Tag Archives: index mutual funds

Trading ETFs can just make dumb moves cheaper

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patmckeoughBy Patrick McKeough, TSINetwork.ca

Special to the Financial Independence Hub

Trading ETFs can work just as well in facilitating dumb moves as it does with smart moves.

Most investors would agree when we say that Exchange Traded Funds or ETFs started out as the most benign investment innovation that has come along in our lifetimes.

The problem is that ETFs work just as well in facilitating dumb moves as smart ones. And there are all sorts of dumb moves that ETFs can facilitate.

In fact, if you get an urge to invest in oil stocks, or gold stocks, or Swedish stocks, or windpower stocks, or any of hundreds of other stock groups and themes, you can act on that urge without doing any messy and time-consuming research on individual stocks—research that may give you pause and keep you from investing.

Manage your portfolio successfully into retirement

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Sensible Investing TV: How to Win the Loser’s Game, Part 9

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Screen Shot 2016-03-09 at 1.44.02 PMSensible Investing TV has posted part 9 of its How to Win the Loser’s Game series of videos, which you can view by clicking here. This 9-minute segment is the second-last episode of the ten-part series.

You can also find it here at Findependence.TV, where all the earlier episodes, plus those of FWB TV, are housed.

David Booth, co-founder of Dimensional Fund Advisors (pictured), says this:

“One of the big difficulties is getting people to stay the course when results are disappointing. It should come as no surprise to people that markets go up and they go down. When they go down, there’s a tendency for people to go, ‘Gosh, Are we on the edge of an abyss? Will things really get bad from here?’

In 2008-2009, it was difficult to get people to stay the course. My heart goes out to these people that were invested in equities, lost half their money then got out and missed the rebound. It may take quite a while for them to get back even again.”

We need to stay the course, and this video shows why …. the culprits will be familiar to many investors: buying low and selling high, panicking at the worst possible time, listening to media noise. There’s also a good segment featuring Vanguard founder John Bogle and the long-term returns that come from dividend yield and earnings growth, as opposed to speculation.  Continue Reading…

Indexers are terrible at indexing

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Cartoon Humor Concept Illustration of Couch Potato Saying or Proverb

By Robb Engen, Boomer & Echo

Special to the Financial Independence Hub

Despite all of the evidence that low-cost passive investing outperforms actively managed portfolios, many investors still cling to the belief that an active approach can help steer them through turbulent times in the market.

Even investors who have taken the plunge into index funds and ETFs can’t help themselves when faced with uncertainty. Emotions take over, as do our instincts to tinker with our investments to try and optimize performance.

Earlier this month, Dan Bortolotti updated the investment returns from the ever-popular Canadian Couch Potato model portfolios.

Despite Dan’s best efforts to explain that these new and simplified portfolios should be used as part of a long-term investment strategy, the overwhelming number of comments from readers suggests that it’s nearly impossible for indexers to simply set-it and forget it.

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Peter Grandich interviews Paul Philip about his conversion to DFA’s strategic indexing

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Peter Grandich

Peter Grandich is a well-known financial and economic commentator and author, based in New Jersey. His fascinating story of financial success and setbacks and gradual transition to more spiritual matters can be found in his recent book, Confessions of a Wall Street Whiz Kid. ( I provided a testimonial.)  You can also get a free PDF version. Find out more at his website at PeterGrandich.com.

Paul Philip is a Toronto-based financial planner and head of Financial Wealth Builders Securities. I’ve known both gentlemen for years and can say they are intimately familiar with the concept of Findependence.

In the Q&A below, Peter asks Paul about his (that is, Paul’s) conversion from a belief in active security selection to strategic indexing via the index mutual funds of Dimensional Fund Advisors (DFA).

Yes, mutual funds, not ETFs. As you will see in the interview, the pair certainly sing the praises of this “best-kept secret” but I believe it’s in the best interests of consumers to learn about this firm and the advisors who are building practices sometimes exclusively around DFA index funds. I have in the past attended several all-day seminars presented by DFA Canada and personally own some of their funds (though not exclusively). Several other guest bloggers here at the Hub focus on DFA funds and Paul will be providing the Hub with a regular blog on these topics.  — Jonathan Chevreau

Peter:  Paul, what are your thoughts on investing in today’s uncertain times? Continue Reading…