The Quest for Income as rates fall | Page 2 | General financial discussion | Discussion forum

Please consider registering
guest

sp_LogInOut Log In sp_Registration Register

Register | Lost password?
Advanced Search

— Forum Scope —




— Match —





— Forum Options —





Minimum search word length is 3 characters - maximum search word length is 84 characters

No permission to create posts
sp_Feed Topic RSS sp_TopicIcon
The Quest for Income as rates fall
October 16, 2024
10:07 am
ExtraSauce
Member
Members
Forum Posts: 74
Member Since:
December 16, 2020
sp_UserOfflineSmall Offline

AltaRed said
Life has enough uncertainty for me that I want to have nothing to do with bonds.  

I appreciate the conversation around any solutions working for others here, and am always open to learning new things, but I definitely missed the class on Bonds somewhere along the way.

Keeping it simple, my somewhat ham fisted stock market moto has been 'when blood runs in the streets, wait a few days then start buying' 😀

October 17, 2024
12:07 pm
canadian.100
Member
Members
Forum Posts: 975
Member Since:
September 7, 2018
sp_UserOfflineSmall Offline

ExtraSauce said
October 2024
GIC/term rates tanking, stock market inflated and overbought so I won't be stepping into equities in a big way until we get a decent pullback.

Treading water with increasing RRSP drawdowns seems to be a plan.

Ideas?  

So you say the stock market is now inflated and overbought and you won't be buying equities. So I presume you bought equities when you determined equities were underpriced and good value.
The fact that interest rates are dropping quickly now is a big boon to the equities market. There is a lot of cash which was tied up in GICs in the high interest period (earning 5% and 6% last year) and as those GICs are maturing, a lot of people are moving that cash into equities including high dividend quality stocks eg Royal Bank, Enbridge, Telus and so on. You are going to wait for a pullback - what do you consider to be a pullback and good time to buy? a correction of 5%, 10%, 15%?
At this point, I am not convinced bonds provide much advantage. You may still be more comfortable taking a GIC @ current rates 3% - 4%. No doubt in my mind those rates will be dropping even more over the next few months.

October 17, 2024
2:46 pm
krwilson
Member
Members
Forum Posts: 149
Member Since:
March 15, 2019
sp_UserOfflineSmall Offline

I have been using SPLT.to to keep cash in. Around 6% rate and much better tax treatment compared to interest payments. Due your own due diligence.

https://www.bromptongroup.com/product/brompton-split-corp-preferred-share-etf/

October 18, 2024
12:15 pm
ExtraSauce
Member
Members
Forum Posts: 74
Member Since:
December 16, 2020
sp_UserOfflineSmall Offline

canadian.100 said

So you say the stock market is now inflated and overbought and you won't be buying equities. So I presume you bought equities when you determined equities were underpriced and good value.
The fact that interest rates are dropping quickly now is a big boon to the equities market. There is a lot of cash which was tied up in GICs in the high interest period (earning 5% and 6% last year) and as those GICs are maturing, a lot of people are moving that cash into equities including high dividend quality stocks eg Royal Bank, Enbridge, Telus and so on. You are going to wait for a pullback - what do you consider to be a pullback and good time to buy? a correction of 5%, 10%, 15%?
At this point, I am not convinced bonds provide much advantage. You may still be more comfortable taking a GIC @ current rates 3% - 4%. No doubt in my mind those rates will be dropping even more over the next few months.  

Re the trend of moving cash into equities:

Yes, I hold small positions in ZWU, ZWB, HYLD and more recently NTR and NPI on some bottom fishing potential. Most have moved a little too much for me to now add more, but am still holding.

No idea when I might jump into markets with both feet again but I hate chasing stocks after good moves and will wait until US election clarifies market direction.

Best of luck to you!

October 18, 2024
12:25 pm
ExtraSauce
Member
Members
Forum Posts: 74
Member Since:
December 16, 2020
sp_UserOfflineSmall Offline

krwilson said
I have been using SPLT.to to keep cash in. Around 6% rate and much better tax treatment compared to interest payments. Due your own due diligence.

https://www.bromptongroup.com/product/brompton-split-corp-preferred-share-etf/  

Thanks. I sold my Brompton BMAX after a good run (shoudl have held on longer) but will look into SPLT.to as well.

October 18, 2024
2:27 pm
mordko
Member
Members
Forum Posts: 991
Member Since:
April 27, 2017
sp_UserOfflineSmall Offline

Prefs seem like an odd choice for someone who is risk averse and keen on avoiding the highs.

October 18, 2024
3:29 pm
ExtraSauce
Member
Members
Forum Posts: 74
Member Since:
December 16, 2020
sp_UserOfflineSmall Offline

mordko said
Prefs seem like an odd choice for someone who is risk averse and keen on avoiding the highs.  

I have no problem looking into krwilson's fund that he is using. Happy to learn more about what is working for others! 🙂

No permission to create posts

Please write your comments in the forum.