Couch potato investing for the last 14 years - tracking my progress

retireat50 wrote: ↑ People on this thread are bizarre, someone even said I should not post if I am not an ardent supporter. Can this thread not have both positive and negative comments?

Markets are once again surging, S&P up nearly 1%, QQQ up 1.5% and XAW is flat lol. You can't make this stuff up. To address certain comments

1) Why not just go 100% SPY. I would face a massive tax liability so still have some of this stuff as legacy positions. I am slowly getting rid of this junk when I have some tax losses to offset but will take awhile
2) Someone mentioned they looked at some passive index funds and they had international and bond holdings. Huh??? I am talking about the equity side only. I have no issue with CCP bond holdings and infact have VSB, ZAG,etc on the fixed income side
3) Someone said I was cherry picking. Cherry picking SPY??? When someone says stock market, the Average Joe and Jane think of THE S&P 500. It is the gold standard in terms of an index the world throughout. I would agree with their point if I picked TSLA, Amazon, etc
4) Someone mentioned that this is lower risk. No, XAW/VCN dropped more than SPY during the March lows

Again, I go back to my question which remains unanswered. Under what macro environments will CCP outperform a 100% SPY (S&P 500) holding on the equity side? If the answer is none (which I assume is the case given noone has answered me) then what is the point of anyone following CCP? You get to share when it underperforms but have no prospect of outperformance. You must be compensated for holding equities given there is an assumption of equity risk premium and you must maximize that during the good times. CCP holders are not

sparkaction wrote: ↑ @MarinersFanatik I think @retireat50 bring up some good points and allows CCP investors an opportunity to reflect on why we've adopted this approach.

sparkaction wrote: ↑ @MarinersFanatik I think @retireat50 bring up some good points and allows CCP investors an opportunity to reflect on why we've adopted this approach.

retireat50 wrote: ↑ People on this thread are bizarre, someone even said I should not post if I am not an ardent supporter. Can this thread not have both positive and negative comments?

Markets are once again surging, S&P up nearly 1%, QQQ up 1.5% and XAW is flat lol. You can't make this stuff up. To address certain comments

1) Why not just go 100% SPY. I would face a massive tax liability so still have some of this stuff as legacy positions. I am slowly getting rid of this junk when I have some tax losses to offset but will take awhile
2) Someone mentioned they looked at some passive index funds and they had international and bond holdings. Huh??? I am talking about the equity side only. I have no issue with CCP bond holdings and infact have VSB, ZAG,etc on the fixed income side
3) Someone said I was cherry picking. Cherry picking SPY??? When someone says stock market, the Average Joe and Jane think of THE S&P 500. It is the gold standard in terms of an index the world throughout. I would agree with their point if I picked TSLA, Amazon, etc
4) Someone mentioned that this is lower risk. No, XAW/VCN dropped more than SPY during the March lows

Again, I go back to my question which remains unanswered. Under what macro environments will CCP outperform a 100% SPY (S&P 500) holding on the equity side? If the answer is none (which I assume is the case given noone has answered me) then what is the point of anyone following CCP? You get to share when it underperforms but have no prospect of outperformance. You must be compensated for holding equities given there is an assumption of equity risk premium and you must maximize that during the good times. CCP holders are not

n31290 wrote: ↑ Those of you who hold XAW - have you done anything about the tracking error issue? I am not sure I feel comfortable buying any more, but I don't want to spend the $10 to switch to something else either in Questrade (in my TFSA).

llpresident wrote: ↑ Can you explain what the tracking error issue is? I have XAW and am not aware of this.

will888 wrote: ↑ Let me try to give you an answer to your question. The S&P 500 went through a lost decade in 2000s. From 2000 to 2009, the index gained all of 6%. There you go, if the economic conditions in that decade were to repeat in the current decade, another lost decade could result. Of course, I have no crystal ball and so this is projecting past performance to future results.

You really have to understand that investing in all in on the S&P 500 means a portfolio with 100% in stocks. By all measure, 100% equities is risky. Google search sequence of returns risk. What if your investment profile is that you need to bleed down your investment account for income over the next decade, can you afford to be all in on the S&P 500? You really need to internalize the fact that CCP is lower risk than any 100% equity portfolio. As such, it's long term returns will likely be lower. In the long term, risk and reward are somewhat correlated. If you investment profile is such that 100% equities is suitable, then by all means get 100% S&P 500. The CCP portfolio is not suitable for you. Not suitable for you = bad investment for everyone.

n31290 wrote: ↑ Those of you who hold XAW - have you done anything about the tracking error issue? I am not sure I feel comfortable buying any more, but I don't want to spend the $10 to switch to something else either in Questrade (in my TFSA).

retireat50 wrote: ↑ I'm so glad you brought this up. Yes indeed, in fact if you go back to TSX inception it outperformed the S&P up until just a few years ago on a cumulative basis. Let's take a time machine back to 2000 shall we. Oil was $12...in 2009 it was $140. During that time we also had relatively high interest rates. Obviously in a commodity boom period (mainly due to oil but things like copper also surged) TSX will outperform. Also Financials love high interest rates and TSX has a ton of exposure to financials. So do you think that 1) we are returning to a commodity boom period or 2) we are going back to relatively high interest rates?

If neither, then no the TSX will not outperform and 25% of your portfolio will lag (CCP calls for 25% Canadian exposure). And no, it will not be lower risk just look at the beta of VCN or whatever TSX proxy you want. US indices will continue to outperform with lower rates (lower for longer hurray!) as tech loves low interest rates. So why not ditch something that is guaranteed to underperform? We could also easily return to a decade like 2000 to 2010 for all stocks so if you are not keeping up with SPY now then things like the 4% rate are not valid as it is based on the US markets. 4% SWR needs to be 2% if you are following CCP, this has actually been brought up by Wade Pfau the founder of the 4% rule. It only works for US investing!!

Spiritwalker2222 wrote: ↑
I have a CCP portfolio but here are some contradictions to what you said. I'm not saying it has to be one way or the other, but doing a CCP we have options.

a) I agree it's simple, but most of my portfolio is in a USD account.
b) How does investing in the S&P complicate taxes? It doesn't (in your RRSP).
c) Canadian vs US vs world content, this is not set in stone, use the content you want. My portfolio is mostly US content.