Weekend Reading – Expert predictions for 2022
They say life can only be understood backwards; but it must be lived forwards. Welcome to my latest Weekend Reading edition with some expert predictions for 2022.
In this edition, at the start of a new year, I thought it would be interesting to revisit some expert predictions and see what some experts got totally wrong in the past, as we look ahead for what might happen.
First up, market bear David Rosenberg who believed while things were not very rosy in the stock market let alone our economy right now (March 2020), a recovery will occur, but you’ll have to wait for it.
Well David, that was flat-out wrong since the market quickly rebounded in late-2020 and has been essentially on a tear ever since. If you think this was an outlier like many COVID-19-related predictions, I wouldn’t blame you. So, you might also recall that Rosenberg has been very bearish on Canadian housing since 2010 though.
“It would not be out of the realm to see a correction, using nationwide average home prices as the benchmark, of at least 20 per cent.”
Right.
No, wrong. Very, very, very wrong.
Source: https://wowa.ca/reports/canada-housing-market
Canadian home prices continue to rise – the average home price in Canada was recently pegged at $720,850 and that data is now out of date. Heck, even the average home price in the Yukon was $529,535. A 25% increase year-over-year there.
Forget housing, you might remember some bigger, bolder predictions gone totally wrong.
In a book titled “Dow 30,000 by 2008: Why It’s Different This Time,” written by Robert Zuccaro, Zuccaro was once part of a mutual fund team that achieved triple digit returns in 1998 and 1999, but his 2008 call was wildly inaccurate. Not only did the Dow not hit 30,000 (a benchmark it is still a long ways away from), but 2008 began the worst financial crisis since the Great Depression and watched the Dow plummet more than 30%.
Well timed.
Finally, because I could go on and on….”Rich Dad Poor Dad” author Robert Kiyosaki has warned of a devastating market crash coming.
“Crash and Depression coming,” the “Rich Dad Poor Dad” author said. “Gold, silver, bitcoin, real estate will crash too.”
I suspose if you keep repeating the same thing over and over, you might eventually, potentially, maybe, get it right. Even a broken clock is right twice a day!
Of course, I’ve had my own fun on the site over the years but predictions are just entertainment for me, even when I did get a few things correct.
Last year, yours truly did very well actually in the Canadian Money Forum 2021 Predictions contest 🙂
Enjoy the rest of this Weekend Reading edition including what some experts have on their 2022 predictions bingo card!
Weekend Reading – Expert predictions for 2022 and more!
Love reading and viewing the outstanding infographics from Visual Capitalist: what the experts see coming in 2022.
Congratulations to Dividend Daddy who recently crossed his crossover point for financial independence!
Speaking of financial independence, literally, I was speaking with the awesome team at Explore FI Canada about that subject and much more in this podcast.
Check it out, hear from me on this subject and much more – including what we’re doing over at Cashflows & Portfolios if you want any assistance in figuring our your financial independence number and date!
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A reminder to those who have recently joined our readership and new fans of the site – our site is growing thanks to you!! As an example, a big thanks to Rob Carrick for mentioning our site and services in The Globe and Mail. From Rob:
“TODAY’S FINANCIAL TOOL
Cashflow$ & Portfolios is the name of a website built to help people learn how to reach their long-term financial goals with budget and long-term investing. Brought to you by a pair of veteran personal finance bloggers.”
This week on that site we interviewed speaker and author Sandy Yong – running a giveaway for her book The Money Master.
Rob Carrick interviewed Andrew Hallam (who has a new book out called Balance: How to Invest and Spend for Happiness, Health and Wealth) that offers some great thoughts on how to build a happier life based not just on financial matters, but also on living according to your values.
I have a couple copies of Andrew’s new book on my shelf (thanks Andrew) and I hope to have him on this site in a few weeks – stay tuned!
Passionate dividend investor Matt Poyner who runs Dividend Strategy highlighted how he personally uses the Beat the TSX (BTSX) strategy in his own portfolio.
Matt’s approach is VERY similar to mine, Matt wrote beyond his Canadian dividend paying stocks for income and growth:
“I achieve international exposure with ETFs, in particular, XAW, which is the iShares Core MSCI All Country World ex Canada ETF. I also think that the emerging markets are great long-term investments while currently being undervalued, so I hold some additional XEM, iShares MSCI Emerging Markets Index ETF.
I will hold on to good companies that still pay good dividends. Generally, they have fallen off this list because of increases in their stock price, rather than a decrease in their dividend. I am still a happy owner of large stakes in Fortis (FTS), Bank of Montreal (BMO) and SunLife Insurance (SLF), for example – and may be an owner for life.
First, BTSX stocks tend to be concentrated in telecoms, utilities, energy, and financials. It makes sense to gain exposure to dividend-paying stocks in other sectors.”
A Wealth of Common Sense wondered if the Fed (Federal Reserve) is now trapped. I would say a resounding “yes” just like our Bank of Canada. Interest rates have been way too low for far too long. Our BoC lacks credibility for inaction.
Is the 60/40 portfolio officially dead?
John De Goey wrote about opinions and predictions on the Financial Independence Hub. I liked the ending:
“Nobody knows because we’ve never had a truly massive bear market in our careers. Your guess is as good as mine. Like I said, everyone has an opinion.”
From Cut The Crap Investing, here are some 2021 returns for ETF portfolios. Boring worked well in 2021…
Just in case you missed it…
I wrote about how to invest and combat higher inflation.
I also shared some financial and personal goals I hope to achieve in 2022.
Reader question of the week (adapted slightly for the site):
Hi Mark,
Congrats on all your efforts for moving towards FI….seems like you are almost there! Many Canadians don’t have the means to max out their RRSPs or TFSAs like you. Any suggestions on how to retire if you can only max out one account? Anything you can share? Thanks very much.
You know, very fair question. I hope to do more case studies like some of these ones below.
Have a read and let me know in particular what you are looking for. If need be, I’ll create another case study!
Thanks for your readership.
Mark
How to invest when time is no longer your friend.
Can you even retire on a lower income?
Age 60, retirement on a lower income – can this investor do it?
Save, Invest, Prosper!
As always, check out my Deals page.
Have a great weekend!
Mark
Mark
My name is Mark Seed - the founder, editor and owner of My Own Advisor. As my own DIY financial advisor, I'm looking to start semi-retirement soon, sooner than most. Find out how, what I did, and what you can learn to tailor your own financial independence path. Join the newsletter read by thousands each day, always FREE.
Great read as usual, Mark. This week has been brutal to say the least!!! Is the market crashing?? Are we going to see any further downside? When is the recovery supposed to take place?? Too many unanswered questions and nobody knows for sure. If this steep decline continues, our net worths would be reduced significantly. Do we sell now to stop the bleeding or continue to hold and do nothing and let the market reset itself?? Any thoughts??
Thanks Mark for all your hard work to provide us with all your insights every week. Let’s hope the market recovers!!!
Ha, predictions from the experts. Judging by their records vs your predictions you’re the expert.
RE is a mess. Too many govt incentives, too little supply/local govt restrictions, too many immigrants to main cities, rates way too low for way too long. For those lucky enough to own for some time now (like me) its a non issue.
Fed and bank governor trapped. Yes, and that makes us the same.
The BTSX strategy is a proven winner. My strategy now is similar although I have some FI to offset not having that work pension in retirement.
Everyone have a good 2022.
Ha, Just fun predictions but nice to be on top for sure 🙂
BoC has lost all credibility IMO. No easy way out and self-inflicted wound really.
Big fan of BTSX and I hope to actually have Matt Poyner on the site in a few months. 🙂
Mark
I don’t see residential RE going down. Especially with the move to WFH. That said, if we end up with a long-term WFH of 2-3 days a week, the consequences for the office RE sector could be interesting. And the boost to online shopping (which was trending up anyways) could impact retail RE investing.
I hear ya Kari. Not sure what the long-term game plan is for real estate in Canada. I think residential RE should be fine as will industrial REITs. I continue to own REI.UN (only <1% of portfolio though) for any gains.
WFH is likey here to stay for many I suspect!
Hope you are doing well and best wishes for 2022 to you!
Mark
I agree Kari, it would be very difficult for residential RE to go down – very simply, new build construction is not keeping up with population growth from immigration, and the effect is worst in the larger cities where immigrants tend to come to.
The Globe & Mail had a series of articles last week looking at this (and that there has been net out migration from Montreal and Toronto CMAs, yet prices still rose). RE is more about supply-side issues — the demand side controls being discussed like foreign resident taxes, investor taxes, home buyer TFSAs, etc. all won’t have any impact on the NEED for housing from increased immigration. Canada needs and benefits from immigration, but housing supply (and urban intensification) needs to keep pace.
I agree with you Bart.
The only potential area I see for residential RE is the cottage market. As a percentage it’s had higher growth than the urban centres. And I predict in 3-5 years some of those who bought cottages since 2020 will realize cottages are a lot of work and a lot of money. Post-COVID, some will decide to sell and travel instead.
Great article Mark! and 100% like you said those predictions for the market if you keep repeating it will happen one day but who knows when that day will come , as for the real estate it’s out of control and that’s another story that we keep hearing every year that the bubble is going to burst.
In the mean time I will keep doing whatever I’m doing because it seems to be working as long as I don’t listen to those analysists.
Sounds like a good plan, ignore the talking heads!! 🙂
All the best and thanks for your engagement,
Mark