Weekend Reading – Indexing is too big, stock buys, giveaways and more

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.

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:

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

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.

30 Responses to "Weekend Reading – Indexing is too big, stock buys, giveaways and more"

  1. 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.

    Reply
    1. 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.

      Reply
  2. 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.

    Reply
  3. 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

    Reply
  4. 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.

    Reply
    1. 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.

      Reply

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