Financial Markets Meltdown

[Dean2]

This is on the RBC site. Most Banks offer the same. One way to move and cover a lot of the penalty.

Better yet, you can also go into your Bank and ask to Blend and extend your existing mortgage. Basically you renew early, get to keep the balance of your low rate and blend it with the current 5 year rate. Some banks will do that with the existing balance, some you have to up the mortgage a bit to get the deal. Either way, there is no penalty so a better option.

Since rates are rising, the most you should have to pay in penalty is 3 months interest if you move Banks. Rate differential is negative, bank is getting higher interest than they were on your existing mortgage, so you can't get slammed with that one.

https://www.rbcroyalbank.com/dms/mor...022/index.html


Switching your mortgage to RBC may be your
best move yet.

Did you know there are fees to switch your mortgage? At RBC, we cover up to $1,100 in switch fees on your eligible mortgage and take care of everything for you—so switching couldn’t be easier. Move your mortgage today and experience the RBC difference.
Why switch your mortgage to RBC

Whenever you’re ready to switch your eligible mortgage, we’re ready to cover your switch fees. As part of our commitment to making the mortgage process as easy as possible for our clients, these savings are always available.
Types of Switch Fees Covered
Types of Switch fees Covered Switch Fees Covered by RBC1
Processing fee (evaluation of current home)

Value of up to $300

Discharge fee (charged by your previous lender)

Value of up to $300

Title insurance fee

Value of up to $5001

These are typical fees paid for all switches. If you switch before your term expires you may incur additional prepayment fees charged by your previous lender.
Plus, for a limited time you could get up to $2,000 in cash2.

Move your eligible mortgage to RBC between February 15th, 2022 and June 30th, 2022 and you could receive a cash bonus of up to $2,0002. It’s just our way of saying thanks for letting us be part of your home ownership journey.

How it works:
How it Works
Value of the Eligible Mortgage You’re Switching Cash You’ll Get Back in an RBC Bank Account2
$300,000- $499,999.99 $500
$500,000- $749,999.99 $1,000
$750,000+ $2,000

https://www.atb.com/personal/mortgag...-or-refinance/

ATB Website Info


How renewing or refinancing with ATB can work for you.
Renew early

Taking advantage of current interest rates earlier may save you money. You can renew your closed ATB mortgage within 90 days of maturity with no prepayment penalty. With an open mortgage, you can renew early at any time without penalty.

Take your mortgage with you

If you’ve fallen in love with a new home but want to keep your current interest rate, you can ‘port’ your existing ATB mortgage to your new home with the exact terms that remained at the time of the transfer and no prepayment penalties.

Blend and extend

Renew early, buy another property or refinance without a prepayment penalty. Blending and extending your fixed-rate ATB mortgage lets you combine interest rates, extend your current mortgage and borrow funds at your new blended rate.

[Map Maker]

Originally Posted by EagleEyes

Been selling off what profits i have left and moving into some more cash. Bear markets don't last forever but I cant see much for good news in the next couple of weeks. I will hopefully start DCA on some of my higher quilty stocks soon. Been a hard week. Good luck to everyone else hopefully you find some deals for the future.

I did the same. Sold a few companies that had high debt for sister companies that had more cash in the war chest.
Sold a few that had a higher p/e.
All good dividend payers left so I can hunker down and get dividends for a prolonged bear market.
Sounds good but whatever I do is the wrong choice.

[Dean2]

Originally Posted by Map Maker

I did the same. Sold a few companies that had high debt for sister companies that had more cash in the war chest.
Sold a few that had a higher p/e.
All good dividend payers left so I can hunker down and get dividends for a prolonged bear market.
Sounds good but whatever I do is the wrong choice.

Based on this description, I would say you made excellent choices. If you are living on dividends, share price going up or down is no big deal, as long as the dividends stay or increase. Long term stable things like Banks, Telcos, Utilities, and Pipelines do that for you in spades.

[Map Maker]

Originally Posted by Dean2

Based on this description, I would say you made excellent choices.

Thanks but watch next week, the sister companies I bought will buy out the companies I sold for 40% premium.
All my luck is bad.

[DiabeticKripple]

Talked to a broker and she said that I can lock in a mortgage rate now through them and when my current mortgage expires I can port it over to them.

Basically I can lock in at todays interest rates without paying a penalty at all.

[HyperMOA]

Originally Posted by Dean2

This is on the RBC site. Most Banks offer the same. One way to move and cover a lot of the penalty.

Better yet, you can also go into your Bank and ask to Blend and extend your existing mortgage. Basically you renew early, get to keep the balance of your low rate and blend it with the current 5 year rate. Some banks will do that with the existing balance, some you have to up the mortgage a bit to get the deal. Either way, there is no penalty so a better option.

Since rates are rising, the most you should have to pay in penalty is 3 months interest if you move Banks. Rate differential is negative, bank is getting higher interest than they were on your existing mortgage, so you can't get slammed with that one.

https://www.rbcroyalbank.com/dms/mor...022/index.html


Switching your mortgage to RBC may be your
best move yet.

Did you know there are fees to switch your mortgage? At RBC, we cover up to $1,100 in switch fees on your eligible mortgage and take care of everything for you—so switching couldn’t be easier. Move your mortgage today and experience the RBC difference.
Why switch your mortgage to RBC

Whenever you’re ready to switch your eligible mortgage, we’re ready to cover your switch fees. As part of our commitment to making the mortgage process as easy as possible for our clients, these savings are always available.
Types of Switch Fees Covered
Types of Switch fees Covered Switch Fees Covered by RBC1
Processing fee (evaluation of current home)

Value of up to $300

Discharge fee (charged by your previous lender)

Value of up to $300

Title insurance fee

Value of up to $5001

These are typical fees paid for all switches. If you switch before your term expires you may incur additional prepayment fees charged by your previous lender.
Plus, for a limited time you could get up to $2,000 in cash2.

Move your eligible mortgage to RBC between February 15th, 2022 and June 30th, 2022 and you could receive a cash bonus of up to $2,0002. It’s just our way of saying thanks for letting us be part of your home ownership journey.

How it works:
How it Works
Value of the Eligible Mortgage You’re Switching Cash You’ll Get Back in an RBC Bank Account2
$300,000- $499,999.99 $500
$500,000- $749,999.99 $1,000
$750,000+ $2,000

https://www.atb.com/personal/mortgag...-or-refinance/

ATB Website Info


How renewing or refinancing with ATB can work for you.
Renew early

Taking advantage of current interest rates earlier may save you money. You can renew your closed ATB mortgage within 90 days of maturity with no prepayment penalty. With an open mortgage, you can renew early at any time without penalty.

Take your mortgage with you

If you’ve fallen in love with a new home but want to keep your current interest rate, you can ‘port’ your existing ATB mortgage to your new home with the exact terms that remained at the time of the transfer and no prepayment penalties.

Blend and extend

Renew early, buy another property or refinance without a prepayment penalty. Blending and extending your fixed-rate ATB mortgage lets you combine interest rates, extend your current mortgage and borrow funds at your new blended rate.

Hey Dean, I wonder if you could impart some wisdom or advice? I currently have basically 3 years remaining on my mortgage term at 2.64%. I have about 5 years left on my entire mortgage. Would you blend now, or ride out the 2.64% and maybe gamble on a couple 1 year mortgages afterwards? I currently make basically double payments so I am unable (or unwilling) to commit more to my mortgage to pay it off an additional 2 years earlier. What do you think is the wisest choice in this position?

[Pathfinder76]

Originally Posted by HyperMOA

Hey Dean, I wonder if you could impart some wisdom or advice? I currently have basically 3 years remaining on my mortgage term at 2.64%. I have about 5 years left on my entire mortgage. Would you blend now, or ride out the 2.64% and maybe gamble on a couple 1 year mortgages afterwards? I currently make basically double payments so I am unable (or unwilling) to commit more to my mortgage to pay it off an additional 2 years earlier. What do you think is the wisest choice in this position?

With two years remaining after your current term, I’d lose zero sleep over doing absolutely nothing right now.

[Dean2]

Originally Posted by HyperMOA

Hey Dean, I wonder if you could impart some wisdom or advice? I currently have basically 3 years remaining on my mortgage term at 2.64%. I have about 5 years left on my entire mortgage. Would you blend now, or ride out the 2.64% and maybe gamble on a couple 1 year mortgages afterwards? I currently make basically double payments so I am unable (or unwilling) to commit more to my mortgage to pay it off an additional 2 years earlier. What do you think is the wisest choice in this position?

I agree with Pathfinder. Let it ride at your current rates. Deal with the last two years of payments when it happens. There will be so little left owing that the higher rates won't make all that much difference.

Originally Posted by DiabeticKripple

Talked to a broker and she said that I can lock in a mortgage rate now through them and when my current mortgage expires I can port it over to them.

Basically I can lock in at todays interest rates without paying a penalty at all.

Never heard of that, most rate holds are 90 day max. Don't know how they are doing it since no brokers fund their own mortgages but I would get that in writing cause that is a heck of a deal.

[Dean2]

Originally Posted by KGB

Dean, I think buying right now can wait for another month…. I don’t think we are nearly close to the bottom of this. I am well aware of trying to time the market issue but there is no good news on a horizon as of today. Inflation isn’t slowing down, interest rates will keep going up and the economy is slowing down. The stock market is in a bear market already and the economy is definitely entering the recession. Here in Alberta we probably won’t feel it as bad as other places due to the oil and gas production been ramped up.
I sold about 20% of my portfolio a few months back. I ended up buying Ensign Energy a few weeks back…. Bad move! Since I got that stock, it was going nowhere but down! Damn!

A guy has to do what he is comfortable doing. There were a lot of guys singing the same tune Mar, Apr, May of 2020 and then there were some of us that stuck to the discipline of buying quality stocks when the blood is running ion the streets.

This is what I posted April 29,2020. My bet is I will be posting something similar about this drop. The TSX is still 4000 points above where it was when I posted this barely 2 years ago and over 8000 up from the March 2020 bottom. I won't quote anyone, but a lot of you would benefit from going back and reading what you wrote in March, April, May of 2020. It is good not to keep repeating the same mistakes.

Originally Posted by Dean2

So, how many of you are still sitting in all cash, how many have deployed at least 50% of their cash into long term hold stocks? How many are waiting for the next big drop to buy in and how are you going to know that this is the drop to buy on and there isn't another bigger drop down the road 3 months.

It is very easy to bail out into cash, the much harder part is getting back into the market. For anyone who is still out; the market has rebounded from 11,288 to 15,170 this morning, so it is back to where it was in Jan 2019, the previous high was 18,000 late Feb 2020. Thus it dropped almost 7,000 points but has recovered 4000 of those, which is 57%. Now, assuming you sold out at or very close to the peak around Feb 20th, you are still ahead of the game, except for the Capital gains taxes you paid on non-registered accounts.

Some guys don't want to buy back until the market gets back to 17,000 and holds at that or above, but they are going to leave a lot of potential gain on the table. Still nothing wrong with that if it fits your risk profile but it does illustrate that you need to have as specific a re-entry plan as you had for your plan for getting out. If you and your financial advisor have not put down on paper a specific re-entry plan I strongly suggest you do so, unless you plan to stay completely out of the market going forward. Given interest rates are near zero that is going to make generating income on cash pretty hard unless you find some asset class like rental real estate that makes you happier than stocks. Best of luck to all and hope your are all staying healthy and employed.

[Pathfinder76]

I am predicting that the bottom is near.

[Dean2]

Originally Posted by Pathfinder76

I am predicting that the bottom is near.

To be clear, I have no idea if we are near bottom or not. I didn't know if March was the bottom in 2020 either. What I do know for sure is RBC at 85 in 2020 and now down to 125 from 149, Pembina pipe at 35 then 45 now, FRU at 3 then, 13 now, TD at 57 then 86 now, and ZWU at 12.20 etc are all EXCELLENT values in 2020 and again now. Maybe they drop more before recovering, maybe not, but buying at these prices I know I will be a very happy camper 24 months from now. On top of that I will average a 5-6% dividend yield and reinvested by drip, means even if the shares don't go up my money doubles every 12 years. That is way more than I can get on interest. It is not a fast way to get rich, but over the long term it works.

[Fisherdan]

I don’t know if it’s all bad news really. Yes, inflation right now is terrible, and who knows if it can be tamed soon. And easy, cheap money is gone.

But on the plus side, the economy is rolling, we have near maximum employment, and lots of people are still sitting on piles of cash still… looking to spend after enduring a couple years of restrictions.

Seems like the sky was falling a lot harder back in early 2020, than now.

What do you guys think about oil? It took it on the chin yesterday, but I have a hard time believing that oil is on a downward trend now. We’re heading into travel season, China is not going to stay locked down forever either. Refining and capacity is not up to snuff. OPEC keeps missing targets. Saudis not lifting a finger to help Biden. Russia, Ukraine, Libya, hurricane season coming up.

[bdub]

Originally Posted by Fisherdan

I don’t know if it’s all bad news really. Yes, inflation right now is terrible, and who knows if it can be tamed soon. And easy, cheap money is gone.

But on the plus side, the economy is rolling, we have near maximum employment, and lots of people are still sitting on piles of cash still… looking to spend after enduring a couple years of restrictions.

Seems like the sky was falling a lot harder back in early 2020, than now.

What do you guys think about oil? It took it on the chin yesterday, but I have a hard time believing that oil is on a downward trend now. We’re heading into travel season, China is not going to stay locked down forever either. Refining and capacity is not up to snuff. OPEC keeps missing targets. Saudis not lifting a finger to help Biden. Russia, Ukraine, Libya, hurricane season coming up.

I agree with all your points on oil. I see nothing that our western politicians are doing to alleviate the current supply issues. In fact what we are seeing with the political wisdom leaning towards taxing "excessive profits" is another form of disincentivizing investment. The exact opposite of what they should be doing. Biden dumping a couple hundred million BBLs from the SPR is just another desperation move to top it all off.

I think the selloff in energy names is going to be an opportunity to add to positions or get into them if an investor has missed out on the latest run. As painful as the week was being overweight the sector I am not a seller.

If you want to listen to a real expert on the oil market and energy situation Dr. Anas Alhajji is the guy. He is of the opinion that we are heading full steam ahead into another energy crisis.

https://www.macrovoices.com/podcasts...oices-podcasts

[Fisherdan]

Originally Posted by bdub

I agree with all your points on oil. I see nothing that our western politicians are doing to alleviate the current supply issues. In fact what we are seeing with the political wisdom leaning towards taxing "excessive profits" is another form of disincentivizing investment. The exact opposite of what they should be doing. Biden dumping a couple hundred million BBLs from the SPR is just another desperation move to top it all off.

I think the selloff in energy names is going to be an opportunity to add to positions or get into them if an investor has missed out on the latest run. As painful as the week was being overweight the sector I am not a seller.

If you want to listen to a real expert on the oil market and energy situation Dr. Anas Alhajji is the guy. He is of the opinion that we are heading full steam ahead into another energy crisis.

https://www.macrovoices.com/podcasts...oices-podcasts

Thanks for the insightful podcast. Really interesting the games played with politics and oil. Hard to see how Europe isn’t totally effed. Guess they deserve it. He was clear that short term, he cannot predict, but mid to long term is bullish. With commodities who knows, really.

[bdub]

Originally Posted by Dean2

To be clear, I have no idea if we are near bottom or not. I didn't know if March was the bottom in 2020 either. What I do know for sure is RBC at 85 in 2020 and now down to 125 from 149, Pembina pipe at 35 then 45 now, FRU at 3 then, 13 now, TD at 57 then 86 now, and ZWU at 12.20 etc are all EXCELLENT values in 2020 and again now. Maybe they drop more before recovering, maybe not, but buying at these prices I know I will be a very happy camper 24 months from now. On top of that I will average a 5-6% dividend yield and reinvested by drip, means even if the shares don't go up my money doubles every 12 years. That is way more than I can get on interest. It is not a fast way to get rich, but over the long term it works.

You have a great point, it is next to impossible to time the bottom. You can only see it in hindsight. Things turn around quick when it happens though and gains come quickly. Here is what happened on some recent big dips.

The GFC market bottom was on 3/9/2009. Ten trading days later the SP 500 had gained 19.6%.

The 2018 mini crash bottomed on 12/24/2018. Ten trading days later the SP was up 9.48%.

The 2020 crash bottom was on 3/23/2020. Ten trading days later the SP was up 17.44%.

[AlbertanGP]

Originally Posted by DiabeticKripple

Talked to a broker and she said that I can lock in a mortgage rate now through them and when my current mortgage expires I can port it over to them.

Basically I can lock in at todays interest rates without paying a penalty at all.

My experience is more with commercial properties I own...I'm not sure if the same applies to residential mortgages, which I'm sure is what everyone is talking about here. With commercial mortgages, you can do something called a Forward Fixed Rate. The bank locks in a rate for you now to begin at some point down the road, typically within a few months but I have been offered out as far as six months recently. This is what most banks not holding your current mortgage will offer so that you don't incur a payout penalty with the current lender. It's far from "free" though. The FFR typically comes with a premium of around 30 to 50 basis points currently, and there is usually an up front fee associated with the process. These are the details that don't usually come out until you bite on their attractive offer to get you in the door.

With 3 to 5 year fixed rates climbing close to 6% last week (again, I'm not sure where the residential stuff is at), a person really has to think about where things are heading before locking in for an extended period. Yes rates are going up drastically in the next 12 months or so, but what is going to happen after that is the real question. Will the BoC really bankrupt households with rising interest rates to try to curb inflation at all costs? Or will rates taper off and return back down to the target of 2-3% in 2024? I can see some panicking individuals holding rather expensive fixed rate mortgages in a couple of years as rates settle. Locking in a 5 year fixed right now could cost you in the long run. But you'll likely sleep better at night and that's worth a lot too.

[EagleEyes]

Another rough day in the market. Some stocks seem to be just in free fall mode blowing right pass resistance. Still thinking some red days ahead.

[fishtank]

Oil company taking another down day , cause Biden getting mad at oil company for gas price

[stein]

Canadian banks hitting 52 week lows

[KGB]

Originally Posted by fishtank

Oil company taking another down day , cause Biden getting mad at oil company for gas price

God damn ESI is tanking like a mofo! Right after I loaded up on it….

[Fisherdan]

Originally Posted by KGB

God damn ESI is tanking like a mofo! Right after I loaded up on it….

Dang, that sucks. I have some of that stock too. Trying not to look.

[KGB]

Originally Posted by Fisherdan

Dang, that sucks. I have some of that stock too. Trying not to look.

I am going after Dean2… he recommended it… I know where he lives… lol!

[KGB]

Originally Posted by stein

Canadian banks hitting 52 week lows

Those could be a good buy very shortly. Average dividend is around 5%, so you can load up and just sit and wait for stock to recover. If you have at least 3-5 years - you will be just fine!

[duckup]

Go with a variable mortgage

[Trochu]

That double digit drop that occurred yesterday in my energy stocks has almost regained today.

[Dean2]

Should be an interesting week in the markets coming up. Good thing is, I won't be watching much of what is going on. Have had so many fire sales on Blue Chip, Dividend paying stocks that I am now out of cash to reinvest. Have it all back in the markets as of Wednesday last week. Now I can goof off for the summer and let the markets bang around reacting to all the short term headlines and sensationalist comments and sound bites.


8 quotes worth re-reading in volatile times

1. "Everyone has a plan until they get punched in the mouth"
- Mike Tyson

2. “Far more money has been lost by investors preparing for corrections, or trying to anticipate corrections than has been lost in corrections themselves".
- Peter Lynch

3. “The first rule of investing is ‘buy low and sell high’, but many people fear to buy low because of the fear of the stock dropping even lower. Then you may ask: ‘When is the time to buy low?’ The answer is: When there is maximum pessimism.”
- Sir John Templeton

4. I’ve always said, the key organ here isn’t the brain, it’s the stomach. When things start to decline - there are bad headlines in the papers and on television - will you have the stomach for the market volatility and the broad-based pessimism that tends to come with it?”
- Peter Lynch

5. “Volatility is a symptom that people have no idea of the underlying value”.
-Jeremy Grantham

6. “When an investor focuses on short-term investments, he or she is observing the variability of the portfolio, not the returns – in short, being fooled by randomness."
-Nassim Nicholas Taleb

7. “If investing is entertaining, if you’re having fun, you’re probably not making any money. Good investing is boring.”
-George Soros

8. “Unless you can watch your stock holding decline by 50% without becoming panic-stricken, you should not be in the stock market”
-Warren Buffett

💡Bottom Line:

If you invested $100,000 in the S&P 500 in 1960 you have close to $50M today...

Don't panic, brighter days are ahead.

[Twisted Canuck]

I will add one to that fine list of quotes Dean.

Speculating isn't investing. The sooner you figure out the difference, the sooner you can start actually investing.

TC

Edit: That is not to say there is anything inherently wrong with speculation, assuming one has knowledge and intestinal fortitude. If you don't have an extensive understanding of what you are doing, you may as well go down to the casino and put your money down on black.

[Twisted Canuck]

Originally Posted by duckup

Go with a variable mortgage

That has been great advice for the last 20 years, I had mine as low as 1.5% (3/4% under prime). Right now with all the central banks making some big moves on key rates to deal with inflation, that may not be the best advice currently. Everyone has a different situation and needs to evaluate it specific to where they are at.

I don't have much of a mortgage left at this point, and I got a fixed five year locked in a year ago (first fixed ever) at 1.94%

I'm quite happy with that.

[Labadung]

Even cryptocurrency has collapsed a lot lately

[Twisted Canuck]

And the new guy padding his post count gets the Captain Obvious Award for the day. Thanks, and welcome to the forum.