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 (Wiley 2011) 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.

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15 Responses

  1. rob says:

    Hi Andrew

    The sister strategy to buying index funds is buying and holding Blue Chip dividend stocks and for Canadians it would be stocks like BCE or BMO etc. But when you had individual stocks did you do buy and or trade and take profits.

    I’m of two minds of this, over at fool.com who preaches buy and hold you see stuff like Amazon up 1700%, Netflix up 3300% etc on the other hand when you look at your more “normal” stocks (in this case CDN ones) you see stocks tend to go sideways over longer period of time.

    Of course the whole problem is knowing when a stock has topped or bottomed out, and I’ve seen enough bloggers get it wrong. So my way of find out of favour (favor) stocks is to do the Canadian version of Dogs of the Dow (Beating the TSX). I asked David Stanley (author) if he bought and sold and he said he never sold. Idea was to build up a good basket of quality dividend stocks at a reasonable price.

    But what I see are investors leaving profits behind.

    Recent example

    Manulife price May 2012 $11.23 price 1 year later $18

    Of course the yield dropped from 4.55 to 2.5% which told me it was time to sell. so investing 10,000 a year later gives you 16,020 to invest in the next “dog” which in this case was IAMGOLD which currently is up 25% since I bought it. Had I bought and held Manulife I would continue to get the dividend but over time give up all the capital gains.

    Of course not every year is this good.

    Rob

    PS as you mentioned somewhere else never confuse good luck with being smart:)

    • Hi Rob,

      I rarely sold my individual stock holdings. In the investment club I manage, if we sell one stock in a given year, we consider that extremely high turnover. I prefer to think about what the stock could generate over decades, not years. So I welcomed falling prices. I loaded up on Pfizer, Coca Cola and GE during 2009. And when they fell further, I bought more. I think it’s silly to determine success or failure on stocks based on short time periods. Warren Buffett suggests that you shouldn’t think about owning a stock for ten minutes that you wouldn’t own for ten years. Most bloggers will start their blog, and it will die a neglected death long before (long before) we know if their stock picks worked out.

      Cheers,
      Andrew

  2. jc says:

    Hi Andrew,
    I had plan to invest in US stocks and index fund. I however am concerned with estate duty on US stock holding non-resident are liable should anything untoward happen to them.
    (please refer to the first paragraph of this link:
    Do you know of the simplest way to avoid this potential tax?

    • If you’re concerned about estate taxes, and have access to the Toronto Stock Market (such as Singapore’s DBS Vickers allows) you can buy your ETFs off the Toronto market. Your loved won’t pay estate taxes upon death. Ticker symbols differ a bit, but if you check out Vanguard Canada, you’ll find the ETFs listed on the Toronto market. DBS commissions are a bit higher on Canadian purchases versus U.S. purchases (0.5% versus 0.35% off the top of my head) but you might like the peace of mind.

      • jc says:

        Andrew,
        Thanks for the info about Canada.
        What is the capital gain tax rate if any in Canada for non-resident?
        What is the dividend withholding tax rate in Canada for non-resident?

        JC

  3. Rob says:

    Hi Andrew

    Thanks that’s the view of most dividend investor blogs I follow. Not sure if it was you or someone else who commented that people rarely track what happens to the stocks they sell, which would give you a more accurate view of whats happening.

    Rob

    • Rob says:

      BTW did you ever track you ROI on you stocks? This is one thing I noticed very few bloggers do. It’s something I feel that I should be doing but I’ve been struggling to find a program that will track everything for me. It’s one thing if you add nothing to your account but once you start making deposits buying mid year etc it gets really complicated

      Any thoughts

      Thanks

      • Rob,

        For our investment club, we used Bivio, which tracked club returns and individual returns. It worked very well. For my personal money, I used the tracker at Globeinvestor, but grew lazy after a while and stopped tracking. I had bought the same stocks for the club that I bought for my personal account. I’ve indexed everything now so there’s no real need to track. A rebalanced indexed portfolio is like playing par on every golf course, every day, so I’m now the benchmark others are trying to beat.

        Andrew

  4. Francis says:

    I don’t understand why you advise an emerging market ETF, I can swear that a saw one of your post describe emerging market as a foolish investment and you got only VEA and not VXUS or VWO in your own investment for that reason.

    • Francis,

      There’s a sliver of the emerging market index in my Globe and Mail Strategy Lab Portfolio, but not much. Many people like full global exposure, and with this component, I’ve provided a sample for them. That said, I don’t have any (not even a sliver) of the emerging markets in my personal portfolio, and you could also see that by the asterisk beside my listed holdings on the Strategy Lab model portfolio. None exists beside the emerging market ETF. But the decision of whether you add such an index yourself to your personal portfolio is up to you.

      Cheers,
      Andrew

  5. Ricci says:

    Hi Andrew

    I am completely new to this, and have just finished reading your book. I have probably the most basic questions, so I apologise in advance, but would appreciate your guidance on this.

    I am a 31 year old living in the UK (and am a British Citizen) and have just opened an account with Hargreaves Lansdowne. I am now looking to invest in index funds, however I am not clear (yet) where to invest.

    You recommend splitting portfolios into three:
    – Government bonds (short)
    – Your country stock index
    – International stock index

    Where would you advise me to start? I have read about Vanguard’s index funds, FTSE 100, S&P 500, HSBC, F&C … I honestly don’t know where to begin. And should I be looking outside of these as well? You mention that you have invested in Coca Cola, as well as others. As an ammateur (you can tell by my questions) is there any way to start simply, but effectively? Would investing in the above mentioned indexes be good enough? You also mention diversifying our portfolios, is this in terms of where you invest, or the amount you invest in, or both?

    Thanks so much
    Ricci

  6. Rachel says:

    Hi Andrew,

    Just like Ricci above I have just finiahed your book and I have some basic questions. I am a teacher working abroad and I plan to invest like Ricci above…splitting the portfolio as you suggest.

    After doing a bit of amateur research I appears that stock prices are overpriced and I am frightened to buy now because as you said it is better to buy when stock prices are lower.

    Do you suggest waiting to see if the market falls?

    Thanks,
    Rachel

    • Hi Rachel,

      You’re asking me if I believe in market timing. As I suggested in my book, I don’t because there’s evidence that people are capable of consistently timing the market. I do recommend that you build a diversified portfolio of domestic and international indexes, as well as bond indexes. Try to keep your diversified portfolio aligned with your goal allocation. But don’t speculate. In case you’re interested (and this is just a side point) the U.S. market is currently cheaper than it was during most of the 1990s. Stock prices are measured by price to earnings ratios Rachel, not by absolute levels. Having said that, build a diversified portfolio, rebalance it annually, and don’t speculate. Speculating will lead to more financial heartache and loss (or underperformance) than anything else.

      Cheers,
      Andrew

  7. Tracy says:

    Hi Andrew,
    I bought your book in Chinese version and have been really inspired by the idea of using regular salary to invest. So far I have only contributed to retirement 401k (I live I. The states). I was wondering if the Canadian Index is Available in the US market?
    If not, (as they are not on my list), do you recommend another index to invest at this time when the market is so HIGH?
    Thanks!!!

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