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Old 07-04-2012, 08:55 AM   #101
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Here's the article you need...factual, numbers based analysis.

Global BC | Vancouver sales hit 10-year low, real estate board declares a buyer's market
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Old 07-04-2012, 09:24 AM   #102
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Nobody said life was fair or Canada was supposed to be Dubai. If you want a comfortable life, only you can change that. It's not reasonable to expect some magic entity to give you things for free. Everything on your list can be solved with a little sacrifice and resourcefulness. There's no scapegoat there.
Sorry, I guess I articulated my thoughts poorly. I was trying to say that the govt was letting this housing bubble get out of control (low interest rates and lax lending policies). People are stretching themselves to the limit to live in the lower mainland, not just Vancouver.

I'm not saying anything should be free. I'm not saying everyone deserves to live in a nice house in West Van. I'm saying it's in the govt's best interest to prevent people from defaulting on their mortgages.

I guess the first bit was just me ranting about how shitty living in Surrey was. If you've lived there you know transit is terrible and even driving is a gong show. Still ranting, I don't know about you but I couldn't just "sleep earlier" when I was going to SFU.

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House prices are unhealthy in Vancouver, so save up now. What are you gonna do when interest rates rise and prices come down accordingly? Complain about how you're not able to come up with a down payment?
No actually.. I've been saving for my downpayment. I've been renting for a last 2 years knowing I can't afford buying at these sky high prices. But I've noticed my rent (and other peoples) being increased. I've given up my car, found a job closer to where I live, cook my own food, given up fancy gadgets and taking the gf out just to pay rent and save money for a downpayment and wedding.
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Old 07-04-2012, 09:50 AM   #103
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Well, yes rent goes up, but its limited to cost of living plus 2%, which from what I have seen keeps rented property pretty close to property available for rent in terms of price. That is done at the same time that property tax, heating fuel, and electricity are free to float in the market(and theoretically captured in cost of living).

I mean, people complain that rents are going up and its so expensive...don't move! I have a woman in an apartment at $650...her neighbor? 850. If someone like that moves and complains that she can't find any old apartment for 650, then its not the city's fault, or the province. Effectively, the owner of the rental property is the one thats screwed on that deal out of anyone.
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Old 07-04-2012, 10:43 AM   #104
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Rent has certainly gone up more than 2% per year in the GVRD and Victoria. Yes 2% is the limit that a landlord can raise the rent this year on an exisiting tenant, however when the unit is vacant, most landlords will test the market at a higher price.

I'll be interested to see if less people buying homes in my region leads to low rental vacancies and higher rent due to increased demand. If people don't buy, they need to rent.
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Old 07-04-2012, 11:13 AM   #105
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Rent has certainly gone up more than 2% per year in the GVRD and Victoria. Yes 2% is the limit that a landlord can raise the rent this year on an exisiting tenant, however when the unit is vacant, most landlords will test the market at a higher price.

I'll be interested to see if less people buying homes in my region leads to low rental vacancies and higher rent due to increased demand. If people don't buy, they need to rent.
Yes, this year, for existing tenancies the increase was 4.x% can't remember if it was 4.2 or 4.3. That was higher than average, as its usually about 2%.

Yes, with natural movement, landlords will increase the rent. I can't really speak to other areas, but here we're not spiking the rent to huge amounts, especially considering the amount of money we put into apartments in order to get that increased rent. On average, for a fully reno'd apt right now, we increase by about $100-$150/month-BUT that doesn't pay off for about 3 years on a full cost depreciated by solely the increased rent.
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Old 07-04-2012, 05:30 PM   #106
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Old 07-04-2012, 11:08 PM   #107
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Rent has certainly gone up more than 2% per year in the GVRD and Victoria. Yes 2% is the limit that a landlord can raise the rent this year on an exisiting tenant, however when the unit is vacant, most landlords will test the market at a higher price.

I'll be interested to see if less people buying homes in my region leads to low rental vacancies and higher rent due to increased demand. If people don't buy, they need to rent.
Maybe for a short amount of time, but things tend to go back to equilibrium or balance itself again. I'd expect something like this:
-People can't buy so they rent. Landlords jack up the prices for time being.
-Sellers can't sell, lower their prices. People starting buying again.
-Landlords can't rent out because existing rental prices too high. They lower their prices again.

Obviously, if all the homes in your area are bought and no one wants to sell..they you might see rental prices jump up without any decrease because the above situation won't happen...

First time posting here so I'd like to add:
Yes, prices in the Lower Mainland are a bit much, especially when the average income in BC is around $40,000 for an individual...
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Old 07-04-2012, 11:28 PM   #108
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Live at home and save for a down payment.
Not disagreeing with your post as a whole, but LOTS of people don't have that luxury. As for the comment that other guy made about 1 bedroom condos being 400k+in burnaby? What exactly are you looking for in your entry level condo? Marble floors, and an indoor hot tub? You can get a small but nicely built 1 bedroom for low 300s in vancouver, in pretty prime locations. 250k bought me a condo in Edmonton that is brand new 2 bed, 2 bath, 2 underground parking, almost every upgrade in the kitchen, and well over 1000 square feet, but its in edmonton. If people can't justify the real estate prices here, you need to look harder and decide to either make it work or move to the burbs. 160k can buy you a place in new west. Do I want to live in new west? No, so I'll pay more to live here. People need to look at the options of gaining equity in other markets, and renting in Vancouver if the prospect of owning is so important to them, but they refuse to move, and refuse to pay to buy here. Me and my girlfriend pay 700 a piece, to live in a small 1 bedroom, that I could almost throw a rock into the ocean from our balcony. 700 dollars is 4 nights at the bar. Meanwhile I own a home that got me into the real estate market at 23, and now at 27 has gained me tons of equity, and I live where I want to live. I sure as fuck want prices to go down here, but I'm not going to blame someone because I can't afford a way to buy what I want here, I'm just going to find a way to fucking do it......eventually.
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Old 07-04-2012, 11:53 PM   #109
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Not disagreeing with your post as a whole, but LOTS of people don't have that luxury. As for the comment that other guy made about 1 bedroom condos being 400k+in burnaby? What exactly are you looking for in your entry level condo? Marble floors, and an indoor hot tub? You can get a small but nicely built 1 bedroom for low 300s in vancouver, in pretty prime locations. 250k bought me a condo in Edmonton that is brand new 2 bed, 2 bath, 2 underground parking, almost every upgrade in the kitchen, and well over 1000 square feet, but its in edmonton. If people can't justify the real estate prices here, you need to look harder and decide to either make it work or move to the burbs. 160k can buy you a place in new west. Do I want to live in new west? No, so I'll pay more to live here. People need to look at the options of gaining equity in other markets, and renting in Vancouver if the prospect of owning is so important to them, but they refuse to move, and refuse to pay to buy here. Me and my girlfriend pay 700 a piece, to live in a small 1 bedroom, that I could almost throw a rock into the ocean from our balcony. 700 dollars is 4 nights at the bar. Meanwhile I own a home that got me into the real estate market at 23, and now at 27 has gained me tons of equity, and I live where I want to live. I sure as fuck want prices to go down here, but I'm not going to blame someone because I can't afford a way to buy what I want here, I'm just going to find a way to fucking do it......eventually.
Out of curiosity...are you making money with your place in Edmonton? Just wondering if its worth the investment in Alberta...
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Old 07-05-2012, 12:21 AM   #110
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The rent covers my mortgage, property tax, condo fees and puts about 100 bucks extra on my mortgage a month. I rent it for less than I could probably manage to get, because the tenants are family friends, and they are dream tenants. Never complaining, always incredibly reliable and respectful so I take a bit of a hit. The thing is if I were to have bought a place originally as an investment property, I would have done it a lot different. I would have spent a bit more and got a house and done a 2 bedroom top floor with a basement suite. That is first time home investors perfect situation, and the one that one of my best friends is in out here(also the property is in edmonton) He pulls in around 800-1k a month with that, but has had some headaches being an out of town landlord. Mine works out well, because every year someone rents it, its just gained equity that can go into my next place.
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Old 07-05-2012, 07:47 AM   #111
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^ That's excellent to be up $100 per month. How much/what % did you put down when you bought it?
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Old 07-05-2012, 03:46 PM   #112
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The rent covers my mortgage, property tax, condo fees and puts about 100 bucks extra on my mortgage a month. I rent it for less than I could probably manage to get, because the tenants are family friends, and they are dream tenants. Never complaining, always incredibly reliable and respectful so I take a bit of a hit. The thing is if I were to have bought a place originally as an investment property, I would have done it a lot different. I would have spent a bit more and got a house and done a 2 bedroom top floor with a basement suite. That is first time home investors perfect situation, and the one that one of my best friends is in out here(also the property is in edmonton) He pulls in around 800-1k a month with that, but has had some headaches being an out of town landlord. Mine works out well, because every year someone rents it, its just gained equity that can go into my next place.
Thats great to hear. The real money definitely comes from property appreciation and selling at the right time..as long as you're doing OK on covering mortgage, prop tax, condo fees etc, and property values are rising, thats golden. Seems like its so much harder nowadays to earn money doing that as opposed to in the past.
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Old 07-05-2012, 04:33 PM   #113
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Meanwhile I own a home that got me into the real estate market at 23, and now at 27 has gained me tons of equity
Not saying you're a liar, but based on some "general statistics" about Edmontons RE market...

If you are 27 now (2011/2012) and you bought when you were 23 (2007/2008), you basically bought in at the peak of the market.. see below:

2008

Edmonton Home Prices Stable

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For the first quarter of 2008, Edmonton home prices have remained fairly stable... Overall, the average price for a residential dwelling rose 1.6% to come to rest at $343,760
2012

Latest Market Report

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All-residential4 average selling price $342,014

Sooo 2008 Average Home Price: $343,760 - 2011 Average home price 342,014 = -$1746

Now assuming you had a 30 year mortgage, with 10% down, the finances would break down like this:

Purchase Price: $343,760
Down Payment: $34376
CMHC (2% of loan Value): $6187

Now based on a fixed rate of 5%, which in 2008 was still pretty good (Before emergency rates really came into play) you're mortgage would have resulted in the following:

Monthly Payment: $1,651.15 + Condo Fee's (I would like to note that based on an avg condo fee of say $250.. a $1900/month condo in Edmonton would be hella expensive, and you also said you are +100/month)
Number of Payments: 60
Total of Payments: $99,069.00
Total Interest: $73,581.29

So basically, in terms of payments you would have knocked off $25487.71 over the 5 years (Since this property is generating positive cash flow, as you say)

Less CMHC insurance: -$6187
Less Market Depreciation: -$1746

For a total increase in equity of: 17554.71$ in 5 years.

Now that's still money in the bank, but just for shits and giggles, that same money you spent with the down payment could have been invested in just about any equity in 2008, say JPM, and you would have made 300% on youre investment turning $34376 into $103128, and this would have been 24 months ago.

Just putting the example out there, the reality is that most people were not even putting 10% down, the average was 7.5% down, and over 35 years.. so the interest paid on the average would have actually been worse than this example.

I don't know the particulars of your specific situation.. just food for thought.
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Old 07-06-2012, 12:36 AM   #114
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I bought right before the final crash, so my home had actually dropped right after I bought it about 10k. At the peak of the boom in Edmonton my place was listed, brand new, at around 300k. By the time I purchased it they had dropped the price to 255k and offered 10k in free upgrades to sweeten the deal. I also put down just shy of 100k. You clearly know more than me about real estate, but I have no reason to come on revscene and lie about my mediocre finances. And as I said, I bought this place to live in, not as an investment, so I'm aware that 100k could have been a much more lucrative investment. I'm not a banker, so I just ask mine, and as it stands, its a good investment. Also my variable rate mortgage hovered around 1.75 to 2.25% for the first 2 years of me owning my home, and now I am locked in at (I think) around the 3.5% mark. I really just go on my Mom's advice, who is a banker/financial planner. She claims I literally had the best possible luck for the interest rates, that she had really ever seen in 20+ years of working at the bank.
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Old 07-06-2012, 01:10 AM   #115
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Jason, I'd thank you twice if I could.

And good god, it absolutely makes me cringe to hear about the herd talking about how their friend who is an accountant, nurse or cashier made the amazing sacrifices to become a homeowner. Get a fucking clue. 40 year mortgages with 5% down is not a huge hoop to jump through.

However, becoming a homeowner has nothing to do with a person's ability to afford a home. They made the committment. Doesn't mean they can live up to it. Did these people take into account the affect that a housing crash or an increase in interest rates would have on their equity or monthly income? Do they know how much they are paying in interest on their 30+ year mortgage?

Expect to see a flood of people in negative equity from buying at or near the peak or seriously cutting back due to a marginal rise in interest rates.

They seem like they made amazing sacrifices to buy a home but make no mistake, lax lending standards have made it possible for a population living on credit to go beyond their means. I absolutely cringe at the thought of how many people are so deluded right now to think they are safe from the impending shit-storm that is about to happen.

And believe me, this will affect unemployment levels too. How many realtors do you know? Mortgage brokers? Construction people? When the well runs dry what are they going to do? Eat out at the restaurant your friend works at? No.

And so we're clear, I'm a designated accountant and the son of a realtor who spent 30 years in the industry. As a family, we have seen my dad go through extremely prosperous times and on the stop of a dime go through some of the most difficult times. Heck, I wanted to be a realtor when I was younger. But in spite of my dad's prosperity, he had been through two crushing deflations in the market and knew that it's not a good life to live. Real estate is cyclical. Hopefully someday people can look beyond the hype and understand that statistics don't lie.

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BOOM #1
– Mar/79 @ $73,200
– Apr/81 @ $181,200 (147% increase in 25 months – 102% with inflation)
– Mar/85 @ $127,000 (30% decline in 47 months – 46% with inflation)

BOOM #2
– Jun/88 @ $177,100
– Jul/96 @ $426,400 (140% increase in 97 months – 92% with inflation)
– Feb/99 @ $339,900 (20% decline in 31 months – 23% with inflation)

BOOM #3
– Jan/02 @ $363,900
– Feb/08 @ $920,600 (153% increase 73 months – 100% with inflation)

Prices start dropping after Feb 08… it’s supposed to end here, right? Wrong. The government steps in with super low interest rates and prevents the normal cycle from happening. So what ends up happening?

- Feb/12 @ $1,235,200 (239% increase in 121 months – 177% with inflation)
Yes, on average on we are up. But 3-6 years of price deflation are not an easy thing for a lot of people to get through.

At this point in time, RS brothers, don't buy. My only advice. Wait it out a bit (3-5 years). And if you can cash out, go for it.

Kev
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Old 07-06-2012, 07:23 AM   #116
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At this point in time, RS brothers, don't buy. My only advice. Wait it out a bit (3-5 years). And if you can cash out, go for it.

Kev
funny thing my wife & i have been thinking of cashing out and was wondering if the time was right...we were thinking if we should sell the house we live in and move in to our condo or sell the condo
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Old 07-07-2012, 04:57 AM   #117
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Book and Weblog – Authored by Garth Turner — Greater Fool – Authored by Garth Turner – The Troubled Future of Real Estate

June 2012 statistics for Richmond:

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Last month (June) all of 76 houses changed hands, a stunning 52% drop from a year ago. The average price, meanwhile, has faded by 7%
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Old 07-07-2012, 05:33 AM   #118
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However, if you are well educated yourself.. I think it is beneficial for the rest of the people are being just well, sheeple. Like it or not, everything tends to fall into natural distribution.. and natural selection does rule.

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I can never understand the lack on basic education in personal finances in highschool. They never teach us anything about mortgages, car loans, interest rates, amortization...etc. Yet, they spend so much time teaching us calculus that only a handful of us will use ever again after we graduate. It seems like that the school board is teaming up with the banks to propagating ignorance on purpose.
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Old 07-07-2012, 06:50 AM   #119
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And good god, it absolutely makes me cringe to hear about the herd talking about how their friend who is an accountant, nurse or cashier made the amazing sacrifices to become a homeowner. Get a fucking clue. 40 year mortgages with 5% down is not a huge hoop to jump through.

However, becoming a homeowner has nothing to do with a person's ability to afford a home. They made the committment. Doesn't mean they can live up to it. Did these people take into account the affect that a housing crash or an increase in interest rates would have on their equity or monthly income? Do they know how much they are paying in interest on their 30+ year mortgage?
The expression "House Rich, Money Poor" comes to mind for these people.
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Old 07-07-2012, 06:58 AM   #120
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One of my favourite blogs. It's interesting how realtors across the nation spin things to try to get people to buy. In Montreal, it's no different. I pay $1900 in rent for a place worth $650K in one of the most prestigious neighbourhoods of Montreal, yet people here seem to want to buy at an alarming rate, saying that the market will never cool or crash. In a city and province that has one of the highest unemployment rates, I wouldn't be touching real estate here with a ten-foot pole.
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Old 07-07-2012, 07:20 AM   #121
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One of my favourite blogs.
I do like Garths writing, but sometimes his advice is a little... misleading.

He always preaches about being able to get X% return in a diversified portfolio, I have a coworker who has 400k invested with Turner-Tomenson and so far they have actually been down every year about 7%.

Regardless, very good blog for a macro economic snapshot, tax tips, basic investment concepts, and of course RE.. though he has been calling for a crash for the last 6 years+ and it hasn't happened yet, with the exception of the 2008/2009 price pinch. The man has a way with statistics, thats for sure.

He also called the bottom in 2008/2009, and mentioned it as the buying opportunity of a lifetime (with regards to equities), he was right on that.
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Old 07-07-2012, 08:24 AM   #122
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I do like Garths writing, but sometimes his advice is a little... misleading.

He always preaches about being able to get X% return in a diversified portfolio, I have a coworker who has 400k invested with Turner-Tomenson and so far they have actually been down every year about 7%.

Regardless, very good blog for a macro economic snapshot, tax tips, basic investment concepts, and of course RE.. though he has been calling for a crash for the last 6 years+ and it hasn't happened yet, with the exception of the 2008/2009 price pinch. The man has a way with statistics, thats for sure.

He also called the bottom in 2008/2009, and mentioned it as the buying opportunity of a lifetime (with regards to equities), he was right on that.
I agree with what you said about his advice on portfolios. I'm not sure if he's deliberately doing that to get people to buy his book or not, but I tend to just ignore that portion. I think he calls for the crash continually just to contradict the majority of people who think that it will never happen (Realtors, shady economists, etc.)

Yes 2008/2009 was a fantastic time to get into many equities
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Old 07-07-2012, 04:57 PM   #123
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Now that's still money in the bank, but just for shits and giggles, that same money you spent with the down payment could have been invested in just about any equity in 2008, say JPM, and you would have made 300% on youre investment turning $34376 into $103128, and this would have been 24 months ago.
So wait, where can you invest and get 300% return in less than 5 years?

Is there an RS investment thread? My finances are not even in the same galaxy, is there more that could be told about this? My understanding is that in 2011 a lot of portfolio's decreased by 20-30%, is this totally incorrect?
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Old 07-07-2012, 05:44 PM   #124
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So wait, where can you invest and get 300% return in less than 5 years?

Is there an RS investment thread? My finances are not even in the same galaxy, is there more that could be told about this? My understanding is that in 2011 a lot of portfolio's decreased by 20-30%, is this totally incorrect?
http://www.revscene.net/forums/37482...et-thread.html

The above thread isn't so much about how to make a 300% return, it's more a journal of how much money we all lose hahaha. (Lately anyway)

A 300% return is possible in a lot less than 5 years, it's all about risk tolerance really. Take a look at the chart for any given equity, especially small or micro caps, they tend to be much more volatile then the mega caps.

My example for JPM is as follows:
15.93 March 6th 2009
46.06 October 16th 2009

So in just over 7 months you could have made a 289% return on a company like JPM that even during the financial meltdown had very solid books. I was torn between Suncor and JPM and chose to go with Suncor as there was a lot of mystery surrounding the balance sheets of all major US financial institutions at the time.

With my specific Suncor purcahse:
21.20 Approx. Nov 20th 2008
39.75 Approx. October 16th 2009

187% Return in roughly 11 months is what I got, at the time I bought SU, JPM was still trading in the 40's, so that's why I went with Suncor.

2011 the major indices ended the year slightly up, so it is reasonable to assume that most investors also ended the year up.

The first half of 2012 on the other hand, there has been some fairly significant loses in some sectors, commoditie prices have really taken a beating, so the commodity heavy TSX has been suffering a bit.

If you want to learn about investing, get reading lol. And never take advice from anyone without doing your due diligence... for every piece of good advice you will ever get, you will probably get 20 pieces of garbage advice.
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Old 07-07-2012, 06:04 PM   #125
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http://www.revscene.net/forums/37482...et-thread.html
The first half of 2012 on the other hand, there has been some fairly significant loses in some sectors, commoditie prices have really taken a beating, so the commodity heavy TSX has been suffering a bit.

If you want to learn about investing, get reading lol. And never take advice from anyone without doing your due diligence... for every piece of good advice you will ever get, you will probably get 20 pieces of garbage advice.
Thanks for the heads up!
Not really interested in stock market stuff but could be interested in following the thread for a while! No 300% in Investors Group or other financial people huh?
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