Confessions of a Value Investor

I’ll admit, I used to be a value investor. 

I bought cheap individual stocks with half of my portfolio, while indexing the other half.  Despite being an index investor, I have a soft spot for the value methods practised by my Strategy Lab colleague.

In this article  I explain why I gave up on value investing:

Read my Globe and Mail article





Andrew Hallam

I’m a financial columnist for Canada’s national paper, The Globe and Mail, as well as for AssetBuilder, a financial service firm based in Texas. I’m also the author of Millionaire Teacher: The Nine Rules of Wealth You Should Have Learned in School (2nd Ed. Wiley 2017) and The Global Expatriate’s Guide To Investing: From Millionaire Teacher to Millionaire Expat (Wiley 2015). My mission is to educate, motivate and inspire people on basic retirement planning and best practices for investing, using evidence-based strategies. I’m happy to comment on your questions. However, please read the Terms of Use, Privacy Policy and the Comments Policy.

You may also like...

3 Responses

  1. Rhys says:

    Hello Andrew,

    I've read your book cover-to-cover twice now (well, I just skimmed the last chapter the second time through – not for me) and absolutely loved it. I have recommended (and lent) the book to family and friends. I completely re-organized my portfolio based on it using TD's e-series of funds and simply feel much more in-control of my financial future, whether for good or bad. And I can honestly say now that I enjoy it when markets are down, such as the slight drop in May. It provides a re-balancing and "discount sale" opportunity. Hoping for markets to go up is a really difficult mindset to break! I've used the "taking the dog for a walk" price/earnings analogy a bunch of times in the past few months and it's perfect.

    One irrational fear I had was that since it's such an elegant and simple investing strategy, it would start to become extremely popular and possibly lose some of its effectiveness. But I understand now that this is completely unfounded for 2 main reasons:

    1. People need to be ready to make the plunge into index investing. Few are. Preach to them all you want, but people are largely driven by inertia.

    2. Active investors really believe they can beat the market. Many of the comments below this Globe & Mail article are perfect examples. Your responses to them are very gentlemanly and commendable.

    Thanks for everything, Andrew!

    Rhys

  2. Thank you Rhys,

    If I treat the commenters on the Globe and Mail site with respect perhaps they might reciprocate (with some luck). Anonymity doesn't bring out the best in people, does it?

    Thanks again Rhys,

    Andrew

  3. Cameron says:

    Hello Andrew,

    I just recently finished reading your book and extremely enjoyed it! I have worried a lot about my finances, since I have a good amount of savings but it was just sitting in a very low-interest savings account. I wanted to be wise with my money and invest, and reading your book opened my eyes. I recently invested a good amount of money in the three Vanguard index funds that you mentioned. I went 20% bond index, 40% domestic stock, 40% international stock.

    My question deals with taxes…

    You mention a lot about selling off some shares when that index is high and buying the one that is lower, and therefore, a good deal. I know Vanguard doesn't charge you anything to invest, but do they charge anything for selling? And if I am constantly selling my higher funds to buy the ones that are lower, won't this cause more taxation, instead of just leaving them as they are?

    I guess I am just a little confused on the costs associated with selling the funds. I hope this isn't confusing. Thanks so much for the good advice about investing!

Leave a Reply