By Guest Blogger Doug Rowat
We only use exchange traded funds (ETFs) in our client portfolios. But this week, instead of detailing all the strengths of ETFs (the efficiency, diversification and low cost, for example), I will explain, much to the horror of my peers, why we don’t use two other common marketable securities: individual stocks and mutual funds.
Why we don’t use individual equities
There’s nothing inherently wrong with stocks, after all, equity ETFs are made up of them; however, the problem is the number of stocks typically required to properly control risk. To completely eliminate “unsystematic risk” in a US portfolio, for example, requires dozens and dozens of individual equities. Systematic risk refers to market risk. For example, the 2008–2009 financial crisis more or less indiscriminately dragged down all stocks. Unsystematic risk refers only to company-specific risk. For example, Enron went bankrupt because management was fraudulent. Systematic risk cannot be eliminated through diversification, but unsystematic risk can be.
Proper Diversification: It Takes a Lot
Source: Burton G. Malkiel, ‘A Random Walk Down Wall Street’
However, as you can see from the chart above, eliminating unsystematic risk takes about 60 individual stocks. Keep in mind that eliminating unsystematic risk doesn’t mean that you’re risk-free, it simply means that you’ve brought risk down to a level that doesn’t exceed the market. It’s not practical for most retail investors to own 60 individual equities. Trading costs, for example, would quickly become excessive. And having an informed outlook on all these different companies is, needless to say, unlikely.
Furthermore, creating a GLOBAL portfolio with individual stocks is even more problematic. I’ll be the first to admit, for instance, that I couldn’t pick a Japanese consumer stock to save my life. Bill Murray’s famous quote from Lost In Translation, “For relaxing times, make it Suntory time”, marks the extent of my knowledge of the Japanese alcohol and spirits sub-sector, for example.
For most retail investors, an equity-only portfolio is expensive and cumbersome, and impractical for global diversification.
Why we don’t use mutual funds
S&P regularly provides its SPIVA Scorecard, which examines the performance of actively managed Canadian mutual funds versus that of their benchmarks and corrects for survivorship bias. Survivorship bias? Yes, mutual fund companies have this habit of discontinuing funds that have poor performance thus, ostensibly, wiping away that unflattering data forever. The SPIVA Scorecard attempts to account for this performance, essentially holding the mutual fund companies’ feet to the fire. The data reveals, unsurprisingly, that the vast majority of mutual funds underperform their benchmarks—with high management fees being the main reason. The table below shows their dismal long-term track record. S&P, by the way, also does a scorecard for US mutual funds with similar results.
No doubt, there are financial advisors who have a careful and highly effective system for identifying the 9% or so of equity mutual funds that actually do outperform their benchmarks over the long term. More power to these advisors. However, what I’ve seen more often is a less rigorous due-diligence system of simply selecting the funds that are ranked highest by Morningstar, the industry’s most widely known mutual-fund evaluator. However, as a recent article by The Wall Street Journal has shown, chasing the best star ratings has its drawbacks. The Journal pointed out, after examining the performance of thousands of funds, that only 12% of 5-star-rated funds maintained this rating after five years. Basically, the Journal highlighted that the Morningstar five-star rating is not a good indicator of future outperformance.
Convergence to the Mean: Morningstar Ratings Over Time
Source: The Wall Street Journal
I’m not concluding that individual stocks and mutual funds don’t have merit. If you have the resources to conduct effective due diligence and add value for your clients by utilizing both, then keep up the good work. However, in the aggregate, I’m skeptical.
So, why should I simply trust Turner Investments’ active ETF management I can hear you saying? Fair point. I think our clients largely have been pleased with performance. But, our services include much more than just portfolio management. Life-long financial planning, tax strategies, regular market commentary, sober second thoughts on major purchases and overall risk control are just a few of the other services our clients pay us for.
And one thing I guarantee: If our clients find our performance unsatisfactory, we’re only a phone call away. Good luck getting that high-priced mutual fund manager on the line.
120 comments ↓
With everything seemingly valued so high, is it a bad time to build a portfolio now?
It’s interesting that when houses cost the most ever, people clamour to buy them. When markets rise to new heights, people recoil. – Garth
Hey Robax, I saw you moonlighting on the television the other day.
Next time I see the boss of this blog I will put in a good word on your behalf…
M43BC
https://m.youtube.com/watch?v=vVrKeK_S7Mc
investments are for long term
More excellent advise.
And for FREE no less.
Doug, take the rest of the weekend off.
You’ve earned it.
Meanwhile in the GTA….
http://blog.newinhomes.com/news/whitby-meadows-draws-huge-crowd-on-opening-weekend/
Hi Doug,
Thanks for the informative post.
With regards to actively managed mutual finds is it much more common to find value in smaller markets compared to larger?
There is a Calgary based investment company that has been killing it over the years with their Canadian and developed International equity funds but lagging behind with their US Equity fund possibly do to the shear size of that market.
I know past performance is not a prediction of future returns but is there any info out there with regards to the size of a market and the ability for active managers to beat their respective index?
We only use exchange traded funds (ETFs) in our client portfolios.
_________
Fair enough, … but, I was informed recently that, ”on an after-inflation basis, the S&P/TSX composite index lost money over the past decade. The TSX averaged a gain of 1.1% annually for the 10 years to late-October, while inflation averaged 1.6% And, yes, that includes today’s record-high close on the TSX.” [Globe and Mail]
I didn’t check it, … but if one assumes above is correct, … passive investing (index ETF investing ) long-term, just perhaps, is not a path to building wealth?
Anyway, … same article also questioned, “what exactly is long term? It’s not five years or less – that’s basic. Now, it seems that 10 years may not be enough, either, …”
… just a thought.
F.S., Comox, BC.
While PASSIVE ETFs are indeed “cheap to buy” vs the typical ACTIVE mutual fund, it comes at a downside price…
ETF’s offer 0 (zero) downside protection in a correction. You follow the sector or market 100% as you own it all.
Active Mutual Funds will beat ETF’s in this case. So you save 1% a year on an ETF vs MF, but then lose 5-10% in a correction…
As advisors we should be protecting the clients downside and not just saving them on fees. (Penny smart, pound stupid).
Do you offer a service where you can combine your tfsa and rrsp to use as the mortgage? This is possible but no one out there is offering such service. Not that i know of.
#6 Joshua on 11.04.17 at 3:02 pm
Hi Doug,
Thanks for the informative post.
With regards to actively managed mutual finds is it much more common to find value in smaller markets compared to larger?
—
As SPIVA shows, 91% of equity funds underperform over the long term. That data point alone would convince me stop my search for any mutual fund.
–Doug
#1 would it be the same thought? Buy high hope higher?
Isn’t ut supposed to be buy low sell high?
Where do I sign up?
As an individual how do I identify when a fund is exchange traded?
Dayum, it was a real pleasure reading today’s blog post.
Outside the data confirming that my less than stellar opinion of the rank and file advisories that “push” or at least focus exclusively on mutuals v. ETFs, it is the reiteration that TI are much more than just a “take the money and run” advisory. Those value add services can be so so valuable at times.
My personal opinion from nearly 40 years of investing and almost one year of being one those “rank and file gnomes” is that there simply isn’t the experienced talent in those ranks to add value to their clients investments. Too much focus and time spent on building a client base to have the time for market due diligence. Just get a client, puff them with Morning Star bafflegab and move on to the next client hoping they don’t ask pertinent questions you can’t adequately answer. BTW, I got out of the rank and file advisory business because of my disgust with the boiler room nature of the business.
#1 Overheardyou on 11.04.17 at 2:06 pm
With everything seemingly valued so high, is it a bad time to build a portfolio now?
——
And what alternative would you propose instead? Cash? Inflation erodes that. Bitcoin? Well…no! Even Bitcoinnaire is starting to cash out based on what he mentioned over the last few days. That ship may have sailed too. If he starts cashing out, the end may be near.
I recommend you read “The Four Pillars of Investing”. If having a balanced and diversified portfolio of ETFs that is rebalanced annually or more often if there’s some large swing mid-year still doesn’t make sense after reading that, well, I don’t know what else to say.
#5 N on 11.04.17 at 2:53 pm
Meanwhile in the GTA….
http://blog.newinhomes.com/news/whitby-meadows-draws-huge-crowd-on-opening-weekend/
——
What a sad article. Many fools and their cash will soon be parted. I liked where it indicated how purchasers made decisions to purchase in 10 minutes. Unbelievable. I wonder how many of these fools will claw their own eyes out after realizing what they’ve done. LOL
RE: “#1 Overheardyou on 11.04.17 at 2:06 pm
With everything seemingly valued so high, is it a bad time to build a portfolio now?”
Depends what you build the portfolio with. Everything is not valued so high. At the moment people expect:
-interest rates will go up forever
-houses will crash in value
– technology companies will keep their 100 to 1 and higher price to earnings ratios (for those that actually have earnings)
-oil stocks will stay in the toilet
– alternative energy companies with no earnings and speculative growth plans will continue to operate as giant ponzi schemes and there will always be a bigger idiot
-bond prices will go to zero
-there will never be another recession. What is a recession?
-A car company that produces less than 100 cars per month on its main mass production line, and has one factory with three lines, will always have a higher market valuation than any other car company in the world.
-governments can borrow recklessly forever. There is no danger of any government going bankrupt, or not being able to make its payments. Government debt never needs to be paid back and can be refinanced forever.
-a mortgage is not a debt, it’s an asset.
-Bank stocks can only go up in valuation.
The list goes on. If any of the above turns out not to be true, then this creates buying opportunities for securities of one kind or another.
#101 crowdedelevatorfartz on 11.04.17 at 8:26 am
@#29 akashik record
That Japan?
—
That Japan… of what?
nice read
will we see the day when financial advisory firms share historical data as the mutual fund industry?
such as ;
return, alpha, Sharpe ratio, beta.
what % of advisory firms beat a corresponding index? I would guess LESS than that of mutual funds. Likely significantly so. Which begs the question- those cleints using a firm are excepting lower returns in exchange for tax advice/estate planning/someone to call when the markets get rough
I’m not concluding that individual stocks and mutual funds don’t have merit. If you have the resources to conduct effective due diligence and add value for your clients by utilizing both, then keep up the good work. However, in the aggregate, I’m skeptical.
……..
just because person A doesnt excel at picking stocks doesn’t mean it has little merit and we should all be buying a ‘basket of stocks’, as they’re ‘ less risky’
etf’s ?
zwb – why would anyone pay .72 mer for this etf? All you got to do is BUY the big 5 banks and save .72%
confirmation bias is fun– we navigate to data that supports our beliefs or rather what we see as right/the correct way.
#104 Ace Goodheart on 11.04.17 at 8:53 am
RE: #95 the ryguy on 11.04.17 at 2:20 am
#29 akashic record on 11.03.17 at 7:50 pm
This is a very large country.
You can really not “pack it” full of people. Everyone will fit.
Most of the land in Ontario is Crown Land. If they need more for development, they can have another general all sale.
People are good. We need more.
Anyone who says we only need people of a certain colour, is an idiot (and a racist)
—–
The fact that most of the land in Ontario is Crown Land probably has something to do with unresolved legal situation with First Nations.
Dating back to those times when immigration to North America had no controls and the general view was that “this a very large continent, you can really not ‘pack it’ full of people, everyone will fit”.
Have you ever took the time to explore and contemplate what happened to Natives?
Regardless, you are responding to an argument about how to develop future economy with ideological, political argument.
ETFs are awesome for most of the portfolio
Major challenge is bond, small cap and EM exposure
Sorry I love ETFs but for these three I get low cost active
Series D or A low cost fundco
Anything can happen if course but odds are very good those investing now and who hold for 10 years will be down in real after tax terms
Wouldn’t surprise me if US blue chips go into a 99-00 melt up into early 2020
ETFs allow you to keep costs down
The everything but Precious Metals bubble is amazing
Caveat emptor
Attention new Blog Dogs the following user names are still available. Reserve yours today:
BTC BSD
Mark of the Least
Stop Scion
Heir in the Awful Places
Social Justice Worrier
ETH ETA?
Tableau Rasta
Chartist Guy In the Room
Fancy Coloured Blog Dog
A Random Dork on Wall Street
Where are the customer’s blogs?
REITa MacNeil
…
Reserved: Blog Dog Poloz
Doug, you spelled “sober” wrong.
Should be “sobar”.
Right SM?
ETFs are awesome for most of the portfolio
Major challenge is bond, small cap and EM exposure
Sorry I love ETFs but for these three I get low cost active
Series D or A low cost fundco
Anything can happen if course but odds are very good those investing now and who hold for 10 years will be down in real after tax terms
Wouldn’t surprise me if US blue chips go into a 99-00 melt up into early 2020
ETFs allow you to keep costs down
The everything but Precious Metals bubble is amazing
Caveat emptor
………………
series A funds? never. brokerages are now required to eliminate them . D series is still not good enough
F series. Questrade has them available. Bye bye itade!!
#8 The Technical Analyst, CSTA, CPD on 11.04.17 at 3:32 pm
While PASSIVE ETFs are indeed “cheap to buy” vs the typical ACTIVE mutual fund, it comes at a downside price…
ETF’s offer 0 (zero) downside protection in a correction. You follow the sector or market 100% as you own it all.
Active Mutual Funds will beat ETF’s in this case.
—
Based on what evidence? If 91% of fund managers underperform their benchmarks then they’re almost certainly adding no value in any kind of market–or for your (unsubstantiated) logic to be true, hopelessly, hopelessly, hopelessly underperforming in an uptrending market. If this is the case, I’ll take my chances with ETFs in a down market.
–Doug
I’m at the point in time where I won’t even buy any stock unless I have an equal short position on something else. I still buy penny stocks as it’s the only thing left that has any value today. As one can see Trump hasn’t made it easy for day traders. When the stock market only goes either always up or always down is the worst of all worlds for day traders.
etf’s ?
zwb – why would anyone pay .72 mer for this etf? All you got to do is BUY the big 5 banks and save .72%
confirmation bias is fun– we navigate to data that supports our beliefs or rather what we see as right/the correct way.
—
Read Louis Menand’s scathing review of Lynne Truss’s Eats, Shoots & Leaves.
To paraphrase Mr. Menand, it’s hard to fend of the suspicion that your whole comment isn’t a hoax.
Isolate ZWB? Because there aren’t 1000s of other available ETFs that are more diversified and lower cost. Confirmation bias indeed.
–Doug
Re: #8 The Technical Analyst, CSTA, CPD on 11.04.17 at 3:32 pm
It’s looking more and more like they’ll never be any correction until the stock market in America finally peaks. Nothing new ponzi’s all follow the same pattern.
#24 Ponzius Pilatus on 11.04.17 at 5:17 pm
Doug, you spelled “sober” wrong.
Should be “sobar”.
Right SM?
—
Sobar is much more poetic. It has the fingerprint of a human.
#26: Based on what evidence? –Doug
Go back a few months, I posted the proof here using a common RBC 100% equity fund vs the comparable ETF in the 2009 crash. The RBC active MF saved the investor over 14%.
Uptrend: ETF’s win.
Downtrend: Active MF’s win.
It is all about dumping the losing sectors. In a market-wide ETF you can’t do that.
I present this same case to the two largest banks in Canada I work for doing their technicals.
Had “Bar of Gold” today at the breeders at Del Mar followed the track bias as every front runner folded up in the stretch.
So, why should I simply trust Turner Investments’ active ETF management I can hear you saying? Fair point. I think our clients largely have been pleased with performance. But, our services include much more than just portfolio management. Life-long financial planning, tax strategies, regular market commentary, sober second thoughts on major purchases and overall risk control are just a few of the other services our clients pay us for.
—-
The way I look at it, Turner Investment is a local franchise of the large American firm, Raymond James.
Raymond James provides probably the heavy lifting of creating portfolio templates, possibly relying primarily on various computer models. They are most likely fairly similar to the portfolio models that other industry participants make available.
Franchises like Turner Investment does the heavy lifting of marketing, harvesting clientele and somewhat customizing the RJ portfolio templates.
The biggest benefit of hiring TI is if you can sufficiently utilize the “other services” that Doug mentions, which are truly personal advice.
The more sophisticated, structured your wealth is, the bigger the effective value of this personalized advice.
Turner Investments is not a franchise, but a wealth management group focused on clients. Raymond James provides us infrastructure, compliance oversight and investor insurance like all banks do. But, unlike banks, there are no RJ portfolios. No RJ products. No templates. No computer-created model accounts that we follow. No mutual funds. No pooled funds. Every client is treated individually and provided holistic management – blending the business of investing their funds and caring for their other needs, from real estate advice to estate issues. I built this from zero, and am proud of the fact we now rank among the top 3% in North America. There’s a reason for that. — Garth
Read Louis Menand’s scathing review of Lynne Truss’s Eats, Shoots & Leaves.
To paraphrase Mr. Menand, it’s hard to fend of the suspicion that your whole comment isn’t a hoax.
Isolate ZWB? Because there aren’t 1000s of other available ETFs that are more diversified and lower cost. Confirmation bias indeed.
–Doug
…………
good grief
not confirmation bias at all. Playing devil’s advocate. ETFs are not the be and end all as your blog entry suggests. EWB was an example of a rip off product. No protection to the downside is another , for all etfs.
I find advisory firms , en masses, like to trash mf’s cause of COST and underperforance while never reporting THEIR historical data? Any reason why? :)
#31 The Technical Analyst, CSTA, CPD on 11.04.17 at 5:48 pm
#26: Based on what evidence? –Doug
Go back a few months, I posted the proof here using a common RBC 100% equity fund vs the comparable ETF in the 2009 crash.
—
You proved your assertion with one mutual fund? Compelling.
–Doug
Turner Investments is not a franchise, but a wealth management group focused on clients. Raymond James provides us infrastructure, compliance oversight and investor insurance like all banks do. But, unlike banks, there are no RJ portfolios. No RJ products. No templates. No computer-created model accounts that we follow. No mutual funds. No pooled funds. Every client is treated individually and provided holistic management – blending the business of investing their funds and caring for their other needs, from real estate advice to estate issues. I built this from zero, and am proud of the fact we now rank among the top 3% in North America. There’s a reason for that. — Garth
—
Thank you for the clarification. Impressive. Congratulations for your achievements.
So predictable ANTIFAs big Nov 4 revolution a big flop.
Happens every time you send in a socialist to do what comes naturaly a capitalist. Effort and conviction.
Another black eye for the globalist.
J, Google it.
#31 The Technical Analyst, CSTA, CPD on 11.04.17 at 5:48 pm
#26: Based on what evidence? –Doug
Go back a few months, I posted the proof here using a common RBC 100% equity fund vs the comparable ETF in the 2009 crash. The RBC active MF saved the investor over 14%.
Uptrend: ETF’s win.
Downtrend: Active MF’s win.
It is all about dumping the losing sectors. In a market-wide ETF you can’t do that.
I present this same case to the two largest banks in Canada I work for doing their technicals.
——
I’m not impressed with the example provided nor the certifications. Here’s the important question. Being as smart as you are, how big of an investment portfolio have you personally accumulated? You never bring that up, just share your technical analysis which is questionable.
I see and hear many “big hat no cattle” types who talk big, reduce a loss for one client by fluke and then think they know the market better than anyone else. Blah blah blah! Such a load of crap. The chart above regarding the Morningstar ratings is on the mark. Doug is bang on.
The market is irrational and so long as you know that, you will do fine with your portfolio. Choose your %’s for your ETF portfolio and then rebalance annually and maybe a bit more when there’s a big swing in between. That’s it. Or did I need an acronym behind my name to explain that and sound believable?
Stone, RICH, WEALTHY, YAY!
Those 3 are better than CSTA, CPD
As kids we were looking at the neighbors husky, the dog had a baby blue eye and a brown eye.
My friend observed”look one eyes different one eyes the same”
I agree with the content of this post; thank you for sharing all this information and backing it up through reliable sources. I have two questions for Doug / the audience:
– isn’t ETF investing close to momentum investing given that most ETFs are capitalization weighted?
– relatedely, what do you think of equal weighted ETF funds based on the most common indexes such as S&P500?
We should always remember! People who chase the lowest cost/price get what they pay for…..
This is the first time I completely agree with the commentary. ETFs are 100 percent the way to go. You want downside protection when markets drop? Sell and get out. You can’t beat ETFs for diversification, liquidity and low cost. More than makes up for any drawbacks, if any.
Hey Doug
Thanks for the reassuring post. I’m fully invested in ETFs with a big tilt toward equities (I’m 32). I worry that having all my money in ETFs may presents it’s own, unknown risk or crisis. Wouldn’t it be wise to diversify some money out of ETFs into other investment vehicles, such as a mutual fund?
Thanks
Bruce
Do bank brokerage services use templates?
What is the minimum amount a client has to invest with your company before you will consider them? I have (almost) finally convinced my wife that [email protected] has a set of financial incentives that aren’t necessarily in line with our own.
Also, what if we live outside of the GTA?
This blog is not a commercial. Contact me offline ([email protected]). — Garth
Turner Investments is not a franchise, but a wealth management group focused on clients. Raymond James provides us infrastructure, compliance oversight and investor insurance like all banks do. But, unlike banks, there are no RJ portfolios. No RJ products. No templates. No computer-created model accounts that we follow. No mutual funds. No pooled funds. Every client is treated individually and provided holistic management – blending the business of investing their funds and caring for their other needs, from real estate advice to estate issues. I built this from zero, and am proud of the fact we now rank among the top 3% in North America. There’s a reason for that. — Garth
I can confirm that statement. I’ve been a client since it was called turner tomilson. I haven’t personally met Garth because our paths never crossed. I’ve met with the rest of his team and I can tell you that I’m able to call the office and get into contact with anyone if I have a question. On my recent webinar review with Doug he went over my portfolio then asked if anything will change in my life or anything he needs to know so he can plan accordingly. A tax deductible 1% fee is well worth the cost of admission. I use to trade myself but I have a life and don’t want to waste my time thinking about it anymore.
Loved the article Doug and completely agree with your take. I have followed this blog for years and thanks to Garth moved to a balanced portfolio ETF approach years ago which stopped my portfolio’s bleeding with active managers, “strategic mutual funds”, and attempts at market timing/trading. Thanks for that – only wish I had learned faster.
Your approach is the evidence-based one. I just spent the last week reviewing the evidence again for my own blog. I am an amateur, so you don’t need me to say that. However, for the nay-sayers that think an active manager protects you in downturns – you are right that in those bad years active managers tend to beat passive ETFs net of fees by a little bit, but the problem is that in other years the passive ETFs win net of fees. The markets spend many more years in bull than bear mode and the active managers don’t outperform enough in downturns to make it up. You would also think that active managers would outperform in less efficient markets like emerging markets, but again the fees kill them. I am sure there are individuals managers who do consistently win enough to justify their fees, but they are rare and good luck picking them in advance. It seems to me like predicting the weather. You can spend a lot on expensive equipment, mathematical models, experts – and maybe predict a few hours in advance of the “weather rock”. Best to just look out the window for free.
Seems the way to go is passive ETFs in a balanced diversified way like espoused on this blog for years. We are lucky to have gotten this guidance for free. I also agree that financial planning is way more than just a portfolio manager and the real value is in having an advisor help is with making a comprehensive personalized plan, managing our hormonal decision making, and bringing up stuff you never heard of or thought about. We are lucky to have Turner Investments’ evil Harley ridin’ dog lovin’ twin giving us free advice and doing that. If you have the time, stones, and control to act on it on your own, then this blog is a goldmine to make your own personalized plan. If not, get an advisor before you hurt yourself. I cringe when the comments section here goes crazy and Garth has to rein it in. We are lucky, even for those of us who ride solo, Garth is offering us a free helmet.
Recent Sale Report.
I will move back from some affordable ones back over to some heavy hitters.
This one sold 29 days ago.
4055 w 12ave Vancouver.
Asking 4.28
Sold 4.07
Tax assessment 4.39
So overall not as big a discount as some of the other but hopefully I will find some bigger fish to fry this evening…
M43BC
https://www.zolo.ca/vancouver-real-estate/4055-w-12-avenue
Most people just don’t have the stomach to buy and hold stocks. Yours truly included. Emotion really is the killer. We buy and sell – sometimes for a win but other times at a loss. We can all look back with regret and shake our heads but we also forget the emotion at the time that controlled our impulse to sell. These days your one glass of wine and one click away – far too easy to make mistakes. You might make more with bitcoin or apple or facebook in these up trending times but when things turn as they always do, good luck not clicking for a loss at some point. Over time I also believe its a fools game. I’ll stick with these guys.
Index funds and ETFs contain as many losers as winners. And so much money has flowed into passive investing that it’s been noted fair valuations have become next to impossible. This trend will certainly be tested in the next big downturn.
#34 thanks for the reply Doug on 11.04.17 at 6:12 pm
ETFs are not the be and end all as your blog entry suggests. EWB was an example of a rip off product. No protection to the downside is another , for all etfs.
I find advisory firms , en masses, like to trash mf’s cause of COST and underperforance while never reporting THEIR historical data? Any reason why? :)
—
Mutual funds don’t ‘protect to the downside’ either, which is why they almost all underperform their benchmarks.
And what advisory firms are trashing mutual funds? Bank-owned? They heavily promote their mutual funds. Why? Because they manage them and sell them. Independent advisory firms? They don’t create mutual funds, but their advisors certainly sell them ‘en masse’. Virtually no one within this industry trashes mutual funds.
Most commenters on this blog rail against the establishment, but you, oddly, and I suspect unintentionally, defend it.
You are true outlier.
–Doug
Recent Sale Report.
This one sold 27 days ago.
2278 w 33rd ave Vancouver.
Originally asking 3.68 then 3.28 then2.99
Sold 2.82
Tax assessment 3.4
You know I probably should be happy that I found a different way to report recently sold properties without the help of a realtor,but I’m not.
For the best part of a year ,I tried to build a working relationship with multiple realtors on this blog ,partly for transparency,partly so both sides of the story were told in equal measure and let the masses to decide what is best for them.
I will not resort to labelling them scum or shysters ,but it is a sad day for Canada when an immigrant who is willing to sacrifice part of his weekend ,just like the boys on this blog and I haven’t had a response in probably 3 months and all they have to do is show the occasional win ,loss or draw and yet they have time to write posts stating how much they care about their clients.
The fact that you guys could find no goodness in your heart to help me share my goodwill is an indictment on your character and perhaps modern society.
I will make mistakes,I apologize in advance but it is clear to me now that I am flying solo…
M43BC
https://www.zolo.ca/vancouver-real-estate/2278-w-33rd-avenue
That was written as only an advisor can
:)
#37 Smoking Man on 11.04.17 at 6:45 pm
So predictable ANTIFAs big Nov 4 revolution a big flop.
Happens every time you send in a socialist to do what comes naturaly a capitalist. Effort and conviction.
Another black eye for the globalist.
…………………………
How’s your black eye ? That bouncer really nailed you the other night.
Garth et al, do you have a minimum investable amount before you take on new clients? I have a buddy in town that runs a wealth mgmt firm but he’s upped the buy in to $5mil…sadly i do not qualify…
for the outlier compliment
Mutual funds don’t ‘protect to the downside’ either, which is why they almost all underperform their benchmarks.
yes they do
check Mawer Canadian Vs XIC in downleg yrs.
you choose NOT to answer my question, Doug?
‘I find advisory firms , en masses, like to trash mf’s cause of COST and underperformance while never reporting THEIR historical data? Any reason why? :)’
or is that 1% fee you charge eliminate any possibility of beating the index? Oh, here comes the good part ‘we’re are not about beating the index, only mutual funds are’?
What a sad article. Many fools and their cash will soon be parted. I liked where it indicated how purchasers made decisions to purchase in 10 minutes. Unbelievable. I wonder how many of these fools will claw their own eyes out after realizing what they’ve done. LOL
…………..
you come across as a pathetic kid
@#33 akashic reboot
“I built this from zero, and am proud of the fact we now rank among the top 3% in North America. There’s a reason for that. — Garth”
++++++
Get your investment “software” to beat those returns…….. my akashik robot fantasy aficionado.
http://www.google.ca/url?url=http://www.dailymail.co.uk/news/article-4810660/Austrian-brothel-buys-SECOND-sex-doll-high-demand.html&rct=j&frm=1&q=&esrc=s&sa=U&ved=0ahUKEwiK0pq4mKbXAhVPyWMKHRk5BTMQFggjMAQ&usg=AOvVaw1tN1GS-egl3QplSBiLz7LS
“We only use exchange traded funds (ETFs) in our client portfolios. But this week, instead of detailing all the strengths of ETFs (the efficiency, diversification and low cost, for example), I will explain, much to the horror of my peers, why we don’t use two other common marketable securities: individual stocks and mutual funds.” – DR
———————————————————–
Does this mean you never go short? Or do you sometimes use inverse ETF’s?
Although I agree with you in staying away from mutual funds, along with using ETFs for the bulk of my positioning (as high as 25% weighting in any one ETF from time to time), I also participate with individual equities (long or short), restricting each to a maximum of 2-3% valuation.
If I were to fork over my hard-earned dollars to a professional manager, I’d probably choose you. But so far, so good with my long-term performance (-14% in 2017). Don’t laugh – I killed it in 2016! :-)
TCC
@#55 Four Fingers Watson
“How’s your black eye ? That bouncer really nailed you the other night….”
******
Smokey is from the Planet Nictonite. When he removes the “human” mask…….its all good.
https://en.wikipedia.org/wiki/File:%D9%84%D8%A8%D9%8A%D8%A8%D8%AB%D8%A8%D9%82%D9%82.jpg
Recent Sale Report.
I tried to explain to a couple of people why zolo stats have been slightly distorted and a sale like this one and the 13.5m sale on Point Grey Rd can change things in a hurry with low sales numbers.
3333 The Crescent, Vancouver.
Originally asking 22.5m then 19.5 then 18.8 then 17.8 then 16.8
Sold for 15.5m
Tax assessment 20.5
O.k so from these numbers you can deduce that it went for 7 million below original ask or 31% and 24% below assessment.
I came across this one a couple times during my study.
Not surprisingly it was a long burn and was marketed internationally as you will see if you click on the second link and scroll down.
These two sales alone put 30 million into someone’s pockets and help distort the monthly numbers despite taking massive discounts,something my biggest Pink Pumpkin at 3241 Point Grey Rd who is on the hook for 15.5 million.
I said I would find a bigger fish to fry,dinner is served…
M43BC
https://dexterrealty.com/officelistings.html/details-69879528
https://www.primelocation.com/overseas/property/canada/
Recent Sale Report.
4473 w 5th Ave Vancouver.
Originally asking 5.28 then 4.98 then 4.69 then 4.29
Sold for 3.86
Tax assessment 3.6
Couldn’t confirm sold date on zolo but the evidence I found suggested 25 days ago.
Some cases take 5 minutes,some 30 minutes, you just have to search and play the game that no one else can be bothered playing…
M43BC
http://victorkwan.com/mylistings.html/details-67381783
“The markets spend many more years in bull than bear mode and the active managers don’t outperform enough in downturns to make it up.” yup that says it all. It’s ALWAYS All about time not timing.
There’s always a new, improved, hot, cool, option to choose from but in the end on any given year anyone can be right or wrong. Over time, like 5-10 years your just going to get nickel and dimed to death with mutuals and good luck getting insight from a FM sales gnome. Yes there must be some but how do you know one at sight? Anyone who can pass the IFIC exam can sell MFs and if you don’t know already, the IFIC exam only weeds out the congenitally stupid. 50% chance on every question and a pass is 60% right.
And like I keep railing on about…it isn’t ever about how much you make but only about how much you keep.
Rock solid advice, excellent portfolio construction, wealth management, tax advice and a steady hand through the ups and downs is well worth the 1% fee.
I have been with Garth for a few years now and am looking forward to retiring with a seven figure portfolio in my early fifties on a blue collar wage thanks to his firms guidance.
It is a nice feeling to sit back and not have to worry about the financial future and be able to concentrate on what matters, family and good friends, leave the money stuff to the experts, which in my experience these guys are.
I totally understand this investment philosophy, but I don’t understand why you would wouldn’t augment this with a very small percentage of highly speculative stock (eg cannabis producer or junior miner) potentially capable of producing a home run, whose selection would be rotated eg annually.
Recent Sale Report.
2688 w King Edward Ave,Vancouver.
This one sold 31 days ago.
Originally asking 5.26 then 4.88 then 4.68 then 4.58
Sold 4.1
Tax assessment 4.41
So they were fairly ambitious with their opening as the house sold for 22% less ,but it was actually one of the closer ones to assessment.
I actually have been driving by this house twice daily on my way to and from Point Grey each day to try and finish a renovation 4 years in and no end in sight.
Some people have more money than Mike Pence…
M43BC
https://www.zolo.ca/vancouver-real-estate/2688-w-king-edward-avenue
@#58 re
“you come across as a pathetic kid”
******
Sometimes .
While laughing at other peoples incredible stupidity and misfortune may seem crass…..its only human.
http://www.google.ca/url?url=http://www.independent.co.uk/news/uk/home-news/black-humour-jokes-sign-intelligence-aggression-a7551841.html&rct=j&frm=1&q=&esrc=s&sa=U&ved=0ahUKEwiF4Z2NrabXAhUNxWMKHcirBjMQFggaMAE&usg=AOvVaw3sz3Nlli8KlfnXwfwMYzWH
“With everything seemingly valued so high, is it a bad time to build a portfolio now?”
What’s valued “so high”? No-earnings US tech stocks perhaps, but the TSX, for instance, is just barely above its 2008 level on a nominal basis, and still pretty significantly below its 2008 levels on a real (inflation-adjusted) basis. No credit has been given for nearly a decade of retained earnings and debt pay-down. Nor for interest rates which are structurally much lower today than they were back in 2008.
If you draw a trendline of the TSX going back to 1980 (2000) at a slope of approximately 8%/annum, you intersect the index value a number of times throughout the 80s and 1990s, and even the mid 2000s.
However, over the past decade, there have been no index intercepts except briefly in 2009. Using that 8%/annum trendline gets you a TSX index value today of 34,500.
A TSX index level of 34,500 might seem high, but in reality, its just normal long-term growth. The reason we don’t have that level today is because the speculators have spent much of the past decade obsessed with RE instead of observing the rapidly improving fundamentals of TSX index components.
But the fundamentals are rapidly coming into play for a nice run in the TSX index. The bank’s earnings are powering up now that risk premia is expanding rapidly into falling housing prices. The oil and gas sector has cut its costs dramatically in response to the deflationary environment in the oil and gas labour market. Mining is doing better. Telecoms are absolute cash machines having completed most of the heavy lifting of wireless investment. A very bright future to look forward to for Canada and the TSX, that’s for sure, as the wealth of Canadians becomes de-vested from excessively valued housing, and re-vested in the business that keeps the Canadian economy running. With any luck, the unemployment crisis that has gripped Canadians not associated with the FIRE sector might actually start to go away too.
#57 thanks Doug on 11.04.17 at 8:28 pm
check Mawer Canadian Vs XIC in downleg yrs.
//////////////////////////////////////////////////////////////////////////////////////////////
First who cares about Canadian equity? Personally I only invest when it’s tax advantaged and in dividends.
Secondly whilst I do agree that MAW106 vs. VCN or XIC has a very slight edge but normally that’s quoted INCLUSIVE of the 2%+ dividends and a 1.17% MER over a 0.06% on VCN.
And, who cares to invest here?
Show me a mutual that can even match the SP500 or a balanced all in one fund like VXC in 10+ years.
Doug, I agree that investing in about 60 individual stocks to have sufficient diversification is to expensive for most individuals, especially given the need to rebalance from time to time. But can you not have one large diversified stock portfolio for many clients, with the expenses to a large part being attributed only proportionately to each client? To the extent different client investment profiles overlap, their needs can be addressed in effect in the same way as that of 1 individual, and so the fees for buying and sellin (including for rebalancing) can be split across them. No?
@#67 Floppie
“to and from Point Grey each day to try and finish a renovation 4 years in and no end in sight….”
*******
I have a friend who is a highly sought after Finishing carpenter.
He spent two years building an exact 2 story high miniaturized replica of the Library on Parliament Hill inside a mansion in British Properties.
https://en.wikipedia.org/wiki/File:LibraryReadingRoom.jpg
Another carpenter spent 2 years on the master bedroom.
The house was 7 years and 4 designers into a 10 year? build…..
The newest designer walked into the “Library” and proceeded to talk the billionaire owner into ripping it all out and redesigning……
The Master bedroom was next…….
My friend quit as did the other craftsman.
The Uber rich and their money
*Correction I mean quote mutual inclusive of fees. Seldom quotes are inclusive of fees. Low fee passives like Vanguard, BlackRock reign in the long run.
Mawer is markedly better than the average ‘active’ mutual rotting on most group plans that’s for sure. But in the long run low cost passives meet it and beat it. Plus again who cares about <2% of the world market? Do you go 20% in Denmark funds? Neither do I.
Recent Sale Report.
This one sold 21 days ago.
O.k ,time for a change of location and budget.
This one barely has a Westside address in Mt Pleasant.
23 w 14th Ave ,Vancouver.
Originally asking 1.93 then 1.85 then 1.74
Sold 1.74
Tax assessment 2.1
So this is one of them ones that got ground down but will be recorded as being sold at ask.
They got an Westside address by 50 meters.
If the big earthquake comes they could wake up on the Eastside of town…
M43BC
https://www.zolo.ca/vancouver-real-estate/23-w-14th-avenue
You proved your assertion with one mutual fund? Compelling. –Doug
——–
Who said anything about using one fund? Pick any average equity fund you like and run the analysis yourself.
Or don’t.
Recent Sale Report.
This one has a 38 day scab on it but by Vancouver real estate reporting times that’s farm fresh.
2994 w 32nd Ave ,Vancouver.
Originally asking 2.96 then2.87
Sold 2.76
Tax assessment 2.99
One of the less dramatic cases presented ,but they all help build an overall profile as to what is going on.
Even Marvin Gaye wanted to know what’s going on…
M43BC
https://www.zolo.ca/vancouver-real-estate/2994-w-32nd-avenue
I think it’s very unfair to paint all mutual funds with the same brush. The company that I have dealt with over the past 30 or so years have some of the lowest mer’s in the industry and they are one of the best bond managers having won many awards for their performance. There are no front or tail end loads, no fees for buying or selling or switching between funds. I have a personal advisor to call upon anytime I wish in person or by phone at no cost. He gets a minor commission which is part of the mer. The funds are some of the best performing in the country. My current portfolio 40 equity 60 fixed is up 6% ytd net of fees. rThe mer on my portfolio is .82% I gave the etf route a whirl a few years back but didn’t find it all that great. A bit of a crap shoot to say the least with the 1000’s of different funds to choose from. I prefer the KISS formula which has worked great for me anyway.
You seem to think the downside protection does not impact upside. When those mutual funds try to protect you from a correction they are often wrong and cost you positive returns. How many mutual funds sold the S&P 500 when Trump was elected in order to protect from the inevitable correction (that everyone seemed to predict prior to the election). Downside protection will cost you in bull markets. The last year is a perfect example. Any mutual fund that sold on a dip thinking that big correction was coming gave up returns. Nobody can predict the market. That is proven.
Doug,
What happens when after years of investors embracing ETFs that we find bad companies continue to get rewarded for their dismal performances?
Does this skew valuations of bad corporations unfairly higher?
At least with individual equities, investors punish a bad earnings report or other negative news. Not with ETFs as they just keeping buying the basket of companies — rotten apples and all.
#31 The Technical Analyst, CSTA, CPD on 11.04.17 at 5:48 pm
It is all about dumping the losing sectors. In a market-wide ETF you can’t do that.
I present this same case to the two largest banks in Canada I work for doing their technicals.
———————————————————-
Exactly.
#68 crowdedelevatorfartz on 11.04.17 at 10:09 pm
@#58 re
“you come across as a pathetic kid”
******
Sometimes .
While laughing at other peoples incredible stupidity and misfortune may seem crass…..its only human.
—-
Try svering at a same time and won’t be as painful to watch. You must read this!
https://www.keele.ac.uk/pressreleases/2017/is-swearing-big-and-clever.php
Recent Sale Report.
This house also sold 38 days ago.
3035 w 2nd Ave ,Vancouver.
Asking 2.39
Sold for 2.2
Tax assessment 2.55
A more compact set of numbers,the higher you climb up the ladder the more rungs you can miss on the way down…
M43BC
https://www.zolo.ca/vancouver-real-estate/3035-w-2nd-avenue
Lots of fascinating information today…
..especially that crowdedelevatorfartz has a friend?
Question: leased or payment plan?
Recent Sale Report.
This one sold 25 days ago.
2305 w 13th ave, Vancouver.
Originally asking 5.53 then 4.49 then 4.88 then 4.68
Sold for 4.58
Tax assessment 5.04
So it went for 17% less than original ask and I think that will do for tonight.
I will see what worms I can pull out of the garden tomorrow…
M43BC
https://www.zolo.ca/vancouver-real-estate/2305-w-13th-avenue
9
I have been using my rrsp for 25 years to invest in Mortgages and recently my families tfsa’. There is nothing to stop you from syndicating a mortgage with your rrsp and tfsa. I syndicate mortgages using rrsp and non rrsp. But I don’t do it for the public . Solid 8 per cent returns last 20 years tax deferred
#70 mike from mtl on 11.04.17 at 10:15 pm
“Show me a mutual that can even match the SP500 or a balanced all in one fund like VXC in 10+ years.”
That seems like a double-dog dare. Pick any U.S. index fund at random. Oh—I don’t know—how about the RBC U.S. index fund?
http://funds.rbcgam.com/pdf/fund-pages/monthly/rbf557_e.pdf
You’d have doubled your money if you’d invested any amount in this fund back in 2012! Whatever you do, don’t tell MF, or he’ll soil his pants! (He hates to miss out on things—while missing out on things. It seems to be his shtick.)
I’m still waiting to hear how all your passive ETF portfolios are doing once the next bear hits.
With the stock market being the second most expensive in history, it won’t be Winnie The Pooh either. It will be more like a BC bear pack that hasn’t eaten all winter.
Not one person has mentioned precious metals. Including, as far as I’m aware, Turner Investments. If the whole point is uncorrelated assets that you rebalance every so often, why wouldn’t you want some gold?
Way too much money has gone into passive investments. That’s going to be a major bubble story too.
I got the best advice ever from my wife. She had observed the chart meetings and the math geeks from a distance and one day in passing concluded…”Why not just buy the stocks that go up?” From the mouths of babes ….right? As investors we labour under misconceptions set down decades ago by people now long dead. EMT for example….the 60/40…. the market isnt the same because the economy isn’t the same…stuff of dinosaurs. Buy good companies that have paid good dividends for decades…stay away from anything you’ve just heard in the news….and win consistently…without fee’s. It’s simple….’buy the stocks that go up’.
A summary of the Saturday funnies.
Primarily discussions on the merits of passive vs active and DIY vs operator assisted investing. A score of 6 on the Intelli-meter™ and 2 on the Abuse-ometer™.
ETF’s are cheaper than Mutual Funds.
Mutual Funds rarely outperform the market index.
The TSX index has produced negative real returns over the past ten years.
Stocks are cheaper than ETF’s, but 60 different stocks are required to reduce company-specific risk to an unquantified overall market-risk.
Buying 60 stocks costs $600 and stock picking is hard.
Buying 1 ETF costs $10 (sometimes free to buy) plus the MER (iShares average MER =.36%) per year.
If Garth buys the ETF it costs 1% plus the ETF’s MER per year.
High house prices bad, high stock prices good.
Some rumblings that stock markets can go down.
“For those about to flop” is still looking for friends.
One mention of proper grammar, albeit indirectly.
Can I get an Amen?
***** Commercial Solicitation *********
Eyestrain and Bowelstrain LLC offers a portfolio protection service that takes the “I” out of risk. We simply reset your online trading password whenever the TSX drops by more than 20% within a 30 day period. The password is blockchain encrypted and only restored after 180 days. We also put a hold on your newspaper delivery and disconnect your internet. Our phone line is always busy.
ETF investing = Wu Wei
“Wu wei refers to the cultivation of a state of being in which our actions are quite effortlessly in alignment with the ebb and flow of the elemental cycles of the natural world. It is a kind of “going with the flow” that is characterized by great ease and awake-ness, in which–without even trying–we’re able to respond perfectly to whatever situations arise.”
(Reninger, Elizabeth. “Wu Wei: the Taoist Principle of Action in Non-Action.” ThoughtCo, Sep. 13, 2017, thoughtco.com/wu-wei-the-action-of-non-action-3183209.)
Sometimes the most powerful action is to take no action at all.
In some areas of life, such as investment, greater activity does not necessarily translate into better results.
If we patiently follow the path of wu wei, we can expect steady growth in our accounts over time.
Big Daddy…ABSOLUTELY!!! That is the simplest and most consistent path to financial security AND it has been that way for ever.
Just a tiny modification to that simple strategy… Buy companies that pay healthy dividends that have a strong track record of increasing those dividends at least annually. Since divs are paid from net net income, a regular pattern of div rate increases demonstrates the company’s capacity to continually grow their gross income and control their overheads. This more often than not also demonstrates that the company has been successful in diversifying their market or business model.
The second indicator of these rare companies’s capacity to continually grow their business is their history of splitting their stock. If anything shows growth and strength then splitting is it. The major reason for splitting is that their price is creating systemic resistance for retail investors. If the company is a widely held issue and their price is close to or exceeding $10,000 for a board lot then that is serious resistance for a retail investor. Ignoring a company’s split history when evaluating stocks is a recipe for missing a money spinner. A share price today is meaningless to fixate on if the company splits every few years.
#57 thanks Doug on 11.04.17 at 8:28 pm
for the outlier compliment
Mutual funds don’t ‘protect to the downside’ either, which is why they almost all underperform their benchmarks.
yes they do
check Mawer Canadian Vs XIC in downleg yrs.
you choose NOT to answer my question, Doug?
‘I find advisory firms , en masses, like to trash mf’s cause of COST and underperformance while never reporting THEIR historical data? Any reason why? :)’
or is that 1% fee you charge eliminate any possibility of beating the index?
—
We don’t sell our services based on performance though we do disclose it to prospective clients we have met with several times and throughly reviewed together
their financial situation. As I explained in my post, our fee is not predicated on only performance and our focus is always on overall financial planning and risk management.
Garth explained in an earlier post the successful business he has built up from scratch. Do you think these clients stay with us because they’re dissatisfied with our 1% fee, amongst the lowest in the industry?
And, once again, citing a single mutual fund is not evidence that the mutual fund industry as a whole outperforms in a down market.
–Doug
If anyone on here is into individual stock picking, seems not so popular on here, but two books I’d recommend are Superstocks and Mark Minervini’s book.
Both are awesome. Superstocks deals with high volume breakouts, and Minervini is an excellent overall methodology.
#87 Ian on 11.05.17 at 6:37 am
I’m still waiting to hear how all your passive ETF portfolios are doing once the next bear hits.
—
The ETFs are passive, our portfolio isn’t.
–Doug
‘Etfs are passive , our portfolio isn’t ‘
Doug ?
Welcome to active management . What % of this kind of management beat the index? Since you spent quite a bit of time sharing how mutual funds do not
Have enjoyed the exchange . Thanks
Let me try to explain differently rather than isolating a fund vs etf (although there many examples , nonetheless ..)
As you stated an etf is PASSIVE (not talking smart-beta here). It moves up and down not based on supply/demand ,rather , the underlying . So if DOW does up in a bullish market it will replicate it . BUT if economic Factos are deteriorating the etf CANNOT adapt , get defensive –it will be fully exposed to a correction. Some. Corrections are violent .
Have a good day
That’s what you pay an advisor for, and why a balanced, diversified portfolio is carefully built to mitigate against corrections, which rarely announce themselves in advance. While equity (and mutual fund) investors were trashed in 2008-10, balanced portfolio investors made an average of 5% a year by snoozing through the crisis. — Garth
#86 Gravy Train on 11.05.17 at 6:18 am
//////////////////////////////////////////////////////////////////////////////////////////////
Right I should have clarified that as ACTIVE fund.
Indeed RBF557 is a passive index fund basically 1:1 of say VFV. However it has MER 0.72 compared to 0.08% of VFV. That said I’d love to have the choice of these simple relatively low cost passives in my (forced) group plan.
Original point still stands though – compare MAW108 vs. VFV. What would my 1.17% get me when it always lags behind?
////////////////////////////////////////////////////////
#87 Ian on 11.05.17 at 6:37 am
I’m still waiting to hear how all your passive ETF portfolios are doing once the next bear hits.
/////////////////////////////////////////////////////////////////
Rebalance on the fire sale smarty pants.
#75 The Technical Analyst, CSTA, CPD on 11.04.17 at 11:02 pm
You proved your assertion with one mutual fund? Compelling. –Doug
——–
Who said anything about using one fund? Pick any average equity fund you like and run the analysis yourself.
Or don’t.
—
Maybe you can come out of the shadows, reveal your full name, the bank you work for and your contact information and let us examine the research you’ve conducted and published.
–Doug
@#83 Lost the Lease
“Question: leased or payment plan?
++++++
Nah.
I prefer blackmail,extortion and fear.
It’s so much more interesting and empowering.
And it seems to be working for the Russians running the President of the US.
05.17 at 9:33 am
#75 The Technical Analyst, CSTA, CPD on 11.04.17 at 11:02 pm
You proved your assertion with one mutual fund? Compelling. –Doug
——–
Who said anything about using one fund? Pick any average equity fund you like and run the analysis yourself.
Or don’t.
—
Maybe you can come out of the shadows, reveal your full name, the bank you work for and your contact information and let us examine the research you’ve conducted and published.
–Doug
////////////////////////
Robax’s back is better.
Now he is taking names and numbers and looking to kick some ass…
M43BC
Hey FTATF
Like a lot of others on this blog I appreciate your efforts.
You probably know about this but just in case you do not, a bit of advice.
Realtors are known to turn on each other like bleeding piranhas at a feeding frenzy. Thus they probably will not publicly assist your efforts. However, there are a few out there that may be helpful behind the scenes.
Try and get a helpful realtor or three to hook you up with a real estate listing service called PCS or Matrix in the cities of Vancouver and TO. Even Paragon will show price changes and sold vs list pricing. Realtorca is completely useless for data mining. I believe PCS was showing the sold price per sq/ft as well as DOM, price cuts and the final sold price VS list.
#95 Huh ? on 11.05.17 at 9:12 am
‘Etfs are passive , our portfolio isn’t ‘
Doug ?
Welcome to active management . What % of this kind of management beat the index? Since you spent quite a bit of time sharing how mutual funds do not
*************************************
When prefs went on sale and GT told us they were good to buy I’m guessing that’s what he did with his clients portfolios. When Brexit caused a nice big dip I’m also guessing that he (like my advisor did) sent a message to clients asking if they had any spare cash lying around for a great opportunity, or if not then shifted some of that safe stuff/cash which survived the dip over to capitalize on the rebound.
What did [email protected] do?
Best line heard this week:
“Is this any good in the snow?”
“oh, please its a Kia
its what God would drive!”
Power, corruption and fear…..coming to a Saudi Kingdom near you….
http://www.google.ca/url?url=http://mobile.reuters.com/article/idUSKBN1D506P&rct=j&frm=1&q=&esrc=s&sa=U&ved=0ahUKEwjR95-W36fXAhVB32MKHVKKAb0QqQIIMDAJ&usg=AOvVaw2ow6HB34XAkURxAqENz-ZG
#100 For those about to flop… on 11.05.17 at 9:54 am
05.17 at 9:33 am
#75 The Technical Analyst, CSTA, CPD on 11.04.17 at 11:02 pm
You proved your assertion with one mutual fund? Compelling. –Doug
——–
Who said anything about using one fund? Pick any average equity fund you like and run the analysis yourself.
Or don’t.
—
Maybe you can come out of the shadows, reveal your full name, the bank you work for and your contact information and let us examine the research you’ve conducted and published.
–Doug
////////////////////////
Robax’s back is better.
Now he is taking names and numbers and looking to kick some ass…
M43BC
——
Looks like the TKO already happened. ;-)
@#101 Re:
“Hey FTATF”
******
he’s not FTATF …. he’s Rubenesque
Excellent. Very informative. My question is with the popularity of ETF’s, could this be pushing markets higher than normal? Personally I love them. Just worried about money flowing in and pumping some companies stock prices higher than they should be.
“While equity (and mutual fund) investors were trashed in 2008-10, balanced portfolio investors made an average of 5% a year by snoozing through the crisis. — Garth”…well, isn’t this timely. I was just thinking about asking what the record was during that ugly run.
It sure is easier to sleep nights if you’re even marginally in the positive side when the rest of the world seems intent on implosion. And 5% positive isn’t marginal at all.
Re: #87 Ian on 11.05.17 at 6:37 am
We’re still in a long term bear market dating back to the dot com crash. When the central bankers implode the market 18 years of gains will be wiped out.
those about to flop on 11.05.17 at 10:23 am
Hey FTATF
Like a lot of others on this blog I appreciate your efforts.
You probably know about this but just in case you do not, a bit of advice.
Realtors are known to turn on each other like bleeding piranhas at a feeding frenzy. Thus they probably will not publicly assist your efforts. However, there are a few out there that may be helpful behind the scenes.
Try and get a helpful realtor or three to hook you up with a real estate listing service called PCS or Matrix in the cities of Vancouver and TO. Even Paragon will show price changes and sold vs list pricing. Realtorca is completely useless for data mining. I believe PCS was showing the sold price per sq/ft as well as DOM, price cuts and the final sold price VS list.
////////////////////
Thanks for the encouragement and advice.
I hear what you’re saying about realtors but I actually encouraged them to stay anonymous and just chip in and do 5 sales a week or roughly 20/25 a month.
One of the reasons I chose a handle is because some of the developers I work for might frown upon my efforts to bring some transparency to the market place.
Others couldn’t care less what I do in my spare time and know that I now have a disability and that I wouldn’t be doing The Grouse Grind and just happy that I come to work Monday as fresh as possible.
I have been fine tuning my new system off blog for a couple of weeks after realizing that realtor assistance was non existent and also after a flurry in the Spring with my Pink Snow cases that did not see the market surging to help cover their inflated buy price, to now waiting to see what all the other cases that are in quicksand choose to do.
There is s fair chance that a large swath of these cases are still on the market next Spring despite no indication of improvement in certain segments.
I don’t know where all this research will lead me to ,but I will try and keep it up for as long as the current rules are in place and the readers of this blog are thirsty for the information ,also it is a way of keeping a promise I made to the boss of this blog last year when he sounded jaded.
This blog is wildly popular but unfortunately it seems only a small percentage of the population are interested in the topics discussed here.
The very least we can do is look out for each other…
M43BC
#95 Huh ? on 11.05.17 at 9:12 am
‘Etfs are passive , our portfolio isn’t ‘
Doug ?
Welcome to active management . What % of this kind of management beat the index? Since you spent quite a bit of time sharing how mutual funds do not.
—
A mutual fund is charging 2% or more PURELY for performance. Is the mutual fund manager going to council you when markets are choppy, discuss the merits of TFSAs or RESPs, prepare a long-term wealth plan for you, provide tax advice, give advice on whether it makes sense to take out a line of credit, check in with you regularly to make sure your finances haven’t changed or ensure you’re not taking on more risk than you’re comfortable with and adjust your portfolio accordingly? Just a few of the services we provide.
I’ve explained our 1% fee includes much more than portfolio management, but if our clients are unhappy solely with performance they can go elsewhere–many DSC mutual funds make even this simple decision costly.
–Doug
Re: #85 Under the radar on 11.05.17 at 6:07 am
You’re playing Russian Roulette try something different without the word mortgage in it. Your luck will never hold out the odds will catch up to you.
Re: #1 Overheardyou on 11.04.17 at 2:06 pm
Uranium and uranium stocks are still relatively well priced compared to the price of other stocks. This is a rare time when uranium and uranium stocks have not followed the price of oil. No on ever believed there was a recovery in America anyway. Wait for alternate investments and choose the right one/ones.
#89 Eyestrain on 11.05.17 at 7:37 am
Amen.
But you missed (possibly through no fault of your own) Big Daddy’s “buy the stocks that go up”.
Re: #15 Stone on 11.04.17 at 4:14 pm
You’re giving the guy bad advice. While the central bankers will let him win all the battles in the end he’ll lose the war. Such can also be said for people in the market much earlier in time. One of the few things not overvalued is uranium since almost all producers can’t make a profit at current levels.
Lots of good blog discussion today……
The biggest issue with the MF industry today remains the model by which they are sold. Front end/back end/deferred are all just taxes on your investment dollar that go to the dealers/investment companies.
Even without those charges, the MERs still include a
‘trailer’ fee to your advisor. This immediately puts your advisor in conflict. She may just recommend the fund that gives her the highest trailer as opposed to the best investment for you.
On the plus side, there are now lower cost no-load
index funds offered at the big banks with low buy-ins and very small additional contributions with no commissions.
The problem remains as whether you are getting good advice in those places.
112 dont think so, i pick my borrowers and have strict parameters. I don’t lend outside the GTA, have had some defaults over the years, loan to value is very good. i do the power of sales. I sleep well. People don’t like losing their houses
#11 Anony on 11.04.17 at 3:46 pm
#1 would it be the same thought? Buy high hope higher?
Isn’t ut supposed to be buy low sell high?
—–
I thought it was buy low sell high, but it seems to me everything is very high right now.
—–
#15 Stone on 11.04.17 at 4:14 pm
#1 Overheardyou on 11.04.17 at 2:06 pm
With everything seemingly valued so high, is it a bad time to build a portfolio now?
——
And what alternative would you propose instead? Cash? Inflation erodes that. Bitcoin? Well…no! Even Bitcoinnaire is starting to cash out based on what he mentioned over the last few days. That ship may have sailed too. If he starts cashing out, the end may be near.
I recommend you read “The Four Pillars of Investing”. If having a balanced and diversified portfolio of ETFs that is rebalanced annually or more often if there’s some large swing mid-year still doesn’t make sense after reading that, well, I don’t know what else to say.
—–
Thank you for your tip! I’ll be sure to pick up a copy of that book, I’m just starting to build a portfolio, I don’t have much as the majority of my capital is for purchasing a home but it’s out of reach at this time. So I figure it’ll be best to invest some of it while I wait.
—–
#17 Ace Goodheart on 11.04.17 at 4:24 pm
RE: “#1 Overheardyou on 11.04.17 at 2:06 pm
With everything seemingly valued so high, is it a bad time to build a portfolio now?”
Depends what you build the portfolio with. Everything is not valued so high. At the moment people expect:
-interest rates will go up forever
-houses will crash in value
– technology companies will keep their 100 to 1 and higher price to earnings ratios (for those that actually have earnings)
-oil stocks will stay in the toilet
– alternative energy companies with no earnings and speculative growth plans will continue to operate as giant ponzi schemes and there will always be a bigger idiot
-bond prices will go to zero
-there will never be another recession. What is a recession?
-A car company that produces less than 100 cars per month on its main mass production line, and has one factory with three lines, will always have a higher market valuation than any other car company in the world.
-governments can borrow recklessly forever. There is no danger of any government going bankrupt, or not being able to make its payments. Government debt never needs to be paid back and can be refinanced forever.
-a mortgage is not a debt, it’s an asset.
-Bank stocks can only go up in valuation.
The list goes on. If any of the above turns out not to be true, then this creates buying opportunities for securities of one kind or another.
—–
Exactly my point, there are so many markets that are doing so well. It’s difficult someone as new to investing as I to find these opportunities. However, this blog and the comments have giving me some excellent advice. Much better than anyone from the bank has. The collective wisdom of this group is amazing. Thank you!
—–
#113 Tony on 11.05.17 at 11:40 am
Re: #1 Overheardyou on 11.04.17 at 2:06 pm
Uranium and uranium stocks are still relatively well priced compared to the price of other stocks. This is a rare time when uranium and uranium stocks have not followed the price of oil. No on ever believed there was a recovery in America anyway. Wait for alternate investments and choose the right one/ones.
—–
Thank you for your response! I have definitely not looked into natural resource stocks. The only thing I’ve been told is to buy gold when the markets are unstable
Thanks for sharing this kind of post with us. really very great stuff, keep posting.
without errors below:
Do people realize that 1% of the 2%+ you pay in a MF go to the advisor for financial, retirement, tax planning and advice? The rest goes to the management of the funds, to someone who manages the portfolio 50+ hours a week. I believe a blend of both ETFs/ MFs work for a portfolio with a good balance between index and active.
Keys: There are great and cheap/expensive managers out there that beat the benchmark as 99% of products post returns net of fees. These managers can also weatherproof their funds in expensive markets. Your advisor is there to do the homework for you as it can be quite the extensive process picking a fund and constantly monitoring it.
Discount brokerage: Mutual funds should not have the extra +1% cost through your DB account as you are not paying for any advice. The regulators have looked at this and will be taking action.
At that point, .7% for a factor etf) vs 1.5-1.8% for active management, a tenured PM who has seen past downturns and downside protection. If you can find a Canadian or american div fund with 90% upside capture and 60% downside capture, you are winning. This means you wont make as much as the benchmark but you will only go down 60% when the market drops, let’s smooth out that standard deviation so we can sleep. I can go out and enjoy myself knowing my portfolio is in good hands. We have options with products, heck put 5-7% of your portfolio in a Robo, they are there to fill a gap. Diversify yourselves through algo portfolios and human run active management.
I own individual stocks, ETFs and Mutual funds. Diversification is there including protection on the downside. We have some great products to choose from in 2017.