XIU is a Dog!! Better You Put Your Money in a Savings Account!!

[GoldStone]

there is no 20-year in XIU as the etf only debuted in 1999.

Yeah but, the underlying index returns are readily available. My Own Advisor posted the link to data. XIU tracks its index well.

[Sampson]

I think many new investors are blindsided by misguided hype into believing that 25% US equity + 25% international equity are going to deliver sterling results.

But that's not the purpose. I still believe most investors can and would benefit from indexing. I don't disagree that with some effort and knowledge, it could be possible, and maybe, maybe even more likely you can post greater returns then a general indexing strategy. However, many investors are neither inclined to learn, nor even begin to try. I am guessing this is the majority of people, even looking around in my own circle or friends and relatives, they would do much better indexing that following 'tips', buying pseudo-indexing tracking Canadian Equity funds, or not investing at all.

[PharmD]

Belguy,

You looked at the wrong number on the Mawer Canadian Equity fund. It's ten year return was actually 9.81%. The number you quoted was the group average. It only slightly outperformed XIU, but after commissions it would look even better and has lower beta to boot.

[CanadianCapitalist]

Most of these V-soups have been around for at least 10 years, no?

No. Only VTI (US stock) has been around for 10+ years (Inception 2001). VEA (Developed Markets ex. USA) inception is 2007. VWO (emerging markets) inception is 2005.

10-year returns (in USD):
US Markets - 8.76%
Developed ex. NA - 8.20%
Emerging markets - 17.0%

Stock market returns can be shown to be poor (or good) if you carefully pick the start and end dates. The 10-year returns above are satisfactory only because the start period is the bear market of 2001-02. But the fact remains that most 10-year rolling periods have returns that beat bonds. It's just that in the late 2000s, 10-year returns were quite poor due to extraordinarily high returns in the 1995-99 period when the S&P went up an annualized 26%.

It is extremely dangerous to invest based on recent history.

[Sampson]

Stock market returns can be shown to be poor (or good) if you carefully pick the start and end dates.

I know you and I often try to emphasize this point. What is curious is that a rolling average (weighted or not) has not been developed and systematically adopted to compare different assets. It is always point A to point B, as if anyone invests all their money upfront anyway.

[CanadianCapitalist]

I know you and I often try to emphasize this point. What is curious is that a rolling average (weighted or not) has not been developed and systematically adopted to compare different assets. It is always point A to point B, as if anyone invests all their money upfront anyway.

I agree. One of the best sources for rolling returns information is the Dimensional Matrix Book. It includes all kinds of data that will be interesting to investors (large-cap, small-cap, value, growth, blend and my favourite, real returns). Here's the 2010 version:

http://www.tma-invest.com/files/inve..._Book_2010.pdf

[Belguy]

I understand (sort of) all of the above but, for me, it is disappointing to look at the S&P/TSX Index and see that it has returned -0.25% over the past FIVE YEARS!!! ending September 30. Perhaps, if you are young and have a long time horizon, it isn't so serious but I am approaching 70 and the fact that I have not been able to grow my portfolio in any meaningful way has a huge impact on my quality of life in retirement.

Can we look forward to five more years of no net growth in this index? Nobody knows but the prospect is even more discouraging.

Here we go again!!

http://www.theglobeandmail.com/globe...rticle4609835/

I have been accused of being too negative a lot of the time but I am just as frustrated with all of those who keep trying to put a positive spin on quite a negative situation.

It's tantamount to trying to put lipstick on a pig and, over the past five years, the markets have not exactly been a great place to invest one's money.

In some cases, cash under the mattress would have done just as well.

Invest now and hope that things are better over the next five years. You pays your money and you takes your chances.

Maybe the next generation of retirees will have better luck and timing. For we senior seniors, time is running out.