Pickering Angels

Index funds are the smart way to invest

Mandala

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more interesting stuff about BRK

Higher returns with less volatility than the market !!!!


But, Warren Buffett himself argues the everyday man should just by the S&P then forget about it




Berkshire Hathaway (BRK)~15%Lower than the market despite higher returns
S&P 500~17–20%Varies by period; higher drawdowns

Berkshire has historically delivered higher returns with lower volatility — a rare combination.





PeriodBRK DrawdownS&P 500 Drawdown
Dot‑com crash (2000–2002)~–50%~–49%
Great Financial Crisis (2008–2009)~–32%~–57%
COVID crash (2020)~–32%~–34%

Berkshire tends to fall less in major crises, especially when the downturn is credit‑driven (Buffett’s specialty).







BRK.a is worth a million $ per share

BRK.b was created so everyone can buy it but it is the same thing as brk.a


There is no more value in brk.a except you get voting rights and the prestige of owning a million $ share




bottom line


Berkshire does not appear overvalued relative to its intrinsic worth. You might think it is as investors buy based on the Buffet name, but
If anything, it’s one of the few mega‑caps that isn’t trading at a tech‑bubble premium.







For many investors, BRK.B is a solid core holding.

however,

for most people, an index fund is still the default because it spreads risk across the entire economy.

S&P changes quickly, BRK does not and that is the big drawback to BRK. Don't put all your eggs in one basket philosophy


Warning!

Since 2020, the S&P 500 has outperformed Berkshire, mainly because of the massive tech‑led rallies in 2020–2021 and again in 2023–2024.
 
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Mandala

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In my opinion, the problem with index funds like XSP and XIU, is that they don't pay enough yield. This is a major problem for income oriented investors.

Never understood that

Just sell some shares for income?

A dollar worth of dividend lowers the share value by a dollar
 

sprite09

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In my opinion, the problem with selling shares for income, is that you never know when to get back into the market. Also, you might be forced to sell shares at distressed prices. That's why I prefer covered call ETF shares like HMAX, for part of my portfolio. I can use the monthly income distribution of HMAX if I need money. That way I don't have to sell any shares whatsoever.

That's one reason covered call ETFS are becoming so popular.
but selling shares was so you can spend

once you got disposable income, you invest again

true, distressed prices, but chances are if the index funds are distressed, your stock is likely, too. as the other poster implied , a $1 dollar dividend in a down market is exactly as selling $1 worth of shares

people just dont like the act of selling shares - it's a psychological matter.
 

99oilersdoc

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Dec 12, 2025
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You may become filthy rich over the next 15 years if you put your money
into inverse equity ETFs or even better 3x leveraged & inverse ETFs.
You need to be VERY careful with leveraged products. They rebalance frequently and you can lose your a$$ in fees even if your bet on direction is right. No problem shorting or even using leverage short term (ie you think something is coming, Brexit for example) but sitting in a 3x short product long term probably wont end well.
 

Zoot Allures

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In my opinion, the problem with selling shares for income, is that you never know when to get back into the market. Also, you might be forced to sell shares at distressed prices. That's why I prefer covered call ETF shares like HMAX, for part of my portfolio. I can use the monthly income distribution of HMAX if I need money. That way I don't have to sell any shares whatsoever.

That's one reason covered call ETFS are becoming so popular.

You sell share only when money is needed. Foced to sell at low prices ? Maybe, but maybe you sell when they are high and about to fall, you never know.

Covered calls sell options that limit upside then give the options as premiums this limits upside

Another very popular way for safe monthly income is index of Canadian banks that give dividends that pay out even when stock goes down so you just ride out downturn but you reduce upside as you are restricted to banks that do not historically match the overall market

There is no free lunch, you want security then you will lose upside, if you chase high returns, that means risk taking

Check out post 28 with Ben Felix, who is excellent source of investment info

I have learned a lot from him and he believes in the Warren Buffett investment style.

I get a real sense he actually knows WTF he is talking about with no Bull.

Most investment advisors are full of bull or are incompetent or are a salesman or all three
 
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sprite09

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Not necessarily, if you aren't happy with the XEQT's low 1.6% yield. XEQT no doubt is a solid ETF, but if you can't sleep at night holding XEQT, then there's no point buying it. Whereas I feel comfortable holding HMAX with a 12% yield, and this can help me sleep at night. It all depends on the investors age, risk tolerence, time horizon, and if the investor is working, semi-retired, or even retired fully.
it's total return that matters

in the end, yes, it's whatever makes feel sleep at night, but I'd look into more of the cons of using covered call ETFs (namely capped upside )...they're essentially yield traps
 

Mandala

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In my opinion, the problem with index funds like XSP and XIU, is that they don't pay enough yield. This is a major problem for income oriented investors.

I feel strongly about what I am going to say: income from investment is best done by watching the stock rise then selling shares when needed, not in distributions.
Distributions are taken directly from the stock price, how could it be otherwise?

So, buy quality stock not quality distributions

The question is how to buy a quality stock? The answer is it cannot be done, not by anyone.

Accept that as fact, then buy all the market with an index fund.
 
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Mandala

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All true. My only reasons is that the dividends tend to be lower than the underlying stocks. I prefer the income so...I just buy the stocks. Besides, there are really only 15-20 stocks that I'd buy on the TSX and data (somewhere, too lazy to look) says that this is close enough to emulate the index anyway.

Please don't mention CC ETFs. Ya, I've seen the arguments but I'm waiting until a really good -40% crash to see how they hold up.
ETFs will crash in a crash.

What you are doing is what mutual funds do. All kinds of mutual funds with every philosophy possible.

They all fail to beat the market. Market timing does not work.

The reason is as you sit out waiting for the 20% bear market that will come, the bull has risen 30%.

If it was as easy to do as you think it is then it would have worked by now so everyone would be doing it, then it would no longer work because everyone would be doing it.
 
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Mandala

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Sorry, I respectfully disagree!

Why? Let us compare evidence.
My evidence is Ben Felix and Warren Buffet.
Google them with a question about index funds compared to dividends then give me your evidence.
 

Mandala

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ETFS are much better then mutual funds. Sometimes you don't want to beat the market. You just want to produce enough monthly distribution income, to pay your bills.

Also with my financial approach, you don't need to pay for a financial advisor. I'm a DIY investor with a discount brokerage account. I also admit that my financial approach isn't for everyone, but I've been doing my own finances since 2002, and I'm still hanging in there.

I'm not a licensed financial advisor, by the way. I started with mutual funds in 2002, and then switched to ETFS in around 2005. All I invest in is ETFS. I've never bought an individual stock, in my life.

We have been in A HOT MARKET since yiou started.
If you actually know what your returns are, most investors do not, do not think you are doing well until you compare to the markets.

The S&P is the best choice for comparison.
 
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Mandala

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Not really. My portfolio suffered through the 2007-2008 financial crisis, and the 2020 covid financial crisis. The S&P 500 is also irrelevant to me, as I only invest in canadian dividend etfs, and canadian covered call ETFS. I don't own any US etfs whatsoever. My portfolio is 100% Canadian equity ETFS. I own 0% bonds and 0% gics.
The S&P and Nasdaq are better investments than Cnd

But, that aside how has your portfolio done to the other cdn etfs? The TSX is a good reference point

You buy Canadian dividend ETFs and covered call ETFS?

At least you do not buy individual stocks which is a huge mistake


Anyways, Ben Felix is Cdn and he is an real expert who is not selling stuff, you and I are not experts, you disagree?


He is dead set against covered calls, no upside and big downside
 

HungSowel

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I would rather own shares in good businesses at a fair P/E, however, everything is overpriced so most of my money is in index funds until I spot a good opportunity.

Back last year when google stock dropped like a rock because the FCC was threatening to strip the chrome browser away from google, I knew that would not happen and I should have bought google stock but I was stupid and did not. Google is still on my radar as I believe they are a good business and I will wait until the next opportunity.

I have other companies on my radar and I will pounce when there is opportunity. While I wait for opportunity, I will probably earn 10-20% per year from index funds which is still a great prize.
 
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jeff2

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I would rather own shares in good businesses at a fair P/E, however, everything is overpriced so most of my money is in index funds until I spot a good opportunity.

Back last year when google stock dropped like a rock because the FCC was threatening to strip the chrome browser away from google, I knew that would not happen and I should have bought google stock but I was stupid and did not. Google is still on my radar as I believe they are a good business and I will wait until the next opportunity.

I have other companies on my radar and I will pounce when there is opportunity. While I wait for opportunity, I will probably earn 10-20% per year from index funds which is still a great prize.
Yeah, also with Google people thought AI would kill it. I missed the chance also.
Everything is expensive(except for oil I guess) and that is a problem.
 
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jeff2

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Yes, but with that logic, index funds such as XSP and XIU are also overpriced. XIU is at it's 52 week high.

iShares S&P/TSX 60 Index ETF | XIU

XSP, is also very close to it's 52 week high, as well.

iShares Core S&P 500 Index ETF (CAD-Hedged) | XSP
Yes, they are both overpriced. XIU mostly because of the big run up in gold and the banks and XSP mostly because of the AI run up.
Way back I had XSP and I remember one year the currency hedging tracking error was large.
 
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HungSowel

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Yes, but with that logic, index funds such as XSP and XIU are also overpriced. XIU is at it's 52 week high.

iShares S&P/TSX 60 Index ETF | XIU

XSP, is also very close to it's 52 week high, as well.

iShares Core S&P 500 Index ETF (CAD-Hedged) | XSP
Yes. If you buy individual stocks you expose yourself to risks of owning individual stocks ontop of High P/E risk. If you own an index you are only exposed to high P/E risk.

Most of my money is in XIU, the returns on it last year was phenomenal and right now we are still in a commodity supercycle so XIU is pretty good but there is the Trump tarriff threat so I might exit XIU if CUSMA is looking like it won't be renewed but my guess is that it will be renewed with only minor changes.
 
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