Afaik the general guidance is go fully diversified and you cant go wrong over a 10, 20, 30 year time horizon. E.g. as a Canadian I should look at VEQT.

As I've started reading up on value investing lately I'm wondering if I'd be better off investing in some companies that I think may do well over the same time horizon (still learning valuation and will have to reevaluate every year ofc)

Some of the best companies are in all the big etfs anyway. Apple, Microsoft, coke, Walmart, mcdonalds etc. Or i can invest in etfs that focus on fewer companies than the entire global market.

Why dilute your investment with a what will undoubtedly be a large amount of crap hoping the winners will carry the etf forward when you can try picking.

If I put 100k in say mcdonalds instead of veqt, which do you think will be higher in 30 years?

Almost all data is against you. Obviously, anyone can outpace the market, but statistically you are unlikely to beat it over a long time horizon.

This is easily the most common, beat to death topic around investing, also if you invest in say the S&P 500, there's already criteria weeding out many of the losers since they would not be eligible to even be in the S&P500 to begin with.

This post was edited by SBD on Jan 26 2024 11:32am

I mean millions try stock picking and we can beat the markets for certain time periods but for the last 100 years there have only been a few to have consistently beat the market

Many firms with more financial insight knowledge than the retail investor, will still manage to do worse than referenced index funds overtime

Investing is an emotional game as well as technical. It’s easy to say buy low sell high but in practice it isn’t so simple all the time. You can pick companies that you think will be better off but nothing is a guarantee. What index funds offer is adaptability because of how ETFs are adjusted based on individual company performances. Overtime the only bet you are making is that there are companies that will keep on succeeding.

What you are proposing with McDonald’s someone proposed once upon a time with AOL, or AT&T, or block buster. 50 years from now the reality is you don’t know what the landscape will be like

That's the general attitude I take. I ask myself, why do I think I am smarter than every algorithm, every employee that's full time job is investing and think I can beat them while I don't even work in the industry and am tossing figures together in Excel at best.

And most importantly, would I bet my retirement, my wife's retirement if I die, my kids inheritance that I can outsmart them.

Absolutely not.

This post was edited by SBD on Jan 26 2024 11:41am

Thats kind of what I mean though. Vfv is less diversified than veqt yet the quality of companies in there is probably much better than a lot of the crap in veqt no?

Going for more global diversification is supposed to be good yet narrower scope etfs are performing better.

Regarding the sp500, the flip side of this thought is that a few decades ago if you weren't investing in the sp500 equivalent of Japan, people would have told you you're an idiot and that Japan's economy is going to the moon and we all saw how that turned out. I get similar guidance regarding investing in vfv over veqt when im researching it online.

Also my brother who knows nothing about stocks or company financials bought tesla and nvidia a long time ago and im a tad envious over the years looking at his performance vs my diversified funds. Idk maybe im going full regard here.

Good for your brother, but it isn’t a reliable strategy going all in on 2 stocks

Take Tesla for example btw. It’s had a massive run in the last 5 years for sure. But it’s off 50% from its all time high still. Could you handle a 50% hair cut in your portfolio in a couple years while watching the overall market continue to break records ?

This post was edited by Bazi on Jan 26 2024 12:00pm

Hindsight is 20/20 and we could spend all day looking at things we wish we did, its probably one of the greatest pitfalls since its makes us emotional and irrational. We diverge, FOMO kicks in and you end up losing your shirt. You have to think about it over the next 30 years, that person putting all their eggs in a few baskets is highly likley to make some bad picks too and that's going to erase a material amount of % gained.

Its been a while since I have read much on total market vs S&P, but there's quite a bit of information on Boggleheads which in my opinion is the best investing forum. If I recall over 50 years the difference was fairly trivial, but its been a long time. That and we have moved into a landscape where we just have mega corporations that consume the vast majority of the total market cap and as a result those smaller companies that are part of a total US market ETF have such minimal overall impact.

This post was edited by SBD on Jan 26 2024 12:00pm

While I'm not personally looking to invest in those two stocks I am thinking of doing my own pseudo etf of companies with good valuations for writing covered calls and cash secured puts on them. After a few years (ive been fortunate lately) I'd maybe have 5% exposure per stock which is still a lot for a single stock but it isn't a significant amount of the overall portfolio.

Thanks for the reference. I'll take a look at bogleheads again, ive only come across their subredit so far, didnt know they had an actual forum.

Me personally , I just have checks on myself since I also like to stock pick and be relatively dynamic . Plus I enjoy the market as a hobby

Brokerage account - all stock picking , buying and selling

Retirement accounts- ALL into VOO dca for the year

Will see if how I do. My personal account has beaten the market the last 3 years but that’s cuz I got lucky with a few names like Facebook , Nvidia . I have decades to go so I doubt I will continue to beat but will try