TheAnswerIs.ca
Model Portfolio
TheAnswerIs.ca Inc. Model Portfolio Performance Update (Q3 2024)
TheAnswerIs.ca Inc. announces a total return for the Model Portfolio from inception October 26, 2016, to Sept 30, 2024, was 105.22%. In other words, TheAnswerIs.ca model portfolio has now more than doubled since inception.
The corresponding total return for the Toronto Stock Exchange (TSX), as represented by the ETF XIC, was 106.53%.
The annualized return for the TheAnswerIs.ca Model Portfolio for the 7.93 years since inception was 9.49%.
The trailing 3-month total return for TheAnswerIs.ca Model Portfolio was 7.90%. The trailing 12-month total return for TheAnswerIs.ca Model Portfolio was 24.73%.
Past returns are not indicative of future returns.
It has been a bumpy, but mostly fun ride higher over the past year. Many global stock markets are near their all-time highs. That does not in itself mean that stock markets are about to fall. However, it is important to recognize that global stock markets are now "expensive," meaning that stocks are trading at high prices relative to their past and expected earnings.
TheAnswerIs.ca portfolio is now about 8 years old and has seen some wild dips and jumps in value over that time. However, by staying focused and invested, over the past eight years, the Model Portfolio’s average return of 9.5% per year, helps an investor achieve their long-term growth investing goals.
Having said that, with stocks at the top-end of the range in terms of prices and earnings, it is reasonable to expect that the next 5 or 10 years may yield a lower average return. An investor should absolutely expect a stock market drop of 20% to 50% from these levels at some point.
Historically staying invested during major 20%-50% stock market downturn has been rewarded, (recall the steep drop and rapid recovery around the 2020 pandemic).
When, NOT IF, the next major stock market drop occurs, keep up with regular periodic purchases, and if able, increase the rate of buying after the next 20%-30% drop in stock markets.
The key to investment success 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 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.