TheAnswerIs.ca Inc. announces a total return for the Model Portfolio from inception October 26, 2016, to March 31, 2021 of 53.11%.
The corresponding total return for the Toronto Stock Exchange (TSX), as represented by the ETF XIC, is 45.16%. TheAnswerIs.ca Model Portfolio return is higher than the TSX return, due to its broader economic sector diversification.
The annualized return for the TheAnswerIs.ca Model Portfolio for the 4.43 years since inception is 10.09% per year.
The trailing 3-month total return for TheAnswerIs.ca Model Portfolio is 7.54%.
The trailing 12-month total return for TheAnswerIs.ca Model Portfolio is 42.40%.
Past returns are not indicative of future returns.
Well, that was something!
In March of last year, after a precipitous drop of 35% in global stock markets, TheAnswerIs.ca Model Portfolio stood at $107,513. Twelve months later, it is at $153,103, a gain of 42.40%. If there was ever a year that clearly illustrated that an investor should buy / hold for the long-term, and ignore the noise, the past year was it!
Investors need to remember that the Bear is just sleeping now, and there is a 100% probability that the Bear will awaken at some point, and stock markets will again convulse downwards by 20-50%. Notwithstanding arguably one of the worst Bear markets ever recorded (especially in terms of speed), TheAnswerIs.ca Model Portfolio is averaging a return of just over 10% per year, clearly illustrating that an all-equity portfolio is extremely volatile, but does provide attractive longer-term returns.
The next time the Bear awakens, we know an investors best defense is to simply... “hibernate”, collect their dividends, and wait for Bear to wander back into his cave. TheAnswerIs.ca Model Portfolio includes ETFs in the utilities and real estate sectors, which pay dividends every month, even during a downturn. Collecting dividends during a market downturn is like getting “paid to wait” for a portfolio to eventually recover from a downturn.
The key to successfully investing for long-term growth, is to make sure any money invested in the stock market can be left untouched for a minimum of 10 years, and preferably much longer. Not selling into a stock market downturn will ensure that there is time for a portfolio to recover and provide potentially attractive long-term average equity returns. Five years before one slows down working, and begins to draw money from their portfolio, one should move a significant portion of their portfolio into fixed income.
Invest long-term and prosper.