There’s a nice mix of reads this week. Including the sage advice from the headline, courtesy of Freddy Flintstone who was investing pre-ETF era. This week I was back at MoneySense, making sense of the markets or at least giving it a go. You’ll find a wrap of the first half of 2022, plus a look at the Canadian real estate market and how some banks hide cash ETFs. Slow and steady wins the race on the Sunday Reads. Enjoy.
Here is Making Sense of the Markets: July 10. You’ll find the performance for assets and investments styles for the first half of 2022.
I also did an update post on Seeking Alpha that includes our personal portfolio returns. It was a trying first half of 2022 for the markets. Of course, corrections, bear markets and recessions are par for the course. We need to be aware and prepared. My personal RRSP portolio is up over 4% over the last year. Not much to see here yet, but let’s chat if we do get a nasty recession.
Beat the TSX on My Own Advisor
On My Own Advisor, Mark a had a look at the BTSX Portfolio in his Weekend Reads.
And Bob at Tawcan offers why he does not invest in bonds, commodities, bitcoin or other cryptocurrencies.
Why don’t I invest in bonds? First of all, because Mrs. T and I are still relatively young. We are only “moving up” from our late 30’s to early 40’s in 2022. So we focus on stocks because stocks have higher historical returns than bonds.
I would agree on the bond front. A younger investor should stick to growth, while investing within their risk tolerance level. If they do need to lower the portfolio volatility and potential drawdowns in bear markets, then bonds and cash begin to make sense.
Also from Bob …
We can invest in “bond-replacement” stable stocks like Fortis and Emera and get much higher yields than bonds.
That is a good consideration as well. I am in the camp of using these bond replacements while recognizing that stocks are not bonds. I hold defensive stocks in concert with a modest bond allocation. The defensive stocks allow us to lighten up on the bond allocation.
If you’re looking for greater growth potential the folks at stocktrades.ca have some ideas. Here are the top small cap Canadian stocks to consider.
The income journey
Matthew Freeman gives an update on his income journey.
And more on the portfolio updates, Dividend Daddy’s June 2022 dividend total is $6,310.72. That’s a good income haul. Come to Daddy he says to the growing dividends. There’s a nice mix of individual stocks and ETFs in the portfolio – the hybrid approach.
Rommel reports on the wonderful growth in his and his spouse’s TFSA portfolio. That is on the blog, My Prudent Life. The portfolio is an expansion of the wider moat portfolio concept. Rommel’s portfolio also includes international diversification by way of broad market ETFs.
There’s a good selection of posts this week on The Findependence Hub.
Here’s the week in review from Dividend Hawk. Hawk will be very busy next week as earnings season gets in gear. The market direction might take its cues from the earnings reports and guidance. We are expected to enter a period of declining earnings growth. Earnings will be balanced against ongoing inflation fears. Next week with be telling.
Stone age advice
Banker on Fire offers the Greatest Hits: Volume 37. That includes a link to a Morgan Housel post (Keep it going) that compares the training and performance of high-level athletes to investors.
Compounding is just returns to the power of time. Time is the exponent that does the heavy lifting, and the common denominator of almost all big fortunes isn’t returns; it’s endurance and longevity.
On wealth buidling perhaps Freddy Flintstone said it best …
Nice and slow, see, that’s the way you do it.Fred Flintstone, stone-age cartoon smart guy
I’m not sure why Fred’s words of wisdom have stuck in my head for the last 50 years.
Get rich slow. Time and compounding is your greatest weapon.
The trillions in ETFs
There’s an interesting book review on Banker on Wheels – the people behind the trillions in ETFs. Success has many parents.
According to Morningstar, by 2020, Index Funds had $16 trillion in assets.
The biggest equity fund in the world is now an Index fund and so is the biggest bond fund.
The largest gold fund has 1,100 tons of gold holdings which is a quarter of that of Fort Knox. Practically, these funds are larger than the economies of many nations.
However, the problem is that this is a highly concentrated industry with three large US fund managers dominating – Blackrock, Vanguard and State Street.
I like to take advantage of the massive shift into ETFs by holding BlackRock (BLK) as one of my 3 U.S. stock picks. I wish Canadian investors would get with program and move out of their vastly inferior high-fee mutual funds. The move to superior investment options such as ETF portfolios, all-in-one asset allocation ETFs and Robo Advisors is a bit glacial in Canada.
Get out of the stone age.
Related post: who makes your ETFs?
All said, keep in mind that not all mutal funds are bad, just most of them. I had another look at some RBC Mutual Funds. Some of them are ‘not too bad’.
Here is another thoughtful post on FiPhysician – As with money, you cannot take time with you.
Adam Grossman offers up when to sell a stock. Certainly we do not want to be too active, but there are times when rebalancing or a sell makes sense. I have not sold out of a stock position in several years. I have been rewarded for a buy and hold and add approach.
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