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“I’m an indexer. I don’t care what the indexes did today!”

“I’m an indexer. I don’t care what the indexes did today!” 
— Preet Banerjee (2014)

These words are from financial Media Maven Preet Banerjee . In that quip, he captures the essence of Index Investing. Couch Potato investing is another name for it.

Balanced in What Way?
All Index Investors Do is Balance

Some think it is prudent to monitor the stock market closely. I know people that do that. Some people get upset by the “moods of the markets”, my question is: why?

If you are worried about your investments, you should not invest in stocks. If you are a day trader, then yes, you should be on top of things. NO it would be best if you were not a day trader. If you feel your investments are that “tenuous” then you really need to review your Savings plan and get out of securities.

Couch Potato investing  assumes you are not changing your portfolio often. Your only problem after that is figuring out what you can do with all that spare time? There are enough things to worry about. Watching your investments daily simply makes you more tense.

How you rebalance your portfolio is up to you. You can add more funds and use that to get back to your goal distribution of funds, or you can “buy and sell” to rebalance the existing funds. No matter how you rebalance, that is about all you are doing with your investments.

What if the markets crash? (yes, that is a link to the 2008 crash that we all seem to have forgotten about) Not much to do about it, it’s better not to look then, especially! Market corrections are a common occurrence in investing, and trying to avoid them can be quite challenging. In my opinion, most “market timing” strategies eventually fail, despite the fact that some people may try to sell you one. These individuals may have gotten rich from selling their strategy rather than actually timing the market. I am currently examining the Fibonacci method for market timing, which I find interesting to read about. However, I have no intention of using it myself as I enjoy investigating and debunking various strategies.

Index Investing Bubble?

People who identify as Index Fund Investors often invest in individual securities and may use Dividend Investing ideas in addition to index funds or ETFs.

I primarily invest in index funds and ETFs, but also hold a few stocks in some portfolios.

I cannot fathom why I am still holding onto these stocks. Although they have performed well and pay dividends, I have sold a few single stocks from my RRSPs, such as Power Corp, but I am reluctant to let go of my other single stock investments and invest in more index funds. I am questioning if this makes me a hypocrite, but if being an “index fund hypocrite” means “do as I say, not as I do,” then I am unapologetically one. It’s time to take charge of my investments and make a more informed decision without procrastinating any longer.

Feel Free to Comment

  1. I was thinking that I am a 100% Couch Potato-er, but then I have to consider than I retired last year (at 53) with a full company pension that gives me some breathing room as to what my investments do. I don’t know that I would feel so “brave” going all in with indexing if I didn’t have my pension.

    1. Is your trepidation about the fact that you are “all in” on Indexes (and not holding GICs and bonds)? Can’t see that being an Indexer is a “brave” thing, it is more the safer thing to do if you are going to be in stocks.

  2. No pure potato or yam here…I hold both indexed products and dividend paying stocks. I figure I get the best of both worlds, total return from the indexes and passive income from the stocks if and when I need it.

    There are very few pure indexers I bet.

    Preet’s comment was a good one. 😉

  3. Oh NO!!! Please say it isn’t so!!! Not a couch yam!!! You are one of THOSE!!!!

    You know what I mean! Healthier and tastier than potatoes!!!

    I just want my FRIES!!! Preferably as a poutine! (grin)

  4. I wanna be an Index Fund Hypocrite some day! Or is that a Dividend Stock Hypocrite? Okay I’ll settle for an Index Dividend Couch Yammer.

  5. Becoming an indexer is a journey that can take several years. I have converted a most of my investments to a couch potato strategy, but I have some active funds that will be around for a while. That is because my ‘advisor’ who supposededly had my best interests at heart, locked me into DSC funds with a 7 year term. I still have a few years to go.

    However, the peace of mind having money in instruments that are transparent and predictable is fantastic. I know how the money is allocated and I can easily follow the trends. This has been an amazing eye opener.

    Keep up the good work.

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