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Index Investing

Four of Canada’s brightest investors go head to head
in a battle for portfolio supremacy

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Meet Index Investor Andrew Hallam

Latest Columns

Manulife funds vs. index funds: Here's how they stack up over 10 years

ANDREW HALLAM

Andrew Hallam is the index investor for Globe Investor’s Strategy Lab. Follow his contributions here and view his model portfolio here.

Imagine professional golf players, at their discretion, dictating which of their shots would go on record for tournament scores and which would be swept under the rug. If regulations allowed such practices, a mediocre player with a large broom might triumph at the U.S. Open.

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How do CIBC mutual funds measure up against its index funds?

ANDREW HALLAM

Andrew Hallam is the index investor for Globe Investor’s Strategy Lab. Follow his contributions here and view his model portfolio here.

Every day, thousands of Canadians settle into chairs in front of financial advisers. Most people don’t have an interest in the stock market. They know they should be investing in RRSPs, but they don’t have the time or inclination to bother with individual stocks or ETFs. Instead, they trust an adviser to select investments for them. In most cases, they end up with a portfolio of mutual funds.

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How do TD’s mutual funds stack up against its index funds?

ANDREW HALLAM

Andrew Hallam is the index investor for Globe Investor’s Strategy Lab. Follow his contributions here and view his model portfolio here.

Quirky imagery works well when explaining concepts to kids. Based on my experience as a high school personal finance teacher, the more ridiculous the better. So, what do index fund managers do all day? They work from hammocks like chilled hippies – if you ask my students.

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Putting Fidelity’s funds to the test

ANDREW HALLAM

Andrew Hallam is the index investor for Globe Investor’s Strategy Lab. Follow his contributions here and view his model portfolio here.

Fidelity Investments may be the bravest mutual fund company in Canada. They compare all of their fund performances against indexed benchmarks.

Most actively managed fund companies, if they compare their results to indexes at all, are highly selective when doing so. They tout top performers in full-page magazine ads, while their dog funds cower in the company kennels.

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How RBC funds compare against index funds, ETFs

ANDREW HALLAM

Andrew Hallam is the index investor for Globe Investor’s Strategy Lab. Follow his contributions here and view his model portfolio here.

Thomas Edison was dubbed a wizard when he created the electric light bulb. The Wright Brothers became American icons when they flew the first airplane. But when John Bogle created the first index fund in 1975, it was labelled Bogle’s folly. That a passive collection of stocks could outperform most professional money managers was considered a joke. Now, nobody’s laughing. Vanguard’s Total U.S. Stock Market Index, thanks largely to its popular, lean-cost structure, is now the largest fund on the planet.

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Like F1 race cars, high dividend-yielding indexes have evolved

ANDREW HALLAM

Purchasing high dividend paying stocks is a lot like driving an old F1 race car. You select your stocks, like choosing a gear. Feeling the clutch, the manual gearbox and revving engine behind gives a sense of control.

But F1 cars have evolved. Transmissions are now semi-automatic, removing some of the drivers’ work. As a result, the cars are faster. Dividend investors may wish to do likewise, with high dividend yielding indexes.

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A three-step plan for turning your child into a saver

ANDREW HALLAM

Andrew Hallam is the index investor for Globe Investor’s Strategy Lab. Follow his contributions here and view his model portfolio here.

One of the things I’m most proud of this year is talking lots of kids in my high school personal finance class into opening investment accounts. The youngest was 14, the oldest 18.

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My wish list for new indexing products

ANDREW HALLAM

Andrew Hallam is the index investor for Globe Investor’s Strategy Lab. Follow his contributions here and view his model portfolio here.

I recently received an e-mail from Magnus Boecker, CEO of the Singapore Stock Exchange. The former president of the Nasdaq OMX Group had seen me speaking on CNBC Asia, and wondered whether I was interested in getting together for coffee.

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Why willpower trumps smarts in financial success

ANDREW HALLAM

Andrew Hallam is the index investor for Globe Investor’s Strategy Lab. Follow his contributions here and view his model portfolio here.

Walter Mischel of Stanford University used a bunch of four-year-olds to change how we think about willpower. He placed the kids in a room without any distractions. He then stuck a marshmallow in front of each child.

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Can you really beat the market from your laptop?

ANDREW HALLAM

Andrew Hallam is the index investor for Globe Investor’s Strategy Lab. Follow his contributions here and view his model portfolio here.

When newspapers sponsor public challenges for active investors to strut their stuff, the results are often embarrassing. In 2012, the British paper The Observer pit selected professional stock pickers against a group of children and a cat named Orlando. The feline purred to the top, gaining 10.8 per cent, compared to 3.5 per cent for the professionals and a 2.9 per cent loss for the kids. (Orlando made his picks by throwing a toy mouse at a grid of numbers allocated to different companies.) How did Vanguard’s British stock market index measure up? It gained 17.4 per cent.

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Indexing with muscle: Sizing up iShares’ Portfolio Builders ETFs

ANDREW HALLAM

Andrew Hallam is the index investor for Globe Investor’s Strategy Lab. Follow his contributions here and view his model portfolio here.

A portfolio of classic action heroes has helped The Expendables film series kick some box office butt. The Sylvester Stallone-led mercenaries, including Jet Li and Arnold Schwarzenegger, are now filming their third instalment.

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Berkshire Hathaway: A stock that even indexers can like

ANDREW HALLAM

Andrew Hallam is the index investor for Globe Investor’s Strategy Lab. Follow his contributions here and view his model portfolio here.

Today I’m a full-fledged index investor, but there was a time when I owned some individual stocks. What was my favourite company back then? Berkshire Hathaway Inc.

I was a devoted fan. For more than a dozen years, whenever its share price dropped, I scurried to buy more. By 2011, my Berkshire holdings had grown to $370,000 (U.S.). Like most stock investors, I had my reasons for owning it, but one in particular might surprise you. To me, it was an index fund on speed.

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How to assess five new Vanguard ETFs

Andrew Hallam

Vanguard Canada is still a scrappy newcomer to the Canadian scene, where it has to face off against much bigger competitors in the battle for investors’ affection, but it’s growing quickly by offering exchange-traded funds (ETFs) designed to appeal to cost-conscious savers.

With the announcement of five new ETFs this week, the firm now features 16 low-cost index funds with an industry-low average management fee of just 0.21 per cent.

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The Permanent Portfolio: the only investment plan you'll ever need?

ANDREW HALLAM

Andrew Hallam is the index investor for Globe Investor’s Strategy Lab. Follow his contributions here and view his model portfolio here.

There are permanent portfolios and then there’s the Permanent Portfolio.

Devised decades ago by the late investing writer Harry Browne, it combines gold, stocks, long-term bonds and cash in equal proportions. The mix never varies and the investor’s only responsibility is to buy or sell once a year, as needed, to maintain the target allocation.

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With U.S. stocks on a tear, our index investor finally makes a trade

Andrew Hallam

Andrew Hallam is the index investor for Globe Investor’s Strategy Lab. This is his first column. Follow his contributions here and view his model portfolio here.

This might sound crazy, but I don’t want to see my indexes rise in value. My Vanguard U.S. stock market index has gained an irritating 22 per cent in Canadian dollars; Vanguard’s FTSE Developed Market ETF has also misbehaved, gaining 15 per cent.

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Low-volatility funds promise an easy ride in wild markets

ANDREW HALLAM

Many investors feel as if they’re walking in high heels on black ice. Based on the last dozen years, it’s easy to see why. Sure-footed gains have been followed by spectacular crashes.

U.S. stocks enjoyed history’s longest bull market through the 1990s then fell 34 per cent between July, 2001, and March, 2003. Canada’s stock market doubled after 2003 only to see most of those gains wiped out between June, 2008 and March, 2009.

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Is it worth making the shift to fundamental indexes?

ANDREW HALLAM

Andrew Hallam is the index investor for Globe Investor’s Strategy Lab. Follow his contributions here and view his model portfolio here.

Is there a better way for investors to index their portfolios? A bitter fight is breaking out over just that question.

In one corner sits John Bogle, founder of the Vanguard Group. He believes that index funds should hold stocks in proportion to each stock’s market capitalization – the market value of all the company’s shares.

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How to respond when your adviser tries to dissuade you from index funds

ANDREW HALLAM

Andrew Hallam is the index investor for Globe Investor’s Strategy Lab. Follow his contributions here and view his model portfolio here.

Playground battles cause more bloody noses than resolutions; arguments with your spouse bruise egos and rarely lead to happy marriages. But sometimes we need to take a stand on things that are important.

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Dogs of the Dow inventor's latest bet: the dogs of the world

ANDREW HALLAM

Andrew Hallam is the index investor for Globe Investor’s Strategy Lab. Follow his contributions here and view his model portfolio here.

Most people are terrible investors. In the 20 years between 1990 and 2010, the average U.S. equity fund holder made just 3.8 per cent per year, less than half the S&P 500’s return, according to a study by Dalbar, a Boston-based consulting group.

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Unnerved by surging markets? Try value averaging

ANDREW HALLAM

Andrew Hallam is the index investor for Globe Investor’s Strategy Lab. Follow his contributions here and view his model portfolio here.

With the U.S. market continuing to hit new highs, many investors are wondering whether it’s a case of too much too soon. During the past 10 months, the S&P 500 has risen nearly 24 per cent, including dividends. Vanguard’s MSCI Canadian stock ETF hasn’t kept pace, but it’s up 14 per cent since June.

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Hedging against forex moves? Don't waste your money

Andrew Hallam

Those who created index funds with hedges against foreign currency swings were certainly well-meaning. But they remind me of the scientists in the short story, Flowers For Algernon. The story is about a mentally disabled man named Charlie who undergoes an operation to increase his intelligence. The operation will, in theory, benefit him. But, in practice, it tragically doesn’t.

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Think you’re smarter than a hedge fund manager?

ANDREW HALLAM

Andrew Hallam is the index investor for Globe Investor’s Strategy Lab. Follow his contributions here and view his model portfolio here.

In the Globe and Mail’s Strategy Lab investment competition, the indexed portfolio I created last September is in last place. My colleagues Norm Rothery, Chris Umiastowksi and John Heinzl are three hares that have left me – the indexed tortoise – far behind.

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How I triumphed over bone cancer and reshaped my investing strategy

ANDREW HALLAM

In May of 2009, when I was 38 years old, I outran 13,000 competitors to win the JP Morgan Corporate Challenge, an annual 5.6-kilometre race in Singapore. As I broke the finish tape, I felt what many other runners would feel under the circumstances: short-term invincibility. I had no idea that I had bone cancer.

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Outsmarting the market: Don't be a sucker

ANDREW HALLAM

Andrew Hallam is the index investor for Globe Investor’s Strategy Lab. Follow his contributions here and view his model portfolio here.

Want to know which way the market is going to jump next? Find a chatty toddler and ask her if she’s feeling bullish.

No, her predictions aren’t likely to be accurate. But she will probably do just as well as the highly paid forecasters you see on television.

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Why you should celebrate falling markets

Andrew Hallam

Andrew Hallam is the index investor for Globe Investor’s Strategy Lab. Follow his contributions here and view his model portfolio here.

The only time I remotely resemble a fist-pumping Roger Federer is when stock markets fall dramatically. The first three weeks of November didn’t deliver a grand market slam, but I relished the market’s stumble.

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Welcome to Strategy Lab




Stock market ideas, investing insights (and competition): Watch and participate as four of Canada’s brightest investors go head to head in a battle for portfolio supremacy. Whether you’re a dividend collector, a value hunter, a growth junkie or an indexing enthusiast, you’ll find inspiration for your own investing.

About Andrew Hallam

Andrew Hallam

Andrew Hallam is the author of the best-selling book Millionaire teacher: The nine rules of wealth you should have learned in school. Raised in British Columbia, he now teaches personal finance at Singapore American School -- and built a million-dollar investment portfolio on a teacher’s salary.

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