medianet

Tuesday, April 14, 2020

Take Advantage of Volatility - The Limit Order

There are lots of different views on the economy and the stock market right now due to COVID.  I am quite pessimistic about the economy in the short to medium term due to:

  • Shutdowns for COVID: massive unemployment, supply chain disruptions, psychological impact
  • Globalism and free trade: Trump, China, and COVID have dealt a big defeat to these concepts and the economies of many countries
  • Lack of productivity: why are companies worth so much in the first place
  • Central Bank and government actions on COVID: these have never been tried before and we don't know the effects on employment, inflation, businesses
  • Psychological effect: it will be hard to get people to work again after this fatal threat
But others are not so pessimistic and the stock market is recovering, but not smoothly.  One day, the market is up by 4%, another day down by 4%. Bond ETFs are less volatile, but were down about 12% at one point and then quickly rebounded.

I personally want to keep at least 2 years spending in cash just in case, so I need to sell ETFs (bonds or stocks) or stocks.  I also want to maintain my asset allocation targets.

What is the best approach?  I could just put in a market order to sell when I feel really pessimistic and probably get a low sale price.  I could watch the ups and downs and try to pick a day when the market is up.  What I ended up doing was putting in a limit sell order at a price that I thought was high, but not so high as to be unattainable.  For example, Vanguard Total Stock ETF has been as high as $160 and as low as $115 in the last month or so.  I put in a limit sell order at $142 when it was around $120.  Today, the order went through.

So my idea is to use limit orders to take advantage of volatility in the markets.

Disclaimer: this is not professional investment or retirement advice and should be used at your own risk. The author is not a licensed financial advisor. You should not believe everything on the Internet including this blog and should check multiple sources possibly including a professional financial advisor before making decisions.


Monday, April 6, 2020

Take Advantage of the Lousy Market

Like me, you probably lost a lot in the past few months in the stock market, after making big gains last year.  Those big gains, and rebalancing my portfolio, caused me to have a higher income in 2019 due to capital gains, and pay more tax.

Is there any way to deal with this?  Yes there is.

You can sell your losers today, and get a capital loss in 2020.  Then, according to the Canada Revenue Agency (CRA), you can use these losses to get back some of the tax you paid in 2019.  Here is an excerpt from the CRA website:


So there is some relief.  By the way, don't just sell and then quickly buy back the same stock or fund, that is called a "superficial loss" in Canada (wash sale in USA).  You will not get credit for your loss if you sell and buy within 30 days.  Better to look at what needs rebalancing, sell the losers in the overweight category, then buy appropriate investments in the category that needs more weight.  For example, selling a Canadian mutual fund and buying an international fund to get more international exposure.

Disclaimer: this is not professional investment or retirement advice and should be used at your own risk. The author is not a licensed financial advisor. You should not believe everything on the Internet including this blog and should check multiple sources possibly including a professional financial advisor before making decisions.

Thursday, April 2, 2020

COVID19 User Guide




I thought I would compile a user guide based on my experiences in Ottawa during the pandemic, feel free to add comments, as long as they slavishly praise me Trump-style.

New Things I Tried and they Work

  • PCExpress grocery delivery and pickup from Massine YIG on Bank Street.  You can even talk to a real person about your order by calling the store.
  • Doordash restaurant delivery for Colonnade pizza. It comes from the restaurant in Carlingview, but its cheaper than Ubereats.
  • Foodora delivery from the LCBO on Isabella.  A limited selection of wine, beer, and spirits but in a pandemic, we recreational drug users should not be too picky.  Use the smartphone app as the website is temperamental.  It will not accept your address unless the postal code exactly matches the Google maps postal code (which is wrong for our building).
  • You can make your own hand sanitizer with rubbing alcohol and aloe vera gel from Amazon.ca.  3/4 alcohol, 1/4 gel.
  • The New York Times is offering free coverage of covid19.  Their competitor WSJ does not.
  • Nespresso online ordering is working.
  • Workouts using Facetime with our personal trainer Jamie Kelly.  An Ipad works best as the video is good, screen is large, and you can move it around as you exercise.
    • Workout videos from Youtube are also good.  Lots of variety for different ages and abilities.  I use a 6 minute workout from the NYT as my base exercises.
  • The instant pot is a great way to make soup with leftover meat, vegetables, broth, pasta.  
  • Farm Boy on Metcalfe is open from 7 to 8am for vulnerable shoppers (seniors etc.).  It is well stocked and there are only a few shoppers.

Things that Don't Work

  • Instacart Loblaws delivery is down.  Website won't even give you a delivery slot and the help lines are overloaded.
  • USA social security office in Ogdensburg is closed
  • BMO sends checks to our old address in Virginia from 3 years ago but sends statements to our correct address.  You have to go to a branch to fix this.
  • The QPP have blocked the bridges into Quebec from Ontario.  The police are better used to stop gatherings.  

Things That Work, but have Problems

  • Amazon canada is running low on stock and delivery times are long now.
  • Massine YIG grocery store makes people line up on Somerset at 2 meter intervals and lets them in slowly during peak demand.