BK, If you venture over to the buing and selling a home forum you will see a post from Dave over a very deep personal tragedy he has had and thus I would not anticipate a response any time soon.

Ah,.. thanks for telling me.

It wasn't just for Dave, but he has an interesting "non-Dave Ramsey" opinion.

I'll go over and read his post.

Thanks again

Variable rates on Home Equitie loans is down to 4%. Might be worth the gamble.

Hi again, well-behaved kelton,

If you plan to borrow to invest for any but a short term, I strongly suggest that you arrange an iron-clad non-variable rate deal. It seems to me that, with a large proportion of local debt held abroad, soon the borrowers will be forced to pay much higher rates if they hope to seduce the lenders into parting with their precious money.

I bought my first stock, an oil co., about 45 years ago: it was bought out, after a few years.

I bought a non-equity mutual fund, for a special situation, about 34 years ago. Later I bought various equity-based mutual funds - mainly about the time that I sold a variety of them, 25 years ago: most recent such purchase was about 17 years ago.

Despite mutual funds' managers' claims to skills at asset management, very few of them have proved able to outperform the market averages consistently ... but they get their fixed percentage of the funds under their management, whether *or not* they succeed in producing above average - or any - increased values for the owners of the money that they are managing.

I've bought only a few stocks over several recent years, thinking the prices too high, until about 2005, then more early in 2006, when I bought our largest telco, then more of it near the end of last year, prior to the conclusion of a buyout proposal to take it private at a higher price. Now, after much huffing and puffing ... that deal appears to have fallen through: share price dropped to below my cost for either purchase.

As many major Canadian miners have been bought out in recent years, I bought shares of a substantial miner early this year and more recently, after a substantial drop in price, using most of my available liquid assets. Still more drop, since.

Unwisely, in a market moving down, I bought some small, speculative companies' shares last year and earlier this year: *not* to do that in an uncertain market! Their prices have gone down, too.

It appeared that the telco deal would conclude soon, providing some more funds with which to invest for the next while ... but probably that's not going to happen.

My long-time unused Line of Credit (fully secured by mutual fund and stock certificates) rate was 4.75% (variable) a few weeks ago.

I'll likely draw on it soon to buy some more carefully chosen stocks.

As I expect to get no fresh money from the telco deal and thus expect that I'll draw on the line of credit sooner than I'd expected earlier, and it looks as though the low market may well persist longer than I'd expected, I'm having some more share and mutual fund certificates issued in order to allow myself a higher limit on the Line of Credit.

How soon will I likely buy again?

Don't know - probably after about six months. Or - after it appears fairly conclusive that the market's recent successive drops have finished. If there appear to be some bargains available: as one mutual fund manager said, 25 years ago, "I like to buy a dollar for 60 cents".

How much?

Don't know.

How long will I continue?

Don't know that, either. Death/prolonged illness hasn't given any indication as to when s/he/they may show up.

Maybe I'll notify you when one of them does.

I hope that you're having a week that you can remember with appreciation and (continuing) thankfulness.

ole joyful

P.S. Business/markets don't like uncertainty.

Our Prime Minister became so as he's the chosen leader of the political party that won the most seats in Parliament following an election about 6 weeks ago, an elction that he called unnecessarily early ... but his party holds less than a majority of votes in Parliament. Last week, a couple of weeks after the new Parlaiment started, the financial minister made a report that so angered the three disparate Opposition parties ...

.. that they've (improbably) united ...

... and may win a vote of non-confidence in his governing capability, early next week ... it was to have been last Monday, but he forced a postponement.

Now, he may shut down the Parliament for a while, to avoid getting outvoted (the equivalent of fired). He has a minority of votes, remember?

But, lacking some major changes, he may get fired soon, anyway.

While I'm watching ...

... I think that I'll not be buying any Canadian stocks for a while.

Canadian Dollar being undervalued ... and U.S. Dollar overvalued, I don't want to exchange to buy U.S. stocks now, either. Unless I can borrow with U.S. Dollar account.

Better buy gold (stocks), I guess.

Gold will soon be worth more than fog-backed paper dollars.

ole joyfoul

Well, mortgage rates may be low, but we found out to our chagrin that we can't refinance. Our house is worth substantially less than what we paid for it.

We're in year 3 of a 5/1 ARM. We're going to spend the next couple of years tucking away as much money as possible, so that when our interest rate does start increasing, we'll have money to be able to make our payments (our loan has a cap on how much the interest rate can increase per year, so it can't go up that much, but still, better safe than sorry) I guess we'll just ride this out for a few years, and hope the market turns around so that eventually we can refinance.

Unlike some people, we make more than enough money to be able to afford our payments, so I'm not concerned about losing our house...we just made a poor choice on a mortgage so that we could save a little money in the short term to cover remodeling costs, with the expectation of refinancing in a couple/few years. We had no idea the housing market would tank. Bummer.

Hi Kelton,
(And thanks IMMENSELY to ALL who have been so supportive, both online and off... both with brilliantly thought out words and (exponentially more) with nothing to say/write at all but a 'touch'... my wife & I have been surviving on the breaths of oxygen from each of your thoughts...)

Kel....

There are a variety of different advisors & 'gurus' out there... and Dave Ramsey is EXCELLENT... for a specific category of consumer. Basically; the financially immature who normally make 'budget decisions' by how much money is left in their pockets (and therefore who are not mature enough to manage more complex conversations about good debt versus bad debt, and the conservative protection of well-used leverage.)

SO... Dave Ramsey & Suze Ormon BELONG... they are critically GOOD for a certain segment of society (a frighteningly large segment, no doubt.) They are serving to keep a large portion of the lowest denominators from becoming hopelessly enslaved beyond their own comprehension...

HOWEVER... Ramsey & Ormon aren't offering well-developed principles & strategies for the "financial adult."

My house is paid off (sorry Dave), but has anyone seen mortgage rates lately?

HEY... I believe (correct me if I am wrong) that in our previous threads I had actually advised YOU, for YOUR particular emotional state, to go ahead & deposit your money into your real estate equity... no?

Just getting off the phone w/ my bank's mortgage person, I can get refinanced at 5.35% (30 yr) with only a $2,500 fee...out the door. When did this happen? I thought low interest loans were history?

Now... WHY did you have that "thought"? CERTAINLY WAS NOT from reading ME. I've been telling people we'd not seen the lowest 30 FRMs back in 2003 when they hit the 4.9%s, and that we can expect to re-touch or even dip below those.

Dave, you have this "cash is king" philosophy. Do you suggest that I do this? I'm guessing your answer is yes.

NO. YOU, in particular, have explained very clearly (both explicitly and implicitly) that you do not trust yourself in the effective management of your cash, and that emotionally it "burns a hole in your pocket."

Unless you've been doing some DRAMATIC emotional/financial therapy work in the last few months, my advice remains the same (for you specifically.)

Although I have no idea about what to do with the cash-out I would receive from this, that interest rate is very compelling.

That is because you are only looking at one side of the coin; the COST-of-money side. If you aren't prepared and capable of managing the GROWTH/PROTECTION-of-money side, then this is just a shiny stinkbait on the devil's fishing line looking for folks like you.

I do NOT like debt of any kind, but it could be argued that in this environment... a 5.35% 30yr loan looks crazy cheap. Should I refinance?

Cost-of-money rates WILL (and are already) getting cheaper... but even FREE debt, for YOU, is a bad idea for the reasons above.

Stay the course, my friend. My support goes with you.

Dave Donhoff
Leverage Planner