What an amazing year
What an amazing year it was. Despite many naysayers, despite the doom-and-gloomers, despite Trump, despite China, despite all the alternative investment vehicles out there, old fashion, stock market investing, had an amazing performance.
My Friends ignored me
This year, I did a lot of consulting. Friends and family wanted to know how to make money in the stock market, but not just money, what they wanted to make was Real Money. Whatever that means.
My response is always the same:
- Buy low fee Index ETFs
- Don’t buy bonds
- Buy 1/3 Canada, 1/3 US, and 1/3 International
- Don’t watch the news
- Don’t trade; buy and hold forever
As you can imagine, during all my consultations, the people across the table look at me attentively, smiled politely, and completely ignored my words.
Out of the people whom I consulted, some went into day trading to make some Real Money, some went into Forex, Cryptocurrencies, and real estate.
I am putting my cards on the table
Well, here we are, at the end of the year. And I am putting my cards on the table and inviting anyone who wants to follow me, to look at my portfolio and follow me if they want to.
My philosophy
I have explained in several posts in the past, but here it is one more time.
- No Bonds
- Low-cost ETFs
- Don’t listen to the news
- 1/3 Canada, 1/3 US, 1/3 International
The reason why this philosophy gets discounted, it’s because it’s too easy. We humans, we believe in complexity. If it is too easy, anyone could do it, and it has no value. Everyone wants to know the secret.
Here is the secret: “There is no F&CKING SECRET!”
Which ETFs do I Buy?
All of them are from Vanguard, which I believe is the lowest ETF provider in the world. These are their tickers and names:
- Canada: (VCN) Vanguard FTSE Canada All Cap Index ETF
- US: (VFV)Vanguard S&P 500 Index ETF
- International: (VIU) Vanguard FTSE Developed All Cap ex North Amer Idx ETF
The results
For the results, I add the capital gain of the stock plus the dividend yield to get a total return. Here it is.
| ETF | Return | Yield | Total |
|---|---|---|---|
| Canada | 18.54 | 2.74 | 21.28 |
| U.S. | 23.09 | 1.56 | 24.65 |
| International | 12.15 | 2.84 | 14.99 |
| Total | 60.92 |
60.92 ÷ 3 = 20.31%
What to do for 2020?
The amazing thing about this strategy is that you never change strategy. You never look at the news, you don’t care about timing the market.
You invest the money when you have it. You sell ONLY after retirement when you need the money for your regular living expenses.
When you invest new money, try to invest in the investment which had underperformed. And when withdraw money, withdraw it from the one that has over performed.
How about rebalancing?
No rebalancing. Overtime ( 10 years +) these investments tend to rebalance themselves. If they don’t, don’t worry about it. Enjoy the ride. Let winners run.
Happy New Year. 🎉
Related Posts
- How to deal with negative social influences
- How to deal with the fear of failure
- At what point money doesn’t make you any happier?
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