Juggling Dynamite

Some useful discussion on BNN about asset allocation decisions (clip below). A rarity!

The comments on late cycle, historic over-valuations in equities, electrification, and mutual funds and ETFs being fully invested at all times, are all very relevant points. And I agree that Canadians are woefully unprepared for the global transition away from fossil fuels which is already underway today.

That said, in terms of the guest’s comment to ‘get out of the Canadian dollar’, I would add that the bulk of one’s savings should remain in the currency in which they pay their bills. So, Canadians cannot afford to ‘get out’ of their home currency. But holding a targeted weight in the US dollar can certainly be a valuable diversification late in each market cycle, when ‘flight to safety’ becomes the dominant concern.  (Year to date, however, holding US dollars has hurt Canadian portfolios, so patience is required.)

Tim Gramatovich, chief investment officer at Peritus Asset Management, joins BNN to weigh in on active versus passive management and why he’s invested in bank loans.  Here is a direct video link.

Whether they are house flippers/speculators who have been sitting on empty or rental properties with negative cash flow now looking to lighten costs, or aging owners needing/wanting to downsize home expenses and increase cash savings, or people with buyers remorse tired of being property poor, Toronto listings (the most bubble-like housing city in the world according to a new UBS study) jumped 69% year over year in September.

The market forces are moving in the right direction in Toronto and the GTA (greater Toronto area, where I live) at long last.  But prices have a long way to mean revert before they can reconnect with long-standing income and affordability ratios.  See Toronto home sales sink 35%, while owners count on ‘uptick‘:

Sales across the Greater Toronto Area sank 35.1 per cent year-over-year last month as 6,379 properties traded hands, according to data released by the Toronto Real Estate Board on Wednesday.

The average selling price in September was $775,546. While that marked a slight uptick from the year-ago period and August’s average price of $732,292, it was still almost 16 per cent below the April peak of $920,791.

Prospective buyers had more selection to choose from last month, as active listings surged 69 per cent year-over-year.  Here is a direct video link.

The more of us who make the individual effort to transition to sustainable power, net zero buildings and transport, the faster prices will fall and the faster the needed change happens globally.

There may be an unexpected beneficiary of a trade case that threatens to upend the $29 billion U.S. solar industry: energy storage. Here is a direct video link.