Core & Explore Redux

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MotleyFoolMotley Fool Canada just posted my latest blog for them, which addresses the question of whether it’s possible to combine indexing (“Core”) and high-conviction stock-picking or the judicious choice of certain sector ETFs. (“Explore.”)

As I note in the piece, this is a followup to Preet Banerjee’s feature story on this topic last year in MoneySense. It also features a nod to MoneySense stock-picking guru Norm Rothery, who also writes for the Globe and Mail, and publishes his own Stingy Investor newsletter.

Strange Bedfellows

I’ve commented before in the editor’s note at MoneySense that Norm is a strange bedfellow to indexing guru Dan Bortolotti, who runs the Canadian Couch Potato blog. It was Dan along with his colleague Justin Bender at PWL Capital who I was thinking of when in the Motley Fool post I referred to “indexing purists” who generally scoff at the notion of poisoning the purity of indexing with such an unsavoury activity as picking stocks. Another indexing purist I had in mind was Mike Bayer at Burgeonvest Bick. You can can find Dan, Justin and Mike all listed at the “Getting Help” section here at the Hub.

And yet when at MoneySense we got reader feedback to Preet’s story, it seemed that more often than not in the real world of actual investing behaviour, fairly sophisticated do-it-yourself investors often engaged in a blend of stock- or sector-ETF picking and traditional “Core” use of low-cost broadly diversified ETFs. (What Vanguard founder John Bogle recommends and no doubt the Bogleheads discussion forums.)

Foolish or foolish?

As I asked at the end of the piece for the Fool, do you think Core & Explore is a foolish practice (that’s with a lower-case f, so a bad thing) or a Foolish thing (that’s with an upper case F in FoolLand and therefore a good thing)?

Please email me at jonathan@findependenceday.com and we’ll do a followup piece on this, either here or for another media outlet, or probably both.

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