Blog

TIARA

  By now, you’ve likely heard the term FOMO – the Fear of Missing Out.  You’ve likely also heard the term TINA –– There Is No Alternative.  Taken together, these handy little pop culture acronyms explain a good deal of what has gone on in capital markets over the past

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I Fought the Fed

The fed won.  I admit defeat. My point is that what just transpired was merely the most recent bout.  Circumstances were extenuating. I demand a rematch.  As soon as things begin to normalize, I absolutely believe I will win.  To provide a bit of context for how I feel now,

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One Month In

  I consider myself an optimist, but the events of the first four weeks of January have given me pause.  Being positive doesn’t mean you should abandon reality. Candidly, I don’t see much reality in reading about what some people expect with capital markets in 2022.  More than a few

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Using a Letter of Wishes

  Most people know it is prudent to have Powers of Attorney (PoA) in place for both property and personal care. It would be awful to be incapacitated without a plan and a clear path forward regarding what is best.  People also know that Wills are critical for all but

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Like Having a Friend Climb a Ladder

Various people have asked me to weigh in on our inflation situation with a particular focus on what central bankers should do about rates going forward.  The ‘what to do’ elements include queries about when to hike, how much, how often and to what end.  I like to use metaphors

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A Second Resolution for 2022

Lots of people will be making resolutions this week.  Some will be kept, but, as we all know, most will not.  Here’s a resolution that could be made every January with some confidence: to stuff as much money as you can into your TFSA.  Every Canadian citizen gets new room

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Drawn scales with empty cups on chalkboard

2022 Resolution: More Pre-Mortems

Pretty much everyone knows what a post-mortem is, but what, exactly, is a pre-mortem?   Wikipedia says it is a ‘managerial strategy in which a project team imagines that a project or organization has failed, and then works backward to determine what potentially could lead to the failure of the

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Limiting Your Suspended Disbelief

  It may well be that central bankers around the world have never seen their credibility on trial like it has been in 2021.  Perhaps one Christmas present we can all wish for is genuine guidance from those who purport to provide it in 2022.  To my eyes, the ‘guidance’

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Bubble

Why do Bubbles Burst?

Having spent pretty much all of 2021 insisting that we are in an ‘everything bubble’ where stocks, bonds and real estate are all trading at unsustainably high valuations, a few people have gotten tired of my repeated dire warnings that have not come to pass.  I understand.  I certainly am

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Are financial advisors really ready for a serious downturn?

Clients facing a big, sustained drop in the markets might not listen to advice that worked last time I recently listened to an excellent podcast hosted by my friend Preet Banerjee, who had my acquaintance Dan Bortolotti as his guest. Much of the conversation was about Dan’s fantastic new book, Reboot

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Cute dog behind the kitchen table

Are we there Yet?

  Now that we have reached December and the Omicron variant of the coronavirus is looming as a possible threat, the financial industry reassurers of the public are out in full force.  The implicit logic so many of the TV and radio talking heads use is dismaying, and much of

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money background

Jay Powell’s Second Go Round

  Now that Joe Biden has re-upped Jerome Powell as the chair of the Federal Reserve, another of the philosophical monetary policy quandaries has been resolved. Rather than speculate further on whether the tea leaves involve the new chair being a hawk or a dove, it turns out he’ll be

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INFLATION spelled out using wooden letter tiles going up direction on white surface background.

Interested in Buying a Bridge?

Central bankers have a credibility problem.  Many people have commented that their primary role is one of general market psychology.  That perspective has never been clearer.  As such, central bankers often say things that seem inconsistent while maintaining plausible deniability about what they might do down the road.  When you

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Domino game. Dominoes on a black table

Opinions are Like…

The old joke is that opinions are like noses – everybody has one. The other thing everyone says about opinions is that we’re all entitled to them.  If we’re speculating about how things that have never happened in the past might play out in the future, there’s also a bit

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Teenage Boy Drinking Caffeine Energy Drink Gaming At Home Using Dual Computer Screens At Night

Doing the Best We Can

Part of being a portfolio manager (PM) is that there is a fiduciary obligation to put client interests first.  That’s unique in comparison to those advisors who are not PMs because of the difference regarding behaviour – both for clients and the people giving the advice.  Many advisors list ‘behavioural

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Stock market crash

Going Stag

Talk of stagflation is all the rage.  Sort of.  Most of the articles I read about the subject focus primarily, if not exclusively on inflation.  Where’s the ‘stag’ part?  The word ‘stagflation’ is a handy portmanteau that came about in the 1970s when, for the first time in modern history,

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Political speech

New Cabinet; Old Challenges

On October 26, the new federal Cabinet was unveiled.  As cabinet shuffles go, it was larger than most, with several new faces and most of the old faces getting new portfolios.  While many people have offered their thoughts in general, I’d like to draw attention to one minister in particular:

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The Challenge is Bigger than most Think

Now that it has been a month since the federal election, we can all reflect on what was resolved last month.  Seeing as there were six parties that ran national campaigns and five that got seats in the legislature, the 2021 election was one of the most convoluted and inconclusive

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Winter is Coming

I have long enjoyed using tropes and phrases from popular culture in explaining how things work in the world of finance.  As a person who binge-watched Game of Thrones during the pandemic, I couldn’t help but think that current circumstances are ideal for trotting out an oft-used phase that doubled

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Security Selection is a Nebulous Value Proposition

By now, you will have almost certainly heard a few stories about the folly of stock picking as a viable way to beat the market.  The problem that high net worth (HNW) investors are disproportionately saddled with is they are bombarded with people who purport to be able to add

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The Country of Perpetual Minority Governments

Now that the 44th general federal election is behind us, there seems to be an emerging consensus that it is unlikely that any party will be able to confidently secure a majority government at any time in the foreseeable future.   Stated differently, it now looks as though Canada is in

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Difficult decision

Resulting

Annie Duke’s excellent book Thinking in Bets is an applied case study on decision-making.  Now that Canada’s 44th federal election has ended, the postmortems are rolling in.  Almost all of them involve a narrative akin to it having been an exercise in futility. I’ve heard people reference the movie Groundhog

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child

What Childcare Tells Us About Economic Growth

Canadians will be finding themselves in voting booths soon.  While there are several issues being discussed this time around, the differences between the two parties that have a chance to form a government are more subtle than they have been in previous campaigns.  One policy question where there is a

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Drawn scales with empty cups on chalkboard

When was the last time you Rebalanced?

There are several approaches that individual investors and advisors alike might take to portfolio management.  One of those is rebalancing.  In simple terms, rebalancing is simply selling a portion of something that is up and re-positioning the proceeds into something that is down (or perhaps merely up relatively less).  It

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Woman votes on election day.

You Can’t Handle the Truth

The scene most people remember from “A Few Good Men” is the one in the courtroom where Tom Cruise emphatically asks Jack Nicholson for the truth and Nicholson looks Tom Cruise right in the eye and angrily says “you can’t handle the truth”.  That, in a nutshell, is where we

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INFLATION spelled out using wooden letter tiles going up direction on white surface background.

The 5% Solution

One thing that many economic historians often overlook is that one’s worldview is shaped by life experiences.  That includes matters like love, marriage and divorce, money and savings and attitudes toward political risk – to name a few.  If our values, likes and dislikes are shaped by our experiences, it

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Highland Cattle

Confirmation Bias in Action

I was recently caught by a friend who discovered I was talking to myself while I thought I was alone – lost in thought.  In my absent-minded ‘debate’ with an invisible counter party, I was explaining my rationale for employing specialty products designed to capitalize on the lessons of Prospect

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money background

“I Will Die by Fire”

The federal election campaign is now well under way.  People who have been following my views will know that I am broadly in favour of the public policy response that Canada (and the Western World) has used to combat COVID-19, but that there have been a number of so-called ‘unintended

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Stock market crash

No one saw it coming in 1929 either

Stock market bubbles are not as rare as many people think. They occurred throughout history, with multiple generations seeing large swaths of accumulated wealth evaporate in short order.  With very few exceptions, the shellshocked investors are left to survey the carnage while trying to discern what happened and why they

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Signing Last Will and Testament

Insure Yourself with Purpose

Some things in life are brand new.  Some things fall out of favour and disappear.  A few can pass through a high period, fade into the background, and then make a comeback.  It is rare, however, for a concept that has fallen out of favour to make a comeback based

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Girl in a straw hat and a sundress in a field of sunflowers

Think of Risk like Lawyers Do

Perhaps more than any other profession, lawyers are keenly aware of the need to manage liabilities – both real and perceived.  The liabilities being managed can range from overlooking evidence to underestimating opposing counsel to reputational risk to out and out malfeasance.  All professionals need to be careful, but lawyers

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Successful Afrcan Businessman

How (IN)Credible is the Transitory Inflation Argument?

If there’s one thing we’ve all learned in the past two years, it is that central bankers mean business – both literally and figuratively.  In other words, when central bankers say they ‘have our backs’ in both extending the business cycle by promoting fuller employment and doing so without causing

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Teenage Boy Drinking Caffeine Energy Drink Gaming At Home Using Dual Computer Screens At Night

Overconfidence leads to Optimism Bias

Are you an above average driver?  What about love making?  Are you better than most, worse than most or about average?  Surveys have shown over and over that people tend to overestimate their own abilities.  This tendency has become known as the “Lake Wobegon Effect” as a hat tip to

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Professional psychologist taking notes at couple meeting with patients

Whose Bias is it, Anyway?

One of the great benefits of living in a free society is that people can have legitimate differences of opinion about the meaning of information and best courses of action.  In this space and, more recently, on social media, I have taken to pointing out the small army of credible

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Domino game. Dominoes on a black table

History Might Just Repeat

Churchill is reputed to have quipped that, “those who fail to learn from history are doomed to repeat it”.  The quote is trotted out whenever something bad happens in the present day that seems similar to something bad having happened previously. Most of the time, however, the quote is used

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Father with a toddler boy walking on beach on summer holiday, having fun.

Great Expectations

With apologies to Charles Dickens, our views of what the future might hold may need some re-calibration. Like his novel Great Expectations, the world today is full of challenging circumstances.  The modern financial planning world is dealing with a situation that may ultimately border on becoming an existential crisis.  

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Woman hand with crossed fingers isolated on white background

The Debt Cycle gets a Stick in the Spokes

I’ve written a fair bit about market cycles over the past few months.  In truth, I have touched on the equity market, the bond market and the real estate market.  In doing so, I have opined that all three are in a bubble and that all three are being driven

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Political speech

The interplay between politics and economic choices

The past 16 months or so have been fascinating.  As we entered the 2020s, the world was a simpler, happier place.  People got together in public settings to socialize and strategize. In contrast, these days, we just sequester and soliloquize.  The other change that you may not have noticed is

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Cute dog behind the kitchen table

How to Invest in this Market

There are many who feel there’s a tragedy of epic proportions brewing in the stock market. The problem is we humans tend to have short memories and therefore expect the future to replicate the recent past. Research done by market economist Robert Shiller of Yale shows there’s a striking correlation

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Doctors discussing chest x-rays

Get Out!

  Owing to everyone cocooning during the pandemic, I suspect many of us have watched more movies than usual over the past year or so.  One of my personal favourites of the recent past is Get Out, a fantastic 2017 psychological horror (i.e., no ‘monsters’ in the traditional sense) film

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Bubble

The Bubble Blowing Contest

  One element of Bullshift that I cannot help but notice is how the finance business has selective and self-serving definitions and explanations that abound when explaining the business to the public.  We’ve already discussed how a 10% move downward is called a “correction”, but there is no term for

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Thoughts on the 2021 Budget

Overstimulated

By now, you’re likely aware of the many sordid details found in the 2021 federal budget.  I’ve been following the discussions closely and I was glued to my TV set as the long-awaited details were finally released on Monday.  This is a brave new world.  I’m a bit excited and

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Sport game hockey

The John Tavares Principle

This is an homage to number 91 in your program, the captain of your Toronto Maple Leafs – John Tavares.  It’s about a quick and dirty calculation hack you might find useful then thinking about market gyrations.   Big moves and market volatility can be killers to your portfolio value.  Even

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Define “Inconsiderate”

For better or worse, I tend to be a stickler for semantics and exactitude.  As you might imagine, that usually means going through life with this mindset is “for worse”.  I dislike it when advertisers use the word “fast” instead of “quickly” even though, as I have grudgingly learned after

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Are People Denying the Real Estate Bubble, Too?

By now, you’ll know that I have been alarmed by stock market valuations for a long time.  Late 2019, in fact.  Recently, I pointed out that the bond market is severely stretched based on current valuations.  It is now time to complete the TINA Trifecta by examining real estate.  

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Innocent by Association

Ever notice how there’s no counterpart to certain words?  For instance, have you ever met anyone who is “gruntled”?  The same might apply to phrases.   One phrase that I have heard often is “guilty by association”.  If that’s possible, shouldn’t it also be possible to be innocent by association?  I

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Belief Perseverance

According to Wikipedia, “Belief Perseverance” (also known as ‘conceptual conservatism’) involves maintaining a belief despite new information that firmly contradicts it.  Astonishingly, such firm beliefs may even be strengthened when others attempt to present evidence debunking them, a phenomenon known as the ‘backfire effect’.  We’ve all seen this playout south

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The information contained herein has been provided for information purposes only.  The information has been drawn from sources believed to be reliable.  Graphs, charts and other numbers are used for illustrative purposes only and do not reflect future values or future performance of any investment.  The information does not provide financial, legal, tax or investment advice.  Particular investment, tax, or trading strategies should be evaluated relative to each individual’s objectives and risk tolerance.  This does not constitute a recommendation or solicitation to buy or sell securities of any kind. Market conditions may change which may impact the information contained in this document.  Wellington-Altus Private Wealth Inc. (WAPW) does not guarantee the accuracy or completeness of the information contained herein, nor does WAPW assume any liability for any loss that may result from the reliance by any person upon any such information or opinions.  Before acting on any of the above, please contact me for individual financial advice based on your personal circumstances.  WAPW is a member of the Canadian Investor Protection Fund and the Investment Industry Regulatory Organization of Canada.