# A One Index Fund Portfolio



## Belguy (May 24, 2010)

Here is a recent article from the Globe and Mail that suggests just holding a single investment--the iShares S&P/TSX Large Cap 60 ETF (XIU) and rotating in and out of it depending on market conditions:

http://www.theglobeandmail.com/glob...-the-world-is-getting-smaller/article2409281/

I would be interested in others thoughts on this approach. It would certainly make managing one's portfolio both cheap and easy and by having interests in sixty of the largest Canadian companies, many of whom are big exporters, you would also benefit by how the markets are performing in the U.S. the emerging markets, and elsewhere.

From my own experience, I have learned that overdiworseification is just as apt to reduce returns as to enhance them.

Why not just purchase one investment product and have an instantly diversified portfolio which includes the sixty largest companies in Canada? 

You could do worse!!


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## Dibs (May 26, 2011)

Just some thoughts:

1. The global markets are becoming more and more correlated, but Canada is still overweight some categories (finance, natural resources) and underweight in others (pharma, tech).
2. This guy invests in an index fund, but still is trying to time the market. Remember that timing the market is not easy. "It's time in the market and not timing the market"
3. The guy leverages his position with his timing, which I would not be comfortable with, if I was a passive index investor. 
4. He has no fixed income allocation..?


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## fatcat (Nov 11, 2009)

hate to be the cynic but the guy probably makes all his money from his newsletter ...

ok, here goes and please correct where i am wrong: his newsletter is $120 a year and i don't know how many subscribers he has but let's say 10K, that means he takes in 1.2M a year on the newsletter

if he is a really good market timer (after all he publishes his own newsletter, he must be good right ?) and can get in and out with regular and predictable profitability, he isn't going to be publishing a newsletter, he's going to be getting other peoples money and starting his own firm where he has a much bigger potential upside, much, much bigger than 1.2M a year

but no, he writes his little newsletter, what am i missing here ?

look at dennis gartman, he can't even beat the tsx ! but he publishes his newsletter

why i insist on owning stocks when i could be telling other people what stocks to own and making money on it, i have no idea


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## Belguy (May 24, 2010)

If you had bought and held XIU over the past ten years, your annualized return would have been 6.94 per cent. Would you have been happy with that? Over the past three years, the annualized return is 12.92 per cent.

I have no idea whether one would have enhanced or diminished one's returns by trying to time the markets but the consensus is generally that you cannot be successful with market timing over the long term.

Had you decided to further diversify your portfolio by adding an S&P 500 and an international developed market ETF, you would only have reduced your returns compared to just holding the XIU.

Sometimes, more diversification doesn't mean better returns.


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## caricole (Mar 12, 2012)

fatcat said:


> hate to be the cynic but the guy probably makes all his money from his newsletter ...
> 
> ok, here goes and please correct where i am wrong: his newsletter is $120 a year and i don't know how many subscribers he has but let's say 10K, that means he takes in 1.2M a year on the newsletter


I 100% agree witf fatcat...exept the guy has probably only 200 subscriber to pay his groceries and never invested in the market

It is the case for most of these «newsletters«, «investement books», «investment coarses» etc....

Or they never invested, or they lost their shirt and are now trying to find other ways to pay for groceries

One case sticks out in my memory of the 70's

«THE GOUROU OF THE DAY» Jo Granville

The DJ can never break the barrier of 1.000

He made the biggest BEAR CALL EVER

The DJ will go to 450, sell everything and short the DJ (was at ± 700)

The DJ went thrue 800, 900, 1.000, 1.500, 2.000, and never loocked back

It made me realize since that day what all these forecasters and analizers are worth (to me)

my opinion :hopelessness:


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## Belguy (May 24, 2010)

I really didn't mean to start another discussion on how well most of the financial gurus' predictions work out in the long run (probably not any better than most stock pickers) but rather how a single ETF holding 60 stocks comprised of the largest companies in Canada can, in and of itself, constitute a sufficiently diversified portfolio whereby breaking that portfolio down into more ETF's would not guarantee better results.

Over the past ten years, you would have experienced an annualized return of almost 7 per cent just by holding a single ETF comprised of the 60 largest Canadian companies.

Could you have been satisfied with this result?


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## Jungle (Feb 17, 2010)

Sure, but did anyone know that 10 years ago?? Can anyone figure out which ETF will do the same for the next ten years? No. This looks like poor allocation and market timing to me.


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## caricole (Mar 12, 2012)

As for diversification

To me the XIC seems more suitable and less subject to extreems Composite ( 283 ? stocks) Capped to avoid the case of Nortell who made up 30% of the XIU before made it collapse


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## CanadianCapitalist (Mar 31, 2009)

Belguy, you are falling prey to hindsight bias. If you know what's going to be the best performer in the next years, of course, you'll load up on it. Chances are you don't and therefore you diversify. Holding just XIU is a very poor decision IMO. You get exposure to basically two sectors: financials and energy. It may work out. Or it may not. There was a long period of time when the TSX trailed the US markets badly. It could very well happen again.


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## Soils4Peace (Mar 14, 2010)

Wow, that article is completely useless!


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## mrPPincer (Nov 21, 2011)

My thought on this approach.. this guy to keep trying to time the market and should probably stop before he loses everything

"In 2010, Mr. Dony invested in a leveraged ETF .... and he lost some 30 per cent"

Now he's advocating a different timing strategy using the top 60 tsx stocks based on his observations that the markets move in sequence these days.

Two thoughts on this, one, when the markets are experiencing a lot of volitility it looks like the different sectors are more correlated than they used to be but this isn't necessarilly the case. They may seem to rise and fall together when you look at a chart but when you crunch the numbers the correlation is still less than one.

Secondly, narrowing your equity exposure increases your risk for a lower level of potential benefit than it's worth, and you lose the gains you can harvest by rebalancing on low correlations.

Also by trying to time the market he'll further lower his potential for equity gains than the risk of sitting out of the market at any given point of time is worth, my opinion.

Personally I don't know why the G&M is publishing this crap, I think they're leading people down the garden path. Again, just my opinion.


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## andrewf (Mar 1, 2010)

Agreed. Shame on G&M for publishing this. Market-timing is not inherently evil, but it really doesn't strike me that this guy gets it.


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## Four Pillars (Apr 5, 2009)

Belguy said:


> Here is a recent article from the Globe and Mail that suggests just holding a single investment--the iShares S&P/TSX Large Cap 60 ETF (XIU) and rotating in and out of it depending on market conditions:


This isn't very accurate. The article is an profile on an individual investor and how he invests. 

There is no "suggesting" that anyone should follow his investment strategy anymore than the profile on Rachelle "suggested" that everyone should get into warrants.


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## Belguy (May 24, 2010)

I would make the argument that, in my own experience at least, diversifying outside of Canada by holding XSP and XIN has actually served to reduce my long term returns. I understand the point about not knowing what the future will bring and that past relative performance is no guarantee of future returns. However, my point remains that you would hold a diversified portfolio of the sixty largest Canadian stocks by simply holding a single investment in your portfolio that being the XIU. There are plenty of stock pickers on this forum who have nowhere near that much diversification with the relatively fewer stocks that they own. If you had owned an S&P index fund, you would have gained essentially NOTHING on it over the past 13 YEARS!!! Also, the MSCI Global equity index lost an average of 2.95% per year over the past five years and gained a modest 0.45% per year over the past 10 YEARS according to Globefund. 

Conclusion: You could very easy do comparatively well by just holding a single investment in your portfolio which, in turn, holds the 60 largest companies on the TSX. Conversely, over the long term, diversification is just as apt to negatively affect your results as it is to improve them. In my own experience, more diversification outside of Canada has not helped improve the performance of my portfolio one twit and many investors agonize over which international ETF's to include in their portfolios when holding a single Canadian ETF MIGHT very well produce superior longer term results.

By the way, if you included bonds in your portfolio by way of holding a Canadian balanced mutual fund, the average gain for such funds was only 1.1 per cent during the past five years and 4.1 per cent over the past ten years according to Globefund data. This is one indication that diversifying into bonds hasn't done much, if anything to improve returns and this is only likely to be more so in the future as interest rates rise.

By holding only a single investment as your total portfolio, that being the XIU, you COULD very much end up doing better than your more diversified index investors if the past decade means anything.

I pick XIU because, in these uncertain economic times, I just prefer to hold the large caps instead of a more diversified ETF by market cap. 

In the final analysis, all that I am saying is that additional diversification may not necessarily work in your favour.

You pays your money and you takes your chances.


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## fatcat (Nov 11, 2009)

Belguy said:


> I would make the argument that, in my own experience at least, diversifying outside of Canada by holding XSP and XIN has actually served to reduce my long term returns. I understand the point about not knowing what the future will bring and that past relative performance is no guarantee of future returns. However, my point remains that you would hold a diversified portfolio of the sixty largest Canadian stocks by simply holding a single investment in your portfolio that being the XIU. There are plenty of stock pickers on this forum who have nowhere near that much diversification with the relatively fewer stocks that they own. If you had owned an S&P index fund, you would have gained essentially NOTHING on it over the past 13 YEARS!!! Also, the MSCI Global equity index lost an average of 2.95% per year over the past five years and gained a modest 0.45% per year over the past 10 YEARS according to Globefund.
> 
> Conclusion: You could very easy do comparatively well by just holding a single investment in your portfolio which, in turn, holds the 60 largest companies on the TSX. Conversely, over the long term, diversification is just as apt to negatively affect your results as it is to improve them. In my own experience, more diversification outside of Canada has not helped improve the performance of my portfolio one twit and many investors agonize over which international ETF's to include in their portfolios when holding a single Canadian ETF MIGHT very well produce superior longer term results.
> 
> ...


belguy, you missed cc's point ... stock-pickers are arguably at more risk of loss since they need only pick 1 or 2 serious losers and they have big trouble ... could holding only xiu be a great bet ? sure, but we have no way of knowing for certain what would be a great bet because we can't predict the future

i keep second guessing myself and think maybe i should hold 10-20 good diversified dividend payers and avoid the fees

except i can buy 85% of the total tsx for only .09 if i use vanguard, what a deal and i can sleep well at night

lacking the ability to predict the future, we all need to make our choices based on our personality, financial needs and on the research that is available

the globe and mail has published so many investment strategies, one could go nuts considering them all

hey wait, i think i'll start a newsletter about investment strategies .. excellent, i'm giving everyone here a introductory subscription for 10% off, please send $666 dollars to gimme.com .. i'll get back to you


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## humble_pie (Jun 7, 2009)

oh, my, quite a bit of misinterpretation in this thread.

first, the Globe is not involved in this story in any way. They are news publishers. This article appears in a series of 3rd party profiles called Me And My Money, edited by tony martin. It profiles interesting individual investors in order to expose their strategies & approaches. 

the series is designed as a service to readers. As media, the globe neither endorses nor disapproves of each profilee's investment activities.

next, the article is clear that on-again-off-again timed XIU is just Donald Dony's current approach. In the past he's used everything from shanghai index funds to australian etfs when his technical analysis has shown him that opportunities exist.

article is also crystal clear that Dony, at least in his own estimation, is one ace technical analyst. And he sells a newsletter. There's nothing unsusual about any of this.

Dony's approach is not unique. The barrie, ontario investment counsel firm Venable Park uses an almost identical technical approach. They, too, have refined what they say is a reliable market timing analystics tool. When the tool drives them into financial markets, they buy mainstream etfs almost exclusively. Other times, they are out of stocks & sitting in cash. Reportedly, the last cash-sitting went on far too long, so that reportedly venable park missed out completely on the great bull run of 2009-2011.

there are a number of cmf forum posters with stories that are easily as interesting as Donald Dony's. If any wish to be profiled in this Me And My Money series, you'll note that editor Martin cordially invites one & all to contact him at the globe & mail.


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## Four Pillars (Apr 5, 2009)

I would love to see Belguy profiled in a "Me and my money" article.

Nobody spells doom like Belguy.


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## HaroldCrump (Jun 10, 2009)

Four Pillars said:


> I would love to see Belguy profiled in a "Me and my money" article.


He was already profiled.
Following is the article (as they say, a picture speaks a 1,000 words):


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## warp (Sep 4, 2010)

I must say that I have noticed a not-so-nice tendency on this board to say silly and sometimes nasty things about BELGUY, including attempts to ridicle him.

He has the right to ask questions and make his points on this board , just like everyone else. If you don't agree with him, make your case or shut up.

It is HIS money, after all, and he is trying to get a sense of the best way to invest that works for HIM.

As far as I can tell, none of us here are modern day Warren Buffets, and we are all on here to hopefully learn something.

So cut out the snide remarks, and if you have nothing intelligent to say, or add to his questions or opinions, then do yourself , ( and the rest of us), a favour, and say nothing at all.
That in itself, might be the most intelligent decision you made all day.

BELGUY......good luck with your money management, and I sincerely hope you do well and find the strategy that works best for you, and lets you sleep well at night.


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## Four Pillars (Apr 5, 2009)

HaroldCrump said:


> He was already profiled.
> Following is the article (as they say, a picture speaks a 1,000 words):


Lol! I must have missed that column.


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## Four Pillars (Apr 5, 2009)

warp said:


> say nothing at all.


You're probably right. I've tried my hardest to ignore Belguy's nonsense posts, but I just can't do it.

Even his one serious thread about tires made me laugh. I was picturing him tooling around in his '75 Caddy lip-syching along with his favoure Nouriel Roubini audio book.


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## Belguy (May 24, 2010)

Your support is appreciated, warp!! I thought that this was an open discussion forum on investment ideas and that is what I try to present. Apparently some, when they don't like your ideas, take cheap shots at you or resort to some classic putdowns. I pretty much just ignore those folks and keep on doing what I'm doing. Just because I submit some ideas doesn't mean that I am going to transform my portfolio to reflect every new idea that comes along. In fact, with me, it is quite the opposite. I tend to just buy and hold each investment, that I purchase, pretty much forever and only buy and sell for rebalancing purposes. That said, I do feel that the biggest mistake that I have made along the way is to include too many individual ETF's in my portfolio in a misguided attempt to enhance my returns which I feel has not worked very well to my advantage. If I were advising new investors on what to do, my advice would be to keep your list of investments short and sweet to keep trading fees and portfolio management both cheap and easy.


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## moneyisfornothing (Feb 18, 2012)

Belguy said:


> Your support is appreciated, warp!! I thought that this was an open discussion forum on investment ideas and that is what I try to present. Apparently some, when they don't like your ideas, take cheap shots at you or resort to some classic putdowns. I pretty much just ignore those folks and keep on doing what I'm doing. Just because I submit some ideas doesn't mean that I am going to transform my portfolio to reflect every new idea that comes along. In fact, with me, it is quite the opposite. I tend to just buy and hold each investment, that I purchase, pretty much forever and only buy and sell for rebalancing purposes. That said, I do feel that the biggest mistake that I have made along the way is to include too many individual ETF's in my portfolio in a misguided attempt to enhance my returns which I feel has not worked very well to my advantage. If I were advising new investors on what to do, my advice would be to keep your list of investments short and sweet to keep trading fees and portfolio management both cheap and easy.



Belguy
whatever is said i do like ur posts.
keep it up:encouragement:


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## Belguy (May 24, 2010)

You can't please all of the people all of the time. As for the putdown artists, I feel that their comments reflect more on them than they do on me. For my part, I would never resort to any such putdowns of other members of the forum but it takes all kinds to make the world go around. I just wish that they would lay off but I expect no such luck.


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## moneyisfornothing (Feb 18, 2012)

Belguy said:


> You can't please all of the people all of the time. As for the putdown artists, I feel that their comments reflect more on them than they do on me. For my part, I would never resort to any such putdowns of other members of the forum but it takes all kinds to make the world go around. I just wish that they would lay off but I expect no such luck.


indeed.
i have been reading more of ur posts and the way u trade.
i have a different style but i am sure that u r doing just fine.
the old school says stay invested and i think that is what u r doing.
don't mind the others.
cheers:encouragement:

p.s just one curious question do u go in and out of XIU?
i ask because i believe that this specific ETF rebalances but correct me if i am wrong:encouragement:
either way never mind , u have 60 magnificent stocks in that basket except for very few.


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## sags (May 15, 2010)

I have followed the markets for about 7 years, made a little money in volatile biopharma companies, and sold what little we had just before the crash. Didn't have any idea the crash was coming.........just dumb luck. 

Haven't reinvested anything since..........but concentrated on paying off all debt, which seemed like a better use of the money at the time. 

Coming into a healthy amount of money soon from an inheritance...........and have concluded that diversification is an concept that is akin to betting against yourself. 

If you go to the horse races and bet every horse in the race........you will win the race............but lose money doing it.

The new money will all go into one stock.............just don't know which one yet.

Have it narrowed down to two. TD Bank preferred shares or Rogers Communications. Leaning towards Rogers.

Nice solid companies, with decent dividends, strong balance sheets, and good long term capital gains......I think.

Spend the dividend cash on ourselves, and leave the stocks to Junior.............to do with whatever he pleases.

That's my plan................as non diversified as it can get, I suppose.

Belguy has been around a while........from the old 55plus forum..........experience is a good teacher.


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## MrMatt (Dec 21, 2011)

I'll do you one better.

Buy VT, hold it.
You've got the whole world in a single fund, along with a low fee.


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## mrPPincer (Nov 21, 2011)

humble_pie said:


> oh, my, quite a bit of misinterpretation in this thread.





Four Pillars said:


> There is no "suggesting" that anyone should follow his investment strategy anymore than the profile on Rachelle "suggested" that everyone should get into warrants.


I stand corrected. I understand that GM is just putting some interesting profiles out there and not advocating anything per se

problem is that readers will see something that's presented as a viable investment strategy when it's actually more like a profile of somebody that took a trip to the casino.
The guy got burned at the crap table so now he's cooling his heels at the blackjack table until he comes up with another idea.

I have to admit that I know absolutely nothing about technical analysis, but given the only numbers that we have about his track record (his best year, 40% folowed by his worst loss, -30%), I can easily put those two numbers together and see that he's down 2% on only those numbers.

I guess my point is that trying to time the market is a dangerous game even for the most sophisticated investors, and as well, that underdiversification only adds an unnecessary level of risk.


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## Toronto.gal (Jan 8, 2010)

warp said:


> I must say that I have noticed a not-so-nice tendency on this board to say silly and sometimes nasty things about BELGUY, including attempts to ridicle him.


This is very true and I'm guilty as charged, but Mr. Belguy is not as innocent as he would like some of you to believe warp & you have been around long enough to know that he has done his share of mockery as well.

At any rate, I would agree that 'two wrongs don't make a right'. And to Belguy's credit, he is very entertaining as well; I would not like CMF as much without him!


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## Belguy (May 24, 2010)

sags, I'd be careful about putting a significant portion of your inheritance into any one stock. That is certainly not adequate diversification. Putting it into a single ETF such as XIU, which carries diversification by way of the SIXTY largest stocks on the TSX does, on the other hand, provide adequate diversification. When investing in individual stocks, the consensus seems to be that adequate diversification can be obtained by holding ten to fifteen stocks diversified into different sectors.

Moneyisfornothing, no I do not rotate in and out of any of my investments. I buy and sell for rebalancing purposes only although I may whittle a few investments out of my portfolio over time to reduce the number of holdings which I now have. When it comes to the number of holdings in a portfolio of index products, I have come to the conclusion that 'short is sweet'.


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## londoncalling (Sep 17, 2011)

Toronto.gal said:


> .... he is very entertaining as well; I would not like CMF as much without him!


I couldn't agree more. I do find his posts very entertaining and do read alot of his links. Like most posters, the infromation they provide may or may not be useful to the individual member. Regardless, I would not want anyone to feel intimidated for posting anything on this board. Each individual is responsible to take what they want from a post and ultimately is responsible for their own success or failure. Sometimes losing a bunch of money is a hard but necessary lesson. Good luck to all with their investments, no matter their style or approach.

Cheers


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## dcaron (Jul 23, 2009)

Along the thinking pattern of Belguy, any thoughts on holding a single "balanced" ETF such as iShare's XTR, for a 10-15 year horizon?
It generates decent dividend of 5.8%, has been around for 7 years since inception, contains a basket of funds for simplified portfolio, at a cost of 0.57% MER. 

I suppose that it's like a lazier form of allocation as compared to couch potato. :beguiled:

https://research.tdwaterhouse.ca/re...=&omni_prop14=5&omni_prop15=tdw:symbol search

*Company Name	Position	Allocation	1 Month Change	Market Value*
iShares S&P/TSX 60 IndexXIU	Long	15.0%	+9.42%	$63.5M
iShares DJ Canada Select Dividend IndexXDV	Long	14.6%	+9.42%	$61.7M
iShares S&P/TSX Capped REIT IndexXRE	Long	14.5%	+9.42%	$61.1M
Ishares S+p/Tsx North American	Long	11.8%	+9.42%	$49.9M
iShares US High Yield Bond Idx C$-HedgedXHY	Long	9.1%	+9.42%	$38.7M
iShares DEX HYBrid Bond IndexXHB	Long	8.9%	+9.42%	$37.5M
iShares DEX All Corporate Bond IndexXCB	Long	8.8%	+9.42%	$37.1M
iShares DEX Long Term Bond IndexXLB	Long	8.7%	+9.42%	$36.8M
iShares DEX All Government Bond IndexXGB	Long	8.6%	+9.42%	$36.5M


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## Spudd (Oct 11, 2011)

Is that 0.57% MER on top of the MER's of the underlying funds?


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## dcaron (Jul 23, 2009)

MER of .57% for the basket XTR fund only, not in addition to underlying funds.


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## fatcat (Nov 11, 2009)

said:


> MER of .57% for the basket XTR fund only, not in addition to underlying funds.


but you are paying the mer of all the underlying funds as well ... they are assembling everything and doing the legwork and so and you only have 1 purchase to make but you certainly are paying the underlying mer's ... you aren't owning the "stock equivalents" of these etf's you are owning the actual etf's so you are paying the mer's that go with each fund ... i may be wrong and stand to be corrected but don't see how it can be otherwise

this is an example of a standout fund in that area also: http://www.mawer.com/mutual-funds/fund-profiles/mawer-canadian-balanced-retirement-savings-fund


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## Belguy (May 24, 2010)

Your investments in bonds is not going to end well:

http://www.theglobeandmail.com/glob...lifeboat-becoming-bogged-down/article2411640/

U.S. house prices plummet:

http://www.marketwatch.com/story/us-home-prices-fall-to-nearly-decade-low-2012-04-24


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## moneyisfornothing (Feb 18, 2012)

Belguy said:


> Your investments in bonds is not going to end well:
> 
> http://www.theglobeandmail.com/glob...lifeboat-becoming-bogged-down/article2411640/
> 
> ...



Bel
with ultra low fee comissions ,retail guys like us can easily trade stocks.
i am not talking about timing the mkts.
i am talking about trading the mkt that is presented to us.
Bonds will always be bonds.
tis a tough mkt out there and like you say it is a lost decade , unless you traded it.
cheers


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## Sampson (Apr 3, 2009)

Part of the issue with Belguy's posts are that initially many people did try to move forward the discussion. CC's post upthread is a perfect example. But rather than addressing points raised by other voices, Belguy typically post sensational, 'headline' grabbing statements - and contributes nothing further.

One point that I will challenge that has been discussed or at least suggested by Belguy several times during this thread is that holding multiple ETFs can be a drag on returns. The issue he is missing is that the purpose of diversification is not to enhance returns, it is to lower volatility.

Combine Belguy's desire to enhance returns (evidenced by this thread) with his low tolerance for volatility (evidenced by all the 'sky is falling' posts) and you have a consistent stream of complaining-like posts. After a few, it doesn't push the discussion any further at all.

If the takehome message from the G&M post is that money can be made holding only a single investment vehicle, then yes, this is true. One can make even more money concentration your portfolio further. Take the same investment period, and report the returns had 100% of the portfolio been invested in AAPL. - to summarize, CC posted these exact points in a much more succinct post above, but no attempt to either debunk that or to discuss further.


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## mrPPincer (Nov 21, 2011)

Belguy said:


> Your investments in bonds is not going to end well:
> 
> http://www.theglobeandmail.com/glob...lifeboat-becoming-bogged-down/article2411640/


That's a good timely message from Rob Carrick. 
Unfortunately my guess is the average investor will probably stay overweighted in bonds until the rates go up and then get out long after they realize their bonds have been losing value.



> "The saddest aspect of the rush into bonds is that it came at a time when the smart move was to buy stocks. True, the Canadian market has been disappointing lately. But it has enjoyed a strong rebound since the crisis: Over the three years to March 31, it gained 15.6 per cent a year."


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## CanadianCapitalist (Mar 31, 2009)

Rob did mention this in his column but the caveat is that if you have a balanced portfolio, it is best to stick with the current bond allocation. Odds are in favour of bond yields moving up (and prices down) but this is by no means guaranteed.


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## humble_pie (Jun 7, 2009)

that is one cool classic car, it suits belguy all the way down to its fins.












this thread has rambled all over 3 themes:

1) is dullsville donald dony's globe & mail profiled timing of mainstream index funds an efficient investment strategy;

2) contributions of the Dormouse to cmf forum;

3) what do bonds contribute to investors' portfolios.

all in all, i'd say belguy outshines the globe's profiled donald dony, even though his (belguy's) frequent complaints are known to have lowered his rating. Notice that dony doesn't complain about his market losses but instead takes it on the chin like a spartan soldier.

last bond article i read, the wizards were saying either a) bonds will soon fall in value while yields & interest rates rise; or b) bond party will not be over til the fat lady sings. If one thinks of Dormouse as a proxy for the fat lady, he's not singing yet.


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## mrPPincer (Nov 21, 2011)

CanadianCapitalist said:


> Rob did mention this in his column but the caveat is that if you have a balanced portfolio, it is best to stick with the current bond allocation. Odds are in favour of bond yields moving up (and prices down) but this is by no means guaranteed.


That's a good point regarding allocation.
Nobody has a crystal ball that I know of.
Personally I am holding to my long term fixed income allocation (but I'm temporarily keeping it in a HISA).


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## Belguy (May 24, 2010)

And now, this thread has rambled over to U.S. Dividend ETF's!!

http://www.theglobeandmail.com/glob...ys-to-cash-in-on-us-dividends/article2412984/

Will the rambling never end??!!


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## HaroldCrump (Jun 10, 2009)

humble_pie said:


> that is one cool classic car, it suits belguy all the way down to its fins.


That is one cool car indeed.
I personally prefer the Impala to the Caddy










^ That is a Convertible '58 Impala

The pictures of these cars is what makes this thread interesting, not the ETFs and dividends.


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## HaroldCrump (Jun 10, 2009)

Here is David Ball singing _a '66 Corvette_

http://www.youtube.com/watch?v=0gxLEVg5aHM

If you are going to buy just one ETF, it should be a '66 Corvette, IMO


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## Toronto.gal (Jan 8, 2010)

Harold, you're going to get banned for going off topic with your classy pics. :hopelessness:

Love both cars! Have you been to Cuba btw, there are lots there! 

How about starting a thread about cars? Here is the one I like: the Classic Fiat 500 :biggrin: [I like small cars].










Back on topic: is it time to invest in Cuba?


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## humble_pie (Jun 7, 2009)

.

i'll be down to get you in a deux-chevaux dormouse,
better be ready by half-past-eight.
now baby don't be late becuz i wanna be there
when
the band starts playin.

gonna wear out both my shoes
when we dance those jelly roll blues
at the antique car rally you & me, dormouse.


(signed)
love, Alice


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## Beaver101 (Nov 14, 2011)

:highly_amused: ... you *guys* are just too much (i'm trying to keep quiet)!


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## Toronto.gal (Jan 8, 2010)

Don't be shy Beaver!

That's the classic [blue] French Citroën; "the first mass-production car company outside the USA".

My father used to love/collect cars and that was one of them [a later version]; not in Canada though, I don't think they ever sold here, but I could be mistaken.

Back on topic: these classic pics. inspired me to trade F today. :biggrin:


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## Four Pillars (Apr 5, 2009)

This thread just gets weirder and weirder. 



HaroldCrump said:


> Here is David Ball singing _a '66 Corvette_
> 
> http://www.youtube.com/watch?v=0gxLEVg5aHM
> 
> If you are going to buy just one ETF, it should be a '66 Corvette, IMO


Thanks Harold - that's a good song/video.


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## HaroldCrump (Jun 10, 2009)

Speaking of French cars, here is the Puegeot Cabriolet, not sure of the exact year - prolly mid 60s.


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## Sampson (Apr 3, 2009)

i guess classic cars are one investment vehicle to get rich by trading.


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## Belguy (May 24, 2010)

My thread has been hijacked!!:upset:

"Canadian pension fund managers prefer to put more of their money into buy-outs, infrastructure and property, believing that these produce higher returns than publicly traded stocks and bonds."

--The Economist.


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## Eclectic12 (Oct 20, 2010)

Belguy said:


> My thread has been hijacked!!:upset:
> 
> "Canadian pension fund managers prefer to put more of their money into buy-outs, infrastructure and property, believing that these produce higher returns than publicly traded stocks and bonds."
> 
> --The Economist.


My condolences on the hijacking.

As for the quote, if little ole retail guy like me could get some of the favourable terms the pension managers get, I might think the same. Even for stocks - I doubt they are paying $29 per trade.


Cheers


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## HaroldCrump (Jun 10, 2009)

Eclectic12 said:


> As for the quote, if little ole retail guy like me could get some of the favourable terms the pension managers get, I might think the same. Even for stocks - I doubt they are paying $29 per trade.


True, and in addition, that quote from "The Economist" is completely useless for individual, retail investors vis-a-vis pension funds.
Pensions funds have investment horizons of several decades, unlike most individuals.
They need reliability and predictability of income for their models, more than anything else.
They would settle for a 4% return that is predictable and non volatile rather than a 7% return that is speculative.

I am not saying that infrastructure is not a good investment, just that the investment strategies of pension funds cannot be blindly adopted by individuals with a fraction of the time horizon.


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## Belguy (May 24, 2010)

I have readjusted my investment horizon out another few decades so that I will have a better chance of achieving my ultimate financial objectives. The original time horizon just wasn't going to do it.

Soon, pretty much the only folks who will be able to afford to retire at a decent age will be those with a public service pension.

Note to young people out there: Get a government job if you can.


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## CanadianCapitalist (Mar 31, 2009)

Belguy said:


> Soon, pretty much the only folks who will be able to afford to retire at a decent age will be those with a public service pension.
> 
> Note to young people out there: Get a government job if you can.


Just so you know it depends on what you mean by "decent" age. The Federal Government has already said that the retirement age for new hires will be 65.


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## Belguy (May 24, 2010)

Yes, but most of those who are depending on their own investment portfolios for their pension income may not be able to retire until they are well into their 80's at the rate we're going---or maybe not until after they are dead!!:suspicion:


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## Sampson (Apr 3, 2009)

I won't be retiring in my 80's. I have an extremely healthy savings rate - planned in real rates of returns of only 3-5% - and will be able to retire extremely early. It isn't clear to me that ROR will actually be lower in the future, they have been decent over the past 10 years or so - a portfolio reasonably weighted in the Canadian markets would have performed well. Even if rates of return are lower in the future during my retirement, I have reasonable expectations for ROR in my retirement years, only 2-3% real returns.

Why would anyone not plan for lower returns during retirement? If they didn't, they surely must understand they are chasing performance and not actually following a financial plan. Getting the highest/best returns, or returns you obtained 10 years ago is not a plan, it is just hoping for the best. I won't leave my personal future up to such a risky venture.

The resason younger generations will have issues with retirement won't be due to stock market returns - it will be due to poor savings rates.


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## Belguy (May 24, 2010)

Yes, but you do HAVE to have all of the latest electronic gadgets do you not? There are so many modern necessities to spend one's money on that were not even around in the simpler earlier times. How are you supposed to keep up with the Joneses and save for your retirement at the same time? 

I agree that savings rates are more important than investment returns especially given the lower returns that can be expected going forward. Gone are the days when you can calculate in and count on a ten per cent or more return on your investments per year!!


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## Eclectic12 (Oct 20, 2010)

Belguy said:


> Yes, but you do HAVE to have all of the latest electronic gadgets do you not? There are so many modern necessities to spend one's money on that were not even around in the simpler earlier times. How are you supposed to keep up with the Joneses and save for your retirement at the same time?
> 
> [ ... ]


 ... not having the latest toy or keeping up with the Jones' sure helps save for <insert option of choice from: retirement, early mortgage payoff etc.>!

Then too, skipping the $39 brand-new scoop shovel and picking up the $2 garage sale one that needs a $0.20 screw also helps with the cash flow!


Cheers


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## Sampson (Apr 3, 2009)

What about the 70's? Investment returns for rolling 10 year periods during that decade were worse than they are now. How did all the people in their accumulation or retirement phase of life during that period retire? They turned out just fine.

Who is to say that we should be living such an wonderful retirement anyway. People have to realize that you can live off welfare here in Canada much better than if you are a professional in some countries around the world.

People in this country will retire just fine. Stop pushing the fear.

I thought we were supposed to be talking about using a single investment vehicle or asset class to make money anyway in this thread. I should find a suitable link that suggests buying real estate and only real estate - flipping houses is a way to make money or a better strategy than a balanced portfolio. Wait, there were a bunch of TV shows on a few years ago to that effect. Maybe that is your path to riches Belguy, start flipping real estate, you can't trust the markets or concepts derived from modern portfolio theory to help you make money.


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## Belguy (May 24, 2010)

Agreed that over my lifetime at least, real estate was the way to go. I should have purchased that bungalow in Willowdale and that cottage lot in Muskoka but hindsight is 50/50. Since the stock market is not likely to go anywhere during this secular bear market, real estate is still likely to be the better long term investment for the young whipper snappers out there.


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## mrPPincer (Nov 21, 2011)

On the other hand now could be a good time to be positioning oneself for a secular bull market.

BTW thanks for the wakeup call, until now I hadn't notice that since 1999 we've been in a secular bear market...
I've just been keeping the faith and figured it was just a temporary downturn, but I guess I lost track of time.

I just hope the secular bull market begins within the next 10 years because if it doesn't I'll have to plan to live a hell of a lot longer if I'm gonna capitalize on it well.
Now if you'll excuse me I must hide under my bed.


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## Eclectic12 (Oct 20, 2010)

Belguy said:


> If you had bought and held XIU over the past ten years, your annualized return would have been 6.94 per cent. Would you have been happy with that? Over the past three years, the annualized return is 12.92 per cent.
> 
> I have no idea whether one would have enhanced or diminished one's returns by trying to time the markets but the consensus is generally that you cannot be successful with market timing over the long term.
> 
> [ ... ]


Consensus be what it may ... what the individual investor does is more important. The investor who always panics (i.e. sells at the low and buys at the mid or high price) is going to do poorly and the investor who is patient will do better. 

If one looks at XIU over the last ten years, where the investor puts some spare cash into the pot when it's low - what happens to the ten year 6.94%? After all, how many investors really put 100% of their cash into XIU ten years ago and zero since? 


Cheers


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## Eclectic12 (Oct 20, 2010)

mrPPincer said:


> On the other hand now could be a good time to be positioning oneself for a secular bull market.
> 
> BTW thanks for the wakeup call, until now I hadn't notice that since 1999 we've been in a secular bear market...
> I've just been keeping the faith and figured it was just a temporary downturn, but I guess I lost track of time.
> ...


Hmmm ... I'm not sure where the secular bear market since 1999 reference is from. I could find references upthred to XIU having a 6+% over ten years and a S&P flat over thirteen year.


IAC, staying out of the markets because "one buy ten years ago didn't make a lot" is a sure recipe to make next to nothing. 

If I'd either put a lump sum in, then nothing or stayed out of the market completely, I've have missed the following:
a) AGU - bought @ $26, sold 2/3 at $100, re-bought @ $50, sold 1/5 at $82. Remainder at yesterday's close is $86.
b) DFN - bought @ $3.9 sold 9/10 at $12. 
c) BNS - bought @ $29. Close yesterday @ $53.97
d) BMO - bought @ $26. Close yesterday @ $59.76 
e) BPF-UN - bought @ $12. Close yesterday @ $18.29 while increasing distribution to $1.17 per year
f) SLF bought @ $18. Close yesterday @ $24.32

I also have losses but when the losses have been minimised, it does not take a lot of good gainers to be ahead overall. The last I checked my records the just before the "crash" period of 2008 plus about eight months after worked out to something like of 16 stocks, five were down ( 1 for 98%, three for 30%, 1 for 4%), five up around 60%, five up 120% and 1 up 225%. That's ignoring dividends and distributions.

Going back to around 1999 is more difficult but one buy and holds that worked out well was STN - bought 100 @ $15.39, two 2:1 splits so there's now 400 @ yesterday's close of $31.85


So IMO, buying in more than a lump sum, as well as when the market is down helps.


Cheers


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## mrPPincer (Nov 21, 2011)

Eclectic12 said:


> Hmmm ... I'm not sure where the secular bear market since 1999 reference is from.


Sorry, that was a referance to something Belguy posted in the Market Forecasts thread:



Belguy said:


> From the G&M's Rob Carrick, we are living in a secular bear market where stocks will go up and go down on a daily basis but ultimately lose in value:
> 
> http://www.icecapassetmanagement.co...ManagementLimitedGlobalMarkets April 2012.pdf


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## kcowan (Jul 1, 2010)

I think the main change is heightened awareness. In the 70s, a portfolio update was often yearly or at best quarterly. Now we get non-stop coverage of markets and economies. And instantaneous portfolio read-outs. This higher awareness does not change performance. It might increase anxiety among unsophisticated investors.

But the best retirement tool forecasts a 4% return for a stable retirement. That is a very reasonable goal even for today's portfolios.


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## Belguy (May 24, 2010)

Well, at least the markets had a good week and so we can all enjoy the weekend.


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