Friday, September 27, 2013

Buying the Market

I have heard many times that if you buy more than says 20 stocks, you might as well buy the whole market as you will not do any better.

However, this has not been my experience. When I started funding my RRSP and then my Locked-In RRSP, I chose different stocks that I had in my Trading Account. I have done the same thing for my TFSA. I currently have 51 stocks. I just bought a brand new one for my TFSA account this year.

My return last year was 13%. The TSX is up by 4%. Mine you I am including dividends in my return, which the TSX is not. However, my dividends accounted for 3.75% of my return, which leaves my capital gain at 9.75%.

My 5 year total return is 6% per year. The 5 year TSX return is negative 2.1%. The TSX adjusted for dividends at 2% per year is negative 0.1%. (I use 2% because I have read it is the long term average dividend return for the TSX. I know the current one is 3%, but it varies all the time and I have not yet found a place where I can find the dividend yield on the TSX over a number of years.)

On my other blog I am today writing about Canyon Services Group (TSX-FRC, OTC-CYSVF)...continue...

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 site for an index to these blog entries and for stocks followed. Follow me on Twitter.

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