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dh.

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  1. If you're interested in investing, I highly recommend The Elements of Investing—a short and easy read that really gets to the core of it!
  2. Yes, this is definitely a short-term analysis, driven by the intention to pay off the borrowed funds ASAP. Taking the 1930 example (investing $10k just after crash of 1929): 1930 -28.48% 7,152.00 1931 -47.07% 3,785.55 1932 -15.15% 3,212.04 1933 46.59% 4,708.53 1934 -5.94% 4,428.85 1935 41.37% 6,261.06 1936 27.92% 8,009.15 1937 -38.59% 4,918.42 1938 25.21% 6,158.35 1939 -5.45% 5,822.72 1940 -15.29% 4,932.43 1941 -17.86% 4,051.49 1942 12.43% 4,555.10 1943 19.45% 5,441.06 1944 13.80% 6,191.93 Total value of 10k investment after 15 years invested: $6,191.93, for a loss of $3,808.07 Borrowing cost of 10k at 2.95% over 15 years: $5,557.49 Total loss: $9,365.56 Let's take it further, and go for 30 years: Only after 27 years does this strategy return a profit, and remember, this is a very optimistic calculation: assuming investment after the 1929 market crash, assuming constant and near rock-bottom borrowing cost, and zero MER and transaction costs. Of course, you could pay off the money borrowed earlier, and save some of your borrowing costs, but I still think a better investment is to pay off debt before investing, and then to invest real money for the long haul. Borrowing money to "invest" does not seem to be a solid financial approach. Look at what your return in 1960 could have been had you used your own money instead of borrowed! Of course, making a lump-sum purchase of stock at a single point in time is not an ideal investment strategy, but my goal here is to illustrate the cost of using borrowed money to speculate in the market. I'm also sure that after 1929, many people thought the market was as low as it could go. And again after 1930. And again after 1931. Etc.
  3. It's a gamble, and you will be subtracting guaranteed interest compounded monthly from any potential market gains (or losses). Let's create a few scenarios, all of which are "buy and hold" for 6 years. We'll take very small amount from our LOC to simplify the math, let's say $10k. The cost of doing so is easy to calculate: $10,000 after 6 years at 2.95%* compounded monthly = $11,933.72, for a cost of borrowing equal to $1,933.72. Note, this assumes it will be paid off in full at the end of the 6-year period. So how much can we make from the stock market? An impossible question to answer, but let's create a few hypotheticals. For the sake of simplicity, I'm not including any transaction costs (which should be fairly low, since this is a fixed-term buy-and-hold situation). Scenario 1: 2020 is the bottom of the crash, and the market only goes up from here (modeled after the recovery following 2008): Year 1: +23.45% Year 2: +12.78% Year 3: 0.00% Year 4: +13.41% Year 5: +29.60% Year 6: +11.39 Total value at end of year 6: $23,307.90, for a gain of $13,307.90 $13,307.90 - cost of borrowing = net return of $11,374.18 Scenario 2: 2021 is actually the bottom, recovery identical to 2008: Year 1: -38.49% Year 2: +23.45% Year 3: +12.78% Year 4: 0.00% Year 5: +13.41% Year 6: +29.60% Total value at end of year 6: $12,587.08, for a gain of $2,587.08 $2,587.08 - cost of borrowing = net return of $653.36 Scenario 3: 2020 is more like 1973: Year 1: -17.37% Year 2: -29.72% Year 3: +31.55% Year 4: +19.15% Year 5: -11.50% Year 6: +1.06% Total value at end of year 6: $8,140.98, for a loss of $1,859.02 $1,859.02 + cost of borrowing = net LOSS of $3,792.74 Scenario 4: 2020 is actually more like 1930 (just after the crash of 1929): Year 1: -28.48% 0.7152 Year 2: -47.07% 0.5293 Year 3: -15.15% 0.8485 Year 4: +46.59% (woohoo! the largest gain ever recorded before or since!) Year 5: -5.94% 0.9406 Year 6: +41.37% (holy cow! woohoo!) Total value at end of year 6: $6,261.05, for a loss of $3,738.95 $3,738.95 + cost of borrowing = net LOSS of $5,672.67 (would've been even worse if we started in 1929) So, basically, there's no way to predict the outcome. Borrowing money to invest is a dangerous game to play (more properly called "speculating" than "investing"). If you were using your own money (i.e., didn't have to repay it at some point), and your strategy was to buy and hold for 30+ years, then yeah, the next few years will probably be great for investing (just like every other year). I would rather take advantage of current low interest rates by paying off as much of the LOC as I can, because this is a true investment in future wealth. All numbers modeled on historical S&P 500 rates https://www.macrotrends.net/2324/sp-500-historical-chart-data which do NOT in any way predict future rates. There is absolutely no way to predict the market, do not believe anyone who tells you they can. I am not an financial professional. *cost of borrowing is based on current canadian bank prime rates, which despite significant movement of the overnight rates by the Bank of Canada, has yet to move. Based on this, I think we can safely assume that 2.95% is as low as the banks are willing to go at this point. A lot of LOCs have rates that are prime -0.25%, but I just left it at the full prime rate because there is equal possibility of the rates rising alongside any market increases. In fact, it is worth considering that the cost of borrowing may increase significantly before these scenarios complete, especially in the cases with more dramatic market gains.
  4. Suppose you are a family physician who is beginning to see more and more cases of what appears to be COVID-19. There is currently no cure, and no vaccine. However, a small unreplicated study suggests a combination of hydroxychloroquine and azithromycin may improve patient outcomes. The use of these drugs has not been approved for this purpose, and further studies are underway but so far incomplete. The president of the United States, along with other influential members of society, have widely praised this drug combination (without adequate proof), and some of your patients have started asking for it. These drugs are easily ordered, but already some parts of the world are facing shortages—and they're needed to treat other serious diseases. Your colleague suggests ordering a small stockpile, just in case the research shows these drugs help your patients. He also suggests keeping some for personal use. What do you do? https://www.cbc.ca/news/health/sanctions-canadian-doctors-experimental-drugs-1.5511244
  5. Why did you take less than a full course load in your third year? Depending on the situation, you may still be eligible. Dal requires a full 30 credits in each of the last two years of an undergraduate degree, unless there are exceptional circumstances: If granted a course load requirement exemption, the GPA score is calculated in the following manner: My understanding is that Dal interviews all eligible Maritime applicants. If you meet the above criteria, as well as the MCAT and CASPer cutoff, then you will likely receive an interview.
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