Investing

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

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  • Oct 20th, 2020 1:44 pm
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[OP]
Deal Addict
Oct 1, 2006
2109 posts
1706 upvotes
Montreal
GillesVilleneuve wrote: I do my investing with TDDI and have been doing the couch potato investing since 2015 (using VXC, VCN and VAB), and it always pisses me off seeing that unhedged SP500 TR index benchmark (the orange dotted line) completely obliterating my CCP portfolio:P. Although I know its irrational, it always makes me wonder why I simply don't put all my money in into an unhedged SP500 ETF; since 2015 or so, its outgained my portfolio almost 2:1.
I hear you. Diversification often feels like losing, but in the long-term it often wins:
Last edited by Germack on Aug 26th, 2020 3:13 pm, edited 1 time in total.
Newbie
Feb 27, 2020
2 posts
2 upvotes
Germack wrote: I hear you. Diversification often feels like loosing, but in the long-term it often wins:
Fantastic video, thanks for sharing. You often read about investing advice from laymen (or common folk not working in the business, like me), however it's always fascinating hearing the insights from educated people in the investing business. I won't feel as bad now looking at that SP500 graph anymore...
[OP]
Deal Addict
Oct 1, 2006
2109 posts
1706 upvotes
Montreal
Even the smartest and brightest can fail to beat a simple index portfolio:

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Newbie
Sep 15, 2017
17 posts
4 upvotes
So much of this is ego and mind, I love couch potato but you can always see that part of yourself creeping up that wants more excitement especially if you have disposable income - that is why this works - it is based on human nature vs 'the market' which is a reflection of a collective way of doing things i.e, dalio's trending macro explanations.
Sr. Member
Mar 4, 2008
537 posts
91 upvotes
BC
Not sure where to ask this, but a financial advisor was talking to me about an ETF called CIC.to - its an ETF for the big banks of Canada. Apparently has a dividend payout of 9%....thoughts on this ETF? or what is a good ETF for the big banks? Thanks in advance!
Deal Addict
Jan 3, 2013
2103 posts
353 upvotes
Sidney
JimboD wrote: Not sure where to ask this, but a financial advisor was talking to me about an ETF called CIC.to - its an ETF for the big banks of Canada. Apparently has a dividend payout of 9%....thoughts on this ETF? or what is a good ETF for the big banks? Thanks in advance!
Sounds like added risk. If I wanted the banks, I'd just do an equal-weight bank ETF like ZEB.
Deal Addict
Mar 10, 2010
1342 posts
338 upvotes
JimboD wrote: Not sure where to ask this, but a financial advisor was talking to me about an ETF called CIC.to - its an ETF for the big banks of Canada. Apparently has a dividend payout of 9%....thoughts on this ETF? or what is a good ETF for the big banks? Thanks in advance!
It's dividend yield is 9%, it is not paying you a return of 9% per year (this year it's ~3.5% ROI). Here's some reading about dividend yield.
Newbie
Jul 22, 2018
70 posts
35 upvotes
Germack wrote: I hear you. Diversification often feels like losing, but in the long-term it often wins:
I did not watch the whole video. But is diversification actually supposed to win long term or just not supposed to make the returns as volatile. I always thought a full equity portfolio is the one that is supposed to win in the long term. So you really shouldnt be comparing to SP500.

Also never did understand why Canada is in there if you are thinking of diversification it seems counter intuitive.
Sr. Member
Feb 22, 2013
836 posts
676 upvotes
BardoonD52881 wrote: I did not watch the whole video. But is diversification actually supposed to win long term or just not supposed to make the returns as volatile. I always thought a full equity portfolio is the one that is supposed to win in the long term. So you really shouldnt be comparing to SP500.

Also never did understand why Canada is in there if you are thinking of diversification it seems counter intuitive.
I think of diversification reduces volitility which in turn helps you to achieve your expected return. With investing, I think investors forget that you will eventually have to convert paper gains into realized gains. If your portfolio is gyrating all over the place (even if it is usually trending up) then it's going to be a lot more difficult to sell and achieve expected rate of return.
Deal Addict
Dec 3, 2014
1907 posts
1084 upvotes
Ontario
BardoonD52881 wrote: I did not watch the whole video. But is diversification actually supposed to win long term or just not supposed to make the returns as volatile. I always thought a full equity portfolio is the one that is supposed to win in the long term. So you really shouldnt be comparing to SP500.
It's all fun and games until you are ready to retire during a real market crash. By real I am referring to the period of 1929-1956 (nearly 30 years to get back to ATH), 1973-1987 (14 years), 2000-2014 (14 years). I don't even need to mention the 2008 crash because by that point the market had STILL not recovered from 2000.
Newbie
Jul 22, 2018
70 posts
35 upvotes
llpresident wrote: It's all fun and games until you are ready to retire during a real market crash. By real I am referring to the period of 1929-1956 (nearly 30 years to get back to ATH), 1973-1987 (14 years), 2000-2014 (14 years). I don't even need to mention the 2008 crash because by that point the market had STILL not recovered from 2000.
Maybe change from fun and games to a more bonds portfolio if you are getting ready to retire.

Otherwise if you are contributing its still better to go in. As you will recover a lot faster.
Member
Jul 30, 2012
427 posts
416 upvotes
JimboD wrote: Not sure where to ask this, but a financial advisor was talking to me about an ETF called CIC.to - its an ETF for the big banks of Canada. Apparently has a dividend payout of 9%....thoughts on this ETF? or what is a good ETF for the big banks? Thanks in advance!
CIC is a "Covered Call" overlaying the Bank(s) holdings. Part of your return is derived from the dividends and the other aspect is selling calls to enhance yield (up to 25% Call Writing).
This product is very similar to BMO ZWB (which has a much higher market cap). The performance (including returns) is very similar.

The return is not fixed and will fluctuate depending on the call writing aspect. Additionally, Covered Call products tend to "outperform" the benchmark when the underlying stocks are falling in price (i.e. calls may be sold prior to a stock downturn). They underperform when the underlying stocks rise in share price because with Call writing strategies, part of the portfolio is consistently called away at potentially "lower" prices when the stock(s) are in an uptrend.

CIC_ZWB Bank Covered Calls ETFs Chart Link
Deal Addict
Dec 3, 2014
1907 posts
1084 upvotes
Ontario
BardoonD52881 wrote: Maybe change from fun and games to a more bonds portfolio if you are getting ready to retire.

Otherwise if you are contributing its still better to go in. As you will recover a lot faster.
Right but I know many people who are near retirement and still investing aggressively. I understand why, yields on fixed income are trash and inflation is a rising threat to capital. However, as investors we seem to have a very short memory. It has been a long while since we had a real sustained bear market. We would be in one now but monetary policy is in uncharted waters trying to borrow our way into prosperity.
Member
Jul 30, 2012
427 posts
416 upvotes
llpresident wrote: Right but I know many people who are near retirement and still investing aggressively. I understand why, yields on fixed income are trash and inflation is a rising threat to capital. However, as investors we seem to have a very short memory. It has been a long while since we had a real sustained bear market. We would be in one now but monetary policy is in uncharted waters trying to borrow our way into prosperity.
The speed off the March lows was a surprise to me. I was expecting a longer entrenchment like 2000/2002, 2008/09. As you say, the Feds prevented any type of credit lockup this time around during the recent crash.

That aside, I am up considerably on Bonds (Capital gains) this year and I don't discount eventual stock market fears even at ultra-low interest rates. In some respects, equity risk is so feared in some countries that investors are willing to buy negative credit yields (Japan, several European Countries now).
Sr. Member
Mar 4, 2008
537 posts
91 upvotes
BC
DealRNothing wrote: CIC is a "Covered Call" overlaying the Bank(s) holdings. Part of your return is derived from the dividends and the other aspect is selling calls to enhance yield (up to 25% Call Writing).
This product is very similar to BMO ZWB (which has a much higher market cap). The performance (including returns) is very similar.

The return is not fixed and will fluctuate depending on the call writing aspect. Additionally, Covered Call products tend to "outperform" the benchmark when the underlying stocks are falling in price (i.e. calls may be sold prior to a stock downturn). They underperform when the underlying stocks rise in share price because with Call writing strategies, part of the portfolio is consistently called away at potentially "lower" prices when the stock(s) are in an uptrend.

CIC_ZWB Bank Covered Calls ETFs Chart Link
Thank you! This was what I was looking for. As someone already mentioned, more risk to take on. Great to know!

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