Investing

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

  • Last Updated:
  • Jan 19th, 2021 3:52 pm
Tags:
None
Sr. Member
Jun 14, 2018
644 posts
654 upvotes
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
CCP isn't meant to be a better performing investment strategy than, say 100% US equities. It's meant to be a low-MER investment strategy to keep people stay invested, even amidst the dips. It's to give investors a sense of security with diversification.

Think of it like losing weight. Which method is the best? Calories in, calories out? Keto? Intermittent fasting? It doesn't matter. Just do the one that works best for you and keeps you on the path as long as possible. That's essentially what CCP is. It's just another investment strategy that is a lower cost alternative to the typical mutual funds that have been around forever.

It's bizarre that this is triggering you so much. I started doing CCP as well, then have switched to higher US equities myself, but I certainly don't have the same vitriol for CCP as you do.
Deal Addict
Mar 31, 2017
1618 posts
927 upvotes
Burnaby
I obviously can't speak for others nor am I particularly well versed in this topic but here's why I follow CCP:

A) It's simple - I don't wanna deal with investing in USD/forex and I don't wanna focus on "maximizing" my returns (otherwise I should be investing in stocks anyways)

B) No tax melodrama - I have enough stress in my life already and certainly don't need more and to have to start worrying about tax implications of investing in S&P

C) Local - I like the comfort of knowing that atleast a portion of my investment stays local to Canada. If I can help this country develop more (even if it's just a tiny bit) then I'm happy to do so

D) Easy - CPP is an easy to follow guide that doesn't require much grunt work on my end. It's also far easier to get advice on it in forums (such as this one) than to pivot and do my own thing, where I'll undoubtedly end up messing a thing or two (or, as is usual for me, ten!)

E) And finally, it works! - While I don't doubt that S&P could make me more money long term, I have (or atleast I think I do!) a well thought out plan of how I can retire in the next 15-20 years. S&P investment may or may not lead me to the same position but I'm not about to start that research and planning all over again...just to do what I intend to do anyways (I.E. Semi-retire in 20 years~)

Anyways those are my reasons for sticking to CPP. I honestly don't see the need/greed to fix what ain't broken.
Sr. Member
Jun 14, 2018
644 posts
654 upvotes
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.
Yes, there's good reasons to steer away from CCP, as I have, but there's no reason to trash it as much as he has. It's for beginners and/or people who don't want to spend a lot of time dealing with investing, but still want to build a reasonable portfolio.
Deal Expert
User avatar
Dec 12, 2009
19641 posts
7755 upvotes
Toronto
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
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.
̶K̶o̶o̶d̶o̶ ̶$̶4̶0̶/̶6̶G̶B̶
Public Mobile 2016 fall promo, $23/1GB, $38/5GB
Fido $0.00/4GB+tablet
Tangerine Bank

Top