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May 17, 2018 | Killing the ‘Little Guy’ with ‘Investment’ Sales Dung

Danielle Park

Portfolio Manager and President of Venable Park Investment Counsel ( Ms Park is a financial analyst, attorney, finance author and regular guest on North American media. She is also the author of the best-selling myth-busting book "Juggling Dynamite: An insider's wisdom on money management, markets and wealth that lasts," and a popular daily financial blog:

Abuse of trust is a dominant business model in conventional ‘investment’ sales and wealth ‘manglement’.

As I mentioned in April, this odious truth was on full display at the recent ‘Canadian Wealth Expo’ in Toronto, where gullible attendees were showered with high-powered propaganda like this line from one of the seminar selling, self-declared ‘experts’ on investment: “Wealthy people don’t determine what they want based on what they can afford, they know what they want and figure out how to afford it.” Run away!

As I have noted many times, those who buy assets at extreme valuations are speculating, not investing, whether they realize it or not. Sooner or later, bad math works to eat them alive. See some salient observations on Canadian real estate in this article: Sylvester Stallone, Pitbull and the Canadian Wealth Expo ‘circus’:

Many people who piled in to the market in recent years are already finding that the sums are not adding up. Of the Toronto condo investors that took possession last year, for example, 44 per cent now collect less rent than the mortgage requires, according to CIBC Economics. Of those, more than a third are down at least C$1,000 a month.

Motivated sellers will be in increasing supply as prices stagnate and fall. Those that wait for the panic liquidation before they buy, are likely to earn just rewards.

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May 17th, 2018

Posted In: Juggling Dynamite

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