Many thanks to columnist Ellen Roseman for mentioning this blog in her column in the Toronto Star titled Bear Market would lay bare risky tax strategy that highlights the risks involved in the Smith Manoeuvre in light of the steep drops in the stock market. Ms. Roseman quotes from my review of Fraser Smith’s book:

In a Google search, I found a vigorous debate at a personal finance blog of an Ottawa-based software developer. The Canadian Capitalist published a review last April, in which he agreed on the downside risk. “People are irrational,” said the blogger.

“They will be willing to buy a home with a huge loan and even if housing prices decline, they probably won’t sell and rent immediately. And they’ll do their best to meet the mortgage payments. Taking out a huge loan and investing in the market is a different cup of tea. In a market correction – or worse, a bear market – they are going to panic and sell, not having the stomach to take further losses.”

It would be even better if the nice folks at The Star would link to the post quoted in the article! If you found this blog from the mention in The Star and are interested in learning more about the Smith Manoeuvre, you may also find the following posts and the comments sections interesting: