Financial Jungle

• It’s been a long time since Vancouver suffered any blows to real estate prices, and many young speculators are cajoled by the same headlines from prior bubbles. Langley Financial Planning revived a precious post from the Vancouver Housing Blog, who had amassed a collection of newspaper headlines just prior to the last 2 housing collapses. Here are my favorites:

  “To those who are waiting for Vancouver house prices to collapse, I can only advise them not to hold their breath . . . Unless there is a major recession or significant depopulation, house prices are unlikely to drop significantly.” - Jerry Jackman, VP Royal Lepage, November 18, 1988 in the Vancouver Sun. (In 1989, prices started to drop - with an eventual 30% or so drop. Real prices did not attain these heights again for 58 quarters, or around 15 years.)

  “The whole world wants Vancouver because everybody is moving here now and everything points up, up, up.” - Realtor David Goodman, December, 1989 in the Sun. (The market did not reach these heights again for 15 years.)

  “Price stability, rather than decline, would be expected for most of the housing stock . . . since underlying home ownership demand remains strong due to continued high immigration.” - Frank Clayton, January 18th 1981 in the Sun. (The market crashed by about 50% over the following year. )

• Before you visit eBay, try some of these shopping tips from Lisa, a guest from Get Rich Slowly. A few tips include sniping the goods to discourage pre-mature bidding wars, favouring gently used items, and keeping a watch on shipping costs.
• Can money buy you happiness? Not exactly, but it can help if you know where to spend it. Linda Stern, from Reuters, offers a few techniques to convert your wealth to happiness. It may surprise you that most of these techniques don’t include buying big toys like sport cars or big screen TVs. I’ve also written a topic on money and happiness.
• Despite recent hissing from investors, stocks remain cheap, according to professor Jeremy Siegel:

  Based on the S&P 500 Index, which constitutes 80% of the total market value of U.S. stocks, these stocks are now selling at 16.5 times a conservative estimate of 2007 earnings. In a world where government rates are below 5% and inflation is below 3%, stocks are not only reasonably priced, but cheap on a historical basis. - July 30, 2007

That’s all, folks!