We can never really know when to sell something if we do not know why we bought it. Failure to know why we buy makes us vulnerable to common and avoidable mistakes. I sold my home in Québec because the reasons I bought it no longer existed. I am highlighting a few of the concepts we should all keep in mind.
I wanted a place that was easy to travel to and where I could speak French. I wanted the enjoyment of a city with many cultural venues. I preferred access to modern and convenient medical facilities. Because I work, I needed an office and telephone service in the same time zone. I believed that the loonie would rise in value due to steady political leadership.
Travel to Canada is no longer easy. Because fixing the Canadian medical system would require years of construction and large commitments of money, a solution will not take place within my time horizon. My favorite jazz bar no longer has live music. The café where I ate lunch after church is out of business. The few places where one can eat outdoors lack staff and have long lines for vaccine passport verification. Forget the opera.
Political risk is high. Trudeau’s Liberal Party held on to power with slightly less than one third of the votes in 2021. The loonie languishes and xenophobia is on the rise, although I do not believe that is the case in Québec. I have found the people there to be among the nicest in the world. Nonetheless, the Trudeau administration claims that housing shortages are caused by foreigners. He wants to tax them and place a moratorium on foreign buyers. Those taxpaying property owners who are not permanent residents are grouped as tourists. They have been prevented from travelling to their homes, even when fully vaccinated and with a negative Covid test. Canadians who owned homes in Florida were always allowed to travel here, although only by airplane, a bizarre restriction. The underside to group solidarity is exclusion.
This will end, but not soon enough to fit my original purposes. I know that my love of Québec will always tempt me to fall for the sunk cost fallacy, the idea that wasted money should be followed by more wasted money, even when the costs are unrecoverable. That love also comes with opportunity cost, the time and money invested in Québec prevents me from doing other things, such as travel to France, where they have far more medical capacity than Canada.
So, I am headed to la Côte d’Azure, rather than falling victim to escalation of commitment bias, which is the irrational behavior of investing additional resources in a failing project. I would not know how to avoid any of these pitfalls if I did not have a clear understanding of why I bought in the first place.