The four words ‘this time its different’ were made famous by Sir John Templeton as an admonition against the overzealous embrace of new paradigms.
To him, there is nothing new under the sun regarding the interplay of valuations and emotions in the emergence of investing bulls and bears. The thing is, sometimes the world changes in such a fundamental way that there really are no antecedents.
For example, where is the precedent for having the gangster in the White House? As a thought exercise, imagine if Al Capone could have become President in the 1930s. Here’s a man who managed to avoid being brought to justice (sound familiar?), who ran his empire using violence and the threat of violence, and who, for a time, was wildly popular among those who knew him. He was petulant and reactive; not strategic and thoughtful (again, does that sound familiar?)
As of mid March, the U.S. has surrendered its status as a constitutional democracy, as the President has effectively put himself above the law by ignoring a court order. This is unprecedented. Nothing like it has ever happened before. It’s different. The United States is no longer a country of laws, it is a country of unbridled power for the person at the top. To paraphrase a recent article in Time magazine:
“… a court that cannot enforce its rulings is not a court – it is a suggestion box…. and a presidency that can ignore the courts without consequence is no longer constrained by law – it is an untouchable executive”.
No more wind in our sales from Bond Bull market
There are other things that are different in 2025, too. For starters, the world is dealing with an existential crisis – climate change – the likes of which has never been seen before. Then there are the challenges that, while not unprecedented in history, have not been encountered in our lifetimes. Debt levels, both private and public, are at their highest level since World War II. A bull market in bonds that lasted over 40 years ended a few years ago due to the normalization of rates coming out of COVID. There will be no more wind in our economic sails, as has been the case throughout the entirety of the investing lifetimes of everyone reading this.
The peace dividend has been paid out. Everywhere throughout the world, countries are rearming because of geopolitical instability that has arisen out of autocratic powers that seem determined to acquire new territory at all costs. Not only is this destabilizing geopolitically, it also diverts expenditure into military pursuits that would have otherwise gone toward expanding the economy and/or some element of improved social justice.
Deglobalization is very much part of this new reality, too. Tariff barriers are being erected by the gangster madman, and countries around the world feel they have no meaningful recourse other than to reciprocate in retaliation, thereby exacerbating the needless self-inflicted harm. Continue Reading…
I have stood here before inside the pouring rain
With the world turning circles running ’round my brain
I guess I’m always hoping that you’ll end this reign
But it’s my destiny to be the king of pain
– King of Pain by The Police
Image courtesy Outcome/Shutterstock
By Noah Solomon
Special to Financial Independence Hub
This may seem strange coming from a me: a quant geek who uses data, technology, and machine learning to develop and manage investment strategies, but here it is:
I believe that technology has made markets less efficient.
The efficient-market hypothesis (EMH) was developed in the 1960s at the Chicago Graduate School of Business. It states that asset prices reflect all available information, causing securities to always be priced correctly, thereby making markets efficient.
In my view, perfect efficiency is like the tooth fairy: it would be nice if it really existed, but in reality, it is purely fictional. This divide between the ivory tower and the “real world” was epitomized by the legendary Fisher Black, co-architect of the Black Scholes option pricing formula. After moving from M.I.T. to Wall Street, Black remarked, “Markets look a lot less efficient from the banks of the Hudson than the banks of the Charles.”
Bubbles: The Archnemesis of the EMH
Over the past several decades, markets have borne witness to two extreme bubbles:
In 1989, the Japanese stock market was trading at 65 times earnings. The aggregate value of Japanese stocks exceeded that of U.S. stocks despite the fact that the U.S. economy was three times the size of Japan’s. Soon after, things went from sensational to miserable, with Japanese stocks suffering a particularly prolonged and steep decline.
Little more than a decade later, the S&P 500 Index, aided and abetted by a tremendous bubble in technology, media, and telecom stocks, reached the highest multiple in its history. Not long thereafter, the index suffered a peak trough decline of roughly 50% over the next few years.
Clearly, to quote palace guard Marcellus in Shakespeare’s Hamlet, “Something is rotten in the state of Denmark.” How is it that markets experienced such extreme aberrations? I’m not sure that “crazy” is the right word, but I’m darn sure that it’s not “efficient.”
Without a doubt, periodic bubbles can be attributed to recency bias, a common behavioural quirk where investors overweigh recent information and events at the expense of considering objective facts and probabilities. This can cause people to chase recent winners and push their prices to unsustainable levels. According to famed economist John Kenneth Galbraith:
“There can be few fields of human endeavor in which history counts for so little as in the world of finance. Past experience, to the extent that it is part of memory at all, is dismissed as the primitive refuge of those who do not have the insight to appreciate the incredible wonders of the present.”
Recency bias notwithstanding, I believe that there are other factors at play that are contributing to irrational behaviour and resulting in decreased market efficiency.
The Rise of Passive Investing & Market Efficiency: Nobody Knows
A persistent feature of markets over the past 20 years has been a secular shift in assets from active managers to passive, index-tracking funds. I do have some sympathy for the argument that this has led to less efficient stock prices. Granted, if the entire world shifted to indexing, then by definition markets would become inefficient for the simple reason that nobody would be analyzing companies.
However, this is clearly not the case, which begs the question of what percentage of investable assets need to be in passive vs. active strategies to engender a meaningful decline in market efficiency. I don’t believe that anyone can answer this question with any degree of certainty.
The Paradoxical Effect of Technology: The Wise Crowd vs. the Foolish Herd
Market manias and the related mispricing of assets seems paradoxical given the amount and speed of information that has become widely available over the past 20 years, not to mention the precipitous declines in commissions and other trading costs. However, speed and availability of information is a proverbial double-edged sword, especially as it pertains to the efficiency of markets over the medium to long term.
In theory, technological advancements, and specifically the ability to obtain and process greater amounts of information at an increasingly rapid rate, should make markets more efficient. However, these developments are not a significant factor for investment strategies with medium or longer-term horizons, for which the speed and availability of information are not particularly important.
On the other hand, technology has had a deleterious effect on the proverbial “wisdom of the crowd,” which is defined as “the notion that the collective opinion of a diverse and independent group of individuals (rather than that of a single expert) yields the best judgement.”
The catch here lies in the word “independent.” While I agree that security prices should be “correct” when investors think and act independently, this is clearly not the case when they act with a herd mentality and all run off the lemming cliff in unison. Under such circumstances, the crowd’s “wisdom” becomes anything but, which leads to manic behaviour and market inefficiencies. In a world where social media personalities such as Keith Gill (Roaring Kitty) can incite their millions of followers into frenzied bouts of groupthink, crazy things are bound to happen. Continue Reading…
Over the years, I have come to really like the all-in-one ETFs from Vanguard and iShares. I like these ETFs because they are a simple way to diversify your portfolio across different sectors and countries. These ETFs also automatically rebalance regularly, making an investor’s life much easier.
Due to the popularity of the all-in-one ETFs, both TD and BMO also created similar ETFs. Which company offers the best all-in-one ETFs? Are TD ETFs better? Are iShares ETFs better? Are Vanguard ETFs better? Or are BMO ETFs better?
Let’s find out!
TD ETFs
TD has many different ETFs, including active ETFs, special focused ETFs, and broad market index ETFs that are well-suited for different investment strategies. When it comes to all-in-one ETFs, TD offers three different ETFs that were created in 2020:
All three of these TD all-in-one ETFs have a MER of 0.17%. This means if you have $1k invested in one of these ETFs, you effectively would pay $1.7 in fees every year, which is extremely cheap if you think about it.
Here are the historical performances of these three ETFs:
1 Yr
2 Yr
3 Yr
TCON
12.48%
9.63%
4.41%
TBAL
19.27%
14.96%
8.04%
TGRO
26.27%
20.16%
11.70%
You can buy and sell all three ETFs via online brokers. Since many brokers offer commission-free trades nowadays, you can buy one of these all-in-ones regularly and build up your portfolio.
Sign up with Wealthsimple using my referral code (or type in YDC3NA) and get a $25 reward for simply signing up.
Sign up with Questrade using my referral code (or type in 826124747428063) and get a $50 reward.
BMO ETFs
Like TD, BMO offers five different all-in-one ETFs (BMO calls them Asset Allocated ETFs).
VRIF has an MER of 0.29%, while the other five all-in-ones have an MER of 0.22%. VRIF probably has a slightly higher MER because of the fund structure. Interestingly enough, Vanguard all-in-ones have the highest MER out of the four fund companies (I said this because historically Vanguard has lead the way when it comes to lowest MER).
Here are the historical performances of the Vanguard all-in-one ETFs:
1 Yr
3 Yr
VCIP
8.90%
1.99%
VRIF
10.44%
3.08%
VCNS
13.61%
4.45%
VBAL
18.40%
6.90%
VGRO
23.39%
9.39%
VEQT
28.40%
11.83%
The best all-in-one ETFs for your investment portfolio
As you can see, all four fund companies offer all-in-one ETFs with different asset exposures. Which are the best all-in-one ETFs for your investment portfolio?
Well, that is totally dependent on your risk tolerance and your investment timeline.
If you are an investor who is approaching retirement or is already retired, you might want to invest in something more conservative. In other words, you don’t want to lose sleep whenever there’s a market correction. For you, a steady investment income and stable portfolio value growth is more important. Therefore, you probably will go with either a conservative all-in-one ETF or a balanced all-in-one ETF.
If you are younger with a longer investment time horizon, you want to aim for portfolio growth. Therefore, you’d probably go with either a growth all-in-one ETF or an all-equity ETF to maximize your return over the long term.
Best Conservative All-in-One ETF
As mentioned, if you are a conservative investor who needs a steady investment income with stable portfolio value growth, a conservative all-in-one ETF is probably the best choice for you.
The question is, which conservative all-in-one ETF is the best?
Let’s compare TCON, ZCON, XINC, XCON, VCIP, VRIF, and VCONs all of which are heavily exposed to fixed income.
Fixed income to equities Mix
MER
1 yr return
3 yr return
5 yr return
Yield %
TCON
70-30
0.17%
12.48%
4.41%
N/A
2.26%
ZCON
60-40
0.20%
13.94%
4.79%
4.87%
2.45%
XINC
80-20
0.20%
9.97%
2.81%
2.86%
2.70%
XCON
60-40
0.20%
14.38%
5.07%
5.35%
2.17%
VCIP
80-20
0.25%
8.90%
1.99%
2.11%
2.86%
VRIF
70-30
0.32%
10.44%
3.08%
N/A
3.55%
VCON
60-40
0.24%
13.61%
4.45%
4.71%
2.51%
Among ZCON, XCON, and VCON, which all have the same 60-40 mix, it’s interesting to see that XCON had the best returns consistently, but XCON has the lowest distribution yield.
Among TCON, XINC, VCIP, and VRIF, TCON has had the highest returns, most likely due to the lower MER fees.
Not surprisingly, ETFs with a higher exposure to stocks have had higher returns in the last five years. Continue Reading…
While investing in technology companies can be lucrative, it’s also risky. With great risk comes great reward, so the saying goes. However, not everyone has the luxury of risking their savings. Is there a way to maximize returns while minimizing risks?
Volatility is the Name of the Game in the Tech Sector
The COVID-19 pandemic was a catalyst for exponential growth. Venture capital (VC) activity set records in 2021. In the United States, VC-backed businesses raised around $329.9 billion, almost doubling 2020’s $166.6 billion in funding. Approximately $774.1 billion in annual exit value was created that year.
The potential for high returns is tempting, but this trend has slowed as peoples’ reliance on technology has waned. Startups are burning through their cash reserves. Those looking to make money from the tech sector should be strategic about their investments.
In the tech sector, volatility can make investors disgustingly rich — or cause them to lose everything. Technological advancement, driven by fierce competitiveness, happens fast, frequently disrupting the status quo. This allows unknown disruptors to rise to the top quickly.
Take DeepSeek, for example. A Chinese artificial intelligence company built an open-source large language model (LLM) of the same name to compete with ChatGPT for a fraction of the cost. NVIDIA stock — which has risen 285 times higherover the last 10 years — was down nearly 17% on the day this new competitor was unveiled.
Rumor has it DeepSeek was built for drastically less with subpar technology, which makes its disruption all that more consequential. While analysts expected OpenAI’s revenue would exceed $11.6 billion in 2025, it may not be so lucky. The AI companies dominating the market have just been undercut, affecting investments thought to be relatively safe.
How Rapid Innovation can lead to Substantial Gains
The tech sector thrives on innovation because technology goes hand in hand with modernity. The industry is also fiercely competitive, driving research and development. Continual reinvention provokes disruption, making this landscape fertile ground for dramatic, abrupt growth. Often, firms don’t have to fight hard to break into new markets.
Investing in a Volatile, High-Growth Sector is Risky
Market volatility won’t always work in your favor. Even industry giants — seemingly unshakable leaders — can fall to a previously unknown disruptor. Think back to DeepSeek’s impact on NVIDIA. Everything from changing market conditions to regulatory changes can quickly sour a strong investment.
Take Zoom, for example. Zoom didn’t see widespread adoption until the COVID-19 pandemic when it ousted Skype as the most well-known videoconferencing platform. Its share price peaked at $559 in October 2020. One month later, Pfizer and BioNTech announced a vaccine candidate against COVID-19. The next day, it dropped to $403.58. Since then, it has further plummeted, remaining just above $50 for much of 2023 and 2024. Continue Reading…
Theatrical release poster for the film, Idiocracy. via Wikipedia.
By Mark Seed, myownadvisor
Special to Financial Independence Hub
A few months ago I wrote:
“Yes, interesting times may call for interesting portfolio changes! Or not. :)”
Well, here we are.
Regardless about how you feel about the current U.S. Administration, I would think most people would agree that this U.S. President feels very emboldened right now. With no future term to go: this is his last shot at taking shots at pretty much anything and everyone he wants without too many consequences near-term. At least it seems that way …
Since writing this post below from December I thought I would update such a post about any recent portfolio changes and beyond that, how our shopping habits have shifted (if at all) in recent months.
How to invest and shop during Trump idiocracy
I put the term “idiocracy” in the post title since it’s very much how I feel right now.
It’s like watching the Ferris Bueller movie scene: on tariffs.
History repeats.
Now that tariffs are in place and we’re now in a (trade) war between Canadian and U.S. businesses, consumers and workers (sadly), I’m expecting these tariffs will roil stock markets for months or years to come.
I have.
This is how I intend to invest and shop during some prolonged Trump idiocracy.
Approach #1 – What investments can withstand stagflation?
New tariffs are likely, in my opinion, to trigger a sustained period of low economic growth and even higher inflation: which will impact everyone.
At the most basic level, inflation means a rise in the general level of prices of goods and/or services over a period of time. When inflation occurs, each unit of currency buys fewer goods and services. Inflation results in a loss in the value of money and purchasing power. We will all be impacted by this.
Stagflationis essentially a combination of stagnant economic growth, high unemployment, and high inflation. When you think about it …. this combination probably shouldn’t exist: prices shouldn’t go up when people have less or no money to spend. This could be a place where things are trending…
Farmland might perform well during stagflation but we don’t own any.
Instead, I own some “defensive stocks” including some in key economic sectors like consumer staples, healthcare and utilities in my low-cost ETFs that should be able to weather a prolonged disruption. I also consider a few selected stocks we own as defensive plays: waste management companies. At the time of this post, both Waste Management (WM) and Waste Connections (WCN) we own have held up very well and provided stellar returns over the last 5+ years that I’ve owned them.
WM is up almost 100% in the last 5-years.
WCN is up over 100% in the last 5-years.
We’ll see what the future brings and my low-cost ETFs are a great diversifier: regardless.
Approach #2 – Staying global while keeping cash
Beyend certain sectors, investors should always consider holding a well-diversified stock portfolio across different sectors and different economic regions to reduce the long-term reliance on industries directly affected by tariffs.
While I have enjoyed a nice tech-kicker return from owning low-cost ETF QQQ for approaching 10 years now, and I will continue to hold some QQQ in my portfolio, I could see technology stocks tanking near-term. To help offset that, I own some XAW ETF for geographical diversification beyond the U.S. stock market. Thankfully.
Times of market stress are however times to buy stocks and equity ETFs.
Near-term and long-term investing creates buying opportunities for disciplined investors. A well-structured, diversified global mix of stocks including those beyond the U.S. could provide some decent defence against a very toxic, unpredictable economic and political agenda.
For new and established readers on this site, you might be aware I’ve mentioned that our investing approach could be considered a “hybrid approach” – a structure that was established about 15 years ago as follows:
We invest in a mix of Canadian stocks in our taxable account: to deliver income and some growth, and
Beyond the taxable account, we own a bunch of low-cost ETFs like QQQ and XAW inside our registered accounts: inside our RRSPs, TFSAs and my LIRA for extra diversification.
I like the hybrid approach, the process and the results to date.
At the time of this post, I just don’t see how I should be making any significant changes to our equity portfolio.
Beyond our portfolio of stocks and equity ETFs we keep cash/cash equivalents.
Cash savings remains a good hedge for a very uncertain near-term future. We have a mix of Interest Savings Accounts (ISAs) / High Interest Savings Accounts (HISAs), along with Money Market Funds (MMFs) in particular in our registered accounts. Generally, plain-vanilla savings accounts offer very low interest rates. So, if you want to earn more on your savings deposits (rather than simply using your savings account) then consider an ISA or HISA.
The greatest appeal of ISAs and HISAs for taxable savings IMO is liquidity, while earning interest, and member financial institutions of Canada Deposit Insurance Corporation (CDIC) insure savings of up to $100,000. It’s good business for banks and institutions as well since money deposited generates interest by allowing the bank to access those funds for loans to others. There are usually no fees for these accounts and while interest rates have come down in recent months, ISA and HISA interest rates are consistently north of 2% at the time of this post.
I believe some form of savings account / ISA / HISA remains the cornerstone of everyone’s personal finance portfolio since 1. your money is saved for future expenses or ready for emergencies, 2. it is safe/low risk, 3. it is liquid, and 4. you still earn returns.
Let your equities do as they wish after that.
Approach #3 – Shop local, buy local, and avoid U.S. travel
We are fortunate to live in an area in Ottawa where we can shop local and buy from local farmers. We will continue to do that.
For those that want to shop more in Canada and buy more Canadian goods visit here:
We’ve been fortunate to save up some money in our “sunshine fund” as I call it for some future travel. I/we have no near-term plans to spend our money in the U.S.
I’ve been fortunate to visit many, many U.S. States over the years but given this recent trade war initiated by this current U.S. Administration I hardly have any desire to spend my money in a country whereby that government talks about annexing us.
It’s that simple for us.
I encourage other Canadians who can and do travel, to consider the same – avoiding the U.S. – not because of its citizens but the U.S. Administration decisions. Continue Reading…
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