Actually I do have a crystal ball of sorts. Sometimes things are quite clear. Other days I wait for the clouds to clear. I won’t go into detail.

My forecasts predict that all US and Canadian indexes will break significantly below their November lows before this bear is over.

I’m really trying to help out here and I’m not trying to give you a hard time. I hate to see younger people being taken in by the Buy and Hold sales machine.

Be a skeptic…that’s healthy. Your a smart cookie, don’t be fooled by those who only know part of the story. The buy and hold thesis has a fatal flaw.

The BH thesis can only be supported with market historical data that starts about 1956. Or, by using carefully selected data sets. Try applying it from 1929 on-ward or from 1968 onward. I’m not making this up.

BH only holds water if one ignores the data prior to about 1956. This circumstance is a little like a climate scientist who predicts global warming impacts but ignores select portions of historical data because they don’t support the mathematical model.

Have you ever looked into what is behind the B&H thesis? It would make a good blog post.

Actually the TFSA this year isn’t getting much for ‘new’ money. Mostly I’m moving over previous investments that produce distribution income.

The longer picture is to keep fixed income and distribution income in this account (and the RRSP) first and then fill it up with dividend paying stocks if I have room.

MM,

Timing is somewhat important. This low is a good buying window for some investments. So I’m focusing on that for the short haul. Then then I switch to paying down the mortgage to remove that completely before I turn 40. Why? Flexibility in the long term. If the plan goes better than expected I can pull the plug before 45. Hence the back and forth.

Derek,

I was wondering who would get around to noticing that first. The hole there is on purpose. You see the actual numbers for paying down the mortgage is actually closer to 3.5 years instead of three, so to balance off the difference I’m leaving the TFSA balance lower than it should be. It’s a bit overkill, but I’m being more conservative with my calculation this time.

CM,

Bad or good. I’m guessing anyway so I’m fairly flexible with these numbers as placeholders. This is a high level simulation and I’m ok with that.

Dave,

Really it’s not a bad idea, but I’m more interested in picking up some longer term assets at depressed prices now. In the mean time I’m still paying off the mortgage at a good pace and if rates go up in the in term I can always lock in and then kill the beast later.

Tim

I know its all a crap shoot because no one knows where we are going, but I figure I will take advantage as much as possible to pay off my mortgage while my variable rate is low. My TFSA can wait.

Of course I am one of those people adverse to debt, so this strategy makes me sleep better at might.

“Wish I had better news”

Now are you suggesting you have a crystal ball? If you do, please forward me your contact info as I may need your services periodically

Maybe you mean:

“Wish I had a better forecast”

Implying you are delivering the news is rather presumptuous. Don’t you think?

We may be just starting this bear market, a correction of a longer-term bull market (~81 years) that began back at the end of the 1929 crash (1932). It may even have started earlier but that is somewhat academic.

We may be entering, either a much deeper bear than we have seen to date, one with a very long recovrey time, or a messy sideways affair, one that may also go for many years.

See the 1929 – 1932 and 1968 – 1982 time periods for examples. This one has the potential to be worse than either of these examples. In fact…it must be somewhat worse.

Next milestone to watch for…a break below Nov. lows for all indexes in US and Canada. When this occurs is uncertain. Still way too much bullishness out there.

Wish I had better news.

CM