I have been studying the market a lot in the last few years, mainly between 2018 and 2020. I have read a lot of books (check the library here) and also listened to a lot o podcasts during these years.
I learned a lot about companies investing, market stocks, psychology, and a lot of other subjects, and since 2015, when I started to invest in stocks (in Brazil initially) I have been picking my own stocks.
I have matured a lot in those years, I learned the power of diversification, learned to have a long time horizon, learned to be patient, and keep investing at all times. As I like to say: contribution, patience, and discipline are key.
The resulting portfolio after these 7 years of picking stocks, these are the 30 biggest positions, as the portfolio has 75 stocks.
Top 30 larges positions
The EFT is BMO MSCI All Country World High-Quality Index ETF (ZGQ) was a recent addition. You can read the post Why we decided to add ETF to our portfolio: Hedging ourselves where I talked about the reasoning for adding it and also describe it a little.
In comparing my returns with ACWI and S&P 500, I am a bit behind. But that is not the only reason that made me change our portfolio to indexes. The image below shows my returns compared to ACWI.
Historical Returns
All the studies that I did in these last years were kind of a hobby, as I work as a Software Engineer so I don’t spend all my time studying companies.
Since the middle of 2021, I have reduced significantly the time that I spent reading about investing and companies as I am focusing more on professional readings and courses, that ultimately affect my income and our investing capital.
Also, we are traveling and enjoying more life, so on the weekends and free time that I have I am doing other things not related to investing.
With this reduced time and my not-so-good performance until now, we decided to index all our portfolios. Actually, we have been buying ZGQ on our TFSA since we moved to Canada but now we decided to expand and have another ETF.
ZGQ is a great ETF in our opinion, but the cost is very high, so, we decided that for our taxable accounts, we are going to go with VOO, which is an ETF for the S&P 500 and has a fee of only 0.03%.
Basically, we are going to max out the TFSA with ZGQ and all the rest of the money goes to VOO. We also have an RRSP that is a fund by Manulife (which is the company that my employer has the RRSP.
Why VOO?
VOO is the ticker for Vanguard S&P 500 ETF. As the name clearly indicates, it follows the S&P 500. It has an expense ratio of only 0.03% and is one of the lowest-fee ETFs. So the low fee was one of the positive points.
I was also considering one with more global exposure, like iShares MSCI ACWI ETF (ACWI), but I end up sticking with the US only. Most US companies are global so they themselves have exposure to other global economies.
I know that Ray Dalio’s point in “Principles for Dealing with the Changing World Order” has warned that China is approaching the US and may take in the future the World Order, but I still believe that the US (and mainly the dollar) are dominant and can continue to be for a while.
I also know that some other people in the FIRE movement like VTSAX (or its counterpart ETF VTI). I took it into consideration, but as the difference between them is very small (as the 500 biggest companies account for most of the weight in VTI) I decided to stick with the top 500 only.
Final goal
The final goal with this is to spend a lot less time studying investing and companies and spend this time focusing on studying work-related stuff or living life.
Also, this will reduce the risk of me being a bad stock picker and with that losing or having a bad return that will affect our retirement.
Also, this will simplify a lot my investment control.
As always, only time will tell if my decision was the right one or not, but I think we are moving in a better direction than before.
Happy investing!