Wednesday, July 11, 2012

Sad End of Investing

This link was pointed out on StockTwits by tsxsmallcaps. See The sad end of saving and investing. which also has a link to a G&M article called The sad end of saving and investing. This guy is talking about not experiencing any net growth in my 'Couch Potato' portfolio over the past five years.

What he needs to do is to find a few good companies that are earning money and invest in them. Get companies that pay dividends and earn a decent return while you are waiting for better times. If you are going to do no work and be an investing 'Couch Potato' then perhaps you deserve the recent lousy returns that seem to be coming lately in indexing investing.

We are in a secular bear market and nothing is going to change for a while. In such markets you do get within them cyclical bear and bull markets. There are always companies that are doing well in any sort of market, like one of my current favourites Computer Modelling Group (TSX-CMG).

In a secular bear market you can make money in capital gains by buying and selling fast moving rising companies. Or, if you are lazy like me, you can make money in dividends. Where you are not going to make money is in long term ETFs on indexes.

The whole market is not going anywhere until we move to the next secular bull market. We will not move to the next secular bull market until the overall market gets hammered some more. The S&P500 and the TSX will need, at the minimum, an average P/E of 10 or less.

This all is, of course, my personal opinion. However, I am not the only one to think we are in a secular bear market.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on twitter.


  1. Funny I just sent my family a link on why they should ditch thier MF for ETFs. But that had yo do more with expense ratios than investment options

  2. You can get ETFs that mimic dividend growth stocks portfolios, like iShares XDV which mimic the Dividend Achievers index. Some of our banks have MF that invests in dividend growth stocks at low cost. I look at low cost as less 1% in Management Fees.

    I think that people feel that are giving the up risk of investing by using MF or ETFs. However, what they are giving up is the decisions on how to or what to invest. They still assume the risks of investing. I think the real problem with letter others investing for you is that no one cares about your money as much as you do.

    People can be very cavalier in dealing with other people’s money. We see this in a variety of people who look after lots of other people’s money, from bankers to politicians.