Tag Archives: stock market

David Trahair’s contrarian stance: Be a loaner, not an owner

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125_Enough_Bull_High_Res_Cover_FinalBy Jonathan Chevreau

Financial Independence Hub

In this summer’s series on the 7 eternal truths of personal finance, one of the articles was entitled Be an Owner, Not a Loaner, which reflects the usual financial industry advice that stocks are more likely to generate long-term investment returns than cash or bonds.

There is of course a contrary view to this eternal truth and it’s best contained in the new second edition of David Trahair’s book, Enough Bull, originally published early in 2009, right at the bottom of the financial crisis..

Trahair, a chartered accountant and author, could as easily have titled his book Be a Loaner, Not an Owner, because he’s adamant that stocks (i.e. equities), whether individual or pooled through mutual funds or ETFs, are just too risky for the average person.

The book cover includes a small image of a bull (as in a steer), so clearly the title Enough Bull is a double entendre: as in no more bullish prognostications on the stock market, as well as no more bovine excrement, whether dispensed by the animals or financial advisors.

Skeptical about the financial industry and its central belief in stocks Continue Reading…

Stop Doing # 6: Stop Trying to Correct for Market Corrections

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stevelowrie
Steve Lowrie

By Steve Lowrie, Lowrie Financial

Special to the Financial Independence Hub

Recently, the market has been playing right into an important addition to our financial “STOP Doing” list: Stop trying to correct for market corrections.

The subject is not a new one to us. In August 2014, we posted this Q&A: “Is there going to be a market correction (and, if yes, then what)? In light of current events, we’ve now updated that post with 2014 year-end information.

Just as it takes no special skill to predict some days of sub-zero temperatures this winter, we were not being prescient a year ago, when we said that we would probably experience a correction sooner or later. One need only consider abundantly available evidence to recognize that, viewed seasonally, the market frequently “corrects” itself, sometimes dramatically. It’s only when we take the long view that we can see the market’s overall upward movement through the years.

For example, consider the Dimensional Fund Advisors slide shown below, which depicts the U.S. stock market’s gains and losses over the past 35 years. Continue Reading…

Another bad day on markets — try Meditation

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41KxcsypMRL._SX356_BO1,204,203,200_Panicky stock markets in China are spreading to Asia and the rest of the world today. Over the weekend my Twitter feed provided links to various stories arguing the case against panic but clearly there’s extreme anxiety in the air and investors are going to do what they’re going to do.

At the Wall Street Journal, Jason Zweig described five things investors shouldn’t do right now. The New York Times advised Take some deep breaths and don’t do a thing. Here in Canada, the Globe & Mail’s Rob Carrick took a similar stance: Relax, a stock market pullback was overdue.

Deep breaths, relaxing? Sounds a bit like meditation. And that might be as valuable a thing to try right now than a belated attempt to lock the stock market barn after the horse has already escaped.

Here’s a review I did for the FP four years ago of the book illustrated to the left:  The Mindful Investor, Maria Gonzalez. The advice then was that the next time the markets crash, try to calm your mind with meditation. For a video interview I conducted with the author then, click on Mindfulness over Market Matters.

On page 152, the book specifically mentions how to deal with a stock market correction through a relaxation technique. “Once you feel calmer and more stable, you’ll be be better able to listen and make good decisions, ones that aren’t based on panic and fear.”

Of course, the more you watch the carnage through the media and web, the harder this is going to be. You might want to reread Steve Lowrie’s Hub post: Stop reacting to market noise.

Vanguard:  Consider doing nothing at all

Continue Reading…

Thoughts of a Former Whiz Kid

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By Peter Grandich,

Special to the Financial Independence Hub

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Peter Grandich

“And you will know the truth, and the truth will set you free.” — John 8:32

As I begin my 32nd year in and around the financial arena and soon shall celebrate my 59th entrance onto the stage of one of the magnificent creations of the Master of the Universe, this former Wall Street Whiz Kid (who doesn’t deserve to be called a whiz kid after making and losing millions more than once) has never been more concerned about the economic, social, political and spiritual state of the U.S.A.

While it was nice to receive accolades over the years for forecasting many major tops and bottoms in several different markets, I thankfully concluded no one except Almighty God knows the future and portraying oneself as some soothsayer is an insult to Him and mankind. (Not being able to hit the side of the barn in the last few years as a Soothsayer had something to do with it, also.)

So my comments here are that of just a private citizen, speaking aloud and still caring about this thing called the human race.

My first boss and the man who gave me my start as a stockbroker back in April 1984, said to me on my first day in the office (I think only half in jest), “Peter, don’t do three things if you want to be successful in this business. Don’t talk about politics, religion and other men’s wives.”

While I still believe he was joking about wives, he was deadly serious about politics and religion. The underlying theme of his message was, “sell products, not personal opinions.” Continue Reading…