breaking news

Magazine Covers

Magazine Covers

Magazine Covers

Magazine Covers

Andrew Allentuck : Betsy and Horace Planning Your Financial Life After Wonderland

April 23rd, 2018 | by Richard Paul
Andrew Allentuck : Betsy and Horace Planning Your Financial Life After Wonderland
Business and Finance

“Couple with more than $250,000 in cash needs to invest or their savings will shrivel”

“Couple with more than $250,000 in cash needs to invest or their savings will shrivel”


There comes a day, like today when you read such a headline and wonder who in the heck has $250,000 cash in their savings account? When in fact Canadians are the highest indebted people in the world. ( well, in the G-7 that is) With one of the highest housing bubble in the world as a complimentary flavor. But apparently the Financial Post, a.k.a  ( Andrew Allentuck) would dare to troll anyone who does have that kind of money to start taking it out from under the mattress or in their savings account and head straight to the stock market.  (Obviously to kick start a dying GDP) Andrew makes reference to a fictitious couple, ” In Saskatchewan, a couple we’ll call Betsy and Horace, both 56, have take-home income of about $12,750 a month, including $1,500 in monthly rent from farm land they own. Horace works for a small financial institution and Betsy is a civil servant.”


Now before we start looking into this . It’s worth noting one very important saying. Which is , ” You need to learn how to read the lines before you read between the lines”. So let us begin .

So who is Andrew Allentuck? Well, according to his short bio on the FP . ” Andrew Allentuck writes about personal finance for the Financial Post and the Financial Post Magazine. He has authored a number of books including When Can I Retire? Planning Your Financial Life After Work.” As you can see right off the get go Andrew has an impressive resume and is an author of financial planning. And may I add most likely a well read man when it comes to finances. So we can assume he knows what he is talking about, in part. Why in part? Well, as we are about to find out. ” Betsy and Horace” have very legitimate concerns when it comes to investing and getting a proportional return on their savings. ” “We have concerns regarding exposure of our RRSPs to the stock market,” Horace explains. “Our returns have not been adequate, so we have opted for a conservative plan of saving. What we are really seeking is peace of mind.”  But Andrew has , in part also a way of making this couple ease their “peace of mind” by suggesting a longer view of the market stability thru Rob Tyler. Head of a financial group.


Yes, Betsy and Horace make it clear that they have concerns.” Our returns have not been adequate”. As a result, decided to take a “conservative plan of saving”. By which “peace of mind” is the essential key word here! Remember that. Peace of mind.


Clint Eastwood said it best. Remember Dirty Harry….do you feel lucky….do you punk? When asking the bank robber if there we’re any bullets left in the chamber. So in this case , is there any more bullets left in the Feds chambers? Meaning does a central bank have any more ammunitions left to kickstart what appears to be a dying economy? Because according to other financial experts. The global economy is quickly unravelling as never seen in the history of mankind. That’s right, in the history of mankind. See this, this , this , this , thisand this and all this.


You see some investors have a short memory. Now while ” The problem they express is understandable. Capital markets are not stable or even predictable in the short run. Family Finance asked Rod Tyler, a financial planner who heads the Tyler Financial Group in Regina to work with Betsy and Horace. His conclusion is that, to preserve their retirement income from inflation, they will have to take on more market risk.”


That’s right. The head of Tyler Financial Group says ” they will have to take on more market risk.”( bold is mine)  Hardly the comforting words to having a peace of mind. In fact, The Tyler Group is making it quite clear this couple ought to embark on a financial strategy that is quite risky just to “preserve their retirement income from inflation”. And Rob Tyler is unequivocal when he states. ” The asset mostly likely to lose in the long run is cash”.


As Wolf Ricther states. ” Frustrated by near-zero returns on their savings, the desperate couple now wants to shift their cash from savings into stocks, after having missed out on a seven-year, central-bank-engineered, broad-based, mind-blowing bull market in stocks that has been driven to what could be described as crazy bubble levels – along with many other asset classes – a bull market that has now stalled. This could be the worst possible time to shift cash from savings into stocks.

Betsy and Horace may face years of this kind of choice: losing money fast in stocks, or making money so slowly in savings that it won’t keep up with inflation. They’re a victim of central bank policies that had the effect of front-loading years of stock market returns, while punishing prudent savers.”


David Haggith concurs “Most notably, I disagree with this statement by Rod Tyler:

to preserve their retirement income from inflation, they will have to take on more market risk.”

The logic of that is akin to saying, “To keep the boat from getting swamped this storm, we’ll have to open up the hatches a little more so that we can bail the water out.” Might not be a good idea when the hull is only 2% full of water, but the waves are bringing six inches of water in over the sides of the boat.

Taking on more risk by investing more in stocks at a time when the stock market is facing a perilous storm is likely to do more damage than inflation. I understand the basic intent, which is that you cannot make money in order to stay ahead of inflation by taking no risks; but there are times when making money is not as large a factor as simply securing what you have against a high likelihood of losses. There are times when you need to batten down the hatches.

You won’t help yourself by investing for gains that keep your head above the inflationary waters if you swamp the boat in a fifty-percent stock market trough.

Many major investors like Jim Rogers and George Soros are increasing their cash positions substantially right now and their gold positions while decreasing their exposure in the stock market.”

Do you remember when cash was king? That’s right folks. Cash was king then and cash is king now. But Rob Tyler is correct when he says in the long run cash will lose. Why? Because there is a war on cash that is now ongoing throughout the world .( and capital controls)  Since by eliminating cash altogether, bankers and central planners will have all the control in the world to then exact on its populace its will.( imagine for one minute all cash becoming digital? Do you think being digital is going to make the world a safer place for you and I)

“The choice of assets to protect their purchasing power over the long-term comes down to picking and combining stocks, bonds and cash” says Tyler. What stocks and bonds and cash to pick from is where you will have to go in and get your portfolio assessed at a very high cost to begin with. So with $250,000 cash on hand. You can rest assured the promises you will get with the usual caveats and disclaimers will enrich those that make a living off other peoples money. ( whether the market goes up or down)


However, for Betsy and Horace. There is also the option for investing their money, in what they are currently doing. Which is the conservative way of having that piece of mind. The fact that Betsy and Horace now have diversified their portfolio into hard assets is to be commended outright. The only other asset class that they seem to be missing is gold or and silver. Not the ETF kind ( beware) but the actual physical delivery of gold and silver. As silver and gold have been a time trusted way to hedge against inflation. See this. Couple with their farm land and cash reserves. I would say for the next 2 to 4 years. This couple can weather the onslaught now ongoing in the markets until the dust settles to see where to invest for the long term. But for now. The worst investment to make in 2016 is to enter the market.( especially for mom and pop investors)  Since time and time and time again the markets and the banks have been repeatedlycaught manipulating the markets , and the smart money is cashing out, in such a criminal fashion that it begs the question as to why even bother having laws to regulate them?

So to all you Betsy’s and Horaces’ out there. You be careful . The waters are quite choppy! And truly shark infested.


Andrew Allentuck and Rob Tyler have proven to be wise planners. But those days are over. This time it is different.



By Richard Paul




Leave a Reply