Stock market thread.

[chuckcouples]

Here's the compound rate of return for various periods comparing the Value Fund of Canada from Dynamic funds to the iShares Core S&P/TSX Composite Index ETF. I chose these two funds because I know the Value Fund of Canada has been around since 1957 and the iShares had the longest track record I could find as it started in Feb 2001.

The Management Fee of the iShares S&P/TSX Composite Index ETF is 0.05% while the MER of the Value Fund of Canada is 2.43%.

1 Year
VFoC: -0.9%
S&P/TSX: -8.4%

3 Year
VFoC: 11.4%
S&P/TSX: 5.55%

5 Year
VFoC: 5.1%
S&P/TSX: 4.25%

10 Year
VFoC: 7.6%
S&P/TSX: 4.69%

Had you put $10,000 in the iShares fund when it began in February 2001 it would now be worth $22,189.77
If you put that $10,000 in the Value Fund of Canada at the same time, it would now be worth $$31,801.84

That is over a period of 14.5 years. Choosing investments based on their expenses is a terrible idea as you often get what you pay for.

On another note, had someone invested $10,000 into the Value Fund of Canada when it opened in October 1957, it would now be worth just under $4,300,000.

[Big Ev]

Here's the compound rate of return for various periods comparing the Value Fund of Canada from Dynamic funds to the iShares Core S&P/TSX Composite Index ETF. I chose these two funds because I know the Value Fund of Canada has been around since 1957 and the iShares had the longest track record I could find as it started in Feb 2001.

The Management Fee of the iShares S&P/TSX Composite Index ETF is 0.05% while the MER of the Value Fund of Canada is 2.43%.

1 Year
VFoC: -0.9%
S&P/TSX: -8.4%

3 Year
VFoC: 11.4%
S&P/TSX: 5.55%

5 Year
VFoC: 5.1%
S&P/TSX: 4.25%

10 Year
VFoC: 7.6%
S&P/TSX: 4.69%

Had you put $10,000 in the iShares fund when it began in February 2001 it would now be worth $22,189.77
If you put that $10,000 in the Value Fund of Canada at the same time, it would now be worth $$31,801.84

That is over a period of 14.5 years. Choosing investments based on their expenses is a terrible idea as you often get what you pay for.

On another note, had someone invested $10,000 into the Value Fund of Canada when it opened in October 1957, it would now be worth just under $4,300,000.

9.9 times out of 10 you do not get what you paid for. That is not to say you can't find exception(s). For the most part, every single portfolio out there is virtually the same and it's not worth it going for a higher MER. 2.43% is insanity. You don't need the advice of a financial advisor to invest your money. They are just trying to sell you their product.

For the funds I use, over the last five years $10,000 in The Dynamic Value Fund of Canada has grown to $12,407 whereas the Tangerine Balanced Portfolio (the second lowest risk of the four Tangerine Portfolios) has grown to $14,804. The Tangerine Equity Growth Portfolio (highest risk) has grown to $15,524.

Low-cost couch potato investing is the way to go for most people.

[TheBadger]

Damn, those are some good jumps. Woulda coulda shoulda. $1000 to $40000 in a week would sure be nice.

I'm a passive investor, but plan to eventually play around more with individual securities - mostly for fun, but also to see if it's something I might be good at. One of the biggest barriers for me so far has been where to find news, track information, etc. Can you (or anyone else here) recommend some good (non-sensationalist) online resources for following news, updates, quotes, charts, etc?

I have always used stocktwits.com for NYSE intraday trading. Always posts on stock-specific news and analysis. I have seriously traded for roughly 6 years now. Musk has done me very well also dabble in the futures.

[blayze]

Here's the compound rate of return for various periods comparing the Value Fund of Canada from Dynamic funds to the iShares Core S&P/TSX Composite Index ETF. I chose these two funds because I know the Value Fund of Canada has been around since 1957 and the iShares had the longest track record I could find as it started in Feb 2001.

The Management Fee of the iShares S&P/TSX Composite Index ETF is 0.05% while the MER of the Value Fund of Canada is 2.43%.

1 Year
VFoC: -0.9%
S&P/TSX: -8.4%

3 Year
VFoC: 11.4%
S&P/TSX: 5.55%

5 Year
VFoC: 5.1%
S&P/TSX: 4.25%

10 Year
VFoC: 7.6%
S&P/TSX: 4.69%

Had you put $10,000 in the iShares fund when it began in February 2001 it would now be worth $22,189.77
If you put that $10,000 in the Value Fund of Canada at the same time, it would now be worth $$31,801.84

That is over a period of 14.5 years. Choosing investments based on their expenses is a terrible idea as you often get what you pay for.

On another note, had someone invested $10,000 into the Value Fund of Canada when it opened in October 1957, it would now be worth just under $4,300,000.

You're comparing an ETF to an opportunistic value fund... apples to oranges, given the different risk profiles. That's like comparing a forward's point production to a defenseman...

Besides, you can make a case for ANY strategy by cherry picking the one fund that does exceptionally. There are always outliers.

[TheBadger]

Troof! ^

[petegreg21]

You're comparing an ETF to an opportunistic value fund... apples to oranges, given the different risk profiles. That's like comparing a forward's point production to a defenseman...

Besides, you can make a case for ANY strategy by cherry picking the one fund that does exceptionally. There are always outliers.

You mentioned before that mutual funds are a scam... Doesn't this discrepancy in returns, evidently from opportunism, justify the MER? Companies like MFS and Mawer consistently destroy ETF's, especially in the international space. Not all mutual funds are junk, but a lot of them are.

[Bra]

Hi Blayze,

I'm looking to allocate 5% of my growth portion to small-cap. I'm not too keen on Canada. Any suggestions?

Bra

[Jason_Banks]

This is akin to saying a person is smarter than a computer. Are you sure about that? Not to say your method is wrong, but have you tracked your earnings/losses against the indexes that these ETF's are designed to mimic? If you can beat the market, great. But be careful when advising newbies to try to play too.

For the record, I'm not talking about obscure ETF's, but general index followers like VXC, VCN, VUN, etc...

Actually I'm not really saying a person is smarter than a computer... but a Person can make better decisions...

What I was actually referring to is an ETF with strict rules and settings carried out by a computer (of course there is still a fund manager who's name is attached and directs the companies within the fund and settings to what the computer works with), this is 'inactive' management and is usually the reason we have big down days, because computers react to what the settings its given and many funds operating like this can cause a large down as they do a 'sell all' when limits are hit.

If I was to go into an ETF, I'd want an Active manager, one who can react to buy when an opportunity arises and could think on his feet when computerized trading or portfolio re-balancing starts...

My advise was not to stay away from ETFs, but do your research on how they are done, and by who... The information is out there, seek it.


But my own preference is that I do my own managing, I'm no expert by any means, but I can only blame me for bad decisions and feel good when I make right ones. For the most part I'm not trying to beat the market, I'm just servicing my needs as I feel necessary. I will not say this is for everyone or most...

[Jason_Banks]

Mutual Funds have been mentioned... I started my personal RRSP with Manulife, I put $19,709 in and in June it was worth $29,756... I've had it about 8 years so its done well and never really fell much during the bad years 5-6 years ago...

I stopped using my RRSP, because I have fore-seen and worked out issues and tax costs projected will hurt me in the long term. They talk about RRSP's being great tax shelters as you delay your taxes until your older and are suppose to be earning less when you retire...

In my case, I project to earn more in retirement than I currently do working, due to a weird set of circumstances I've put my self into with work, my pension and my $$$ usage strategies... It's more tax efficient for me to pay for my income and investing now than in the future according to the current regulations... This could change and I'll have RRSP room to work with, but currently I sit in an odd Bermuda Triangle...


Mutual Funds in my understanding aren't overly different than a ETF... ETF are listed on exchanges, Mutual Funds are Products of institutions... Both have managers and their own fees (Mutual Funds are charged to you, ETFs are worked into the basket)... both can invest in securities, bonds and currencies... and both have their own rules... If anyone can elaborate or refine my understandings I would appreciate it...

Also does anyone own a commodity in the form of like a gold or silver bar (are there other things similar? Obviously you can't really own a Barrel of Oil lol)? I've heard that a person can own these, but they aren't allowed to leave the bank, and if you change banks that the banks move them... but Kevin O'Leary stated on TV that once a year he pulls a gold bar he owns out of his vault at home puts it on his kitchen table and has a conversation with his kids... I would love to own 1 of them, just to say I do and be able to prove it without a certificate...

[chuckcouples]

Hi Blayze,

I'm looking to allocate 5% of my growth portion to small-cap. I'm not too keen on Canada. Any suggestions?

Bra

I would look at the Fidelity NorthStar Fund. It's a go anywhere fund in that the portfolio manager can invest in equities of any type in any country that he wants to. It has a very good track record and should continue to out-perform in the future. It's not a small cap only fund but it does contain small caps when the manager feels they are a good investment.

[Big Ev]

I would look at the Fidelity NorthStar Fund. It's a go anywhere fund in that the portfolio manager can invest in equities of any type in any country that he wants to. It has a very good track record and should continue to out-perform in the future. It's not a small cap only fund but it does contain small caps when the manager feels they are a good investment.

1.85% MER. Still pretty high.

- - - Updated - - -

I do agree with the general sentiment about mutual funds though. Even the more reasonable fees are still too much.
Lastly, before Trudeau reduces it, max out your TFSA account folks. There's a common myth out there that you can't buy stocks inside a tfsa. Not true.
Your TFSA should get your extra money first, even before your RRSP.

People say that?

[Jason_Banks]

I do agree with the general sentiment about mutual funds though. Even the more reasonable fees are still too much.
Lastly, before Trudeau reduces it, max out your TFSA account folks. There's a common myth out there that you can't buy stocks inside a tfsa. Not true.
Your TFSA should get your extra money first, even before your RRSP.

Agreed, This is what I do

[Big Ev]

Mutual Funds have been mentioned... I started my personal RRSP with Manulife, I put $19,709 in and in June it was worth $29,756... I've had it about 8 years so its done well and never really fell much during the bad years 5-6 years ago...

I stopped using my RRSP, because I have fore-seen and worked out issues and tax costs projected will hurt me in the long term. They talk about RRSP's being great tax shelters as you delay your taxes until your older and are suppose to be earning less when you retire...

In my case, I project to earn more in retirement than I currently do working, due to a weird set of circumstances I've put my self into with work, my pension and my $$$ usage strategies... It's more tax efficient for me to pay for my income and investing now than in the future according to the current regulations... This could change and I'll have RRSP room to work with, but currently I sit in an odd Bermuda Triangle...


Mutual Funds in my understanding aren't overly different than a ETF... ETF are listed on exchanges, Mutual Funds are Products of institutions... Both have managers and their own fees (Mutual Funds are charged to you, ETFs are worked into the basket)... both can invest in securities, bonds and currencies... and both have their own rules... If anyone can elaborate or refine my understandings I would appreciate it...

Also does anyone own a commodity in the form of like a gold or silver bar (are there other things similar? Obviously you can't really own a Barrel of Oil lol)? I've heard that a person can own these, but they aren't allowed to leave the bank, and if you change banks that the banks move them... but Kevin O'Leary stated on TV that once a year he pulls a gold bar he owns out of his vault at home puts it on his kitchen table and has a conversation with his kids... I would love to own 1 of them, just to say I do and be able to prove it without a certificate...

Manulife is super expensive. It has probably done well like any other fund since 2008. I don't know what the fees are, but they're definitely going to be too high. While you are still gaining money, you could be gaining more.

[forumname]

The biggest part of the problem is that some idiot decided to call it a tax free SAVINGS account, instead of a tax free INVESTING account. Sounds like a savings account, so people assume that's what it is. Only makes sense.

[Loch]

Your TFSA should get your extra money first, even before your RRSP.

I would probably suggest a split for one reason:
Should the worst happen and you get in a whack of debt, deposits to an RRSP over 12 months old are exempt assets under the Insolvency Act, TFSAs are not.

If all of your life savings/retirement funds are in a TFSA and you get wiped out in a leaky-condo type situation then you are probably going to lose those savings. If they were RRSPs you wouldn't. Is it likely to happen? Who knows, but it is worth keeping in mind.