Skip navigation

 Login or Register | Member Centre

Moving past denial on your portfolio

ROB CARRICK

Globe and Mail Update

Latest comment posted at 10:54 AM EST 20/12/08

Financial yardsticks can measure objectively how badly you've done amid the market turmoil ...Read the full article

This conversation is semi-moderated What is moderation? | How do I report a comment?

  1. jennie williams from Canada writes: So many investors do not discrimininate. They throw out the good stocks along with the bad.
    One also has to look at the current situation as an opportunity. If you have cash in your portfolio it may be time to pick well researched good stocks & buy very slowly. Who knows how much further down things will go.... It is not possible to detect the bottom of the market.
    Stocks will come back. I look for a good stock with all the right fundamentals, paying a decent dividend. So many good stocks are really cheap at the moment.
  2. A Allan from vancouver, Canada writes: Ive got a better index. I put my starting book value at the top of the column and consider all withdrawals from my portfolio as coming from that original investment. I then look at market value and compare it. The difference is my market based gain or loss.

    Advisors and analysts are highly overrated. They've built a fantasy world in which they created superheroes which they put up on pedestals and worship. They failed time and time again, and yet we keep running back to them for more abuse.

    My advisor received a $500000 portfolio two years ago when I stopped self directing because I was ill. All she had to do was structure a laddered payout plan because of my age, stage and health prospects. This didn't bring profit to her though and ( yes she advised me and I agreed as we went along) she changed my holdings, put me into mutuals, flo thrus, trusts and sucked GALLONS of money into her pocket from the fees.

    That would be o.k. if the market rewarded her investments but it failed over and over again on all of the "flavour of the day" crap that they were all pushing and then getting burned on.

    All that counts at the end of the day is are you ahead or behind. Analysts don't get you there, advisors are in it for themselves and the system is full of hidden costs and charges that you pay long before you have a chance of gaining anything for yourself.

    I've gone to cash with what's left. Hopefully I'll die on the last day it runs out.
  3. Joe Average from Vancouver, Canada writes: I have made the conscious decision to follow my own instincts from this point on and not rely on the "experts". I make mistakes then no one but myself to blame. I belive the banks and investment brokerage firms will be doing alot of bloodletting over the coming months and my sympathies to those being laid-off but yr industry's inability to be proactive and warn of impending disaster was preventable in my humble opinion.
  4. Rocky Balboa from United States writes: To: A Allan from vancouver, Canada

    Unfortunately, you are right. Most financial advisers put themselves ahead of their customers. But they are paid by commissions and the system encourages them to become big producers or go into a different line of work. To make matters worse, mutual fund fees tend to be much higher in Canada than in the US. I actually found a Sprott fund that had annual management fees of over 5% per year on the G&M fund data base. I guess this fee included generous trailer commissions for the salesperson. Sounds like "cash" is the best place for you when you can't actively manage your own affairs.
  5. andrew bales from Canada writes: A Allan from Vancouver - sounds like denial to me.

    The blame game is a waste of breath. Remember that everyone: advisors, newpapers, newspaper writers, politicians, fund managers, company execs keep doing what they've been trained to do. It just doesn't work very well when there is a crisis in confidence. The most pathetic - daily newspapers and their writers - they keep doing their job - selling newspapers. It's scaring the crap out of people and that sells newspapers in bad times.

    I've got an idea: why don't we go back to trusting each other? It sounds simple and naive but it's not. It's the most powerful force in a free market system. Start talking it up. You & I and the next person can make a difference.
  6. Gord Lewis from Canada writes: Good comments by all, and I have been in the same boat. In 2002 I procrastinated like a deer caught in headlights as the market dipped by 1/3. I swore to take responsibility for my affairs, educate myself, and above all, never let that happen again. I have been happily cashed out for one year and I am patiently waiting to invest again - but not in mutual funds, which are a racket designed only to generate sales commissions. These guys can only tell you what their horse did in the last race, not the next one. So don't believe the (bull) hype this February.
  7. andrew bales from Canada writes: Gord Lewis - the perfect investor

    I wasn't sure if there was one out there but he's identified himself! One of the problems with Gord's flawed logic is that mutual funds are no different than owning stocks - if you owned them over the last six months you're down. The endless blather about fees and commissions is nonsense - there are "fees" for everything, including Gord's cash. Now for the most dangerous part of Gord's story - he's now telling us that market timing is the way to go and don't listen to the market pundits. Listen to Gord. He's been right for a year according to his story.

    Be very wary of market timing.
  8. Don Portz from Trochu AB, Canada writes: No one size fits all. Every investor is a unique individual with different amounts available for investing, different risk tolerances, different demands for the future, different abilities for financial judgements, different ages, different income levels etc. etc.
    It is generally too bad that many of the Financial Planners and Investment councellors do not take these into account when advising them.
    Comments of the above are probably very valid for that particular individual.
  9. Ed Long from Canada writes: Original investment at the top of the page, time frame, present balance.

    I have a simple mind.

    Just returned from local coffee shop and person asked if she should sell her house, no, and whether she should sell her stocks, she told her "advisor" to sell 1/3 of her high risk holdings.

    Nothing makes sense and negative news cycle and fear are now driving most decisions.

    Might consider not looking at financial news or my portfolio for a couple of months.
  10. All About The Money from Canada writes: Benchmarking presumes you cannot/should not do better than the market. That is fine for normal business cycle corrections. But what is happening now is NOT a business cycle correction. Yes, today's problems will cause a recession, but that is not the problem.

    The market crash has been caused by "A RUN ON THE BANKS WORLDWIDE". How you characterize the situation makes all the difference. When there is a run on the bank, you do NOT sit back and tell yourself it will eventually get better. Runs will destroy even the best banks.

    Advisors and the media and talking heads should have been telling people to sell, a month ago.
  11. Ron Sinclair from Mississauga, Canada writes: I too have it in for the Mutual fund industry and my advisor, but also for my own common sense. It is very clear now that the mutual fund guys and their advisors are never going to tell to cash in your chips and get out for a while. They have to keep you in in order to get their MERs whether the market goes down badly or not. You get an advisor to help you but they are only of benefit in an up market. Their own self interest in getting their fees overrides any obligation to you their client. I am mad at myself for not seeing through their fog - remember the full page Fidelity adds? - and doing what my instincts said were the right thing to do. An advisor that charges a fee and has fiduciary obligations to you the client looks like a much better way to go. I'm surprised there have been no columns by writers such as Rob that look into this aspect of the problem.
  12. Ed Long from Canada writes: All about .... "selling a month ago" means nothing. It's a coulda, shoulda, woulda ...

    The market is not driven by small time retail investors. It is driven by institutional investors, who may have sold in the last two months to protect their portfolios.

    Retail investors have different time frames and priorities specific to the individual.

    And putting your life savings in the hands of an "advisor" without doing an hour or two of homework each day is just lazy and dumb.

    If you cannot manage and make investment decisions, you should not be in the stock market. It is not a bank account. There is huge risk, as many are now discovering.

    And just as speculators and flippers are leaving the real estate market, this huge correction will eventually drive the innocents and dreamers from the stock market.

    It is a rough game.
  13. j k from Canada writes: I cashed out in early October after September's volatility was too much for me. I decided that the all pervasive nature of the problems that were surfacing meant that there was a lot of risk that things would get worse before they got better.
    A friend of mine told me that I 'sold low' and that this was not the time to sell. After taking a loss, I should hold because the market was bound to come back.
    I had taken a close look at the holdings of my mutual funds. They were mostly invested in other mutual funds. It would have taken months of work to figure out what the exposure of all these funds were.
    I reasoned that few mutual funds were positioned to defend against a systemic freeze up of the entire financial system so I sold. I'm glad I did as all of those funds have continued to fall, to varying degrees so at least I cut my losses.
    Personally, I believe that the markets will continue to get worse before we are done with this crisis. In any event, I do not have the stomach for this kind of risk and volatility.
    I have an acquaintance who is moderately wealthy and was invested mostly in individual stocks. He read a book about a year and a half ago predicting some kind of crisis based on the US sub prime mortgage situation, mortgage-backed securities and CDO's. So he cashed out completely over a year ago and planned to wait until the sub prime stuff was purged from the financial system.

    I think that the rating agencies who gave AAA ratings brand new 'innovative' (read worthless) products that they either didn't understand and about which there was no history have to bear the responsibility for a big chunck of this mess. I hope that some of these folks are convicted of fraud.
  14. Ron Sinclair from Mississauga, Canada writes: Regarding Ed Long's comments - where he says if you are not a pro, you should stay out of it - that cuts out a lot of people that still need to provide for retirement in some way. There also should be some kind of certified advisor types that are professional, as in lawyers, accountants, engineers and doctors where the criteria for calling oneself a professional is set down by a licencing body. Too many "advisors" have very few qualifications to actually give investors good advice. It is similar to a paralegal giving advise where a lawyer is really required to give you the best advice. More and more companies do less and less on the pension side leaving individuals to make their own plans. There is a need for constructive action here - not just a brush-off.
  15. Red-necked and persecuted from Canada writes: Some very good thoughts and comments expressed here. Read them all and can sympathize with all. Never saw anything like this, hope never to again. I think once all the mutual and hedge funds have cashed out, things may turn around. Oil is down (doesn't do much for my royalty trust portfolio) but they're not making any more - prices will stabilize and return to a more normal level. Banks and financial institutions will once again look for qualified borrowers to lend to, people will be expected to have and maintain some equity in their homes, and may actually start thinking about paying down the balance on their credit cards rather than just making the minimum payment. The world will get back to normal. Slowly, not nearly as quickly as they came down but slowly, easy by easy - markets will come back. Roller coaster rides make me queasy anyway.
  16. Red-necked and persecuted from Canada writes: Ron Sinclair from Mississauga, Canada writes: There also should be some kind of certified advisor types

    There are but no one could guide you through this unscathed. This market has not behave like any before it.
  17. Jerald Sibbeston from Great White North, Canada writes: Is anyone here seriously suggesting that someone knows what will happen in the market in times like these? I'll tell you what. Before Nov. 12th of this month I had never had any investments in the equity markets. Since the 12th, My uneducated, underinformed, pretty much clueless self has made money while the market is in real numbers down 5% including fridays bounce. I am up 10% from the 12th, for a total gain of 15% above the performance of the market. Come Monday I have a sell at market order on my shares (hopefully the first shares sold that day) because peaks like fridays always have a subsequent dip.

    Why don't you send me your money in the form of a cheque and a trustee agreement, and I'll lose every last penny of it for you. Or make you more than your "money managers" seem to be able to. The moral of this story? Nobody knows where this is going, but I am willing to lose all of my money with the blind faith that I can beat the market. If you don't feel the same way, (or no kidding, willing to let a guy like me handle your life savings) ask yourself: What the He// are you doing in the market? When my feelings change, I will leave the market. As for the pros? I call baloney.
  18. Marcus L from Calgary, Canada writes: It seems to me too many people have forgotten the fundamental rules of stock market investing: 1) If you truly need the money within 5 years or less, you shouldn't be invested with any kind of significant position in stocks. 2) Stocks are worth the quarterly dividend yield and what your neighbour is willing to pay for it. No more and no less. 3) Technical trading based on stock price momentum with timeframes of less than 5 years is not investing. It's speculation at best, casino gambling at worse (like these days). People within 2-3 years of retiring with their RSP portfolio loaded with more than 25% of the holdings in stocks were asking for disaster.
  19. John McMortimer-Boyles from An Undisclosed Underground Location Safe From Nuclear Attack, Canada writes: What ever you do, don't expect the TSE to bounce back up to 13,000 any time soon.

    A lot of baby boomers are reaching retirement age, and a lot of them probably got burned really, really, really badly over the last three or four months. They will be struggling to shore up those retirement plans and won't be back in the market any time soon. No sireee!!

    You have to decide, based on today's conditions, what stocks are worth owning and what stocks are junk.
  20. Gord Lewis from Canada writes: andrew bales from Canada writes: Gord Lewis - the perfect investor
    . . . Listen to Gord. He's been right for a year according to his story.
    Be very wary of market timing.
    .................................................................................................

    Wow, andrew, you sure have read a lot into my comments. I just said that this time I got it right; by sitting on my money for one year I have made a better return than any other year in my life. I am not here to gloat, but I have found out that what little I know is more than any advisor who has ever recommended a mutual fund to me. I am actually amazed that the market took so long to react to the subprime storm that has been brewing for well over a year.

    With reference to your earlier post: I won't trust you, andrew.
  21. no brains on this forum yes that means you.. from Canada writes: I see from the postings that everyone thinks they know whats what...again
    people a mutual fund is a product and advisors are paid to sell them.. thats it nothing less nothing more.. if you want to invest U must stop paying someone else to manage your money, its not hard to do and you can lose an investment just as easy as those so called pro's.. so stop whining and educate yourself vs just giving your money away,,
  22. a neumann from Chicago, illinois, United States writes: I agree with much of the comments by Gord Lewis. It pays to be skeptical of conventional advice and to have a healthy fear of losing money. Like Gord I learned this the hard way from 2000 to 2002. Fortunately I remembered some of those lessons and have been able to limit my losses. There were also a few advisors who warned about this downturn long before it happened. Anyone who was skeptical of the perma bulls , could have taken their advice and saved themselves some anxiety and a lot of money so far. And it still isn't over.
  23. l h from Canada writes: Hmm, all the stages of grief seem to be displayed here in one comment or another. We all have to make some kind of peace with what has happened and continues to unfold, so that we can move forward. It has been an expensive lesson. Don't waste the value of your time (and money) by getting stuck.

    Emphatically I agree with the comment that we must learn to trust each other (not blindly of course) and demonstrate respect and kindness towards one another. Things may get worse; we are all in it together, the far reaching effects of the present situation clearly demonstrates this.

    I am not trying to be a pollyanna, but there is certainly no joy in being bitter and twisted (I'm not accusing anyone of that).

    A book - Your Money and Your Brain Zweig, Jason - some interesting bits.

    Respect to all of you, good to read what others think and feel.
  24. bruno tomassini from Canada writes: Try to "harvest" your losses if you can and get a tax relief. That is, sell abc mutual fund, take the loss and then immediately reinvest the proceeds in fund yxz of the same class. If there is a rebound you are not missing it however you can use the loss against back gains (3 years back) or future gains.

    cheers!
  25. Smoking Man from Canada writes: Great Posts. I nearly got wipe out in the dot.com crash, Never again will I allow anyone to control my money. Analysts are full of it. Forget investing or trying to guess the direction of the markets and just PairTrade. How do I do this I work all day. Two trades per day at 3:50 pm Learn how to Pair Trade (Google Stat Arb), many books available. Use the same market strategy that has made hedge funds what they are today, mind you, last few years they deviated from market neutral, they are going back to it now for obvious reasons. It’s real simple, find 4 highly correlated stocks. I like gold and oil lots of volatility. At 3:50 Go long on the under performer, short the over performer in the group of 4. make sure notionals are even. Trade in the Derivates market like CMC so you can easily get your short fills. Use 3 x Margin. Unload your positions at 3:50 next day. And take new positions. Don’t think just do. Don’t worry about the daily P & L. over a three month time frame, in this volatility you will double your original capital. It’s the only way to beat the market. I started part time a few years ago while working as a programer at Cap Market Companies; now this is all I do. Well I also come on here and cause trouble once in awhile. November Results $38,994.97 Using 100K in capital x 3margin= 150K per side Pairs CNQ IMO PCA SU
  26. mary welsh from Canada writes: The best financial advisor is one who does what YOU tell them to. You have the best idea of your own situation, you are not tied to any particulary product through commissions, thus you should get educated about companies or funds that you may want to buy. Get educated and be ready to start buying some really cheap stuff out there, if you haven't already.
    Just my two cents.
  27. henry yersh from Beaconsfield,Que., Canada writes: The problem with fund managers and advisers is one common to both of them that is called CONFLICT OF INTEREST which they have to deal with if we were all advised to sell what happens to their positions as managers and advisers they would loose control over their clients and create problems for them all in my opinion.
  28. a neumann from chicago, illinois, United States writes: Buy and hold and be broke when you are old
  29. John Holmes from Canada writes: Conflict of interest is the demon that hurts us all in this and many other businesses. Investment advisors must sell investments to survive. If they were compensated on "fee for service" they could more readily advise investors to sell when that decision is their best recommendation. Additionally, they could be compensated on a Profit commission basis. Make you a profit, get paid more. Lose you money, no commission.

    Executives in the insurance business like AIG, get to set the reserves to some extent after an actuary gives them an opinion and range and if they set it low enough they make a profit then a bonus, drive up the stock price and cash in their options.

    Stock options also give executives the incentive to drive up the price of stock even if they have some restrictions on selling the stock they eventually reap the reward.

    There needs to be greater separation between govenance and management. I better stop here or lose readers.........
  30. John Stanton from winnipeg, Canada writes: Tomorrow, say I buy 1000 shares of GE for 14 bucks. I then become a call writer in jan/2009 for 3.80 ie GE Jan 2010 15.0000 call (WGEAC.X). The call buyer pays me 3.80 x 1000=3800 bucks. Even if the stock hits 15 plus bucks, I'll get 15000 3800/14000=> 4800 profit on a 14000 investment.
  31. If I had a million lobsters from Canada writes: John Stanton from winnipeg, Canada writes: Tomorrow, say I buy 1000 shares of GE for 14 bucks. I then become a call writer in jan/2009 for 3.80 ie GE Jan 2010 15.0000 call (WGEAC.X). The call buyer pays me 3.80 x 1000=3800 bucks. Even if the stock hits 15 plus bucks, I'll get 15000 3800/14000=> 4800 profit on a 14000 investment.
    _______________________________________________

    Nice call John - one question = What if GE goes bankrupt??

    Good luck in your buying options.
  32. economic slave from Toronto, Canada writes: A couple of stages were missed: despair, illness and suicide. A lot of ordinary, trusting investors took their money to a financial adviser and followed the advise given. Some financial advisers got their clients to mortgage their homes and put this money into what was referred to as "sound investments, guaranteed to make enough money to pay off the mortgage and have a tidy sum left over". Needless to say, all was lost because the money was invested into risky, unsound investment vehicles which the industry has concoted over the years. The financial investment industry and their greed for huge profits was the driving force behind the recent economic downturn. The innocent investor was used and abused. The sad part about all of this is that there is no independent body which regulates the financial industry. The Ontario Securities Commission is a puppet who protects the financial industry. It is poetic justice to see financial advisers losing their jobs. Now they can experience the hardship which they have bestowed on their clients. Gone are the lavish expense accounts and huge bonuses. Gone are the 6 digit salaries. When they go to work at the big box stores, perhaps they will learn how hard it was for their clients to save the money that was brought to them and which was lost. Perhaps they will learn that honesty is the best policy.
  33. Brian Bishop from Brantford, Canada writes: For the most part you can keep your mutual funds, there are a few exceptions that pop up from time to time. If you were smart enough to by resource & precious metal funds back in 1999 - 2000 & got out earlier this year you reaped huge gains. Buying dividend & equities funds forget it, you'll do better buying individual stocks yourself.

    Benchmarks, what is Mr. Carrick talking about, well it's obvious he's talking like a fund manager, after all he's no different is he. Like a fund manager Mr. Carrick has made his living promoting mutual funds. The only benchmark you need is your previous statement, are you up or down!

    If you want to live with average growth that will never let you retire, by all means invest in mutual funds, the 80's won't be happening again!

    All this gloom & doom from everyone, get off your butts there's plenty of money to be made in stocks & always will be. I just made 60% on a stock I had three weeks, 40% on another I had less than one week. Show me a mutual fund that's making those returns, not going to happen!

Join the Conversation, Leave a Comment

This conversation is semi-moderated What is moderation? | How do I report a comment?

You must be logged-in to submit a comment — login now!

Not registered with globeandmail.com? Register now. It is quick and free.

close

Alert us about this comment

Please let us know if this reader’s comment breaks the editor's rules and is obscene, abusive, threatening, unlawful, harassing, defamatory, profane or racially offensive by selecting the appropriate option to describe the problem.

Do not use this to complain about comments that don’t break the rules, for example those comments that you disagree with or contain spelling errors or multiple postings.

Back to top