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Discussion Starter #1 (Edited)
Here is another sample 'Couch Potato' portfolio for those who want to get a good night's sleep:

http://www.theglobeandmail.com/globe-investor/investment-ideas/features/me-and-my-money/investments-you-can-sleep-on/article1769576/

Also, from Bill Carrigan in the Toronto Star:

McDonalds' stock has experienced a non-stop linear advance from under $15 to $78 in seven years. It is the top five-year performer on the Dow gaining 145% while the Dow itself gained 5% over the same period.

The other top performers have been IBM, HP, Walt Disney, Caterpillar, Coca-Cola and Chevron Corp.

What these have in common is that they are all multi-national companies while the bottom ten components, including Bank of America (down 140%), JP Morgan Chase, and Verizon Communications had businesses which focussed domestically.

At home, the S&P/TSX Materials Index is up 124% over five years.

According to Mr. Carrigan, "if we pause and listen to what the markets are telling us, we may see themes like global consumerism and commodities in our future".

"Buy, hold, and enjoy!"

THE top performing Canadian Equity fund over three years, as of September 30, is the Claymore CAN Fundamental Index ETF with a spectacular return of 0.5%!!! At least you weren't paying some manager a 2.50% MER to lose you money over that term as ALL managed funds in that category did!! In fact as MOST managed funds in MOST broad-based categories did!!
 

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It's all in the way you look at stocks , take your Mcdonalds for example , 145% or so in five years to date.

BUT , there was a period there where it was $61.16 on dec 14/07 and two years later on dec 14/2009 , it was $61.66 , for a grand total of 1% growth in two years.

I wonder how many wondered at that time if it was ever going higher or not and pulled out , there was a lot of volatility during that period as well , major pullbacks of 20% , 30% and more , that must have caused some sleepless nites for those two years.

I'm sure there are just as many who played the dips and made as much or more.

Is that really considered a non-stop linear advance , the majority of those five year gains were made in 2007 and 2010 , with two years of incredible volatility in the middle , I know I would have lost some sleep over those two years.
 

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Discussion Starter #3
Even my broad-based ETF's have suffered from incredible volatility over the past few years.

Most of those who escaped the volatility held a portfolio of cash or GIC's but they weren't getting rich going that route (but maybe sleeping a little more soundly).

If you want to avoid volatility, stay away from stocks.

Just wait until the next 'Black Swan' event to experience what I mean.

And, there will be future 'Black Swan' events--you can bet on it.

When you're on the stock market rollercoaster, hang on to handles because every climb is followed by a death defying drop of one degree or another.

Recently, we have been on a climb but can you see over the top yet?:eek:

I have been in this game for enough years now to know what volatility means.
 

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I'm always amazed that the stocks recommended for the 'sleep well' couch potato investor invariably are the ones that have done well lately. Yes, MCD has been great over the last 5 years, but 5 years ago it was not on the list of 'sleep well' stocks. It had done poorly for years and there was great doubt about the company's prospects. The list at that time would have included Manulife, Citigroup, AIG.

Hindsight is great.

Volatility is always present. Good companies turn bad, bad companies turn around. Life goes on.
 

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If what the market tells us in the previous 10 years would be an indication for what will do in the next 10, then everyone would be rich. Think about tech stocks in 1999.
 

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Discussion Starter #9 (Edited)
While we are on the subject of investing, my current Canadian Equity portfolio allocation is equally divided between the iShares CDN Smallcap ETF and the iShares CDN Value ETF.

While I am a long time investor in firstly mutual funds and more recently ETF's, I am thinking about taking a chunk of change out of each of the above ETF's and investing it in Norm Rothery's StingyInvestor 7 'Retirement All-Stars' as featured in the November issue of MoneySense.

I would keep some funds in the two ETF's and divide the remaining money between the 7 stocks which are:

BCE (BCE)
Husky Energy (HSE)
Industrial Alliance Insurance (IAG)
Intact Financial (IFC)
Power Corporation of Canada (POW)
Telus (T.A)
Toronto-Dominion Bank (TD)

The remainder of the equity portion of my overall portfolio is invested mainly in International ETF's.

This would be my first time purchasing individual stocks and it is probably about time.

Any critiques about this plan?

http://www.moneysense.ca/2010/05/19/dividends-the-stocks-that-pay-you-back/

http://www.ndir.com/


Dividends, dividends, dividends!!! Happy, happy, happy!!!
 

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I'm looking at dividend stocks that are in the MoneySense article as well. But I'm also considering how popular dividend stocks have become, especially in the media over the past while which suggests that dividend players may be a little over priced as more investors flock to those.

I did however add TA (for the yield) and ECA (lower yield, but am going for some shorter term capital gain here as well) as they seem to be a little low. While I'd really like some TD it seems a little high, and my current, but rather small BMO holding is yielding 6%+ of book value which has me chasing holdings that yield at least 4%.
 

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Hmm, I hear a lot of people are into BMO assets, perhaps this should be my one buy in the CDN market,........
 

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When the market crashes again I am making big leveraged bets with index etfs.

I"ve been patiently "waiting" for a market correction for the last 4 months!
Sitting on the sidelines waiting has cost me !!
I now hold too much cash!...which is usually not a problem except that these days you earn very little on cash.

Just shows how tough "market timing" is...and I'm certainle no better at it than anyone else.

What worries me now..is that of course, the minute I stop waiting and buy into the market.....the correction will inevitably follow!

I'm laughing to myself at how the capital markets can play with your head.
Unfortunately we are playing with real money.
 

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I'm always amazed that the stocks recommended for the 'sleep well' couch potato investor invariably are the ones that have done well lately. Yes, MCD has been great over the last 5 years, but 5 years ago it was not on the list of 'sleep well' stocks. It had done poorly for years and there was great doubt about the company's prospects. The list at that time would have included Manulife, Citigroup, AIG.

Hindsight is great.

Volatility is always present. Good companies turn bad, bad companies turn around. Life goes on.
IIRC, MCD was considered a dog of a stock in early 2003. I don't remember the details now but the chain was supposed to have lost its mojo back then. Again, I'm going my memory here but I think they refreshed their menu, launched the "I'm loving it" campaign and the stock went from $15 to $75. It may still be a good stock for all I know, but I don't remember many investors saying MCD was a great buy back then. Hindsight, as always, is 20/20.
 

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I"ve been patiently "waiting" for a market correction for the last 4 months!
Sitting on the sidelines waiting has cost me !!
I now hold too much cash!...which is usually not a problem except that these days you earn very little on cash.

Just shows how tough "market timing" is...and I'm certainle no better at it than anyone else.

What worries me now..is that of course, the minute I stop waiting and buy into the market.....the correction will inevitably follow!

I'm laughing to myself at how the capital markets can play with your head.
Unfortunately we are playing with real money.
That's something one hears a lot these days , I rebalanced just after the big crash in early 2009 , stayed 100% in stocks and took a more active approach trying to make use of the market volatility (more trading) , I'm now up more than 70% , a good return IMO.

Trading fees during that time have not been enough to even worry about , maybe 1 - 2 %.

I don't think there is a major market correction coming for a few years , just lot's af small ones 10-15% , and I intend to take advantage of all of them.
 

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I"ve been patiently "waiting" for a market correction for the last 4 months!
Sitting on the sidelines waiting has cost me !!
I now hold too much cash!...which is usually not a problem except that these days you earn very little on cash.

Just shows how tough "market timing" is...and I'm certainle no better at it than anyone else.

What worries me now..is that of course, the minute I stop waiting and buy into the market.....the correction will inevitably follow!

I'm laughing to myself at how the capital markets can play with your head.
Unfortunately we are playing with real money.
To avoid having too much in cash, I just get in slowly when the market is hot instead of ALL-IN right away and go in faster after corrections.
 

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I"ve been patiently "waiting" for a market correction for the last 4 months!
Sitting on the sidelines waiting has cost me !!
I now hold too much cash!...which is usually not a problem except that these days you earn very little on cash.
warp, me too, but with inflation so low, we need to be careful that we lose perspective, i have been in cash for way to long because i am hypersensitive to the downside

there is nothing wrong with being in cash, it is after all, an asset allocation, correct ?

many of the big boys are in cash also, there is a very strong argument that this thing is far from over ...

read zerohedge.com if you want a sobering, different point of view
 

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Belguy I wanted to comment on your interest to invest in individual stocks and I wanted to give you my opinion. I read a lot of your posts and you are very pro index fund. I don't think you can go wrong with that. It's a really good approach as it's low cost and nearly matches or match(ed) the index.

I noticed that you got the stock list from another source and it appears to be dividend focused.

I think the main advantage is purchasing those stocks at a good price point. Right now, I don't think that price point is there. We had is back in July-Aug. I also own one of those stocks that I purchased back in July and it's been a dog to be honest, but I get a nice dividend payment so that makes up for it. Again it's all about price point.

With index funds you don't need to really look at balance sheets, just dollar cost average it's a no brainer and you can be certain your gains will be the index.
 

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I too am very much against losing out on opportunity cost, and holding on to too much cash, 'cos cash can't earn you much. As much as possible, we should always be in the market.

And especially if we are in it for the long term, then it really doesn't matter at what price point we got in at,.... what then that makes the difference is if there is a good dividend payout. The dividend will give us some 'free money' every now and then, the more regular, the better it is,....
 

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ROX- I am of the opinion that of the big banks BMO would have one of the lower growth prospects. Agree that current yield is higher than the others but this has been the case for much of the last 30 years. BMO has not been one of the better in terms of total returns over this period. In MHO I would go with TD/RY/BNS rather than BMO or CM.
 
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