Weekend Reading – Best ETFs in Canada 2022
I hope you had a great week.
Welcome to my latest Weekend Reading edition: the Best ETFs in Canada 2022.
Just in case you missed last week’s edition: I shared some grim news about Canadian real estate (if you’re banking on housing to fund your upcoming retirement), but good news if you’re a prospective home buyer!
Earlier this week, I also published how to manage a lump sum of money thanks to a reader question.
Weekend Reading – Best ETFs in Canada 2022
My friend Yves Rebetez and I parterned up as a team again in 2022, to share the following:
- Top Canadian ETFs to own – to invest in our Canadian market
- Top ETFs to invest in for the U.S. market
- Top ETFs to consider for international returns
- Some fixed-income ETFs to select from (see lessons on bonds below!)
- Outstanding all-in-one ETFs to own, and finally,
- If you’re really stuck on an island and had to pick just one – there are some desert-island ETF picks!
You can check out my commentary and quotes in the free link above, along with Yves, including this gem I really liked from him:
“With bonds falling, people may want to rethink the traditional 60% equities and 40% fixed income balanced portfolio, too, suggests Yves Rebetez. “We believe the 60/40 portfolio benefited largely from a 40-year bond bull market—nothing more really,” he explains. “Strategic buys into more equities should pay off well, and certainly keeping some cash is always smart. Cash is the opportunity to buy when what you’d like to own goes on sale. So, not when value, as a factor, comes back into play—it now is—but rather when stock market and price movement takes specific securities to a price where you then consider them to be better value.”
Yves and I encourage you to consider being strategic, while keeping some cash handy, when stock prices tank. Consider buying low-cost ETFs or other equities as they relate to your financial plan and objectives.
Leave me a comment and let me know your thoughts. Happy to see any reader takes on these Best ETFs in Canada for 2022 to own.
More Weekend Reading…
Matt Poyner at Dividend Strategy tries to help investors make good decisions in tough markets.
“We all know the stock market can be a rough ride, but it’s easy to forget how common market corrections are. They are so common that we simply can’t be stock investors without enduring them. Just remember that in wicked environments like the stock market, sometimes good decisions are followed by bad outcomes – at least temporarily. It’s part of the game.”
Million Dollar Journey reviewed low-cost ETF VEQT.
“Over time, some companies will go up in value, while others will go lower. On average however, the world’s biggest companies are really really good and making money. The Vanguard all-equity fund gives you instant one-click access to that diversified long-term strategy.”
Matthew Freeman is growing his income machine.
Also in this edition, when it comes to dividends or total market returns, well, the debate rages on.
Certainly many financial experts would argue dividend paying stocks are not for eveyone.
I would agree.
But there’s more to the story…as always.
Case in point: that link profiles two friends of mine on opposite sides of the fence when it comes to investing – dividends vs. total return. I’ll recap the storyline due to The Toronto Star paywall…
Tawcan (Bob Lai) from Vancouver, is a passionate dividend investor: holding 51 dividend stocks and one ETF at this time. Tawcan believes what many other dividend investors believe: “living off dividends” could provide far more financial flexibility (rather than having to sell assets at undesirable investing times).
I feel that way too.
My other friend, now a fee-only planner in Lethbridge, Robb Engen, believes while “there is nothing inherently wrong with investing in big blue-chip companies” – “it shouldn’t be the whole strategy”.
Certainly, as a long-term (almost 15 years now!) “hybrid investor”, I see both sides of this story.
Here are my thoughts again:
- Dividends paid to shareholders provide investors “optionality”. Dividends are paid from the company’s earnings and cash flow – so investors can decide to spend those dividends, reinvest those dividends for a more total return approach, or use the money to invest in other ways, as they please.
- Dividends are therefore just part of a total return approach.
- Dividends are not magical, but they are beneficial ways to increase shareholder value and retention.
- Dividends can help investors psychologically and emotionally and financially – stay the investing course.
Robb is quite correct in the article in that there is “no free lunch” when it comes to investing – you can’t have a pile of dividends paid out AND major stock price appreciation as well to shareholders – it doesn’t work that way nor might it work that way for very long.
I like dividends for many reasons and will continue to do so, as I prepare for semi-retirement.
However, all investors need to be mindful that total return, or at least seeking the best returns possible aligned to your risk tolerance and goals – is what really matters.
Emotions matter more than math, IMO.
For almost 15 years on this site I’ve mentioned personal finance is forever personal.
Heck, don’t take my word for it.
Here is someone more famous than I will be, on his personal confessions when it comes to emotions over math:
- “We own our house without a mortgage, which is the worst financial decision we’ve ever made but the best money decision we’ve ever made.” “On paper (paying off a mortgage with rates so low), it’s defenseless. But it works for us.”
- “We also keep a higher percentage of our assets in cash than most financial advisors would recommend – something around 20% of our assets outside the value of our house. This is also close to indefensible on paper, and I’m not recommending it to others. It’s just what works for us.”
Read on: The Psychology of Money.
Ever wondered how the FIRE-crowd might be doing in this wild economic and market environment? Well, look no further than Chrissy and her family at Eat, Sleep, Breathe FI. She discussed if she retired per se at the worst, possible, time. I don’t think so based on her update!
“So, again, we definitely do not regret FIREing when we did. Now that we (but especially M) have tasted the freedom of FIRE, there’s no going back! If we were to do it all over again, we’d still make the same decision.”
Dale Roberts is now a YouTuber! Check out his short video on the retirement stage for some great insights.
Got retirement and/or inflation in retirement on your mind?
Check out these related articles:
Need help with your retirement math? You’ve got a few options below:
Hit me up with an email or a comment at Cashflows & Portfolios, a site dedicated to helping you manage your cashflow and portfolio wisely including any drawdown plans.
After visiting the site, flip to our Contact page to find out more about our services.
With my partner Joe, I help answer questions like:
- Do you have enough to retire?
- When can you retire?
- How much can you spend?
- Should you take CPP at age 65 or 70?
- How do you minimize the OAS clawback?
- And more and more!
The best part: because I’m not in the business of providing any direct financial advice, the cost of these services is well below what any financial advisor would charge!
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As always, check out my Deals page.
Have a great weekend!