Real Estate & Market Bust? Follow the Leaders!

So, we all know that the Banks essentially run the global markets, and Canada is no exception. Therefore, it would naturally be logical to assume that when the heads or executives of the banks, or those in similar high ranking positions make certain moves, we should probably pay close attention.

We’ve heard all the banks raising concern over the hot housing market in Canada recently, and urging the government to step in to help cool the market down. This in itself is[nbsp_tc]a reason to raise some concern, but add to that some of the recent moves by several top level bankers and executives, and there might be more reason to panic than we think.

Over the last several months, we’ve seen several ‘big names’ in Canada actively listing real estate. Of those, there have also been several ‘big names’ from the banking/financial industry who have decided to also pull out and seemingly try to take their profits off the table.

Let’s start with the bankers. 2 months ago Scotiabank CEO Brian Porter listed his luxurious home in Toronto for almost $4 million, 6 months after he bought it, which would be a nice 10% increase over what he paid for it. Not long before that, BMO’s COO Frank Techar listed his 9,000 square foot home for $11.7 million, after buying it 10 years earlier for about $7.5 million. Former Finance Minister Joe Oliver listed his home for $4.5 million in May, after owning the property for almost 30 years.

In addition to these individuals putting their homes on sale, we should also take a closer look at the moves within their investment portfolios. Better Dwelling reports that there seems to be a lot of insider trading within the financial institutions, specifically with the bank executives selling their own bank’s stock. Almost $28 Million of selling has occurred by executives of BMO alone (over $9 Million from BMO CFO Thomas Flynn). Scotiabank executives sold $14 Million more shares of their own stock, than they have purchased, in the last year.

The site also reports that $89 Million more shares have been sold, than purchased, collectively by insiders at Canada’s big 5 banks. This seems a little counter-intuitive – if you have faith in your company and the direction of the economy, wouldn’t you want to buy more instead of selling?

One or two incidences might be a coincidence, but many who say ‘follow the money’ are pointing at these moves as ‘signs of things to come’. Many are thinking that if these big name bankers are getting out all at around the same time, there must be a reason. We know it’s not a far-fetched idea for the banks (and those at high levels within the banks) to profit off the downturn in the markets and leave the average person in the dust. Remember, it was less than 10 years ago when the banks in the US illegally profited tens of BILLIONS of dollars from the market collapse and got away with it.

Is it time to panic? Should people be concerned and maybe follow suit? Or is this really just ‘coincidence’? Regardless of what your thoughts are, this is definitely something that should get the wheels in your mind turning and really make you more aware of the situation at hand. The public has to be well informed and educated on all financial matters and must take precautions to protect themselves, because we know, nobody else is going to do this for you. As the debt levels keep increasing, people are putting themselves into more and more risk, which could definitely end horribly for them.

People need to pay much closer attention to their overall Financial Plan – and in this case specifically reducing their debt, having a good amount of Emergency Savings and ensure your Investment Portfolio is prepared for the next market downturn.