# What is Moneysense telling me



## AudiS4 (Sep 11, 2013)

I read and enjoy Moneysense. It's far from perfect, but I subscribe and enjoy each magazine. The question is.... is Moneysense an indexing magazine or not? They talk a lot about indexing, but then show me allstar lists of individual stocks with the lists having great track records.


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## none (Jan 15, 2013)

The problem is that indexing is boring and doesn't leave a lot to talk about. Buy the moneysense mag to the perfect portfolio (or whatever it's called) and you're pretty much done - that's it. Sure the odd article about new ones but really not too much to tell. Not really a sustainable magazine that way.

The RE woman Romana or whatever her name is is a massive RE shill. Most of her stuff is crap but is limited to the online free stuff. You get what you pay for I guess.


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## AudiS4 (Sep 11, 2013)

I've read that guide a couple of others and I think those are great. I currently hold a couple ETFs covering Canada and the US and a couple individual stocks. I guess I just don't know how to classify myself and if you listen to the indexing crowd, you're pretty much screwing it up if you're holding and individual equities.


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## none (Jan 15, 2013)

It depends on your exposure - you can build a couch potato from scratch (lots of stocks) but I always think the benefit is so minimal it's hardly worth it. What's the S&P vanguard MER? 0.05% or something? Of course, it's different for REITS but really if you're indexing you're so close to optimal that going the stock route seems a little hyper optimizing (hey if you gots the time though..)


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## Synergy (Mar 18, 2013)

Combining a little indexing with individual stocks works for me. I never was one for following rules, dogma, etc. My goal is to index my RRSP and hold individual stocks within my TFSA and non-registered account. If I indexed everything I'd be bored stiff and I wouldn't pay much attention to the economy, stock markets, etc. Currently I enjoy learning but who knows how I'll want to invest in another 15-20yrs.


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## GoldStone (Mar 6, 2011)

AudiS4 said:


> The question is.... is Moneysense an indexing magazine or not? They talk a lot about indexing, but then show me allstar lists of individual stocks with the lists having great track records.


Clearly, it's not an indexing magazine. It's impossible to sustain a magazine that caters exclusively to indexers. True indexers are not very keen on buying investment magazine subscriptions. :biggrin:

If you run a large indexed portfolio, you can try the all star picks in your play money account, limited to 5-10% of the total portfolio. Let's say you have a 500K portfolio. 10% play money = 50K. Enough to buy 10 all stars, 5K each. $20 to buy and sell. $20 / 5K = 0.4% MER. Not too bad.


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## Synergy (Mar 18, 2013)

GoldStone said:


> $20 to buy and sell. $20 / 5K = 0.4% MER. Not too bad.


MER is a recurring annual fee - is it not? It's really not fair to compaire MER to stock trading fees. If you held the "all star picks" for say 10yrs, the fees would be subtantially less than holding an ETF with an annual 0.4% MER over the same time period, In addition the ETF will normally have trading fees as well. At least that's how I've always looked at it.


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## GoldStone (Mar 6, 2011)

Synergy said:


> MER is a recurring annual fee - is it not? It's really not fair to compaire MER to stock trading fees. If you held the "all star picks" for say 10yrs, the fees would be subtantially less than holding an ETF with an annual 0.4% MER over the same time period, In addition the ETF will normally have trading fees as well. At least that's how I've always looked at it.


Read the MoneySense article. Historic returns of the all star list are calculated under the assumption that you roll over the entire list every year.

* Buy all stocks on the list in equal weight.
* Hold for one year.
* Replace the entire list with next year's all stars.
rinse and repeat

If you follow this strategy, buy and sell commissions are a recurring expense.


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## Synergy (Mar 18, 2013)

^ Interesting. That makes more sense, I'll have to read the article - thanks. Personally I can't say I'd want to turn over my stocks every year though.


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## none (Jan 15, 2013)

^ cost o doing biness!


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## GoldStone (Mar 6, 2011)

Synergy said:


> Personally I can't say I'd want to turn over my stocks every year though.


If you don't turn them over, expect poorer performance long term (compared to the magazine). The beauty of the magazine strategy is that it automatically harvests the winners to buy the next set of value picks.

To give you one example, Methanex was an all star pick last year. It gained 127% in 12 months. It currently trades at a _modest_ P/E of 102. IMO, it would be foolish not to turn it over.

As a corollary, a tax sheltered account is the best place to try the strategy.


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## donald (Apr 18, 2011)

I don't think moneysense is trying to tell you anything.They want to sell(as simple as that)People want to read about individual stock picks(indexing is not only boring but peoples eyeballs glaze over reading about it)I would bet that is one of the best selling editions(annual) by a long shot.
No different than any other investing media(print and tv).....it is all about what is ''sexy'' hard for investing to be sexy but single stock selections would be it lol
It's not about you,it's about them.


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## Four Pillars (Apr 5, 2009)

AudiS4 said:


> I read and enjoy Moneysense. It's far from perfect, but I subscribe and enjoy each magazine. The question is.... is Moneysense an indexing magazine or not? They talk a lot about indexing, but then show me allstar lists of individual stocks with the lists having great track records.


They are a money magazine. Investing articles cover the gamut from indexing, mutual funds, dividend investing, individual stocks, technical trading etc.


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## Synergy (Mar 18, 2013)

GoldStone said:


> If you don't turn them over, expect poorer performance long term (compared to the magazine). The beauty of the magazine strategy is that it automatically harvests the winners to buy the next set of value picks.
> 
> To give you one example, Methanex was an all star pick last year. It gained 127% in 12 months. It currently trades at a _modest_ P/E of 102. IMO, it would be foolish not to turn it over.
> 
> As a corollary, a tax sheltered account is the best place to try the strategy.


I completely understand your point and agree that there will be times when it would be prudent to turn over a stock, but I just can't see having to do it every year simply because a new list has been published. Some stocks may do well over a 2-3 yrs period, others over a 10yr period, and others may need to be turned over before the year is up. Perhaps I'm missing the point and it's really about chasing Tenbaggers and the list provides insight that the average investor would not be able to figure out on their own...

Is the article available online?


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## Synergy (Mar 18, 2013)

^ Found the article - Thanks
http://www.moneysense.ca/invest/stocks/the-top-200-canadian-stocks-2

Results are impressive!


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## AudiS4 (Sep 11, 2013)

Maybe Monesysense isn't that different, a magazine which of course wants to sell magazines.

This week I sold a reasonable position in an ETF. I am going to buy three Allstar stocks with it and hold them until the next list comes out.


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## My Own Advisor (Sep 24, 2012)

I'm with Synergy. I do not want to turn over my stocks every year.

I own about 30 individual stocks, and starting to index more. Most of my stocks are DRIPping so the dividend income retirement plan is largely on autopilot now.

I feel I need more indexed products for diversification, since my bond content is close to zero.


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## Synergy (Mar 18, 2013)

The list by Moneysense appears to be a good tool to help investors screen for individual stocks - I own a bunch of stocks on that list already. I can't however see how one could expect to match the results of the Top 200 by simply picking a handful of stocks from the list and turning them over every year. You could end up doing better or you could end up doing a lot worse - there's no guarantees that you'll match the results of Moneysense unless you buy all 200 - not a realistic endeavor.

Does anyone know if they included transaction costs into their calculations? Purchasing 200 stocks - in the amount of $500 per stock isn't cheap - especially if you turn them over every year.



> If you had split $100,000 equally among our original All-Stars, then sold each year’s picks to invest in the new picks, your portfolio would have almost quintupled in value to $481, 000 in nine years—and that’s not including dividends


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## Asterix (Jul 19, 2012)

Synergy said:


> Purchasing 200 stocks - in the amount of $500 per stock isn't cheap - especially if you turn them over every year.


Synergy,

I believe the strategy has to do with buying only their "All-Star" stocks, and not the full list of 200. For instance, the number of stocks that made their "All-Star" list for 2014 is 11. Anyone with a copy of the magazine knows what this shortened list is? Might pick a copy up out of interest.

Cheers!


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## Echo (Apr 1, 2011)

Synergy said:


> The list by Moneysense appears to be a good tool to help investors screen for individual stocks - I own a bunch of stocks on that list already. I can't however see how one could expect to match the results of the Top 200 by simply picking a handful of stocks from the list and turning them over every year. You could end up doing better or you could end up doing a lot worse - there's no guarantees that you'll match the results of Moneysense unless you buy all 200 - not a realistic endeavor.
> 
> Does anyone know if they included transaction costs into their calculations? Purchasing 200 stocks - in the amount of $500 per stock isn't cheap - especially if you turn them over every year.


I think you're missing the point of the top 200 issue. You don't buy all 200 stocks.

"Over the last nine years, our All-Star stocks generated average annual returns of 19.1%, almost quintupling your money. That does not even include dividends." 

The All-Star class of 2014 contains just 11 of the 200 stocks (stocks that earned at least an A and B on value and growth screens). You buy the All-Stars and turn them over every year. Two of last years All-Stars made the list again this year (ELF and NAL).


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## GoldStone (Mar 6, 2011)

AudiS4 said:


> This week I sold a reasonable position in an ETF. *I am going to buy three Allstar stocks* with it and hold them until the next list comes out.


Buying just three is not the way to go. The strategy identifies a group of attractive stocks, but it doesn't guarantee that each and every stock in the group will perform well. The three stocks that you buy may end up being the duds.

Last year's all star list included 8 stocks. I have a Google Finance portfolio to track their performance. Here are the gains after one year:

+125%
+98%
+95%
+80%
+50%
+34%
+15%
-8%

Average gain: +61%

The bottom three averaged +13.6%.


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## Synergy (Mar 18, 2013)

Asterix said:


> Synergy,
> 
> I believe the strategy has to do with buying only their "All-Star" stocks, and not the full list of 200. For instance, the number of stocks that made their "All-Star" list for 2014 is 11. Anyone with a copy of the magazine knows what this shortened list is? Might pick a copy up out of interest.
> 
> Cheers!


Well that makes a lot more sense - thanks. Is the top 11 all stars posted somewhere? I used up some air miles pts and subscribed to Moneysense so perhaps I'll get more information in the Dec/Jan issue.


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## Synergy (Mar 18, 2013)

http://www.moneysense.ca/invest/stocks/the-top-200-canadian-stocks-2

Why in their article are they referring to the top 200 as their "all stars"?


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## GoldStone (Mar 6, 2011)

Synergy said:


> Well that makes a lot more sense - thanks. Is the top 11 all stars posted somewhere? I used up some air miles pts and subscribed to Moneysense so perhaps I'll get more information in the Dec/Jan issue.


You can use your subscription number to download the article and the spreadsheets.

http://www.rogersmagazines.com/cgi-bin/productpackage/validate.pl


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## My Own Advisor (Sep 24, 2012)

Hey Goldstone, tempted to buy any "all-stars" for the TFSA in 2014?


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## GoldStone (Mar 6, 2011)

Synergy said:


> Why in their article are they referring to the top 200 as their "all stars"?


Top 200 All-Stars is a shorthand for: All-Stars selected from the top 200 companies. The top 200 refers to 200 largest public companies by revenue.


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## GoldStone (Mar 6, 2011)

My Own Advisor said:


> Hey Goldstone, tempted to buy any "all-stars" for the TFSA in 2014?


I already bought most of them. Still on the fence about a couple of names.


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## My Own Advisor (Sep 24, 2012)

@Goldstone, nice 

Looking at a few names for the TFSA myself. Not sure yet. Been leaning towards CUF.UN (which is not on the list).


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## GoldStone (Mar 6, 2011)

Mind you, I put less than 5% of portfolio in the new all stars. Suppose they beat the index by 10%. That adds 0.5% to the total portfolio performance. The entire exercise is mostly for entertainment.

Also, my Canadian equities are now 5% overweight. I need to shave 5% elsewhere. Not sure yet if, and when, and what I'm going to sell. :stupid:


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## My Own Advisor (Sep 24, 2012)

Why don't you just let them (CDN equities) ride?

I'm keeping all my bank stocks, pipelines, utilities, etc. even with run up in price. Will likely turn off some DRIPs soon though and take cash instead.

Looking at CUF.UN, NPI, EIF, ESI and a few others for 2014 investments. Not saving much right now with Christmas shopping...


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## GoldStone (Mar 6, 2011)

My Own Advisor said:


> Why don't you just let them (CDN equities) ride?


I hope to retire in less than 10 years. Preservation of the capital is priority #1. I'm overweight equities in general, not just Canadian equities. I want to reduce my risk exposure.

Read the interview with William Bernstein. I very much agree with his thinking.

http://www.indexuniverse.com/sectio...2-bill-bernstein-take-risk-off-the-table.html


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## My Own Advisor (Sep 24, 2012)

"Bernstein: Yes, when the intelligent investor does some trimming back, he usually feels like a dummy for the next year or two. And when he trims back again, he feels like a little bit more of a dummy. And he feels dumb for awhile each time after he does it. But then there comes a point, three to five years hence, when he feels awfully smart."

Interesting....

10 years, if that is the max. investment period, still seems like a long time but I can appreciate what you are saying.

For more, letting the equities run. If they drop, if, then will turn DRIP taps back on again and accumulate more shares and ETF units. 

If overweight then, why sell, why not buy (bonds) instead to re-balance back into shape? Just curious GoldStone.


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## GoldStone (Mar 6, 2011)

My Own Advisor said:


> If overweight then, why sell, why not buy (bonds) instead to re-balance back into shape?


I count cash (HISA) as part of investment portfolio. Using existing cash to buy bonds won't reduce the equity allocation.

My standard target for equities is 60%. Current weight is 67.6%. New annual savings amount to ~5-6% of portfolio. If I redirect *all* new savings to fixed income, I will be back on target after *2 years*. That's too slow.


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## My Own Advisor (Sep 24, 2012)

Back on target will take 2 years? Healthy portfolio then, well done.


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