# Broad Based Versus Large Cap ETF's



## Belguy (May 24, 2010)

I am currently invested in broadest based, lowest fee ETF's that are invested in all market caps from the smallest to the largest. Recently however, I have often been reading that one should concentrate their holdings on large cap, so-called 'quality' investments.

With this in mind, would a Couch Potato investor be better off holding broad based OR large cap ETF's in their portfolios?

If you are a Couch Potato investor, which do you hold?


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## AltaRed (Jun 8, 2009)

Primarily broad based ETFs. The large caps collectively tend to overwhelm small caps collectively such that returns are not much different. I'd go with the lowest MER types like VTI and XIC. It is only if you want a dividend 'spin' that one might go for the S&P500 or TSE60 or a dividend ETF.


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## GreatLaker (Mar 23, 2014)

I prefer broadly based low cost funds like VCN, VUN and the iShares IMI ETFs. Highly diversified with low expenses. (Although I do hold some HXT in non-registered because of its tax deferment). 

Choosing narrowly focused funds reduces diversification and concentrates on certain market segments which may or may not perform well in the future. I especially avoid higher cost funds like segment ETFs, or non-cap weighted indexes, on the thought that the higher MER is likely to outweigh any increased performance (before fees) over the long term.

Bogleheads has quite a thread on the 3 fund ETF or mutual fund portfolio:
The Three Fund Portfolio

The Nifty-Fifty is a good example of what can happen when too many investors start chasing "so-called 'quality' investments":
http://www.aaii.com/journal/article/valuing-growth-stocks-revisiting-the-nifty-fifty

But overall, the difference between S&P500 vs. US Total Market, or EAFE vs. EAFE-IMI is likely to be small compared to the benefits of finding a good low-cost investing strategy that you can stick to for years.


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## Belguy (May 24, 2010)

The Three-Fund Portfolio is for U.S. investors but I get the point.

It is surprising to me how many investors chose to ignore this advice and continue to try to outsmart the market by trying to time the markets and by trading in individual stocks. Good luck to them.

It looks like broad based index products are the way to go.

As for a bond ETF, at this juncture in the economic cycle, would you go with a broad-based or short-term product?


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## james4beach (Nov 15, 2012)

Regarding whether you choose a stock index with only large caps or more of a mix, I don't think it makes much of a difference either way. If you look at the iShares web page to look at the historical performance of XIU (which is only 60 large caps) versus the TSX Composite, you'll see that XIU has done quite well. In some years the composite does better, in some years XIU did better.

But you certainly did not lose out on anything by holding XIU for the long period, even though it's only 60 large caps. I think what's more important at this point are the low fees.

Based on that, in Canada I definitely think *XIC and ZCN* are the best. They both happen to be TSX Composite, but it's the ridiculously low fee that's most important.

For bond ETFs I'd definitely go with short term. My reasoning is that bond prices have been so thoroughly inflated by central bank stimulus (ZIRP and QE) that to protect yourself, you must keep maturities short. XSB is my favourite here as described in this recent thread on short term bonds

But I think at current market prices, GICs are superior to bond ETFs anyway.


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## cainvest (May 1, 2013)

james4beach said:


> But you certainly did not lose out on anything by holding XIU for the long period, even though it's only 60 large caps. I think what's more important at this point are the low fees.
> 
> Based on that, in Canada I definitely think *XIC and ZCN* are the best. They both happen to be TSX Composite, but it's the ridiculously low fee that's most important.


Fees are really a non issue deciding between for XIC (MER .10) or XIU (MER .18) as they're basically rock bottom. One could definitely play both if your trading costs are small.


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## james4beach (Nov 15, 2012)

True, XIU's fee is still rock bottom. I have nothing against it -- and it's the most liquid ETF in Canada. My parents hold both XIU and XIC.


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## Belguy (May 24, 2010)

My Canadian ETF is VCN.


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## My Own Advisor (Sep 24, 2012)

james4beach said:


> True, XIU's fee is still rock bottom. I have nothing against it -- and it's the most liquid ETF in Canada. My parents hold both XIU and XIC.


XIU is excellent...


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## Moneytoo (Mar 26, 2014)

For US, we hold VTI in RRSPs and VFV in my husband's TFSA. We chose VFV (S&P500) over VUN (Total market, a wrapper for VTI) simply because Vanguard lowered VFV's Management Fee last year to be almost half of VUN's. Their charts seemed identical, MERs as of now are pretty close. I asked my husband if he cares for smaller caps, he said no, he'd prefer to keep VFV. 

As for Canada, we have a bit of ZCN and the rest are individual stocks. 6 of them small caps: one big loser (a tiny position), one big winner (a larger position, will be buying more) and 4 in-between (2 up, 2 down) I wish we had better Canadian ETFs (even with our little knowledge and buying near tops, we're beating the index - and most of the companies in the index I would never buy on my own)


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## gibor365 (Apr 1, 2011)

The problem I see with XIU and XIC that they both have huge exposure to just several sectors : financials , energy, materials .... VTI is much more diversified..



> one big loser (a tiny position), one big winner (a larger position, will be buying more)


 do you care to share the tickers


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## GreatLaker (Mar 23, 2014)

Belguy said:


> As for a bond ETF, at this juncture in the economic cycle, would you go with a broad-based or short-term product?


This is a good (but detailed) paper from Vanguard on the effect of interest rate fluctuations on bond prices, particularly how long it takes to recover from higher rates:
Risk of loss: Should investors shift from bonds because of the prospect of rising rates?

Here is a shorter one from CCP:
How Changing Interest Rates Affect Fixed Income 

This one explains matching bond fund duration with when you need the funds:
Holding Your Bond Fund for the Duration

I also plan to use 5 year GIC ladders for short term funding needs during retirement because it gives me certainty on exactly how much money I will get. I do have some VAB and VSC for liquidity, and for longer term needs beyond what the 5 year ladders cover.


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## My Own Advisor (Sep 24, 2012)

I'm a big fan of a few ETFs...XIU for CDN exposure, VTI for the entire U.S. market and VXUS for everything else. Sure, XIU only has 60 stocks but those are the ones that run our country.

Put VTI and VXUS in your RRSP. Use XIU in whatever account you want since it's very tax efficient.

3 simple ETFs, own the world...and play with your fixed-income, cash, bonds, etc. as you please.


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## Moneytoo (Mar 26, 2014)

gibor said:


> do you care to share the tickers


Sure 

Loser: Striker Exploration Corp (SKX-X) - formerly known as Elkwater Resources, an Oil & Gas micro cap, pumped by Bruce Campbell last year (before oil went down ) Gambled with 500 bucks, thinking it'll either go up 10 times or down to zero. It went down 10 times, so right now closer to zero lol

Winner: *New Flyer Industries (NFI-T)* - love and use their product (long comfy buses), the stock is up ~50% with the dividends in less than a year, so now we don't have enough shares for DRIP (yield on cost 4.8%) Was recently recommended again on BNN: http://www.bnn.ca/News/2015/08/12/T...th-International-and-Diversified-Royalty.aspx , analysts always praise its "perfect chart"


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## eulogy (Oct 29, 2011)

For me, it's very simple. Understanding that a broad based vanilla index should contain mostly the large caps because large caps make up most of the market. This means most of the market returns, movements and such will go with the large cap flow. For example, VTI is roughly 70% of the S&P500. I assume it's even higher in Canada with the TXS and the TXS60.

With that said, I always aim for the broadest, cheapest indexes that I can that make the most taxable sense. I want small and mid cap companies too. Getting the cheapest fund isn't always as simple as looking at the MER, but the cheapest overall including tax. Depending on your risk tolerance, HXT (TSX60) is better in a taxable account then VCN.

As for funds, I hold VT completely in my RRSP and I end up with large cap ETFs in my TFSA and taxable accounts.


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## Moneytoo (Mar 26, 2014)

There doesn't seem to be a lot of insider buying among Canadian large caps: see Holdings tab of Horizons Cdn Insider Index ETF (HII). None of the banks are there, same as in BMO Low Volatility Canadian Equity ETF (ZLB). I guess I'm still not ready to buy a bag of **** just because everybody else owns it...


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## OnlyMyOpinion (Sep 1, 2013)

Moneytoo said:


> There doesn't seem to be a lot of insider buying among Canadian large caps: see Holdings tab of Horizons Cdn Insider Index ETF (HII). None of the banks are there, same as in BMO Low Volatility Canadian Equity ETF (ZLB). I guess I'm still not ready to buy a bag of **** just because everybody else owns it...


HII and ZLB have some specific selection criteria. Maybe that is excluding stocks you were expecting to see in them?


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## Moneytoo (Mar 26, 2014)

OnlyMyOpinion said:


> HII and ZLB have some specific selection criteria. Maybe that is excluding stocks you were expecting to see in them?


Well they have some stocks that I like (and own) I wouldn't buy those ETFs because they have higher MERs and hold fewer stocks than broad based ETFs, but since ZLB keeps outperforming ZCN and Co., I'm checking its holdingd for individual stock ideas. Will keep an eye on HII as well, maybe stocks that are in both will outperform the market even better?

(But if TSX stays low, might just buy more ZCN and hope for the best )


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## Belguy (May 24, 2010)

After all Is said and done, I have often read that the long term success of your portfolio is based more on establishing and maintaining your target asset allocation than on the individual investments that you put in that portfolio and yet most investors spend far more time on the latter.


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## Moneytoo (Mar 26, 2014)

I also read that the only people who benefit from "buy and hold" method are ETF managers who collect their (tiny) fees whether you make money or not (and they are the ones who sponsored those "numerous studies" that encourage passive investing) Time will tell of course - but it's not like after 20+ years (as recommended) of holding an ETF you can demand a refund if you realize that you've been punked...


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## AltaRed (Jun 8, 2009)

Moneytoo said:


> I also read that the only people who benefit from "buy and hold" method are ETF managers who collect their (tiny) fees whether you make money or not (and they are the ones who sponsored those "numerous studies" that encourage passive investing) Time will tell of course - but it's not like after 20+ years (as recommended) of holding an ETF you can demand a refund if you realize that you've been punked...


Management (MER) fees are next to nothing on ETFs. OTOH, mutual fund MERs can be atrocious at 1-3% because not only is a money manager being paid, but in most cases (except Class F), a trailer is being paid to the slimy salesman/brokerage. Anyone who quibbles about a 0.05-0.20% ongoing MER on a broad based index ETF is not really from this planet.


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## Moneytoo (Mar 26, 2014)

AltaRed said:


> Anyone who quibbles about a 0.05-0.20% ongoing MER on a broad based index ETF is not really from this planet.


That's not the point. The point is - do you remember how you got convinced that staying in the market is better for long-term results than trying to time the market (buying low - selling high)? Was it from a personal experience or from reading a convincing article?


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## Belguy (May 24, 2010)

I can tell you from long term experience that purchasing Toronto or Vancouver real estate has been the best long term option. Disclaimer: Past performance is no guarantee of future results.


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## uptoolate (Oct 9, 2011)

By 'long term' Belguy you must mean from 2002 onward as prior to that it was real estate in those two cities was not that great of an investment and certainly the stock market blew real estate in those cities away from 1979 to 2000. Looking at the charts it seems likely that US equities have also outperformed from 2009 onward but that is just cherry picking. 

As far as the question, broad based definitely. The more an ETF is tilted toward small cap and value stocks, the more likely it is to outperform based on Fama and French work. This is why non-cap weighting should result in better returns and is the basis for DFA funds. Cost matters though so if you have to pay much for the small-value slant the premium can easily be eaten up.


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## scorpion_ca (Nov 3, 2014)

I only buy broad based ETF such as VCN, VUN, XEF, ZAG, ZRE and ZPR.


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## Eclectic12 (Oct 20, 2010)

Moneytoo said:


> That's not the point.


Maybe not ... but such a small MER makes holding through a down cycle far more palatable (though more expensive then holding the stock directly).




Moneytoo said:


> The point is - do you remember how you got convinced that staying in the market is better for long-term results than trying to time the market (buying low - selling high)? Was it from a personal experience or from reading a convincing article?


First articles, second observing others sell off when "I can't take the paper losses anymore" and finally comparing the number that were sold to preserve capital which didn't drop enough to buy again versus the number held that delisted/went bankrupt.

The main ones I've done well selling then re-buying are where there's been a five to ten fold long term gain, a big indication that the negative sentiment is wide spread and there's a quick significant drop that leaves a big gain on the table (ex. late 2008).


It's not that I don't believe selling then rebuying can't work ... it's more that most don't get it right and don't have time/analysis/ability to react appropriately.


Cheers


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## Moneytoo (Mar 26, 2014)

Eclectic12 said:


> It's not that I don't believe selling then rebuying can't work ... it's more that most don't get it right and don't have time/analysis/ability to react appropriately.


Fair enough  I guess I'm too caught up in this observation:

"Most investors don’t know this, but historically *the stock market is either in a bear phase or trying to make up losses incurred during down markets 60% of the time.* The implication is clear – if you can limit losses in down markets, you have the potential to use subsequent rallies to build your wealth rather than just getting back to the breakeven point."


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## AltaRed (Jun 8, 2009)

Moneytoo said:


> Fair enough  I guess I'm too caught up in this observation:
> 
> "Most investors don’t know this, but historically *the stock market is either in a bear phase or trying to make up losses incurred during down markets 60% of the time.* The implication is clear – if you can limit losses in down markets, you have the potential to use subsequent rallies to build your wealth rather than just getting back to the breakeven point."


Virtually no one can market time successfully enough to make a material difference. It is only known in hindsight. "Buying the dips" and then holding is about the best 99% of investors can do. The problem with the 'quote' is most who limit the downside by cashing out (through stop losses or similar) are the same ones on the sidelines during the biggest part of the subsequent gains and likely only re-invest when the bull market is already 'long on its legs' and well past the initial 'cash out' point. The quote is really data mining. There are studies that also show that very few days of major gains make up most of the advancement of the stock market. The trouble is: If you are not invested on those days, then one has lost out on the opportunity. IOW, market timing does not work.

Ultimately, there is nothing like holding broad based ETFs over the long term to help avoid the panic of selling individual stocks low and buying momentum/growth stocks high.


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## Sampson (Apr 3, 2009)

altared said:


> most who limit the downside by cashing out (through stop losses or similar) are the same ones on the sidelines during the biggest part of the subsequent gains and likely only re-invest when the bull market is already 'long on its legs' and well past the initial 'cash out' point. .


+ lots


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## GreatLaker (Mar 23, 2014)

Moneytoo said:


> Fair enough  I guess I'm too caught up in this observation:
> 
> "Most investors don’t know this, but historically *the stock market is either in a bear phase or trying to make up losses incurred during down markets 60% of the time.* The implication is clear – if you can limit losses in down markets, you have the potential to use subsequent rallies to build your wealth rather than just getting back to the breakeven point."


Moneytoo is that quote from this web page: Passive Vs. Active Investing, a New Perspective

The author goes on to say:

While individual investors can engage in active investing on their own, I do not recommend that you do so. Using a professional money manager allows you to pursue the things you enjoy rather than sitting at a computer watching the stock and bond markets all day;
I have always counseled investors to seek out the services of professional active money managers rather than going it alone.
Management fees also vary but are typically around 2-2.5% annually. The money manager shares a portion of that fee with Halbert Wealth Management for introducing the client, so there is no additional fee paid to my company by the investor.
The whole page is a pitch for the author's actively managed wealth management services. The type of pitch that tries to convince individual investors that investing is too complicated to do it on their own. The type of sales job that posters here should not fall for.


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## Moneytoo (Mar 26, 2014)

AltaRed said:


> "Buying the dips" and then holding is about the best 99% of investors can do.


Agree.



> Ultimately, there is nothing like holding broad based ETFs over the long term to help avoid the panic of selling individual stocks low and buying momentum/growth stocks high.


Disagree. And consider it a faulty logic to compare mediocre with downright stupid and coming to conclusion that the first is better. Few times that I tried to time the market last year I got it pretty close: buying near bottom - selling near top (not too greedy - making 10-30% profit). With ETFs as well, not just with stocks. 

This year it got harder, so I bought or sold too soon a few times. But it's still better than buying at the top instead of waiting a bit to buy cheaper. The market is changing, so "buying the dips" might turn into "buying the drops". I'm not talking about 99% of investors though - but I'm pretty sure that even Couch Potatoes can do better than average if they keep some cash on a side and load up on ETFs when they "go on sale" (instead of following the mantra "it's time in the market, not timing the market" - which is fine for a bull market, but not for side-ways or bearish one. Yet most keep repeating it, ignoring what's happening right in front of their eyes...)


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## Moneytoo (Mar 26, 2014)

GreatLaker said:


> The whole page is a pitch for the author's actively managed wealth management services. The type of pitch that tries to convince individual investors that investing is too complicated to do it on their own. The type of sales job that posters here should not fall for.


I'm capable to digest relevant information from any source - and it amazes me how people disregard good thoughts because they're coming from "the wrong source". There're many articles on the subject, this quote was just the most concise and to the point.

Peace out. Sapienti sat


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## My Own Advisor (Sep 24, 2012)

GreatLaker said:


> [*]Management fees also vary but are typically around 2-2.5% annually. The money manager shares a portion of that fee with Halbert Wealth Management for introducing the client, so there is no additional fee paid to my company by the investor.


Given all the resources available to investors today, and the competition, no investor on earth should be paying 2-2.5% annually for money management.


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## Belguy (May 24, 2010)

Concerning market timing, there is always the old adage, "buy when it snows and sell when it goes". That way at least you will miss the two months of the year with historically the worst returns on average, those being August and September. On the other hand, November through January are normally the strongest period.

I trust that all of you market timers are sitting on the sidelines until the snow arrives.


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## Moneytoo (Mar 26, 2014)

Belguy said:


> I trust that all of you market timers are sitting on the sidelines until the snow arrives.


Huh? From What are you buying? thread:

2015-07-16, 02:11 PM



Moneytoo said:


> Thinking to buy some Magna (MG-T) that dropped a bit (on the acquisition news I guess), would appreciate any warnings!
> 
> (I've been watching it since January, but ended up buying XTC-T for myself last month - which is up more than 20% since then... but now considering Magna for my husband's RRSP, so trying to be more careful )


2015-07-17, 10:24 AM



Moneytoo said:


> PS Bought 70 shares of Magna (MG-T) for $69.50 (yesterday's limit order got executed this morning before it went further down - so @none can gloat...


2015-07-20, 10:03 AM



Moneytoo said:


> 100 shares of Brookfield Property Partners LP (BPY.UN-T) for $27.72 (building my own Global REITs ETF in CAD - planning to sell RWX-N later this year and use USD for something better, like VTI )



2015-07-23, 11:46 AM



Moneytoo said:


> 50 shares of BAM.A for 45.54 (just love symmetric numbers... had a limit order that got executed this morning )


2015-08-03, 02:18 PM



Moneytoo said:


> Upped my husband's limit order for 50 shares of Apple from $115 to $120 this morning - and as always it went further down right after the order got executed... But now he has 200 shares at the average cost of $103.50 that he plans to hold forever, and I take solace that I bought it at its MA(200) - not the best price, but good enough
> 
> Still waiting for VTI to drop... sigh


2015-08-12, 12:07 PM



Moneytoo said:


> For VTI you mean? I entered the order last night for 30 shares at $106.16 (slightly above its current EMA(200) of $106.09) - just checked, it got executed this morning  (husband is still waiting for $105.50... maybe tomorrow? lol)


2015-08-20, 05:44 PM



Moneytoo said:


> Well - a week later my husband's patience paid off once again. But good that I checked his order few mins before the close - and saw that it didn't get executed even though the price was below! Quickly changed it to market price - and got 50 VTI @ 105.3199
> 
> (He has USD to buy more if it goes down further - and I'll try to wait for XEF @ 26.50, but most likely will give up and up the order, as usually... lol)


2015-08-24, 10:36 AM



Moneytoo said:


> Yay!
> 
> View attachment 5417


2015-08-25, 10:19 AM



Moneytoo said:


> No more cash in my accounts (and nothing to sell... lol), watching VTI for my husband (who believes the fun is not over yet, so didn't buy yesterday - has USD for 70-80 shares, wants to try to buy near bottom... )


But maybe "we" should...


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## GreatLaker (Mar 23, 2014)

Moneytoo said:


> Peace out. Sapienti sat


Sorry Moneytoo, I did not mean to seem like I was criticizing you or misconstruing your comment. :frown: Markets go up and down quite unpredictably and it just does not follow (to me anyway) that investors can find a sustainable cost-effective way to capture the gains but limit losses in down markets.

Maybe I should be spending more time hanging out in the FWF or Bogleheads forums. :smilet-digitalpoint


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## Moneytoo (Mar 26, 2014)

GreatLaker said:


> Maybe I should be spending more time hanging out in the FWF or Bogleheads forums. :smilet-digitalpoint


Whats FWF?  The only other forum I frequent is RFD Investing, they have a few smart people there who challenge conventional wisdom (trying to learn from the best as one day I'm hoping to manage a million+ portfolio - and no, I wouldn't pay more than 1% to anyone, and would prefer to do it myself... )


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## Synergy (Mar 18, 2013)

Moneytoo said:


> Whats FWF?  T


http://www.financialwisdomforum.org/forum/


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## Moneytoo (Mar 26, 2014)

Synergy said:


> http://www.financialwisdomforum.org/forum/


Oh that one - thanks! I read it for a bit before (and saw some CMF regulars there), but didn't even register - too boring for my taste...


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## AltaRed (Jun 8, 2009)

Moneytoo said:


> Oh that one - thanks! I read it for a bit before (and saw some CMF regulars there), but didn't even register - too boring for my taste...


Investing should be boring....really. There is nothing magical about investing if one follows classical investing theory that has been espoused by Benjamin Graham and others. For a long term experienced investor, 20 trades a year would be an active year.


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## Moneytoo (Mar 26, 2014)

AltaRed said:


> Investing should be boring....really. There is nothing magical about investing if one follows classical investing theory that has been espoused by Benjamin Graham and others. For a long term experienced investor, 20 trades a year would be an active year.


If nothing changes financially (i.e. we don't lose our jobs or get ill or encounter an unexpected big expense not covered by savings account), I'll be depositing 5K/month till December'16 in my accounts. That's at least 12 trades per year - plus buying stuff for my husband in his accounts  Maybe after that I'll realize that all my attempts to beat the market are futile and might as well just rebalance twice a year and look for fun and excitement elsewhere - or maybe will keep the portion of portfolio "for fun", we'll see 

Till the end of this year, I'll try to stick to the plan:

Mid-September - 5K in TFSA, XAW
Mid-October - 5K in TFSA, XAW
Mid-November - 5K in RRSP, 5 year Fairfax strip bond
Mid-December - 5K in RRSP, XEF

My husband's TFSA: ZCN (maybe), XEF and VFV
My husband's RRSP: VTI, XEF and Canadian stock (add to NFI and/or buy Canadian Tire)

And yes, I know (was told on this forum when I joined) that we should treat all our accounts as one. But I ended up buying emerging markets in RRSP and Canadian stocks in TFSA and U.S. and developed countries equities in my husband's RRSP. Guess who's been doing most of the work and whose accounts did better? So when we moved to Questrade last summer (where ETF purchases are free), I said screw it, let me buy some VTI and XEF as well.

And yes, I know, it's recommended almost everywhere to buy USD ETFs in RRSPs to save on withholding tax and Canadian equities in TFSAs (don't have non-registered accounts yet) But after a year it became apparent that it makes more sense to buy stuff that grows more in TFSAs as you'll never pay taxes on it - while you will eventually on RRSP withdrawals. Yet people keep repeating the same (bad in my opinion) advice in a gazillion "Asset allocation and what to buy where?" threads.

And don't get me started on bond ETFs (sold CLF and CBO and don't plan to buy any more) or my favorite "Ah just buy a bank, a utility, a pipeline, a telecom and a railroad - and keep till retirement!" stock stapler (thank god telecoms held up - but wish I sold all Bell for $60 in February, not just fifth...)

Anyways, maybe one day I'll realize how stupid I was today - but for now, thank you very much, I'm done with "Investing for Dummies 101".


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## lost in space (Aug 31, 2015)

As a dividend investor I struggle with the idea of a Canadian broad based ETF. I only really look at stocks with a yield above 4% in the end I went with XEI currently 5.2% and a month distributions, more importantly as the dividends have increased so have the distributions, an important factor. In the end I gave up some yield to have a balanced portfolio as it's my wife's work (LIRSP) pension. VUN whole market, yield only 1.5% but non hedged, and VEF Ex North America

I wasn't too happy with a ZAG the BMO bond fund but as mentioned I'm more conservative as it's my wife's money but now I'm glad, while the markets were crashing ZAG has held it's own


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## AltaRed (Jun 8, 2009)

Moneytoo said:


> Anyways, maybe one day I'll realize how stupid I was today - but for now, thank you very much, I'm done with "Investing for Dummies 101".


Hind sight is always 20-20 and there are always outliers (the tails) to the bell curve, but many retail investors who have been stock picking for 15-20 years begin to recognize that 'active stock trading' gains very little traction in the long run for the amount of effort one puts in. It takes 20-30 hrs a week of work to 'be on top of stocks' and trading is pretty much a 50-50 or 60-40 proposition (giving stock pickers the benefit of the doubt here). I used to mutual fund most things until the late 1990's when E*Trade discount brokerage came on to the scene and I became primarily a stock picker (not trader) except for ex-NA stocks which always stayed in mutual funds (later ETFs). I've had my share of success (and failure). About 8-10 years ago when I retired, I realized stock picking in the USA was way too much work and the broad market is both balanced and efficient. So now I am ETFs in everything ex-Canada and now stock pick only in Canada.

Even that has become tiring with more interesting things to do with my time. I will continue to stock pick Canada only because my unrealized cap gains are now huge, but no longer am I really 'trading' stock. My picks are to 'buy and hold' and cash in only when I need to withdraw money sometime in the next 30 years. That said, there is always portfolio maintenance, selling a few here and there for tax loss harvesting, or a company starting to lose its way and needing to be swapped for something else. I will buy the odd 'exceptional' opportunity when the opportunity presents itself, e.g. Aug 24th, but otherwise, I do little with my accounts.

Clearly what one is interested in doing depends on one's stage in life and what else is demanding one's time. Different strokes for different folks.


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## uptoolate (Oct 9, 2011)

^ What they said!

I'm going to believe the research and consider who is on the other side of the trade.


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## Moneytoo (Mar 26, 2014)

AltaRed said:


> So now I am ETFs in everything ex-Canada and now stock pick only in Canada.


Almost same here - have 25 stocks, 20 Canadian, 5 US, planning to buy more Canadian, but keep indexing with US and International equities 



AltaRed said:


> Clearly what one is interested in doing depends on one's stage in life and what else is demanding one's time. Different strokes for different folks.


Exactly! Right now investing is my only hobby, so the results are less important than the excitement of learning, chasing and (sometimes  getting it right! I'd love to try options and day trading, but just don't have the time with a demanding full-time job. Maybe I'll do it when I'm retired, maybe I'll get interested in something else before that (for example, plan to start saving for the renovation in 2017) and will become more passive, but for now - these are more exciting times than bull or flat market!


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## Moneytoo (Mar 26, 2014)

Posted this quote in another thread, but maybe some will find this warning useful here as well:

Currently, high-net-worth (HNW) individuals are more interested in specialized, deep value opportunities than in the broader market. Following their lead seems the wise thing to do.


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## uptoolate (Oct 9, 2011)

I'm not clicking on the link but I would think that the advisors/institutions who want to milk money from HNWIs are very much in interested in getting said HNWIs involved with just about any 'opportunity' that doesn't involve them keeping all of their money working for them in proven winning strategies. And hey, if you can get some of the less than HNWIs to follow their 'lead' - all the better. One of the hallmarks of a sheep sheering endeavour is claimed 'exclusivity'. I'll just stick with my indexes thanks.


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## Belguy (May 24, 2010)

Another gentle reminder after another difficult day on the markets--buy when it snows and sell when it goes. November might be a good buying opportunity if it snows that early. If not, try December.

If you're currently fully invested, lots of luck because you might need it. If, on the other hand, you're sitting on a lot of cash at the present time, you must be some kind of genious. Good on you!


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## Moneytoo (Mar 26, 2014)

The Patient Investor

The Patient Investor is the rarest specimen of all. She may have been a Gambler, Trader or Ostrich at one point in her life, but she has learned from her mistakes and now takes an active role in managing her own investments for the long run. Although she is not a Nervous Nellie, she shares a desire for safety, which is why she keeps a portion of her portfolio in fixed-income investments, and the rest in high-quality stocks, index exchange-traded funds, or a combination of the two. Above all, she has learned that building wealth is a long-term exercise, measured in years or decades, and that short-term stock market blips are perfectly normal. The Patient Investor also eschews debt, lives within her means and sleeps well knowing that her money is being managed in her best interests.

http://www.theglobeandmail.com/glob...hat-kind-of-investor-are-you/article18732390/


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## uptoolate (Oct 9, 2011)

There you go. I did click on that link and would like to think that I could include myself in that category. And remember that 'takes an active role' is much different than using actively managed products. Cheers.


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## Moneytoo (Mar 26, 2014)

I'm getting there (wasn't tempted to up the limit on my husband's limit order for VTI today - and it's two more weeks before I make my monthly deposit, no cash in my accounts, as usually... lol)


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