The Canadian Investor - 15 ETFs and Investing Goals for 2024

Episode Date: January 8, 2024

Join us for our first episode recorded in 2024! In this episode, Simon and Braden discuss GLP-1 weight loss drugs and more specifically Ozempic. Then they go over 15 ETFs that offer low fees and broad exposure to the markets. They finish the episode by going over their investing lessons from 2023 and 2024 investing goals. Ticker of Stocks/ETFs discussed: XAW.TO, VXC.TO, XEQT.TO, VEQT.TO, VFV.TO, VOO, XUU.TO, ITOT, EMXC, XEMC.TO, XIC.TO, VCN.TO, CBIL.TO, UBIL-U.TO, EBIT.O, FGRO,TO  Check out our portfolio by going to Jointci.com Our Website Canadian Investor Podcast Network Twitter: @cdn_investing Simon’s twitter: @Fiat_Iceberg Braden’s twitter: @BradoCapital Dan’s Twitter: @stocktrades_ca Want to learn more about Real Estate Investing? Check out the Canadian Real Estate Investor Podcast! Apple Podcast - The Canadian Real Estate Investor  Spotify - The Canadian Real Estate Investor  Sign up for Finchat.io for free to get easy access to global stock coverage and powerful AI investing tools. Register for EQ Bank, the seamless digital banking experience with better rates and no nonsense.See omnystudio.com/listener for privacy information.

Welcome back into the show. This is the Canadian Investor Podcast, made possible by our friends and show sponsor, EQ Bank, which helps Canadians make bank with high interest and no fees on everyday banking. We also love their savings and investment products like GICs, which offer some of the best rates on the market. I personally, and I know Simone as well, is using the GICs, which offer some of the best rates on the market. I personally, and I know Simone as well, is using the GICs on a regular basis to set money aside for personal income taxes in April of every year. Their GICs are perfect because the interest rate is guaranteed, and I know I won't be able to touch that money until I need it for tax time. Whether you're looking to set some money aside for a rainy day or a big purchase is

coming through the pipeline or simply want to lower the risk of your overall investment portfolio, EQ Bank's GICs are a great option. The best thing about EQ Bank is that it is so easy to use. You can open an account and buy a GIC online in minutes. Take advantage of some of the best rates on the market today at eqbank.ca forward slash GIC. Again, eqbank.ca forward slash GIC. This is the Canadian Investor, where you take control of your own portfolio and gain the confidence you need to succeed in the markets. Hosted by Brayden Dennis and Simon Bélanger. The Canadian Investor Podcast. Welcome to the show. My name is Brayden Dennis, as always joined by the now much wealthier after 2023, Simon Bélanger. Good sir. We had a great year, but I really wanted to kick off today's return with something that I think that we missed in our recap that we did with myself, you, and Dan Kent. Are you familiar? Are you caught up in the Ozempic craze? How familiar with this drug are you?

phrase. How familiar with this drug are you? Decently, I know it's the type of drug, it's called GLP-1, I think is the category of drug typically used. Now it's used more for weight loss, but it originally was developed for diabetes to lower blood sugar, if I remember correctly. So I knew about it, but I don't know enough about the space to feel that comfortable to talk too much about it. It's probably the best way to explain it. Yeah. And I think that's okay. I mean, this doesn't have to be the Canadian science investor today because what started as, yeah, you're right. That's how this drug initially came to be. And then celebrities started using it, it became the kind of influencer LA celebrity bro type of thing to take. And then now it's kind of like permeated into, hey, you want to lose weight? Here's the magic

pill. You know, like we've been seeing those clickbait ads on Google's banner ads for the entire existence of the internet. And here is that magic pill. And I think it was, we missed it as one of the hot stocks of last year, which is the Danish, Danish, right? I think they're Danish. Novo Nordisk. Yeah, the drug manufacturer. So I always try, Simone, to learn something about investing when I get on a plane. And what I mean by that is when you go somewhere new, there's new businesses, there's new companies you're like, oh, I've heard about this company, but they have a lot of local presence here that they might not have back home. Something I didn't know about before,

that they might not have back home, something I didn't know about before, adoption of certain technologies, list goes on and on and on. And in my yuppie bubble of Midtown Toronto, people dressed in Lululemon, they're fit, they go to their morning walk for their no foam, no fat Starbucks. They have social events where they go in ice baths and talk about motivation. They brag about expensive yoga memberships. They buy organic groceries. I am in the yuppie bubble. And people are generally pretty fit, okay?

And I was just in Southwest Florida over the holidays. No hating. I'm not hating. I love Florida. I love the people there. over the holidays. No hating. I'm not hating. I love Florida. I love the people there. On the Gulf side, right? On the Gulf side. Yeah, okay.

And this is a lifestyle of the car, okay? It's not like rural Florida or the rural Southwest US, but it is a different lifestyle when it comes to health. There ain't no drive-through salads, green juice supplements going on around there, man. It is just so different, okay? And people, you know, you don't get anywhere without a motorized vehicle. Like it's just, we'd go for like walks or for runs and I would run like miles and not see one other person on foot. And this is not like, I'm not, it's not tumbleweeds going down the road. Like it's not a desert. It's just a different lifestyle. And so when Ozempic took the world by storm last year,

and this drug maker rips to nearly 500 billion in market cap, I see the Ozempic ads on the boards of Leafs games. And now the 15th largest company in the world by market cap, this Danish drug maker, Novo Nordisk, I thought, ah, this is a fad, right? No, this ain't no fad. I'm just in my organic superfued yoga ice bath bubble. People need this. They're going to buy it. And especially in the places where I've been so unaware of, of just how obese people are, dude. It is serious, man. I think I've been head in the sand about how much people need this just generally in especially especially the areas i was just a part of over the holidays yeah little do you know maybe all everyone in toronto already uses it that's why they're yeah exactly yeah that's right i mean there's and what's interesting about that drug

is i guess it'll be interesting to know the longer term effects. I also saw, I read a little bit about it while a couple of months ago. And I think one of the issues is you, you lose fat, but you also lose muscle mass. So when you lose the weight, so I think, uh, you know, for some people, it's just a hunger suppressant, right? Like I don't actually know that much about it. Yeah. I think that's, that's kind of the, the main idea is that yeah. Hunger suppressant. I don't actually know that much about it. Yeah. I think that's, that's kind of the, the main idea is that, yeah. Unger is suppressant. I don't know exactly what happens when people go off of it. Does it, does their appetite get back? And I mean, from personal experience. I think it does. People say they get, they gain all the weight back as soon as they take, stop taking it. Yeah. And from personal experience, I mean, I struggled with my weight

until I was like 13, 14, like through kid and early teenager. And I eventually lost the weight. But, you know, a lot of people that are, you know, fit or slimmer and have been all their life and sometimes, you know, it's gene related. Some people can just see what they're what the hell they want and they still have a six pack. Right. But, you know, when you're not, I mean, it definitely takes a lot of willpower and determination because it is like a bit of a drug, right?

You get to food and you get those enzymes or whatever, like, I don't know the word I'm looking for, but that's, you know, released in your brain. And to get over that, it's not easy. And I think a lot of people are just looking for a shortcut. That's right. looking for a shortcut. That's right. And I think people have been looking for shortcuts with this for as long as humans have figured out how to have food in abundance. And that's only increased rapidly over the last 100 years. And here is potentially the magic pill. And so if over the next 15 years, I think that this will massively change society if we find that, okay, maybe there are some drawbacks to the pill or there are side effects. I don't think anything like this will not have side effects.

I mean, I'm new to the drug. I don't know. Maybe it has really bad side effects. But if they come to the conclusion that, okay, we're okay with the side effects, or at least that they are much less bad than being morbidly obese, then this is going to be everywhere. Because it is so much easier than, yeah than the addiction your brain has to food. And so even if you say like, yeah, this drug sucks though, because you stop and people gain the weight back. Well, of course, guess what? Get back on it. This is going to be a big thing, I think over the next 15, 20 years. And we're going to talk about our resolutions as investors going into next year.

And this feeds really well into my next one, which is just pay attention, man. Sometimes you fall victim of your own biases and the things that you experience anecdotally. And just pay attention, like think a little bit bigger. And if that means getting on a plane and learning a little bit about what's actually going on outside of your bubble, I think it's worth it. Yeah. And I think we're both kind of in the same boat, right? I think pharmaceutical, it's not in our spheres of competence. And I think we tend to shy, at least for me, I tend to shy a bit away from that. And typically, if I were to invest, I'd just choose probably an ETF route and just choose an ETF.

I mean, I know it'll be actively managed. Most likely, their fees will be a bit higher, but that's the route I would choose. And at the end of the day, it's, you know, do the risk, you know, like you said, are the benefits outweighing the risk or the potential side effects for this? That's right. As do-it-yourself investors, we want to keep our fees low. That's why Simone and I have been using Questrade as our online broker for so many years now. Questrade is Canada's number one rated online broker by MoneySense. And with them, you can buy all North American ETFs, not just a few select

ones, all commission-free, so that you can choose the ETFs that you want. And they charge no annual RRSP or TFSA account fees. They have an award-winning customer service team with real people that are ready to help if you have questions along the way. As a customer myself, I've been impressed with Questrade's customer service. Whenever I call or email, every support rep is very knowledgeable and they get exactly what I need done quickly. Switch for free today and keep more of your money. Visit questrade.com for details. That is questrade.com. Calling all DIY, do-it-yourself investors. Blossom is an essential app for you. It has been blowing up with now more than 50,000 Canadians plus and growing who are using the app. Every time I go on there, I am shocked. The engagement is amazing. This is a really vibrant community that they're

building. And people share their portfolios, their trades, their investment ideas in real time. And it's all built on the concept of transparency because brokerage accounts are linked. And then once you link your brokerage account, you can get in-depth portfolio insights, track your dividends, and there's other stuff like learning Duolingo style education lessons that are completely free. You can search up Blossom Social in the app store and join the community today. I'm on there. I encourage you go on there and follow me, search me up. Some of the YouTubers and influencers and podcasters that you might know, I bet you they're already on there. People are just on there talking, sharing their investment ideas and using the analytics tools. So go ahead, blossom social in the app store and I'll see you there.

All right. So you got 10 ETFs. Speaking of ETFs. Yeah. You have 10 ETFs that going into the new year, people typically tend to look or if they're a passive investor, they might do some rebalancing, they might re-strategize, they might look for some lower fees, simplification, all that stuff. And you don't need to Google search. You just need to listen to this podcast, this summary that Simone's going to give you and kind of all your options in the low cost for passive investors. Yeah, exactly. I actually ended up doing about 15, but I grouped them in different categories. Oftentimes there's like, especially when you're looking at BlackRock and Vanguard, there's other, you know, ETS providers,

there's Fidelity, one of our sponsors that I think they have some really interesting all-in-one options. But if you're looking for more equities, which is the lens I looked at, just to give people some options, especially if you're starting to invest. I know it's a lot of people, their New Year's resolution. Even if you don't have a lot of money, ETFs can make a whole lot of sense because a lot of brokers offer zero commission ETF buying at the very least. But before I get started on that, I wanted just to wrap up 2023. I know the Join TCI members probably remember, well, they're aware of this because I give updates every single month. But I started a little experiment at the beginning of 2023 to show that you don't need a lot of money every month to invest and still make a difference in the long run.

So originally, I had planned to invest $50 each month in the ETF VEQT, which is essentially a global index ETF. And to make things easier, I ended up alternating between buying one and two shares each month. That way, I didn't have to keep track of the amount remaining. If I bought one share, there's like 1463 remaining. So I roll it over to the next month by two and so on. So I just did one and two. So my monthly average ended up slightly higher at $52, but I think I'll get a pass on that one. I'll throw it out. Nope. 52 bucks. Sorry. It doesn't count. And I ended up investing 629, which grew into 668 at the end of the year for returns of 6.1%, clearly lower than the S&P 500 because VQT, obviously, I ended up dollar cost averaging

with this strategy every month. But VQT definitely has a quite heavily weighted Canadian equity exposure, which most likely, well, definitely dragged on the returns and as well emerging markets. There is some decent exposure there. So compared to the US, they definitely underperformed a bit, but that's fine. There are different options, which I'll go over in just a second here. And obviously to have this kind of strategy, especially if you're investing like less than $500, I would say every time you invest, you definitely want to make sure that you have no fee for buying because if not, the commission will start eating quite a bit into that amount that you're investing. Now, I'll be continuing this this year, but I'm actually increasing it.

My goal is to make up for what I'm not contributing through my work because I am working part time now and the rest of the time working on the podcast. So because my level percentage of contribution, that hasn't changed. But because my salary is prorated lower, total amount contributing is actually lower. So I want to make up for that with the ETF buy on a regular basis. And I'm also changing the fund from VQT to XAW. The main reason here is that I want to reduce my overall exposure to Canada. I've been pretty vocal on this before.

I just see too much risk in having too much exposure to Canada. When Canada represents less than 3% of the total global stock market. And I think a lot of Canadians. You know we are both biased. Like we're still way above that in terms of Canadian exposure. But it's something I'm conscious about and I want to reduce. Anything you want to add before I get started? No, I think that that's good.

And I think one thing to point out specifically too, and the difference of performance compared to like a SPY or something, or just looking at the S&P 500 index is currency. I believe the one you're using there is denominated in Canadian dollars. Yeah. Yeah, exactly. Typically, you'll still benefit from, especially if you have a lot exposure to the US or there's going to be some ETFs here that are essentially like US total markets, but traded in Canada in CAD, you'll still benefit from a strong US dollar because it's going to convert and essentially help your returns. But when you don't benefit, I did not add any because I'm not a fan of those. I did not add any hedged ETFs because over the long run, they just don't perform well because the US dollar

tends to outperform the Canadian dollar. Yeah. I mean, if you want to do that, just own some in CAD and then just own the US tracking ETF in US dollars. That's what I would do if I was a passive investor. Yeah. So now I'll get started. So the first category, there's four in this category here. So I'll give different options. The first one is the iShares. So this is the global broad-based index ETFs. You'll see that for the most part, these are index ETFs because I wanted to keep fees low. The first one is the iShare Core MSCI, all countries excluding Canada. The ticker is XAW, fees of 0.22%. It's in Canadian dollars. It's all equities, 63% US, 37% rest of the world.

There's actually 10% of it in emerging markets and 6% in U.S. mid and small caps. So really well diversified, still pretty U.S. heavy, but I do like, and that's the reason I chose this one, is I like the emerging market, the rest of the world exposure, and the U.S. mid cap and small cap. The next one on the list is the Vanguard FTSE. I'll pronounce it FTSE I think more than once here. The global all cap excluding Canada index ETF very similar to XAW just from Vanguard same fees of 0.22% in Canadian dollars and the allocation is essentially pretty much the same they just have a slightly different index,

but it's going to still be heavily weighted towards the biggest mega caps in the US. So pick your poison if you'd like between the two. If you prefer Vanguard or BlackRock, aside from that, very similar. And I had someone on JoinTCI actually ask that. I said, look, I don't think you can go wrong with any of those if that's the kind of exposure you're looking for. The next one, so it's the BlackRock Global ETF, XEQT, and Vanguard Global ETF, VEQT, so the one I referenced earlier. The BlackRock is 0.20% fees and the Vanguard is 0.24%, both in Canadian dollars. both in Canadian dollars. They're all equities, slightly different allocation, but roughly 45% US, 25% to 30% Canadian equities and 30% rest of the world. So for those looking for more Canadian exposure, for example, that could be an option. That's not what I'm looking personally, but you know, still a very reasonable option. And one thing that people notice is the fees,

they'll remain very low. So that's one thing that you can control are the fees when you invest. Anything you wanted to add on that first category? I'm just looking at this list. Is there, because you can go, and I don't mean to steal your thunder here, but you can go like VFV or xu for for u.s exposure yeah super low

fees and then you can go like xeqt for global exposure but those global exposure etfs have way too much canada like they have a quarter of the fund is canadian equities and it's supposed to be a global broad-based you know coverage to stocks is there anything that's traded in CAD on the TSX but it's like 3% like something that's actually relevant to the market weighting of CAD on a global scale I haven't found any there might be some I think the best way that people could do it is you take like the XAW or VXC. Just combine it.

Yeah, you combine it with one that's a Canadian focus like a VCN, for example, or an XIC that I'll talk about. I think that's pretty much. We're going to get lots of messages like, ah, you're forgetting about this one. Please do. Let me know because if there is one that I'm describing, if it's a Fidelity or a BMO or whatever, let me know. Yeah. There's hundreds of ETFs listed in Canada and there's thousands in the US. So clearly, if you look, you can find some interesting stuff.

But this is just to give people, especially those who are starting to invest and want to dip their toes into investing, may not be comfortable owning individual companies just yet. These are great ways to start depending on what you want to achieve and what exposure you want. Now, the next category is the broad-based U.S. index ETF. So this is specific to the U.S. market. The first one is the Vanguard S&P 500 index ETF. There's VFV in Canadian dollars, VOO in US dollars. They're

both below 0.10% in fees. They're all equities. They track the S&P 500 index and they are market cap weighted. Pretty much all of these are market cap weighted, meaning that the larger the company, the heavier the weighting is. So definitely more exposure to the top names like an Apple, Microsoft, you know, name your insert your big tech company. And then the next one here is the BlackRock US total market ETF. I do like these very similar to the S&P 500, but they're broader. Essentially, it's all the US markets. So the tickers here, XUU in CAD and ITOT in US dollars, again, both below 0.10% in terms of fee. It's just very similar to S&P 500, just you get exposure to the whole US stock market. I do like that because it does provide some exposure, although small, because the bigger

name have the most exposure to small caps and medium caps. Before, I know you like US index ETF. Anything you want to add before I go on to the next three categories? No, I think that that's good. People always ask, do I do the S&P 500? Do I do the entire exposure to the US market? Because their market cap weighted, when I say it doesn't matter, I don't mean because I'm not trying to answer your question. I mean, because it doesn't matter. If over the last five years, I went on FinChat and I just compared the performance of VOO versus ITOT, which are the US listed US dollar funds of the S&P 500 versus the all market. Over the last five years, the S&P 500 one did 108% and the total market one did 106%. It's not a big difference.

Flip a coin. It doesn't matter. It's because their market cap weighted that you're looking at such a small difference in alpha that'll be generated by those small companies that it doesn't matter. I would just go with the lowest fee one of all of them and call it a day. Yeah. They're pretty much identical almost in fees. I mean, we're talking about a couple basis points difference or the same fees. So I think they're all good identical almost in fees. I mean, we're talking about a couple basis points difference or the same fees.

So, you know, I think they're all good options just to say that. Now, the broad-based emerging markets... Don't sweat the small stuff is the big thing here, right? Like, don't overthink this. Yeah, and I wanted to add, because we've had that question, Dan and I did a mailbag episode, and someone was asking about emerging markets. So I thought I'd put one here that I thought is really interesting.

There's two. So there's the iShare MSCI Emerging Market X China ETF. Actually, and they're both, one of them is in USD, one of them is in CAD. So the USD is EMXC. The Canadian dollar is XEMC. I would stay away from the Canadian dollar one because the USD one is 0.25% in terms of fee. The Canadian one is 0.30%, but it doesn't include all the trading fees. So it's going to be a bit higher than that. It's essentially managed by RBC and listed in Canada.

It just holds the US one. That's exactly it. But for people wanting in CAD, I mean, it is an option. I would not go towards that one, but essentially they're identical. Aside from that, you're just paying more fees for the Canadian one and it's all equity. It excludes China, which I'm a big fan of. Two thirds of it is in India, Taiwan and South Korea. And one third is the rest of the emerging markets. I think the rest of the one third, the biggest one is like Brazil there. But it does give you some pretty interesting exposure. And with the risks that are associated with China right now, we've talked about it at length in previous episodes. I think it's a really

interesting ETF for those who want to maybe allocate 5% of their portfolio to these markets. They've underperformed US, but past returns and future returns are not necessarily the same thing. So that's something to keep in mind. Anything to add to that one? I thought I lost a lot of money buying Tencent. And I did.

I saved myself more money by selling it at a huge loss. Because it has been tough, tough sledding for these tech stocks in China. Tencent, Alibaba, dude, they trade at ridiculously low multiples. And I don't see any sort of catalyst for that turnaround right now because the story is getting worse and up. Yeah, the economy is getting worse in China without getting into the granular details. But the economy is getting worse. They're essentially in a debt bubble over there. Real estate, which a lot of Chinese have their wealth in, is doing terrible. You have companies that are not able to serve as their debt obligation, and the economy as

a whole is just not doing well. There's just no confidence from foreign investors. No, and then you have the wildcard of the political spectrum in China that essentially, on a whim, have shown that they will just put these regulations against businesses, which is the other thing. You know, the bad economy would be one thing, but then you pile on the fact that the Chinese, the CPP will essentially decide to do whatever they want. It may be good for you. It may not be. Gotta give them some credit. They act and moved fast. Almost everything everything yeah you know our governments aren't capable of doing that i don't know if that's a good thing but uh maybe like somewhere

in between would be good but uh yeah i guess the next one next to our canadian so for those looking to get some exposure to canada it's a broad base index ctf pretty much identical so one option is from BlackRock the other one is from Vanguard the first one from BlackRock ticker XIC Vanguard is ticker VCN almost identical in fees 0.06 for BlackRock and 0.05 for Vanguard both in Canadian dollars they're all equities, Canada only. The Vanguard one is the all cap. Essentially, the all cap is the S&P TSX composite index. So very similar. So if you're looking to mix and match and allocate maybe more like 5% to 10% instead of a 30% if you've chosen VQT, for example, that's a really good option if you want some Canadian exposure but control it a little more with other ETFs, for example, that's a really good option if you want some Canadian exposure, but control it a little more with other ETFs, for example. As do-it-yourself investors, we want to keep

our fees low. That's why Simone and I have been using Questrade as our online broker for so many years now. Questrade is Canada's number one rated online broker by MoneySense, and with them, you can buy all North American ETFs, not just a few select ones, all commission-free, so that you can choose the ETFs that you want. And they charge no annual RRSP or TFSA account fees. They have an award-winning customer service team with real people that are ready to help if you have questions along the way. As a customer myself, I've been impressed with Questrade's customer service. Whenever I call or email, every support rep is very knowledgeable and they get exactly what I need done quickly. Switch for free today and keep more of your money.

Visit questrade.com for details. That is questrade.com. for details. That is questtrade.com. Calling all DIY do-it-yourself investors, Blossom is an essential app for you. It has been blowing up with now more than 50,000 Canadians plus and growing who are using the app. Every time I go on there, I am shocked. The engagement is amazing. This is a really vibrant community that they're building. And people share their portfolios, their trades, their investment ideas in real time. And it's all built on the concept of transparency because brokerage accounts are linked. And then once you link your brokerage account, you can get in-depth portfolio insights, track your dividends, and there's other stuff like learning Duolingo style education

lessons that are completely free. You can search up Blossom Social in the app store and join the community today. I'm on there. I encourage you go on there and follow me, search me up. Some of the YouTubers and influencers and podcasters that you might know, I bet you they're already on there. People are just on there talking, sharing their investment ideas and using the analytics tools. So go ahead, blossom social in the app store and I'll see you there. Now, the next three, the next two, I think for people looking to just have some cash and cash equivalents in terms of obviously a savings account like our sponsors offer at EQ Bank, those are great. They're the most liquid. You need the money right away.

But a good alternative if you want something really liquid is the Horizon 0 to 3 Months Treasury Bill ETF. The first one is C-Bill. The second one is U-Bill. C-Bill is in Canadian dollars. U-Bill is in US dollars. They're both at 0.10% and 0.12%. Now, they both offer a net yield. So when you subtract fees of just around 5%, slightly higher. The Canadian one is backed by the

government of Canada with zero to three months treasury bills. So they're just short term debt from the government of Canada. So you won't lose capital if interest rates go up and down because they're really tied to what interest rates are in place with the Bank of Canada. And in my view, it's as safe as it can get if you're looking for these type of money market funds because it's backed by the government. And the same thing for you, Bill. It's backed by the US government with zero to three months treasury bills. It should be a good option as well for TFSA. I reached out to them. They said there's no withholding tax. I have in my portfolio. I haven't had the first payment just yet. Should get in the next couple

of days. So I will know if it's true what they were saying. And the reason I chose Dode over these high interest savings ETFs like PSA, HSAB that have become really popular is that recently regulators said that they will be imposing more restrictions on these, which will bring down the yield or the interest about 50 basis point at the end of the month of January. basis point at the end of the month of January. And on top of that, these are not CDIC injures, and neither is CBIL and UBIL, but at least they are backed by actual government debt. So in my view, you get a higher yield and a safer investment than you would with these high interest savings ETF. I'm just looking at your next one. Is that really the ticker? Yeah, EBIT. Yeah, I wanted to make it. I'm going to start EBIT. Yeah, EBIT. So it's actually, so I wanted, I was at 14. I'm like, you know what, let's make it a clean 15.

And with the whole talk of a US spot Bitcoin ETF, and a spot Bitcoin ETF just means that it follows the price of Bitcoin. There are some ETFs in the US that look at the future price, and those are very tricky to invest, and they're not great to hold for long term. Now in Canada, we already have some spot Bitcoin ETFs, quite a few. And the one that I saw with the lowest fee is the Evolve Bitcoin ETF EBIT, fees of 0.75%. So for those looking to invest in Bitcoin and have exposure to it, I think it's a great option if you're just looking to have a little bit of exposure or have it in a registered account like a TFSA or RSP. And maybe you would just want to get some exposure before you dip your toe into buying some actual Bitcoin and doing some self-custody. So I think that's a great way

for people to get a little bit of exposure. But as always, any of these, these are just kind of suggestions. Always do your research. There's risk for any investment and it's not investment advice. So if you do choose any of these ETFs or multiple of them, just make sure you do research and allocate accordingly. The last one I'll throw in is, of course, we've been doing sponsorship with Fidelity's all-in-one ETFs. And yes, they're a sponsor, but the all-in-one growth ETF, ticker FGROW, it is a higher management expense ratio than you'd be looking at with some of these other ones listed. But it is actually the only one I've seen that is different. When it comes to buying ETFs, I always say if they're just broad-based,

covering a huge basket, just go with the lowest fee. It doesn't matter. Just pick one and stick with it. Go with the lowest fee. This one is actually really interesting because it is all in one where it has investment grade debt, US equities, international equities, Canadian equities, and has 3% Bitcoin. And I know a lot of people are maybe super against that, then this is not the ETF for you. But a lot of people just want a tiny little bit of exposure as chump insurance. And I know I have. And guess what? It's made me a lot of money and it's made you even more money. So that is obviously one I'd throw in there. Yes, they're a sponsor, but it is worth mentioning as well. Yeah. And the fees are actually quite reasonable. I think it's zero. I'm looking at it here, 0.42%. So yeah, really reasonable. I was actually going to do a segment in a future episode to look at different areas too, I think, because ETFs, there's so many things, right? If

you want to get exposure to a geographic region, an all-in-one ETF, there's the target date ETFs that we talked about. So depending on what you want to accomplish, and I know some people will be like, oh, I would never do that. But for some people, it's actually like a really good option. And you have to keep that in mind. And if one buy every month is going to keep you on track with the all-in-one option, like that's, dude, that's worth money right there. Just simplicity. Dude, that's worth money right there. Just simplicity.

Yeah. All right, let's move on to our lessons from 23 and plans for 24 to round out today's show. We'll go one by one. You and I both have basically three and three or almost three and three of each. So let's kick it off. I'll go first. You and I both had a great year. I returned 39.6% in the calendar year. Why couldn't I just get a clean 40? But hey,

we'll take 39.6. Some of the best performing positions and some of the best performance in the stock market are when things look the worst. If we look last year at some of the months where things looked the worst, inflation was rampant. The Fed was hiking. You didn't know where it was going to go. There was a war starting in Israel. Still lots of unrest in Ukraine. What's happening? What's happening? My portfolio did like 13% that month. And so things can look terrible. And often the best performance in the market comes right off of when investors have found the bottom of what they're willing to tolerate. So stay invested all the time. If you're going to be here for the next few decades investing your

money, stay invested. You know what happens when you miss some of the best days of a decade of investing. It means you don't get any returns. So don't, it's risky to not be participating in some of those days or weeks or months or years. So stay invested. Yeah, no, exactly. I mean, couldn't agree more with that. Was that your last one? I thought you had more lessons.

No, well, should I just rifle them all off? And then you- Yeah, okay, okay. Okay, let's do that. Yeah, I misunderstood how you were doing. Okay. Let's just do that. I thought we would do like lessons and then 2024, yeah.

Okay, fair enough. Okay, I'll do my four, you have three. All right, so my second one is conviction pays off. That was a big lesson for me this year. I mean, if you look at my portfolio, I size things based on conviction. And hey, guess what? It worked really well. And I think that conviction pays off. So take the time to build conviction in positions you own,

because that'll be the willpower to stay invested in some of these names through tougher times. And that's when you're going to get the big payoff. Three, be willing to change your mind about companies you've had hard opinions on. I've talked a lot about this specific example, but the company that I thought was going to be the worst business I've ever seen just a few years ago, I think is set up to be extremely good business over the next decade, which is Uber. And so that was like, it felt like I was like losing my value investor ways by really liking looking at the stock. And it was actually just the ability to change your mind when the facts change, because the facts did change. Number four, focus on what you're good at. You and I both did extremely well with very different approaches. You leaned into what you're

good at. I leaned at what I'm good at. And it's not because, oh, I think that's just going to lead to better performance, which I think it is, but it's going to be that you actually spend time on the things that you'd like. I couldn't give two shits about what economists say about the macro. And that's okay. You do. And you make decisions based off of that. And you actually spend the time on learning about macro. There's multiple ways to win here. It's just that I don't enjoy spending time on it, so I don't spend any time on it. And you can still make lots of money. So those are my four lessons to round those out. Conviction pays off. Stay invested. Be willing to change your mind and lean into what you're good at. Yeah, those are great. So for me, for 2023, the first one is less than more. So I've been pretty vocal about that.

So I felt like I had just too many individual stocks in my portfolio just because I didn't have the time to keep track of all of them. So I went from having 20 individual stock position to 13. So pretty dramatic reduction, probably most a lot more than what a lot of people would be expecting. But I'm comfortable with that. In my view, I'm definitely comfortable with adding a few more positions. But the most flagrant one that I did was that I kind of chopped out all the mega caps that I had. And then I just put in index ETFs in the US because I get that exposure there and remove a couple other names as well. And I actually became more diversified by doing that because obviously with the increased allocation to ETFs, and of course they have, like I just talked about, extremely low fees. Now, like I

said, fine in adding more position if I have some strong conviction, that's fine. But definitely, I want to keep it at the most like the high teens. The second one here is block out the noise. Because if you have strong conviction, like you alluded to in a position, because you did your own research and you've concluded there is value to the position, then stick to it. That doesn't mean if things change materially to not change your investment thesis, but if they do not, and it's just outside noise that doesn't impact your investment thesis, then definitely, you know,

stick with it. And a perfect example for that for me is Allied REIT. I'm obviously well aware of the risk involved there. And needless to say, it's been a, there's been a lot of bad headlines when it comes to office real estate since I started my position early 2023. It's lagged the market. It's down 10 percent now. But at some point it was down about 25 percent. And I could have sold and panic and then obviously incurred the laws. But there's really nothing that change in my thesis.

And they were doing the right move and showing the right metrics every single quarter. So I still think that it's an interesting investment. I still have conviction in it. Anything you want to add to that one before my third one? No, I think that that's right. There's two things that popped out to my mind is the big tech allocation. I do think that that's fair. And it is one of the criticisms I got when I shared my portfolio on Twitter, which by the way, I'm completely open to criticism all the time. Most people really like my portfolio. I mean, it's mostly Constellation Software. But some of the other comments are like, why own 5% Google, 5% Microsoft? Why don't you just roll that up into S&P?

It's basically that. That's basically the fund. And I think it's a pretty fair comment. It's like, well, I own a bunch of positions that are like 6% big tech when you can just have the S&P do that for you for basically no cost. So I think that's a fair assessment, actually. And then the second one is with this commercial real estate investment trust that you own, the sentiment couldn't have... I don't see a world where it gets any worse. No. It's not for the faint of heart. That's for sure.

You know what? I can't think of a sector. Over the last 10 years, there's been very few things that have looked as ugly as commercial REITs in the past 24 months. So it's tough. Yeah. The only thing I can think of is probably cannabis stocks. I think that's right. Cannabis stocks.

And then if you go back like 15 years, like US banks, I would say, like in the midst of the great financial crisis. But yeah, I mean, it was yielding at some point, not anymore, but it was yielding like 11% allied, which is crazy. Like, yeah, it's crazy because typically that's a company that will be like cutting its dividend. That, you know, the reason the yield is so high because the price is so low,

but usually there's a good reason. But, you know, Allied was, you know, all the metrics still kind of chugged along. Small increases there and here, some decreases, but nothing kind of alarming. And it's especially since the infamous Fed pivot, it's been doing a bit better. But their debt is very manageable and it's staggered in a very reasonable way. In my view, there's not too much concern there.

The biggest concern is just the demand side, especially if we enter a recession. concerned is just a demand side, especially if we enter a recession and then combined with the working from home trend, that could be a pressure point going forward. To me, the lesson is think for yourself, right? Exactly. That's it. Yeah. And then the last one, cash is not trash, sort of, I guess, but I never had all that much cash just because it didn't provide any real rates of return. And real rates of return. And real rates of return is just when interest on your cash is actually higher than inflation. And that's what we've seen for most of 2023. And that's not something we've really seen in the past decade or very only for short periods of time if we have.

And, you know, getting that real rate of return, in in my view makes cash a whole lot more appealing obviously you know i'm not saying here like go 100 in cash that's not what i'm saying but i'm mostly invested i'm lean 90 invested or 88 89 invested but given the current valuation levels i'm more than happy and having about 10 in cash and hedging a little bit in case something does happen. It's not really that much of a drag on my portfolio, in my opinion, because of those returns. But clearly, that could be subject to changing, depending obviously, if interest rates go down, then the real return on cash may be negative, depending on where inflation goes. So it's something that lets me

being quite nimble, happy to have it, but it's ready to deploy it if I need to. But I know it's not for everyone. Most people and I know you're mostly close to 100% invested, but I'm happy to have a little bit of kind of safety. And I know it's in cash and cash equivalents. So if there is some sharp changes in interest rates, I'm not going to get any capital loss in terms of the amount invested. It's nice too, because you and I have to set aside a ton of money for tax season. And I'm not putting anything that has a due date of less than 12 months in the market. And so it's been really nice from that perspective to actually get yield on just this kind of like dead money that you're going to have to pay in like six to eight months. So no, that's been nice too.

Yeah, I love the GICs from EQ Bank for that because like it actually like locks it in. You can like usually get it pretty close to tax time and then it's locked in so you can't touch it you can't make any like you know oh i'll spend it but i'll make it back later which i know a lot of people get in trouble with so i i that's a strategy i've been using and i like the ui because when you ladder them you show exactly like the mature day it's just a nice interface to be able to actually plan uh for that stuff are you saying it's better than uh the big banks so oh god i have had how about that is my 2024 resolution to spend as little interaction with canadian big banks

possible because i i can feel my organs age faster and my hair has turned slightly gray when I have those combos with them. So how about that for a resolution? No, that's good, that's good. All right, let's move forward. We're looking into the future. Some things that we'd like to be reminding ourselves

of over the next 12 months. some things that we'd like to be reminding ourselves of over the next 12 months. In 2023, I completed 19 trades in total. I wanted to have all these stats for the Join TCI subscribers and just do kind of like an overview of everything I did. And 19 trades, I mean, to me, it sounds like a lot. If you're a move, the cash swapping, the Norbert's Gambit, the in and out of money market ETFs, you have just seven moves for the whole year. So I made actually seven moves for the whole year. And I think that that's more than I would like, but that's a pretty good spot. My 2020 Braden would be very happy about seven moves on the year. And so I think that we're in a good place. The ideal portfolio turnover is

zero. And so we're in a good place. Number two, continued avoidance of diversification. That was a major theme of me in 2023, especially after Charlie Munger's passing, I was reading a lot of Charlie, listening to a lot of Charlie interviews. And that was a big Charlie-ism is avoiding diversification. And people would say like, Charlie, you own Costco, Berkshire and apartment buildings. Don't you think you're a little too concentrated? And he would basically like in his witty way, called him an idiot without being rude, you know, maybe a little bit rude, but you know, like that's, it's kind of just like, what do you mean? The greatest business, the second greatest business and where people need to live. Like I'm not taking excess risk. And if you think I am, this conversation's over.

And so I think continued avoidance of diversification's nice. Really gate business fundamentals tracking, just kind of like hygiene when it comes to tracking fundamentals. We've built a lot of tools with the FinChat dashboard, which by the way, you gotta give that a rip if you haven't yet. It's pretty awesome.

Number four, turn over some new leaves in the one to 10 billion market cap area, mostly in the US market. I think I've scoured and turned over all of those rocks when it comes to the Canadian market in that space. So looking at the US market, one to 10 billion in market cap, just see what's there. Dude, there is such a large discrepancy between valuations in the top 10 mega caps in the rest of the market. So I know that there's opportunity there. I just have to look. And number five, the presentation test. All right. So the presentation test is something that I want to do this year. And I don't know if it's a real thing. I think I just made it up, but it's extreme discipline and knowing what I own. There are some businesses that have been exceptional performers like CrowdStrike or Thermo Fisher didn't have a great year, but has had a great

decade. On the surface, I feel like I could own these businesses enough and the financials are very well, but I couldn't do a presentation on them. This is the presentation test. It's my new mindset for any company. I don't think I could give a presentation on either of those companies without embarrassing myself. And so I shouldn't own it. And so this is the presentation test. Yeah. It's like cybersecurity important. Good. They're good at it. Really good. They're really good. They need it. Companies need it. They're paying for it. Here's all their customers. Braden, why do they

need it? Hey, shut up. Questions are at the end of the presentation. No, no, those are great. I mean, I don't have too much to add there. I totally agree, especially on the trade front. I tried to minimize that as much as possible. I didn't have that many trade. Most of it was just kind of have that many trade most of it was just kind of same kind of thing those money market ETFs yeah kind of in and out of those and I change a couple of them throughout the year but I mean it was a five dollar fee a couple times that's about it so I think I'll survive you know compared to what I was making on in terms of interest so yeah something definitely that I want to keep the trading to you know trading to minimum as much as possible. But I think we're not big. We've never been big traders, right? So that's

just continuing the trend for us. I do want to mention that that doesn't include me buying more of a stock. I'm calling those seven trades, I backed out adding to new positions, that means a sell or a new position, which I think I could get even lower. I'd like to get it even lower. Yeah, I'd probably be in the same. And I would probably consider trimming not really a trade either. It's more like a comfort level that I want to just reduce my exposure a little bit, even if I still like the business. And everyone has different comfort levels there. I've heard people saying like once it reaches 10 percent, they have a hard rule. Even if they love the business, they're just not comfortable having more than that.

And that's fine. Right. I know you're not like that. I'm not like that. Obviously, like a lot of people would have hard palpitations with my bitcoin exposure and your csu exposure too well probably more with a bitcoin because it's more volatile but again we're comfortable with it i've seen some big prize drops in bitcoin that you know i didn't panic i kept it like your net wealth your net worth tracker is like No, I didn't panic. I kept it. Your net worth tracker is like... It's a roller coaster. Roller coaster, dude. Holy smokes. But I believe in the asset.

If you zoom out, it's been quite a good looking chart. Yeah, I believe in the asset and I'm thinking long term. But so before we go too long, because you have a hard stop in 12 minutes. I do. Yeah. So first one for me, invest more money every single month. So the reason I put that is I invest in a decent amount in 2023. And considering that savings rate have definitely dropped in 2023 for a lot of people, I still consider myself fortunate to be able to invest that much fresh capital. But the reality is my wife was on maternity leave and was

only receiving employment insurance. And for those not aware, EI or employment insurance is great, but it only provides a fraction of your salary, which means that, you know, we were just more relying on my income this year. So I had less money to invest. And EI is 55% up to the maximum insurable earnings, which I don't know offhand what it is, but it's probably around 70,000. So the max you get is 55% of 70,000, let's just say that.

So if you make 100,000, you're still getting that 55% of 70,000. So if you're a higher earner, definitely takes a big hit. So still was disciplined. I still managed to save about 10% of my salary for investing decent amount but I want to increase it to at least 15% ideally I would want to raise it to 20% but I have to be more realistic because we may have a large expense coming up this year and leads me to my second point which whether you want to debate

that whether it's an investment or not, that's fine. But buying a new house, I already home my home with a reasonable mortgage, very reasonable. It's manageable even with higher rates when we renew. I've mentioned it before. We were conservative when we bought it in late 2019. We did not want to overextend ourselves. We did not want to overextend ourselves. But now that we have a little one, my little lady, I mean, the house is becoming pretty small. So we're looking to ideally get something a bit bigger, most likely either not increasing our mortgage or very little. You know, it might happen this year, but it might be in 2025. But I'm definitely putting a little bit money in terms of cash to just in case there's some additional expenses related to that.

So that's something to keep in mind. And obviously, I'm planning ahead and it has an impact on what I'm investing. So either we move further out to get more space for the same amount of mortgage, we inject some new money into it or increase our mortgage. These are all our options. We're not in a hurry and we're well aware that our property is pretty high value in terms of where it's located. So we know we have a decent amount of leverage. So that's my second one. My third one, I kind of come back a bit more to investing here. And I'm very cognizant and I've been bitten by that in the past, but I need to do larger allocations when I start a position. So I had a tendency of starting a position doing kind of a starter position, and then not continuing because the valuation would get higher. And then I get a little bit in my head for it. So I have some

stocks that have done really well, but because they were so small in allocation, they're not needle moving, if you'd like, for my portfolio. Like Axon. Axon's a good one. You should have owned a lot more Axon. Holy smokes. That's it. Yeah. But that's okay. I mean, you make mistakes, you learn from them. That's fine. So I made a bigger mistake by not owning any percent of it. So there you go. And I have a few positions that are below 1% allocation because of this. Positions that I've done quite well, like I said, Axon's a clear example. But it's also easier when you have

really small position to kind of lose track of them sometime. So that's the other issue with it. to kind of lose track of them sometime. So that's the other issue with it. So I started in 2023, I started a few position including Canadian natural resources and allied property REIT. And now they both represent between 1.5% and 2% of my portfolio. And that's something I want to do is I want to make sure that if I start a position, I must commit to add it until it reaches at least 1% of my portfolio. Since I'm adding fresh money every month, it might not always be possible to start it off with 1%. It is possible right now because I have enough cash to do so. But clearly, you know, I may invest a lot of my cash in the next few months, who knows. So my rule is that to any position that I start, it has to, you know, as soon as possible, get to 1%. I think both of our last points tie together extremely well.

Like when people say they're starting starter positions, I ruffle some feathers for sure, because a lot of people like starter positions. And if starter positions is your thing, do your thing. You't let don't let some guy on a podcast tell you not to i think after i was after saying that i think it's a stupid way to invest i i i it's controversial are you calling me stupid i call you stupid i'm calling you to try the presentation test because a, a starter position is admitting that you couldn't pass the presentation test. It's like, ah, you know, now I have some incentive to own the position. It's like, you just told me you let your biases

take over. That's, that's my view on starter positions. And I like your resolution. One, because then if you just add these little small positions, three years go by and you're like, why do I still own this? You sell the thing. And so this is like kind of a higher hurdle rate. We're both describing a higher hurdle rate for conviction and a higher hurdle rate for understanding the business overall. So I think that these are really good and they work together well. Yeah, I mean, for me, it was probably the idea behind it was just trying to average the cost. But then I would kind of not follow through because the valuation would get higher. And then I would like think, oh, it's not kind of worth it anymore. So that's more the mindset of it. Typically,

you know, if I would start a position, I'd have pretty good conviction in it, but totally agree. I mean, for me, it's just it's not needle moving enough if it's less than 1%. And that's the biggest thing. And, you know, between 1% and 2%, it's not going to destroy your portfolio if you're wrong and you lose 50% of the value and you sell it and you were wrong. I think it just has to be balanced there, like 0.5%. I mean, yeah, it's not going to do much unless you 10-bagger it, basically. Unless you like, you know, 10 bagger it basically. Yeah. Unless it's the next monster energy, the next Amazon, the next dominoes. Like though I saw a chart that showed 10,000 invested into monster beverage group. Oh yeah. It's $22 million.

Can you believe that? I mean, I know that it's done well. So I'm not, I'm not surprised. Yeah. Yeah. Oh, I saw that on uh twitter yesterday 10 grand in monster energy was 22 million it might have you seen this game when we're going sidetracked episodes over that's the pod have you seen celsius have you have you drank celsius have you tried this this drink no I've been off energy drinks ever since I got some heart palpitations a couple of years ago. Fair enough. Just coffee now. You don't see it much

in Canada. You see it everywhere in the US. And like, you drive by Circle K, shout out Circle K, shout out Elementation Couture. They like advertise the heck out of, we have Celsius here. Go no further. We're selling it here. This energy drink is absolutely crushing it. And they're basically only selling in the US. I feel like they're all the same thing. These are the ingredients in it.

Oh, probably. Yeah. Yeah. They are the number one beverage seller on amazon now oh wow okay interesting thing it's just a you know i'm just drawing parallels between them and monster like monster's been a monster winner uh-huh uh celsius is been a really big winner and you know it could still have a long way to go here this drink i think the it's like uh i think bio steel some of the flavors unbelievable some of the flavors the like stinky bath water yeah how do the same people make this yeah

yeah hey you want acid reflux in a can uh that'll be $2.99. Thanks so much for listening to the pod. It was a fun one talking about what our plans are for the new year. And yeah, resolutions are cheesy and corny, but with investing, it's actually stuff that you can follow through and not have to like, I'm going to work out 47 days in a row, do 100 pushups a morning. Yeah, that's probably not going to stick. But okay, I have to know businesses better before I invest in them this year. That's probably something you can do. And so I like investing.

And for those who just started investing, some ideas for ETFs, I think an easy way to start investing. And if you're interested in more content from us, we post our portfolio on joinTCI.com. And Dan Kent is also posting there, which we'll need to get him access so he can start responding to people who have questions on there for him. Yeah, he's got lots of questions on there.

That's joinTCI.com. Support the show, see our portfolios. We just did it a couple of days. See you in's got lots of questions on there. That's joinTCI.com. Support the show. See our portfolios. We just did it a couple of days. We'll see you in a few days. Bye-bye. The Canadian Investor Podcast should not be taken as investment

or financial advice. Brayden and Simone may own securities or assets mentioned on this podcast. Always make sure to do your own research and due diligence before making investment or financial decisions.