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If you invest in stocks, the best thing you can do for your portfolio for 2015 is take a critical look back at your results of the past several years.

The question you must answer is whether you have any stock-picking ability.

More specifically, have your returns from investing in individual stocks exceeded what index-tracking exchange-traded funds have delivered? If the answer is yes, you're a rare talent and should probably be managing mutual funds. If no, then take comfort in the fact that most stock-picking investors can't beat the market and thus should consider a switch to low-cost ETFs.

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To assess your stock-picking results, group your Canadian stocks and compare their total returns – that's dividends plus share price changes – against either the total return version of the S&P/TSX composite index. For your U.S. stocks, use the S&P 500 index in Canadian dollars (click here to access one investment firm's total return market statistics database).

Next, it's time to calculate after-fee index returns you're likely to get from ETFs. For indexes tracking the broad Canadian and U.S. markets, reduce the index total return by 0.15 per cent per year. This is a good, middling number – you can get ETFs with lower management expense ratios, and you can pay more.

Now, let's talk timeframes for benchmarking your portfolio of stocks. One-year numbers are trivial, and three-year numbers are interesting but not definitive. Period of five years and longer really tell the story.

Some investors enjoy the discipline of choosing stocks and find indexing unsatisfying. If you're in this group and making returns that either beat the index or come very close to it, then you can certainly stick with stock-picking. But if your returns are undershooting the index by more than half a percentage point or so, you're denying yourself more lucrative returns that are easily obtainable through ETFs. On a $50,000 investment held over 20 years, the difference between making 6 per cent and 5.5 per cent amounts to almost $15,000. Look back at your investing results over the past several years to make sure you're not leaving money like this on the table.

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