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Discussion Starter #1
I have been investing in Stocks, Commodities and Real Estate for last 10 years. So far my returns are more than 55% in Stock Market. My way of investing buying indvidual divindend paying stocks. Some how I didn't pick up (I don't like) ETF and Options in my portfolio. I don't understand why pepole choose ETF where you loose true value of indvidual stocks and Dividend. Is any ETF or option guru who knows pros and cons of these?

Thanks,

Harry
 

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There's plenty of evidence that the average stock picker doesn't do any better than the market over time. So, rather than to try to beat the market, you can match it or very nearly match its performance with an index ETF. Stock picking may be working for you so far, but very few people consistently beat the market, and if you do, you should start a hedge fund.
 

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I have been investing in stocks, commodities and real estate for twenty five years. So far my weighted annual returns are about 8% in mutual funds and the stock market, so I don't know everything yet.

Recently I (fired my CFP and mutual fund managers and) began to use Modern Portfolio Theory to design my portfolio. By diversifying and taking on uncorrelated risk, I increase the potential for stable, reasonably high returns. An Efficient Portfolio is one that has good returns, but lower risk than if you held only one security or one closely related basket of same.

For my taste I get a good combination of potential returns and risk reduction by investing in value, in smaller caps, in different countries and in different types of securities.

Like you I prefer to own the actual security because as long as I hold it there is no management fee.

I can't fill all the 'style boxes' on my own, so I use ETFs and low cost mutual funds to fill the gaps. For instance, I have one ETF that specializes in value-mid cap-ex US. According to MorningStar the P:B is 0.9 and the P:E is 14. I dislike the annual fee but there is no way I could buy even one of these stocks individually, and smaller caps on other continents correlate poorly :) with stocks in my own country.
 

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Discussion Starter #8
Solis,

I have similar strategy but only difference is my investment is in large dividend paying company across 4 countries (Canada, USA,China and India) Only
 

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Discussion Starter #9
I am active trader and maintan my portfolio yearly basis. My current return is on this year
 

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So you are buying ADRs for China and India? Good choices. I think these countries would correlate very little with Canada and USA. TRE is my second largest stock holding, bought at the market bottom last year.
 

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If you are making those kinds of return on an annual basis, then indexing is probably not for you.
He's not. Or rather, if he is, he should start a hedge fund. People will line up to pay him millions of dollars to invest their money.

I don't doubt that there are some who made 55% in the past year. It's hardly an achievement considering what the markets have done.
 

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Discussion Starter #13
I would like to share my portfolio with you guys. I have created my 3-4 portfolio in google finance and also in word doc. Any idea how I can share?
 

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Harry
I'm intrigued. I'd love to see your portfolio if you care to share, i have shared mine on this website. As Frugal mentioned it is not clear if you have 55% year to date (amazing) or over the past year (april 09-april 10) (average). Id like to follow your stocks to see if you can replicate your performance moving forward.

The very best of hedge fund managers don't make 30% year over year, in my case i'd be very happy if i can get a 2-3% premium over market returns, which i think is still very challenging, so i'm using financial leverage to amplify my returns, although it has more downside potential.
 

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Discussion Starter #16 (Edited)
Here is one of my portfolio. I have 3 more small portfolio. Total investment more than $500K.

Apple Inc. AAPL 239.95 -0.65 (-0.27%) 135.00 $17,752.50 $32,393.25 +$14,640.75 +82.47% -$87.75 82.47%
Barrick Gold Corp. ABX 41.10* +0.22 (0.54%) 240.00 9,004.80 9,864.00 +859.20 +9.54% +52.80 9.54%
Agrium Inc. AGU 68.57* +0.04 (0.06%) 250.00 11,442.50 17,142.50 +5,700.00 +49.81% +10.00 49.81%
Bank of Montreal BMO 61.11* -0.21 (-0.34%) 303.00 10,053.84 18,516.33 +8,462.49 +84.17% -63.63 84.17%
Cisco Systems, Inc. CSCO 26.28 -0.06 (-0.23%) 225.00 $3,867.08 $5,913.00 +$2,045.92 +52.91% -$13.50 52.91%
Goldman Sachs Group... GS 179.50 +3.14 (1.78%) 130.00 $15,171.00 $23,335.00 +$8,164.00 +53.81% +$408.20 53.81%
The Home Depot, Inc. HD 32.97 +0.36 (1.10%) 200.00 $3,667.00 $6,594.00 +$2,927.00 +79.82% +$72.00 79.82%
HDFC Bank Limited (ADR) HDB 144.38 +0.13 (0.09%) 20.00 $2,402.12 $2,887.60 +$485.48 +20.21% +$2.60 20.21%
Hewlett-Packard Company HPQ 53.63 +0.34 (0.64%) 250.00 $8,811.75 $13,407.50 +$4,595.75 +52.15% +$85.00 52.15%
ICICI Bank Limited (ADR) IBN 44.05 -0.47 (-1.06%) 400.00 $7,272.80 $17,620.00 +$10,347.20 +142.27% -$188.00 142.27%
Infosys Tech. Ltd. (ADR) INFY 60.31 +0.45 (0.75%) 215.00 $5,951.20 $12,966.65 +$7,015.45 +117.88% +$96.75 117.88%
Intel Corporation INTC 22.31 -0.14 (-0.62%) 528.00 $8,120.64 $11,779.68 +$3,659.04 +45.06% -$73.92 45.06%
Johnson & Johnson JNJ 64.93 -0.29 (-0.44%) 241.00 $13,235.72 $15,648.13 +$2,412.41 +18.23% -$69.89 18.23%
The Coca-Cola Company KO 53.76 -0.06 (-0.11%) 230.00 $10,598.40 $12,364.80 +$1,766.40 +16.67% -$13.80 16.67%
MasterCard Incorporated MA 256.88 +1.22 (0.48%) 105.00 $19,619.98 $26,972.40 +$7,352.42 +37.47% +$128.10 37.47%
Microsoft Corporation MSFT 29.91 +0.56 (1.91%) 275.00 $6,182.00 $8,225.25 +$2,043.25 +33.05% +$154.00 33.05%
Potash Corp./Saskatchewa... POT 114.90* +0.89 (0.78%) 180.00 19,458.00 20,682.00 +1,224.00 +6.29% +160.20 6.29%
Rogers Communications... RCI.B 33.81* -0.12 (-0.35%) 378.00 11,305.98 12,780.18 +1,474.20 +13.04% -45.36 13.04%
Research In Motion... RIM 69.80* -0.25 (-0.36%) 180.00 13,077.00 12,564.00 -513.00 -3.92% -45.00 -3.92%
Royal Bank of Canada RY 58.94* +0.10 (0.17%) 202.00 9,009.00 11,905.88 +2,896.88 +32.16% +20.20 32.16%
Sterlite Industries... SLT 19.49 +0.34 (1.78%) 475.00 $4,388.05 $9,257.75 +$4,869.70 +110.98% +$161.50 110.98%
Suncor Energy Inc. SU 35.33* +0.74 (2.14%) 250.00 7,722.50 8,832.50 +1,110.00 +14.37% +185.00 14.37%
Talisman Energy Inc. TLM 17.62* +0.22 (1.26%) 250.00 3,991.50 4,405.00 +413.50 +10.36% +55.00 10.36%
Tata Motors Limited... TTM 18.74 -0.29 (-1.52%) 500.00 $1,446.00 $9,370.00 +$7,924.00 +547.99% -$145.00 547.99%
Visa Inc. V 91.49 +0.78 (0.86%) 200.00 $11,181.00 $18,298.00 +$7,117.00 +63.65% +$156.00 63.65%
Wipro Limited (ADR) WIT 23.36 -0.07 (-0.30%) 325.00 $3,857.75 $7,592.00 +$3,734.25 +96.80% -$22.75 96.80%
 

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this appears to be a 12-month snapshot, on a rolling forward basis, from march 2009 to march 2010, of a fairly conservative list of north american traded stocks that includes some indian adrs. I don't see any chinese adrs.

just about any well-managed portfolio, submitted to the same 12-month scope, will show the claimed return or better. Taking this exact list and moving the rolling scope back 3 months, to cover the 12-month period from december 2008 to december 2009, will drop the return. Move it back another 3 months to september 2008 to september 2009, and she drops again. Worse, move it back another 3 months, to cover the 12-month period june 2008 to june 2009, and she's in negative territory. And if you want to see a truly ugly collapse, move it back another 3 months to cover march 2008 to march 2009.

at the end of the day, all this futile exercise proves is that markets go up and markets go down. Harry isn't better off by 55%, although it obviously pleases him to think so. Put another way, harry likes to think that his recent 55% rolling 12-month improvement has everything to do with his genius and nothing to do with the huge rise - in many cases a 100% rise - in the underlying markets during the same time frame, but it just ain't so. In reality, all that harry is better off by is whatever notional or paper gain he has enjoyed since he bought each stock, that is, since cost base. Which event could have been many years ago.

and let's not have any nonsense about a claim that somebody jumped from zero invested to 100% invested in stocks in march 2009 for the first time, like athena springing fully grown from the brow of zeus. Even muriel siebert doesn't claim that timing. Even danielle park & corey venable don't claim that timing. Even rickson didn't claim that timing.
 

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Discussion Starter #18 (Edited)
Humble and All: May be you misunderstood my point or I didn't calrify this earlier. Yes, this is 12 months snap shots after book my profits from the stocks which return more than 50%. This is also true that I was down 33% during March 2007 to March 2008. I am active trader and always belive to book prift rather paper money.

Sir, I didn't claimed myself as "genius" or "smarter than professionals". I am just a long term investor with calculated risk. Anyway, I think we are going away from our original topic "Why ETF?" I shared my portfolio not to prove myself "Genius investor" instead to discuss why we need ETF in your portfolio when you are diversify in different sector and geographically.

So please hold your guns for my rate of return!!!
 

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I am extremely skeptical that your risk-adjusted returns are better than a well-diversified basket of index ETFs. So, if they're not, the answer to the question: "Why ETFs?" is "Why not?" If you're not going to beat the market, don't try. Spend 30 minutes a quarter looking after your portfolio and enjoy your life.
 

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Discussion Starter #20
what do you mean risk-adjusted returns? As I mentioned earlier that I am not fully invested in stocks only. I am also in Commodities (lind waldock), Bonds and Real estate market.
What else index ETF includes to cover risk-adjustment? Can you please be specific? Thanks for your comments in advance.
 
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