Weekend Reading – Indexing is too big and more
Welcome to my latest Weekend Reading edition, about indexing is too big, stock buys, giveaways and more.
Read here about my own case study, realizing a capital loss to offset some capital gains.
Thanks to this passionate index-investor, we got some advice about making our portfolios safer and better.
Enjoy the rest of the best and see you here again next week when I will share some of my personal finance ah-ha moments.
Vanguard Canada wrote about indexing getting too big. Remember one of the tenets of indexing, it’s a zero-sum game so for every investing dollar that outperforms the market there must be another investing dollar that underperforms it. Maybe indexing will be popular enough at some point to drive active investors out of the market but I simply don’t see that happening anytime soon; we are nowhere near a tipping point.
Here is a sad story about how NHL Blue Jackets’ defenseman Jack Johnson got cleaned out of millions of dollars, by his parents.
Dan Bortolotti answered this reader question about bond ETFs in taxable accounts.
According to a recent Globe and Mail article here is where the “smart money” is going, into stocks like: Wells Fargo, Microsoft, Cisco, Abbott, Clorox and Kinder Morgan Inc. I would think the “smart money” would be moving into Canadian oil and gas stocks soon.
Tweet of the week:
The Blunt Bean Counter and I were on the same wavelength this week, regarding tax loss selling. His article was excellent.
Have a great weekend!
Mark
Mark
My name is Mark Seed - the founder, editor and owner of My Own Advisor. As my own DIY financial advisor, I'm looking to start semi-retirement soon, sooner than most. Find out how, what I did, and what you can learn to tailor your own financial independence path. Join the newsletter read by thousands each day, always FREE.
Interesting argument on indexing, but I don’t really get it.
I thought that people beat the market due to other people under-performing the market. However, the performance of the actual market is based on the performance of the underlying companies isn’t it?
I’m more than willing to let the active investors fight amongst themselves for to beat, or get beaten by, the market by a few percentage points. I’d much rather index and save myself a lot of time and effort and simply perform equal to the market.
People beat the market for a number of reasons but with indexing as you likely know:
-It’s a zero sum game
-After fees and trading costs, active money management will rarely beat the index
-The market does perform based on the underlying companies but it’s nearly impossible to pick the top stars from the top dogs in any given year
-Investing can provoke strong emotions, so indexing removes that hindrance.
I think you’re wise to index invest.
Some nice set of links. Thanks for the curation.
R2R
I think indexing is here to stay. People like convenience and simplicity. Thanks for the mention. 🙂 Awesome tweet of the week from wealthsimple. Congrats on making the list!
Indexing is here to stay for sure… Thanks, nice mention from those folks for sure 🙂
Great list,
Switching to indexes was the best thing I ever did. I do admit that tuning out your emotions can be tough, hence why I stick to “rules” I’ve made when investing / rebalancing. I find they keep me in check.
I will be indexing more going forward, I’ve learned it simply makes too much sense not to do so.
Thx for the mention Mark! There are also more deals in the oil industry 😉 It was a black Thursday yesterday! lol!
Ha, good one 🙂
Mark, thx for the mention. As they say, great minds think alike (capital loss planning)
All the best Mark, I enjoy your posts.
Thanks for the inclusion this week, I have an uplifiting story about an NFL player refusing his family’s financial requests, glad to see some young men, stepping up too. Have a great weekend.
No sweat BCM!
Great list of articles. Very sad to hear about Jack Johnson’s story. Have a great weekend!
Very sad, by family no less…
Good reading list. With oil being so low and gas prices falling consumers will have more money in their pocket to spend this holiday season. Will be interesting to see how retail stocks pan out!
Good point about retail! Time will tell!
Very nice list, thanks for sharing. I read the article about Jack Johnson earlier in the week. It is a very sad stroy. Hopefully he can find a way out of this situation. I’m pulling for him!
Have a Happy Thanksgiving and enjoy your weekend!
Bert, One of the Dividend Diplomats
All the best guys, thanks for reading and supporting the site!
Thanks for the mention (and Tweets), Mark! You must be a fast reader, that only could have arrived yesterday or so!
I read the pdf version, can’t wait to giveaway the hardcopy to a lucky reader John!
Whether indexing is too big depends on your perspective. If you’re a trader who wishes there were more dumb traders to trade against, then indexing is too big. If you sell expensive actively-managed mutual funds, then indexing is too big. Thanks for the mention.
I don’t think indexing is too big, nor will it get too big, because I think there will always be some level of active management which can be done at a modest cost. I look at fundamental funds or ETFs as examples, although I suppose you could say these are “smart indexing” strategies. This is just a guess of course, I have no idea how investing might change over time 🙂
Enjoy the weekend.
Hey Mark, thanks for the mention. happy shopping tomorrow!
Ah, yes, the deal and deal and more deals 🙂