Weekend Reading – The stock market is easy to beat

Weekend Reading – The stock market is easy to beat

Hey Everyone,

Welcome to an updated Weekend Reading…wondering if the stock market is easy to beat!?

Before that, some recent reads and reminders…

This post got a lot of recent views, when it comes to owning Canadian-listed ETFs vs. U.S.-listed ETFs.

I provide my take in the article but spoiler alert (!) I’m down to just one U.S.-listed ETF now. 

Should you own Canadian-listed ETFs or U.S.-listed ETFs?

I shared what financial advisors find: these Top 10 Retirement Mistakes. 

Based on the reader comments in that post, sounds like more than a few retirees have successfully avoided many of these mistakes based on their financial plans, including by way of what stocks and ETFs they own. Kudos to those DIY investors and a blueprint to share for many of us. 🙂 

Read on to learn more!

Top 10 Retirement Mistakes

Weekend Reading – The stock market is easy to beat

Is the stock market really easy to beat?

Heck no.

Not easy. Let’s unpack a bit. 

My inspiration last time for the Weekend Reading theme came from this recent Globe and Mail (subscription) headline:

Ed Rempel Beat the Index February 2024

Source: https://twitter.com/edrempel/status/1760727394539684314

Oh boy. Read the thread…but this was plenty to catch my attention…!

I don’t share Ed’s perspectives on a few investing subjects including this one but I will try to offer my take at least…

Potentially part of the plot that Ed is trying to address (???) is that index investing exists on a spectrum: there isn’t just one or a handful of indexes to invest in. There are literally hundreds of indexes and index funds to invest in – which makes the investing choice into any indexed fund that any professional may favour a bit complex. 

Even Vanguard is not shy to acknowledge there hundreds of funds to consider:

“Choose from more than 100 Vanguard index funds that track indexes across nearly all U.S. and international stock and bond markets, as well as sector-specific areas of the markets.” – Vanguard.

Source: Portfolio Visualizer. I don’t make this stuff up. 🙂

Heck, even the best investor of our modern time does not practice diversificaiton – rather – concentration. 

Weekend Reading – Does diversification really matter?

For us mere mortals, yes, broad market, diversified, plain vanilla, low-cost ETFs can be huge enablers to long-term wealth-building success for a number of reasons by design – including controlling investor behaviour. You simply own the best (and worst of stocks) with indexing and can move on with your life from there by just focusing on your savings rate knowing stocks should go up more over time than bonds and bonds could be helpful at times more than idle cash. 

This means I personally believe any financial expert that claims they know more about the investing future than anyone else and/or professionals that easily dismiss other forms of investing in the personal finance spectrum should give you pause for where and to whom your hard-earned money goes…

Source: X.

The most successful DIY investors I know, readily admit they don’t know what they don’t know; they invest in a collection of stocks or low-cost ETFs in a manner that meets their investing objectives; including their cashflow needs; they manage debt well or stay out of debt; and they keep a healthy balance cash or cash equivalent assets when things don’t work out – as they know things won’t from time to time or year to year. 

Those are the individuals to learn from, follow and tailor your own path after. 🙂

Those are my thoughts…happy to hear about yours!

More Weekend Reading…

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.

8 Responses to "Weekend Reading – The stock market is easy to beat"

  1. You titled this “the stock market is easy to beat”. Then you say “heck no”. But when you look at the chart you provide it looks like it’s not that hard for some investors to beat the indexes. (at least in this country)
    In Canada we have some very safe stocks to invest in, banks, utilities, and telcos, that pay consistent dividends. The BTSX has surely beat all those indexes over a long period of time. Our own dividend portfolio still has an average of 11.8% gain over the last 20 years. Including these last two loosing years. So not that hard if you stick to your plan. For now.
    All equity is still working for us.

    Reply
    1. Ya, I think the S&P 500 is hard to beat consistently. I’ve always felt that way.
      When it comes to Beating the TSX, there are approaches IMO to meet or exceed the TSX returns over time.

      An average gain of nearly 12% over the last 20 years is outstanding. 🙂
      Mark

      Reply
  2. Hello Mark. Thank you for your post and thoughts on “beating” the market. In the current market condition with rising interest rates and stubborn inflation, shares in many interest sensitive stocks- like banks, telcos,and utilities- have experienced considerable price drops. In the short term, this could be a worry for some folks. But, dividends continue to be paid, and some even grow, so income focused investors in quality stocks held for the long term will have surely managed well. This is a buying / adding opportunity ; note the current yield average on the ” Beat The TSX” selected stocks of 7.35% ( although, I would not consider AQN) To me, this is an opportunity to improve the yield and /or the quality of a dividend focused portfolio ( with some capital gain potential). Always be careful and perform thorough due diligence before making an investment. There are risks. Take care Mike

    Reply
    1. I totally agree Mark. While valuations are down a fair bit for many of the quality blue-chip dividend growth stocks you mention, their isn’t much to worry about unless one needs to sell them in the near-term. The dividends in many cases are at or near historical highs making it a great time to add more to ones portfolio. This will boost income (short and long-term) and provide more capital upside potential which will be come once central bankers begin reducing interest rates. Of course, due diligence is important in selecting blue-chip dividend growth stocks to avoid those with unacceptable risk of cutting dividends.

      Reply
      1. Indeed, Paul. Prices are down a bundle but I don’t intend to change my plan!

        Will be interesting to see what the rest of the year holds!?

        Thanks for reading and sharing your thoughts.
        Mark

        Reply
    2. For sure….for now… “dividends continue to be paid, and some even grow, so income focused investors in quality stocks held for the long term will have surely managed well.”

      That is my hope coming into 2024, time to buy more over the coming months whether that is individual stocks or low-cost ETFs.

      Take good care back!
      Mark

      Reply
  3. “Canadians seem to be doing a lot of things right…including filling up that TFSA (Tax Free Savings Account)”
    Me thinks that some of that has to do with demographics. The TFSA started in 2009 so the boomer generation had a lot of RRSP monies in the bank so to say and less time to max out the TFSA.. Hard to break old habits as well. Just keep on keeping on with the RRSP. Now the TFSA is much better known and also workplace pensions are not as prevalent. Many will take the company RSP to obtain the company contribution and max out their TFSA.
    Both my sons are unionized and with the union pension I have several times mentioned to them to max out the TFSA and then see what contributory balance is left in the RRSP after the union portion. Much different optics now a days.
    I had only the company RSP option and my own RRSP contribution for the majority of my working life.
    Even then, at the beginning, I left management with the bank who obviously put the monies in to their own mutuals funds.
    Now my losses and gains are my own.

    RICARDO

    Reply
    1. That could be true, lots of Boomers and GenX should realize the tremendous wealth-building power that is the TFSA.

      There is something to be said to be in control over your own investing decisions.

      I hope all is well,
      Mark

      Reply

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