Today's show

This week, I focused on using ETFs to rebuild your portfolio after the "lost decade."  Just because we have seen dreadful ten year results for equity markets, we should not give up on stocks as a meaningful component of a long term investment strategy.  In fact, equities have outperformed all other major asset classes, over the long term.  For this reason, I feel it is important to disscuss the options available for investing in equity markets.  Larger portfolios have more options; individual stocks and bond positions may be used to achieve proper diversification.  For smaller, or even moderate sized portfolios, diversification is more difficult.  This may drive you to mutual funds.  As I frequently discuss on the show, most mutual funds fail to beat the index against which they are measured.   In fact, much of the excess returns associated with equities over other assets is chewed up by the 2.5% management expense typical of a Canadian mutual fund.

Exchange traded funds typically track an index, and have much lower management costs than an equity mutual fund.  They give diversification at a much lower cost than a mutual fund.  Further, there are many new, specialized funds that offer you exposure to individual sectors,or even bearish feelings about a sector, or the whole market..

Unfortunately, many investors do not get exposed to these alternatives, either because their advisor does not recommend them, or is not licensed to sell them.  If you are looking to discuss your options, visit http://www.jeffwareham.ca/, send me an email, or call me at (519) 963-8019.