 2% reduction of GST. We are really rich, isn't it?
  24. Stephen F from Canada writes: Please explain (and this isn't sarcasm, I really want to understand). If the markets are near their highs, doesn't that mean that people HAVE put their money in the markets? If money is out of the market, shouldn't it be lower?

    Isn't there a buyer putting money in for every seller taking it out? Please explain where the 'extra' cash has come from and why it is 'extra'. How did they make this calculation - did they look under my mattress?

    S
  25. John Panko from London, Canada writes: The figures are only one sided. What Mr Tal didn't point out to is where the $35 billion may have possibly went. The money may have not been 'parked' - just consider, debt reduction and consumer spending would be the other options. Frankly, given the choice of 2 % or nothing at most for savings in a bank account, I'd reduce my mortgage with freed money at hand where I'm paying 5 - 5.75%. It doesn't look as if consumer spending is rampant, you can tell by the low inflation figures. And as for market options -- everything seems high to me, the stock market, commodities, options -- perhaps maybe the investor should return again to bonds, the smart ones have been doing it for the past year.
  26. jamie yavis from Canada writes: Talk about rich ... how much investor money did the CIBC loose in the sub-prime loan scandal?

    And he wonders why Canadians would rather save their money than give it the the suits who care more about their Mercedes & BMW payments than investor earnings.

    Reminds me of an aptly named book called 'Fleecing the Lamb', or as George Bush once said, 'Fool my once, shame on you; fool me twice, shame on John Kerry.', or something to that affect ;)

  27. Gogh Forit from Canada writes: Now that story is a 'Tal tale'.
  28. Toast And coffee from Canada writes: Most of the comments today make me think of the saying 'cut off your nose to spite your face' While there is no doubt that banks and brokerage houses deserve some criticism or worse, making a decision to keep your money on the sidelines, when stock prices are on average quite cheap, will simply mean you will have less money down the road.

    Like a previous poster I also have been a Financial Planner for two decades. It is the case that far too many investors want to take on additional risk when the market is expensive and are reluctant to do so when it is cheap.

    I tell my clients that staying disciplined with your portfolio mix and regular rebalancing will produce the desired result. Any other approach is gambling. Making a decision to sell off part of your asets that have been doing well to buy the asset class that has been bad takes courage and is always the best decision.

    This banker is not telling everyone to do anything. He is pointing out the historical fact that many people will miss out on the first 10 to 20 percent of growth in the recovery phase. You will have to decide where you fit in.
  29. Johnny Canuck from Canada writes: The markets have become very dishonest. Canadian security regulators and bond rating agencies have reduced themselves to nothing more then the butt of public jokes.
  30. Vincent Clement from Windsor, Ontario, Canada writes: Craig Scott: Spending is not an issue in Canada. In fact, Canadian consumers are in danger of overspending, and that leads to overheating of the economy and credit danger. Saving, or investing, is a problem, and is something the government should encourage.
  31. Jim Z from Canada writes: The income trust sector will soon have to revert to corporate status. The rate of return on this sector will no longer be double digit. Also the energy sector is trading at 52 week highs so not really the time to buy these stocks. Anaylists forecast $200.00 a barrel for oil. However, we may see a global slow down due to the US economy and the price of oil plumet. The bubble might burst. We probably have not seen all of the fall out from the sub-prime market. The real estate market has collapsed in the states. Causing the Canadian lumber industry to lay off thousands of workers. Who I believe will probably not be called back to work in 2008. Whether the Chinese or India economies will sustain the high commodity prices remains to be seen. The pulp and paper industry has sustained millions of dollars of losses. The brokers make commisions whether the clients are buying or selling fine for them to say buy stocks now. Canadians tend to be very conservative and that is why you have 45 billion in cash sitting on the sidelines. Many seniors lost thousands of dollars when they trusted the Conservatives who said we will not tax income trusts. Also the banks are not your buddy and how they ever got caught up in some of these asset back and sub-prime dealings is beyond me. I for one am following the markets very closely on a daily basis and am still very wary of the things that are taking place. The US is virtually bankrupt with foreigners holding many millions of US dollars and bonds. So I feel quite comfortable in standing by with a strong cash position.
  32. Lowen Wrainger from Canada writes: What a weasel! Where does this guy get off by saying Canadians are 'withholding' their money. It's theirs isn't it? How about that phrase that's printed on the money, 'Pay to bearer on demand'. Who's demanding what here? We have now become a predator society!
  33. Globe Insider subscriber content
    jack doober from brantford, Canada writes: Why should I give my money to the bunch of crooks running the stock market..
  34. Don Quixote from The mellow springlike Banana Belt, Ont., Canada writes:
    Yeah, sitting on cash, and all the paid and unpaid leeches want a part of it!

    As my late father used to say: As long you have something, there are people out there who wants all which is yours and only when you walk around naked in a barrel they will let you alone.....

    (With nowadays organ busters even this is not save anymore)
  35. Joe Canadian from Canada writes: Geeze I wonder why? It is called a lack of trust by investors. Between money managers/investment bankers who don't know how to evaluate or are to lazy to do the due dillagence on risk ( sub prime mess) for their investors or the numerous suit crooks (how many go to jail in Canada) who isn't a bit nervous these days. Putting money into the market can be a crap shoot at best with some companies. Some CEO's in North America have be grossly over paid for the returns this century. There are good companies to invest in but......
  36. Imperial K from Canada writes: Well while I have no such riches to invest, I find it interesting a bank thinks we should take risk and go ahead and invest.

    Look, we've all been living too high on the hog too long, and too much credit...time for reality to take us back a few notches, and slow things down.
  37. Imperial K from Canada writes: Also, remember just like anything, they just want your cash.

    They don't like you, they are not your 'Friends' and won't be there if something goes wrong....

    Just remember they are smacking their lips as you approach their desk, and this image may help one be more cautious.

    I understand of course, but the fees are out of this world.

    My god, they charge small stores a deposit charge now for over X thousands of dollars! Can you believe it A DEPOSIT CHARGE!
  38. Brad Fgroupthinkn from Canada writes: Next shoe's to drop; securitized credit card debt, then car loans, then consumer spending; The Big US banks are going to be glad GWB changed Bankruptcy rules to be more favorable to them---------Just in Time.
  39. Don Quixote from The mellow springlike Banana Belt, Ont., Canada writes: Mitch Sprague from Ottawa, Canada writes: Funny stuff. People are being careful with their money and the 'smart' people complain. Wasn't it the 'smart' people that caused the mess in the first place?

    These 'Smart's' haven't found a niche to be productive otherwise, so they suck other people 'cash' and 'play' their financial games with it.

    Is there any company which sell matresses with concealed pockets so I can put my fifty bucks cash in at the end of the month, after paying off all the leeches on a monthly basis.
  40. Michele K from Ottawa, Canada writes: Interesting to read everyone's comments.

    Brad Fgroupthinkn, can you further explain your, 'Next shoe's to drop; securitized credit card debt, then car loans, then consumer spending'.

    I understand that the banks will come out on top, but what's the problem with securitized credit card debt and car loans? Are they going to be called in, forcing bankruptcies on unsuspecting borrowers?

    That doesn't really make sense to me, because what do you secure your debt with but your house, and aren't the banks already holding more houses than they can deal with, values dropping like a stone, etc.?

    Is it time to buy my condo in Arizona, or do I wait for the bottom to really drop out?
  41. RD Lone from Vancouver, Canada writes: Maybe money is parked because people aren't falling for the fastest stock recovery of all time?

    Even look at 2000-2002 when Canada didn't even enter a recession (Q1 2008 GDP declined, so we have a 'half recession' already). It just doesn't bounce back that quickly.

    Listen to the CIBC guy though, his stock options need a bump.
  42. Brad Fgroupthinkn from Canada writes: Michelle K, sure;
    the 'SIV's and CDO's are part of the same family of securitized loans where these 'sub prime mortgages' were 'found'.
    to make the SIV's attractive, these sub prime loans were bundled with other loan products; car loans, credit card debt, and regular mortgages. that way investors got a 'spread of risk'.
    so people that can't make their payments where they live, probably cannot make their car payments and surely won't be able to make their CC payment which are mostly at 25% .
    Dominos is what it looks like.
  43. Michele K from Ottawa, Canada writes: Brad - so I'll be holding off a while longer on that condo then ;)
  44. kothar rumbleg from Canada writes: That is exactly what I am doing, I am not going to "play" the market with my money. You can easily loose as gain. Everyone seems to know the next great and best thing. If you ask me, stay safe if possible until this settles down. There seems to be massive massive amounts of mone flowing here then there destabilizing everything, from investing in food commodities, to oil and gas, to metals, away from realestate and financials. Too much of a mess.
  45. Greg Out West from Canada writes: Don Quixote from The mellow springlike Banana Belt, Ont., Canada writes:
    Yeah, sitting on cash, and all the paid and unpaid leeches want a part of it!

    As my late father used to say: As long you have something, there are people out there who wants all which is yours and only when you walk around naked in a barrel they will let you alone.....

    (With nowadays organ busters even this is not save anymore)
    -------------------------------------------------------------
    My dad always said if you want to double your money fold it in half and put it back in your pocket.
  46. Greg Out West from Canada writes: So this clown would have us believe the massive sub prime losses as well as the current US recession (and soon to be Canadain recession) have all worked themselves out in what ? 3 or 4 months. Hell he's convinced me. Can I just make the cheque out to him and save us both time and effort.
  47. Kevin K. from Edmonton, Canada writes: This article should be read in conjunction with the article concerning Barrick Gold's spat with CIBC to get a real sense of the duplicitous and insensible nature of the source for these comments. Barrick was (allegedly) told by a CIBC executive that their ABCP investments were not exposed to subprime mortgages from the US. Turns out Barrick's ABCP holdings were SO EXPOSED to them that the paper they held was worth only about 1/10 its original value. Oops! Must have been a typo, eh? Now CIBC, in this article, says: Hey, investors, you're being too conservative. The markets are great! Come on in. You're going to miss out on some great deals if you don't give us your money.... Is it wrong for me to think that if CIBC was so wrong about supposedly safe investments for a major corporate client, they are probably wrong about a market that really has not had a major correction in seven or eight years? And if I didn't think that, wouldn't I be an idiot? Last year, my Canadian mutual funds (none with CIBC) either lost ground or made no money. (This, in a rising market!) Factor in inflation, and the only people who 'made' money last year on my investments were my advisor and the fund companies. Which is really the point of this article. CIBC World Markets isn't interested in whether you're making money in the market, or can pay your mortgage; they're interested in whether they're making money in the market, and they can pay their mortgages. And the only way they do that is if you invest, and pay some of the highest MERs in the world. My response? As my father says: "It's not that I don't trust you; it's just that I don't trust you."
  48. david coates from Canada writes: Okay, I'll make it unanimous: Since we don't trust the banks, we don't trust mutual funds, we don't trust the markets, and you CAN'T trust the government, who wouldn't be in cash? Or should we all trust in blind faith so we can be decimated (income trusts, tech bubble burst) again? Not in my playbook.
  49. Greg Out West from Canada writes: A few posters have already hit the nail on the head. Anytime a broker or investment advisor tells you it's time to invest your hard earned money make no mistake, they've already taken a position and are just waiting for you and I to enter the market forcing up the prices of the stocks they already own. Then prior to the market crapping they get out and we're left holding the bag.
    I love it when they tell you "Gee I have money invested in that stock as well" What they don't tell you is they got out just after they told you to get in.
  50. Cal Davidson from Canada writes: I've been an avid market watcher and occaisional participant for 15 years now and one thing I've learned is that when they say buy, sell.

    The other that I've found is that if you ask 10 'financial advisers' the same question (i.e. a la Gordon Pape who said 2 years ago to sell the TSX) you will get 10 different answers.

    So why should we trust these people?
  51. Nobody's Fool from Thailand writes:

    Buy gold ishares COMEX Trust ticker IGT on the TSX. Now RRSP eligable.
  52. Kilgore Trout from So it goes, Canada writes: Why are these pleas going to go nowhere, well, its because these are the same analysts who said Nortel at 120$ was a bargain...
  53. Randal Oulton from Canada writes: I think part of the article was cut off, the part where he said he'd compensate people if his thinking turns out to be wrong and they lose their money, LOL.
  54. Greg Out West from Canada writes: What he isn't saying is that he needs the money to prop the current .
  55. smart guy from Canada writes: You guys are right! Keep your money in cash. Wait until the market is up 30 or 40% to invest it. I need to know where the top is!
  56. The Middle Finger ..I.. from Canada writes: I have $50 "cash" in left my pocket. Where is the $44,999,999,950
    "cash" sitting?
  57. Kilgore Trout from So it goes, Canada writes: To smart guy: Yah, go ahead and buy, as we need to know when the bottom is...
  58. Dwide Schrude from Canada writes: It's downright frightening how ignorant some posters are on the financial markets. Have any of you ever heard of an Andex chart?

    Don't wait to get into the market, get into the market and wait (that's not from my dad, but that's a good thing since he's as old fashioned as the rest of the yokels on this page)
  59. Gordon Murray from Canada writes: At first one thinks: "Wouldn't all that cash make the mattresses so lumpy that there are unreported investings?"
    and then there's autocorrection
    "Nah...it's just denomination changes a bit more, that's all. That's all it is."
  60. Kevin K. from Edmonton, Canada writes: Dwide Shrude: I *am* investing in the market. Unlike most of the people who hold my mutual funds, which have seen record redemptions, I am still contributing a modest amount to my RRSPs, although less than I was before -- because of my pension, my much lower RRSP cap room (I put away a lot in the last two years) and my interest in paying down my personal debt. No, I don't know what an Andex chart is, but I assume the principle is that the longer you hold stocks/funds the less volatile they become, and the more your rate of return over a longer period of time. I'm buying into that strategy in my RRSP, even though right now it's hard to see the benefits of it. If you're right, I'll see it in 20 or 30 years; I certainly hope so. I am not one of the many people on this page who have decided to use money they would ordinarily invest, or have divested themselves of investments, in order to hold it as cash. But I sympathize with them, and understand why they're doing it. In a year or two, we should have a good sense of who was right and who was wrong, but for now all most people can do is trust their gut, so I don't judge anyone who does so. BUT: I don't trust someone who's telling me to invest when the money they make is directly linked to how much we invest with them. I think that's just common sense. Oh, and one last thing: My dad thinks you're a jerk. ;->
  61. k o from Canada writes: I must be missing something ... isn't the TSX up over 5% so far this calendar year, very close to its all-time high? How can this possibly represent an inexpensive buying opportunity? If someone could please explain, it would be appreciated!
  62. Paul, Bytown, from Canada writes: But what about the experts sell-in-May and go away 'till early November strategy?
  63. Mark P from Calgary, Canada writes: No surprise there. The TSX is trading at levels where its basically being given away, at a current earnings yield in excess of 6% after-tax. You can borrow money for a little over 2% after-tax these days. The Canadian public, generally speaking, is quite stupid.

    If the TSX had valuations that were in line with historic averages, and more relevantly, historic ratios compared to other investments (bonds, housing, etc.) the index would easily be well over 20,000 right now.

    If people can't see the value in buying the TSX index right now, quite frankly, they're blind.
  64. Doug Edwards from Rural, Canada writes: It's the Canadian way. Keep you money on a sock and whine when the rich get richer because they invest in equitys.

    Keep you money in your mattress and whine when investors from the US and China buy up Canadian companies
  65. JP M from Canada writes: if CIBC hadn't produced marginal returns for my investments (when they weren't losing my money) over the last decade, not only might I have not pulled all of my investments from them, I might actually believe this self interested clown...

    We'll all get back in, just not until some more of the pain has come and gone, and certainly not with CIBC World Markets...
  66. bill k from Canada writes: While it may be true Canadians are sitting on 45 billion dollars cash they fail to mention many have used the fake manipulated stock rally to either sell into or day trade. Holding long term is bankers propaganda to steal YOUR money. Sooner or later the PPT will not be able to buy up the markets and the crash will continue. Buy Gold , oil, silver etc. Everything else just flip like bank stocks which will crash again.
  67. scamp the from Canada writes:
    How we should all live:

    Trust all of our savings to the 'market'. They need to make their fees.
    Don't get me started on trailer fees at online brokerages...ETFs all the way.

    Don't save for anything, purchase it on credit so the credit companies can get their cut.

    Don't you dare actually save up enough money to buy a house, you must purchase it on credit to keep the housing market up and driving poor people further into poverty required more handouts from government.

    For the good of the economy half your money must go to the government. 1/4 must go to credit card companies. You can use the last 1/4 for food and housing.

    Yeah...good luck with that.
  68. bill k from Canada writes: Paul, Bytown, from Canada writes: But what about the experts sell-in-May and go away 'till early November strategy?

    This is why you have bankers crying that people are not putting their money into the stock market for them to steal. They like to party in the summer time with everyones money. Sell in May and Go Away.
  69. k o from Canada writes: Mark P - if you seriously think now is the time to borrow money to invest in the index, then I'm afraid your comments describing most Canadians as "blind" and "stupid" apply mainly to yourself and your ridiculous investment ideas. Try not to be too bitter when the commodity bubble bursts (or is our new Bank of Canada Governor also blind and stupid?).
  70. smart guy from Canada writes: Hey Kilgour: March 17 - 15% ago
  71. Mark P from Calgary, Canada writes: k o, the TSX is only pricing in $75/barrel oil, not $125. Canadian banks are in excellent shape, and interest rates are rock-bottom.

    Since I practice what I preach, my portfolio consists primarily of the XIU ETF (TSX60 iShares), and some TSE60 index futures (SXF -- traded on the Montreal Exchange). Earnings would have to collapse in order for this to be a bad bet -- but you know what -- earnings are, generally speaking, beating analysts estimates solidly, not falling short.
  72. D McAnn from Canada writes: k o from Canada writes: I must be missing something ... isn't the TSX up over 5% so far this calendar year, very close to its all-time high? How can this possibly represent an inexpensive buying opportunity? If someone could please explain, it would be appreciated!

    Everyone seems to be missing the point. This money didn't get parked yesterday, it is a cumulative effect of the "recent market volatility". Actually, the market dipped as low as 12,100 points in January, therefore since the low, it has actually returned almost 20%, much to the point of the article: these parked funds are missing growth opportunity. Whether or not it is near its all-time high is actually irrelevant, if you pay attention to Dwide Shrude's post. If you don't know what an Andex Chart is, Google it. You can view it online, and it will clearly tell you how uneducated most of these posts are.
  73. Toast And coffee from Canada writes: k o from Canada, the index point system is not a very useful tool in deciding the relative cost of stock investments. First off, the securities making up the index change from time to time. A typical portfolio would not be represented by the index in either holdings or weighting of those holdings. Stocks can be measured by a price to earnings ratio. You will typically see it as current price vs last years earnings. A ratio of 10 would mean that in the last year the company earned one tenth of the amount that all of the stock outstanding, times the current price of the stock (market capitalization) represents. There have been numerous times when stocks have traded at 40 or 50 times earnings and some times companies have no earnings and yet people will speculate on their future earnings. There are lots of solid companies who's stock is trading at less than 10 P/E ratio. So on a comparitive basis there are many stocks trading at very low "multiples". Some of them will even pay a dividend that could be 6% or more per year. If you are aware that their earnings will likely also rise for a variety of reasons in the near future, you will have a good case for owning that stock. If you own several stocks, ideally in different economic sectors, all well researched, you will have a stock porfolio. I hope that fairly short answer helps.
  74. Toast And coffee from Canada writes: k o from Canada, the index point system is not a very useful tool in deciding the relative cost of stock investments. First off, the securities making up the index change from time to time. A typical portfolio would not be represented by the index in either holdings or weighting of those holdings. Stocks can be measured by a price to earnings ratio. You will typically see it as current price vs last years earnings. A ratio of 10 would mean that in the last year the company earned one tenth of the amount that all of the stock outstanding, times the current price of the stock (market capitalization) represents. There have been numerous times when stocks have traded at 40 or 50 times earnings and some times companies have no earnings and yet people will speculate on their future earnings. There are lots of solid companies who's stock is trading at less than 10 P/E ratio. So on a comparitive basis there are many stocks trading at very low "multiples". Some of them will even pay a dividend that could be 6% or more per year. If you are aware that their earnings will likely also rise for a variety of reasons in the near future, you will have a good case for owning that stock. If you own several stocks, ideally in different economic sectors, all well researched, you will have a stock porfolio. I hope that fairly short answer helps.
  75. crime of the century from this is not america, Canada writes:
    "Investors are not in a happy mood, says CIBC World Markets"

    what makes them happy then? more greed and corruption?
  76. Kilgore Trout from So it goes, Canada writes: To smart guy: Good for you, ever hear of a dead cat bounce...
  77. k o from Canada writes: Toast and Coffee - thanks! That helps a lot.
  78. Dan Bleichman from Ottawa, Canada writes: 3 things:
    1. When an analysts says buy you should better sell.
    2. I will wait for the TSX to drop to 12,000 before jumping back in.
    3. No more mutual funds @ 2.5% management fees for me, this time E*trade.
  79. Dwide Schrude from Canada writes: Kevin K, you said in a year or two we'll know if we were right or wrong. Wait more like ten years. Then you'll know.

    The prevailing attitude at any given time is "this time it's different, this time everything will go down and it'll never make it back"

    That has never happened and it never will. For any five year period on the TSX, it has finished above a zero return 98.5% of the time. In a ten year period, the TSX has never been below where it started.

    Also if you remove just the ten best days on the market each year, you miss out on roughly 12% return on your portfolio.

    Don't wait to buy stocks, buy stocks and wait.
  80. Mark P from Calgary, Canada writes: Dan, what makes you think you'll ever see TSX under 12k again? Why would the TSX sell at 12X current earnings, when interest rates are at 2 or 3%? Makes no sense to me. Better get on board before the train seriously starts to leave the station.
  81. Northern Dancer from Outside of Toronto, Canada writes: I like the story because it is upbeat and positive about the economy. I hate doom & gloom stories that appear daily.
  82. John McMortimer-Boyles from An Undisclosed Underground Location Safe From Nuclear Attack, Canada writes: "Canadian households' cash holdings are jumping at a rate of 15 per cent, year-over-year, the fastest pace in more than six years."

    I figure this is a good thing. North American countries have, to my understanding anyway, over the last 25 years some of the lowest household savings rates in the world.

    Money that is saved is available for things like investment.
  83. Green Canada from Canada writes: I for one prefer to sit on it then partake in the joke which is mutual funds. for investors like myself who have concerns beyond returns (environmental/social) the big question is why would I invest when I chat with investment advisors and they don't have the first clue about investor responsibility. The banks want us all to invest with blinders on and the sub-prime dubacle is just one example why they shouldn't be listened to. In other news gun manufacturers say we should buy guns. duh
  84. C. M. from London, Canada writes: Dwide Shrude wrote: The prevailing attitude at any given time is "this time it's different, this time everything will go down and it'll never make it back"

    That has never happened and it never will.
    ___________________________________________________
    You're right, this isn't any different. It is just like we had before the '29 crash....we just need some deflation which should kick in after the feds can't cut anymore cause they're at zero. Everyone who had money in the market when it crashed in 29 had to wait until the mid to late 60's to get it back. ... if they lived that long. Your stats suffer from survival bias. Read "A Random Walk Down Wall Street" !!
  85. david coates from Canada writes: My son's RESP invested with CIBC mutual funds lost a third of its capital between '96 and '02 when he began university. Not only did it lose in the overall, it lost money in very year while other mutual funds were making money hand over fist. You think I would ever listen to those clowns again?
    Perhaps there is $45 billion laying around because some people have taken their profits and are waiting for opportunities to reinvest again. At this stage I find the markets too volatile, that is to say the charts of the past 15 months look like a shark's mouth. You could invest tomorrow and lose 15% by June.
  86. Star Spangled Banner from Washington, United States writes: This board is so risk-averse that the posters may never retire. You sound like your fathers, put the money in a mattress.

    There are a lot of good Canadian companies. If you won't invest in them, I will.
  87. Dwide Schrude from Canada writes: C.M from London, are you seriously referring to the 20's?

    I figured people would assume my comment was relating to a time since the creation of social security, paved roads, the abolishment of prohibition and a PM who wasn't named William Lyon McKenzie King. If you want to look 90 years back as a reference go ahead, also enjoy that vaudevillian play and dancing the charleston, and remember, no drinking since we're still under prohibition.
  88. REV eighteenseventeen from Canada writes: Just wait when a small fraction of that cash goes into gold and silver bullion. The price will go to the moon.
  89. michael morris from Canada writes: I am fully invested, but I would not touch "CICB anything" with a 10 foot pole - I'm sure CIBC will sell you ABCP anytime and guarantee it. LOL! What Canada needs is a Bank Regulator with teeth, not the joke - oh we can't do anything- we have now, invest wisely-not with CIBC.
  90. REV eighteenseventeen from Canada writes: Mark P from Calgary,- I would say a bottom of 12,000 in the TSX is optomistic. I think the floor is significantly lower.

    Many people have no clue. Inflation is running alot North of 3%. Try 10% . If the TSX isn't rising at this rate, if it is flat. Then those TSX investments are flat or decreasing. To sit on cash is just as stupid.
    You better be sure if your buying stocks that they are Class A voting shares because there are more Enrons and Bear Stearns out there just wainting to rip off little old lady's life savings.
  91. Tony . from Waterloo, Canada writes:
    Canadian equity markets are a GREAT place to be investing right now. Back in Jan. as the markets started dropping I pulled out most of my foreign investments and then dumped them into Canadian investments instead after things bottomed out.

    It's been a VERY successful move so far, and with oil trading at $124 a barrel and Canada's investment market heavily involved in energy sectors this is looking better and better every day.

    People are more than welcome to sit on the sidelines, it leaves lots of opportunities for the rest of us.
  92. C. M. from London, Canada writes: OK Dwide Schrude...something more recent...My best friend inherited some money when his folks died. He went to a broker who recommended a nice diversified portfolio of at least a few stocks. Among the gems, Bombardier at $22, Nortel at $120. He is in his midfifties now. When do you think he will be getting back his money with that great financial wisdom of buy and hold ? I reckon Nortel, if it isn't dead in a couple years ought to be getting back to $120 in about what ?? 300 years ?? The problem with this economist and perhaps yourself and other optimists is that you all assume to know where the bottom is. Just like my friends broker thought he knew where the top is. Ben Bernanke and countless other economists says the worst is yet to come. Who should we believe ? In any event, as a previous poster put it so humourously " the charts of the past 15 months look like a shark's mouth. You could invest tomorrow and lose 15% by June." Money flees from instability...but hey.... good luck !!
  93. globefan Eh from Canada writes: After reading all the responses, it appears the Banks and other financial lending and brokerage institutions are facing a serious issue involving Trust..

    Banks and Oil..I should google and see who sits on all the Boards of the Majors in both.
  94. Matt Stiles from Vancouver, Can