World Economy - Anyone worried?

[Ed_The_Gypsy]

Note that Vanguard is rumored to be going into Canada soon. (Canada is said to have the highest management costs in the world.)

Canada's RRSP beats our Roth. They can carry over unused contributions!

[HI Bill]

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Originally Posted by aja8888 Not fraccing discovery (been doing this for 100+ years here), but add horizontal drilling and the ability to drill into formations and produce from 3X greater depths. Great list!

I'm an engineering (not a petroleum) geologist, so this is not my areas of expertise. I thought we had been doing horizontal drilling prior to the 1990s. I thought that horizontal drilling with fracking, and the discovery of the oil shale in the eastern US all came together to make it possible for the US to become indpendent with regards to oil?

[LOL!]

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Originally Posted by Ed_The_Gypsy Note that Vanguard is rumored to be going into Canada soon. (Canada is said to have the highest management costs in the world.)

Hasn't Vanguard been in Canada for years and years? See Vanguardcanada.ca

[aja8888]

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Originally Posted by HNL Bill I'm an engineering (not a petroleum) geologist, so this is not my areas of expertise. I thought we had been doing horizontal drilling prior to the 1990s. I thought that horizontal drilling with fracking, and the discovery of the oil shale in the eastern US all came together to make it possible for the US to become indpendent with regards to oil?

Shale formations were discovered a long time ago but never exploited. I am pretty sure Mitchell Energy in Houston was the first oil company to successfully develop tools and fraccing techniques to extract hydrocarbons from shale around the early 1990s. Mitchell is now Devon Energy in Oklahoma.

Horizontal drilling has been around since before the 1990s and I have seen fields that were in production (not many) but not in shale. The term was more commonly "directional" drilling and was very precise and could extract hydrocarbons with conventional fraccing in conventional formations.

With respect to shales, there are several big plays and a lot of smaller ones, all of which got developed around the same time (a decade perhaps). Many of these shale formations were primarily natural gas plays: (from Wiki)

2.0 Natural gas shale deposits in the United States

2.1 Antrim Shale, Michigan
2.2 Barnett Shale, Texas
2.3 Caney Shale, Oklahoma
2.4 Conesauga Shale, Alabama
2.5 Fayetteville Shale, Arkansas
2.6 Floyd Shale, Alabama
2.7 Gothic Shale, Colorado
2.8 Haynesville Shale, Louisiana
2.9 Mancos Shale, New Mexico and Coloardo
2.10 Monterey Shale, California
2.11 New Albany Shale, Illinois Basin
2.12 Niobrara Shale, Colorado, Kansas, Nebraska and Wyoming
2.13 Pearsall Shale, Texas
2.14 Eagle Ford Shale, Texas
2.15 Devonian shales, Appalachian Basin
2.15.1 Chattanooga and Ohio Shales
2.15.2 Marcellus Shale
2.16 Utica Shale, New York
2.17 Woodford Shale, Oklahoma

3.0 Oil shale deposits in the United States
3.1 Bakken formation, North Dakota

Although the gas plays are listed as "gas" above, several of them provide huge quantities of crude oil like the Eagle Ford in south Texas.

Interestingly, about 60% of the Bakken formation is really in Canada, but the field is huge.

And yes, the concurrent timing of the shale extraction techniques, the advances in horizontal drilling (tools) and fraccing technology has made the U.S. "somewhat" energy independent.

[6miths]

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Originally Posted by LOL! Hasn't Vanguard been in Canada for years and years? See Vanguardcanada.ca

Yes... and no. Vanguard ETFs (God bless them and the memory of Jack Bogle) have been available in Canada for several years but unfortunately that is the only part of Vanguard that has made the leap.

From the Vanguard Canada website, "Vanguard's current registration in Canada only allows us to discuss our products with registered dealers and financial advisors. As a result, we're limited in our ability to assist individual investors directly."

[joeea]

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Originally Posted by retireby45 Not trying to time the market but I have recently started my investment in diversified ETF's in Canada. Time frame is still long term, say 10-15 yrs But all this Canada and world economy situation is making me nervous? Anyone else in my shoes here? What are your thoughts?

I'm not sure what "world economy situation" you are referring to. What exactly makes you nervous?

[Sunset]

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Originally Posted by retireby45 Thanks Spock. My investment are currently diversified as below 80% equities (44.2% International Equities, 19.7% Canadian Equities, 17.8% US equities) rest debt. Timeframe is still > 10 yrs so will wait few years to change my allocations again

That is a pretty high percentage for International.

[DrRoy]

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Originally Posted by Mdlerth Said Tommy Lee Jones to Will Smith in Men in Black: "There's always an Arquillian Battle Cruiser, or Corellian Death Ray, or an intergalactic plague that's about to wipe out all life on this miserable little planet." And yet humanity chugs along anyway. World economy turbulent? Squabbling over tariffs? Yield curve inversions? Meh. We've survived worse.

+1

[target2019]

Quote:

Originally Posted by retireby45 Thanks Spock. My investment are currently diversified as below 80% equities (44.2% International Equities, 19.7% Canadian Equities, 17.8% US equities) rest debt. Timeframe is still > 10 yrs so will wait few years to change my allocations again

Quote:

Originally Posted by Sunset That is a pretty high percentage for International.

Maybe lives in Ontario?
If I lived in Canada, I would probably have inverse of what I have now. It would be 2:1 ratio, Int'l to US.
Or I would possibly use equities ratio like 50:25:25 (Intl:Canada:US).

[OldShooter]

Quote:

Originally Posted by Sunset That is a pretty high percentage for International.

Actually not. Iirc the Canadian market cap is only about 8% of the world market cap so in theory to cover the entire world a Canadian investor would be 92% invested outside of Canada. it's different in the United States because our market cap is almost 50% of the world market cap so percentages of international funds to broaden a portfolio are much less.there is a good Kenneth French video on the subject but I am not where I can chase down the link right now but he actually addresses specifically the Canadian Market because his interviewer is Canadian.

[NW-Bound]

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Originally Posted by aja8888 ... Interestingly, about 60% of the Bakken formation is really in Canada, but the field is huge...

It's OK. With horizontal drilling, we can still get some of that oil north of the 49th parallel.

[6miths]

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Originally Posted by OldShooter Actually not. Iirc the Canadian market cap is only about 8% of the world market cap so in theory to cover the entire world a Canadian investor would be 92% invested outside of Canada. it's different in the United States because our market cap is almost 50% of the world market cap so percentages of international funds to broaden a portfolio are much less.there is a good Kenneth French video on the subject but I am not where I can chase down the link right now but he actually addresses specifically the Canadian Market because his interviewer is Canadian.

+1

The Canadian market is both relatively small and also very heavily weighted to financials and resources so Canadians are wise to diversify to International or like many Americans get their exposure through US Multinationals (it is easy to do both now of course). Canada's stock market cap is only about 2 trillion (7th largest in the world) and like all other countries is dwarfed by the US's 42 trillion (NYSE 31 trillion and NASDAQ 11 trillion). Even China (10.5 trillion total including HK) and Japan (at 5.5 trillion) in second and third place are relatively small.

[ejman]

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Originally Posted by 6miths +1 The Canadian market is both relatively small and also very heavily weighted to financials and resources so Canadians are wise to diversify to International or like many Americans get their exposure through US Multinationals (it is easy to do both now of course). Canada's stock market cap is only about 2 billion (7th largest in the world) and like all other countries is dwarfed by the US's 42 billion (NYSE 31 bn and NASDAQ 11 bn). Even China (10.5 bn total including HK) and Japan (at 5.5 bn) in second and third place are relatively small.

Me thinks you meant trillions no?

[6miths]

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Originally Posted by ejman Me thinks you meant trillions no?

Yes hopefully. Thanks for pointing it out. I would like to say that I was confused by the old British meaning of billion but it was just mental laziness of looking at a table that was labeled in 'billions' but then had figures that were in the thousands rather than trillions and 30.9, 11.9 and so on. I'll go fix it rather than having us all feel quite a bit poorer!!

[Clone]

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Originally Posted by NW-Bound It's OK. With horizontal drilling, we can still get some of that oil north of the 49th parallel.

North Dakota is not on the edge of nowhere, but we can drill horizontally from there and reach it!

[Sunset]

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Originally Posted by target2019 Maybe lives in Ontario? If I lived in Canada, I would probably have inverse of what I have now. It would be 2:1 ratio, Int'l to US. Or I would possibly use equities ratio like 50:25:25 (Intl:Canada:US).

But OP said: "44.2% International Equities, 19.7% Canadian Equities, 17.8% US equities"

So US equities seem under represented since it comprises about 50% of world market.

So it still seems high to me on International.
Which I would not say if it had been: 44.2% US, 19.7 CDN , and 17.8 International.

I just wondered if OP had a reason, example believes in reversion to the mean.

[OldShooter]

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Originally Posted by Sunset But OP said: "44.2% International Equities, 19.7% Canadian Equities, 17.8% US equities" So US equities seem under represented since it comprises about 50% of world market. So it still seems high to me on International. Which I would not say if it had been: 44.2% US, 19.7 CDN , and 17.8 International. I just wondered if OP had a reason, example believes in reversion to the mean.

Agreed. I was at an airport using voice-to-speech, which makes using numbers a PITA. A market-cap-balanced portfolio (for anyone, not just Canadians) would be roughly 45% US equities, 4% Canadian equities, and 51% International outside those two countries. (My 8% memory of the Canadian % of world market cap was incorrect.)

(Note though that these percentages are constantly changing as markets around the world rise and fall. Rather than figuring out the complex rebalancing, I just go with VTWSX or VT.)

Here is the link to Kenneth French discussing the issue of home country bias: https://famafrench.dimensional.com/v...home-bias.aspx

[retireby45]

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Originally Posted by OldShooter Agreed. I was at an airport using voice-to-speech, which makes using numbers a PITA. A market-cap-balanced portfolio (for anyone, not just Canadians) would be roughly 45% US equities, 4% Canadian equities, and 51% International outside those two countries. (My 8% memory of the Canadian % of world market cap was incorrect.) (Note though that these percentages are constantly changing as markets around the world rise and fall. Rather than figuring out the complex rebalancing, I just go with VTWSX or VT.) Here is the link to Kenneth French discussing the issue of home country bias: https://famafrench.dimensional.com/v...home-bias.aspx

This is where I need your advise. I am not that savvy with what proportion to invest and in which sector. Know that keeping 10+ yrs investment, it should mostly in start be in equities.

Do you know any Fidelity fund that behaves like VTWSX or VT? idea is same to make sure my proportion automatically tracks with how market behaves.

[retireby45]

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Originally Posted by Sunset But OP said: "44.2% International Equities, 19.7% Canadian Equities, 17.8% US equities" So US equities seem under represented since it comprises about 50% of world market. So it still seems high to me on International. Which I would not say if it had been: 44.2% US, 19.7 CDN , and 17.8 International. I just wondered if OP had a reason, example believes in reversion to the mean.

I am not that Savvy with investing in market. Thats why choose index funds. Just thought it makes sense to go most in equities keeping 10+ yrs time frame in mind

Any fidelity fund you can refer which i can consider with good mix of equities? I just get confused to understand how to distribute my equity investment (i mean how much against US, Intl, Canadian market)

Silly question i know but i cant figure it out

[retireby45]

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Originally Posted by target2019 Maybe lives in Ontario? If I lived in Canada, I would probably have inverse of what I have now. It would be 2:1 ratio, Int'l to US. Or I would possibly use equities ratio like 50:25:25 (Intl:Canada:US).

I am in Canada. and really confused if I am doing the right mix. Seeing you reply, you think it looks ok?