Is It a Good Idea to Go "All In" with ETFs?

Janus2faced wrote: ↑ what age are you today & how long have you been invested in the stock market?

then there's the other side of you the leverage investor.

42 and I'd say investing for 15 years; but the first 5 years was more casual

letmesee wrote: ↑ There were a few times in the past couple of weeks when certain individual blue-chip stocks dropped sharply (like GOOGL, UNH, PLTR), and I thought it was a good opportunity to buy in.

This wasn’t part of my original plan, which was to stick with all ETFs, but because it looked like a bargain, I went for it (couldn’t resist that RFD “deals deals deals!” mindset).

Now my once all-ETF portfolio is all over the place and kind of off track, haha.

FOMO is a bad investment strategy.

As an aside, this post reminds me of 2021. I made some really bad FOMO buys at the time - LSPD, CTS, SQ, all near their highs, only to sell them at big losses. Thankfully they were a small % of the overall port and the overall damage was limited.

I think the best thing for you is to just buy an all in one ETF (eg VGRO or XGRO), stop watching stocks, work on the FOMO (I have it too - we all do) and then just add money to the all in one ETF.

letmesee wrote: ↑ When I first started investing in stocks, I decided to stick with ETFs, mainly ZSP, because I didn’t know much about the market (and I told myself that's probably the safest and easiest)

Then I came across people who had portfolios made up entirely of different ETFs. That made me realize there were even more ways to diversify an all-ETF portfolio.

This left me confused, so I began conducting further research.

I kept seeing people talk about things like the Bogleheads’ 3-fund portfolio, the 4-fund portfolio, and all these other strategies.

It all started to feel pretty complicated.

For new investors (I am one of them), the biggest challenge is not stock up and down, but emotionality. Your emotions could easily take the driver seat and make irrational decisions

Many ways to avoid it, but one way is to minimize number of decisions you need make. For example, you could have four index funds couch potato strategy, but then you need make decisions about how to rebalance it and each decision will give your emotion a chance to showcase

So might be at the beginning, just cut to bare minimum and buy all in one ETF to start with. Later, when you have time, you could always do more

@letmesee I shouldn't be so dismissive; we all make mistakes and mistakes are part of the process. I certainly have made many (and will continue to do so).

If you really want to get into stock picking, and are serious about trying to hone a craft and beat the index then I'd browse this substack and read the free articles. If it ignites something in you want you want to learn more, that's a positive sign.

Today I note FICO is selling off, and I'm trying to judge if it's a buy or not. I still think it's crazy overvalued, although I'll probably ask Deep Research to do some digging and see what it says as a starting point. Again, if your eyes glaze over then it's also a sign to stick with ETFs.

Other good reads are Richer, Wiser Happier; The Essays of Warren Buffett; Buffett and Munger Unscripted; and The Art of Execution. There are some podcasts that are great resources if you are interested as well.

I've also started to use Deep Research from Gemini AI to research companies and provide other opinions / feedback on my thoughts and positions. For example yesterday I spent about an hour using it to look at the airline part / aftermarket service industry and asked it to compare HEICO to Loar to TransDigm which was a really interesting experience. Again, if this makes your eyes glaze over then it's not worth it!

On the Index / ETF side I have a spread sheet that I have set up with a fixed asset allocation for a variety of ETFs. I then enter the current market value, and the spread sheet tells me what I need to add to, and what I need to sell. I do this quarterly. It's very mechanical, no thinking, just enter numbers, place trades. I last changed the allocation in 2020 when I added some small BTC and ETH exposure. Enough to make a difference if they do something (which they have), not enough to tank me if they do nothing.

Like many others I used to invest in stocks - hearing about one having high growth or a solid dividend or whatever.

I then realized that no on can predict the future, and 'reliable dont-ever-sell-them retirement-proof' stocks (BCE & AQN are two of late) can also falter.

That being said, I do have a prediction in one thing - the idea that services and supplies will continue - so I just DCA every month into a global-based ETF (this link should get you started or read a popular thread like this one) and spend my time involved in other things.

For background - mid 40s, homeowner, no mortgage/debt, DB pension, have my TFSA/RRSP maxed out yearly + put everything else in my unregistered account (with the exception of about 4-5% of my portfolio in cash/gold).

newt_101 wrote: ↑ Like many others I used to invest in stocks - hearing about one having high growth or a solid dividend or whatever.

I then realized that no on can predict the future, and 'reliable dont-ever-sell-them retirement-proof' stocks (BCE & AQN are two of late) can also falter.

That being said, I do have a prediction in one thing - the idea that services and supplies will continue - so I just DCA every month into a global-based ETF (this link should get you started or read a popular thread like this one) and spend my time involved in other things.

For background - mid 40s, homeowner, no mortgage/debt, DB pension, have my TFSA/RRSP maxed out yearly + put everything else in my unregistered account (with the exception of about 4-5% of my portfolio in cash/gold).

I think that is a good example of different views that people need to consider: I would not have ever put AQN into the "reliable dont-ever-sell-them retirement-proof" category because of the lack of a long-term track record. It is younger than you are!

cloak wrote: ↑ I think that is a good example of different views that people need to consider: I would not have ever put AQN into the "reliable dont-ever-sell-them retirement-proof" category because of the lack of a long-term track record. It is younger than you are!

You may not but many did.
Those were just a couple of examples to give perspective.

The list is extensive - Lehman, Citi, Enron, Blackberry, Nokia, Yahoo, Sears and on and on.

No idea where to put this but as a DP with SP500, I am semi-glad I bought both XSP and ZSP as the currency fluctuations have sort of balanced out and I only deal with the SP500 performance.

Since this year CAD > USD in terms of change, my XSP is vastly outperforming ZSP

speedyforme wrote: ↑ No idea where to put this but as a DP with SP500, I am semi-glad I bought both XSP and ZSP as the currency fluctuations have sort of balanced out and I only deal with the SP500 performance.

Since this year CAD > USD in terms of change, my XSP is vastly outperforming ZSP

Long run, you still lose though vs you only bought ZSP

smartie wrote: ↑ Long run, you still lose though vs you only bought ZSP

Is that based on currency devaluation that accumulates?

When I look at ALL TIME the difference is 10% total return between the 2. But perhaps I am doing it wrong

speedyforme wrote: ↑ Is that based on currency devaluation that accumulates?

When I look at ALL TIME the difference is 10% total return between the 2. But perhaps I am doing it wrong

Not sure what do you mean “all time”, they established in different years

smartie wrote: ↑ Not sure what do you mean “all time”, they established in different years

Sorry, not all time; 5yr return which is when I started

speedyforme wrote: ↑ Sorry, not all time; 5yr return which is when I started

Even for five years ,ZSP is 97% vs XSP 82%, (97-82)/82=18.3%, that’s a lot

smartie wrote: ↑ Even for five years ,ZSP is 97% vs XSP 82%, (97-82)/82=18.3%, that’s a lot

In the short term currency matters. In the longer term not so much. Larry Berman covered currency in his educational segment yesterday. He shows USD to be a nothing burger over the duration that its been the reserve currency.

newt_101 wrote: ↑ You may not but many did.
Those were just a couple of examples to give perspective.

The list is extensive - Lehman, Citi, Enron, Blackberry, Nokia, Yahoo, Sears and on and on.

I don't disagree.

It makes a lot of minutiae and "talking heads" to go through since half the names you mentioned had no real history of delivering... and that is before getting into how healthy or unhealthy the other half were at any given time.

TrevorK wrote: ↑
I currently aim for ETFs with the majority of my investments. I have a bucket of stocks I bought during COVID but for the most part I have pivoted to ETFs. I want to preserve the money I have, or have a great chance at it, rather than roll the dice. While it's been successful for me before I don't have the time to put in the same research now that led to me buying stocks like Apple. I know I'd rather have steady returns because I'm at the point of retiring when I want. Preserving this is more important than making another $100K on a stock pick.

Which ETFs are you buying? Thank you.

smartie wrote: ↑ For new investors (I am one of them), the biggest challenge is not stock up and down, but emotionality. Your emotions could easily take the driver seat and make irrational decisions

Many ways to avoid it, but one way is to minimize number of decisions you need make. For example, you could have four index funds couch potato strategy, but then you need make decisions about how to rebalance it and each decision will give your emotion a chance to showcase

So might be at the beginning, just cut to bare minimum and buy all in one ETF to start with. Later, when you have time, you could always do more

How to choose the ONE ETF then?

ChristineY wrote: ↑ How to choose the ONE ETF then?

Be honest with your true level of "risk tolerance".

Can't really go wrong with: XGRO/VGRO or XBAL/VBAL

(read up on the Couch Potato to understand why)

ChristineY wrote: ↑ Which ETFs are you buying? Thank you.

I buy VEQT.

Some background:

There are many companies that make ETFs, and for the most part they do perform similar to one another. There are slight differences but that's a good topic to get into after the basics. You'll notice they all follow a similar naming convention:
- VEQT, VGRO, VBAL: Managed by a company called Vanguard
- XEQT, XGRO, XBAL: Managed by a company called iShares
- ZEQT, ZGRO, ZBAL: Managed by the bank BMO
...and more.

You'll notice they all follow a similar naming convention EQT, GRO, BAL. The major difference between these is what they try to hold:
- EQT will hold 100% equities (stocks) from around the world
- GRO will hold 80% equities (stocks) and 20% bonds from around the world
- BAL will hold 60% equities (stocks) and 40% bonds from around the world

As you can see, the major difference in them is the ratio of equities to bonds. The theory is that the more bonds you have, the less of a drop you will see in value if the market does poor. However, if the market does well the theory is that your portfolio won't go as high either. This makes sense because bonds are generally a safer investment that aims for a fixed return and because of that they don't get the large jumps or dips you see with equities - slow and steady.

Historical performance does not mean future performance:
- Over the last 5 years $10,000 invested in VEQT would yield $18,446 and that same amount in VBAL would yield $13,995. While that's a big difference, that is also during the time when the stock markets have experienced tremendous growth so we expected it.
- Between February 2019 and February 2021 $10,000 invested in VEQT would have returned $13,855 and that same amount in VBAL would yield $12,936. This is expected - the markets were poor (COVID) and I cherry-picked an example to show you why some prefer VBAL because it's just slow and steady.

I use VEQT because with my risk tolerance I don't mind being 100% invested in equities because I have a large pension when I retire so that will likely feed most / all of my spending. My investments are more going to be fun money when I retire and likely a large inheritance for my kids, or what allows me to retire early. However, which of the major three you choose (EQT, GRO, BAL) is based on your own risk tolerance - you may not have the same safety net I do and thus may want to be more conservative (GRO, BAL).

If you have any questions feel free to ask.

TrevorK wrote: ↑ I buy VEQT.

Some background:

There are many companies that make ETFs, and for the most part they do perform similar to one another. There are slight differences but that's a good topic to get into after the basics. You'll notice they all follow a similar naming convention:
- VEQT, VGRO, VBAL: Managed by a company called Vanguard
- XEQT, XGRO, XBAL: Managed by a company called iShares
- ZEQT, ZGRO, ZBAL: Managed by the bank BMO
...and more.

You'll notice they all follow a similar naming convention EQT, GRO, BAL. The major difference between these is what they try to hold:
- EQT will hold 100% equities (stocks) from around the world
- GRO will hold 80% equities (stocks) and 20% bonds from around the world
- BAL will hold 60% equities (stocks) and 40% bonds from around the world

Thank you for your detailed explanation. Which ETFs will you buy if you have US dollars and won't want to convert them to CAD?