Dogs of the TSE

Discuss your favourite picks, broker, and trading or investment style.
User avatar
NormR
Veteran Contributor
Veteran Contributor
Posts: 5234
Joined: 18 Feb 2005 11:19
Contact:

Re: Dogs of the TSE

Post by NormR »

ig17 wrote:
NormR wrote:If anyone has a variant of the method they'd like to see back tested, let me know.
I'd like to see a back test that limits the investable universe to the top 30 companies, as suggested by Stanley.

In fact, two back tests. :wink: One would rank the companies by the market cap. Another - by the revenue.
Good suggestion. Preliminary evidence is very encouraging for those focusing on the top 10 yielders in the top 30 by either revenue or market cap within the TSX60. :) (I'll try to remember to do it on the TSX overall next time.)
User avatar
NormR
Veteran Contributor
Veteran Contributor
Posts: 5234
Joined: 18 Feb 2005 11:19
Contact:

Re: Dogs of the TSE

Post by NormR »

DenisD wrote:
NormR wrote:Bloomberg
Wondering how far back you can backtest Canadian screens with Bloomberg? What are your views on the optimum length of a backtest?
Not long - about 12 years in Canada I think. But it seems to depend on the factors used. That's generally too short for serious work IMHO.

How many years of data does P123 have?
DenisD wrote: About three years ago, I made a change to my large-cap screens to eliminate the worst losers. A stop loss algorithm O'Shaughnessy has mentioned is: sell after a 50% loss if the percent return of the stock is in the bottom decile of the universe. I decided to not buy a stock if it's three or six month percent return is in the bottom decile of the universe.
Interesting, where did he mention the rule?
DenisD
Veteran Contributor
Veteran Contributor
Posts: 4081
Joined: 19 Feb 2005 01:24
Location: Calgary

Re: Dogs of the TSE

Post by DenisD »

NormR wrote:How many years of data does P123 have?
US and Canadian data starts at the beginning of 1999. If a data item contains more than one year of numbers, it will still start in 1999. For example, a five year growth rate. At least for the US. Not sure about Canada. The data comes from Compustat. They have some data from Value Line too. Should be adding European data this year.

Not sure how good the 1999 Canadian data is. I showed some results of Canadian high dividend backtests in this post: http://www.financialwisdomforum.org/for ... 52#p527052 Unfortunately, the tables don't display correctly with the new version of the forum software. :( You can see which companies it picked in 1999.

Interesting, where did he mention the rule?
Sorry. After poking around for a few minutes, I can't find a source. I know I've seen or heard the 50% loss rule several times. I think I've only seen or heard the bottom decile of returns rule once. That would limit the number of companies sold in 2008/09. Unfortunately, he never says what to do with the money from the sale.
DenisD
Veteran Contributor
Veteran Contributor
Posts: 4081
Joined: 19 Feb 2005 01:24
Location: Calgary

Re: Dogs of the TSE

Post by DenisD »

I usually find something to read in the Stingy News.

Testing the Dogs of the TSX by NormR

Is there a back test of the Safer Dogs?
User avatar
NormR
Veteran Contributor
Veteran Contributor
Posts: 5234
Joined: 18 Feb 2005 11:19
Contact:

Re: Dogs of the TSE

Post by NormR »

DenisD wrote:I usually find something to read in the Stingy News.

Testing the Dogs of the TSX by NormR

Is there a back test of the Safer Dogs?
In future episodes :D
like_to_retire
Veteran Contributor
Veteran Contributor
Posts: 5923
Joined: 27 Feb 2005 07:14
Location: Canada

Re: Dogs of the TSE

Post by like_to_retire »

nisser wrote:How many years can a company be a Dog until you call it dead? ;)

Specifically referring to TA here. It seems to have been on a downslide for the last 10 years with no light in sight.
hehe, well I just clicked the button on my BTSX-ltr spreadsheet to update how I have been doing so far this session, and I had to laugh when I see that TransAlta (TA) is leading the pack.

My BTSX-ltr runs from Nov 08 - Nov 08, so 29.3% of the term has passed. My software includes the prorated dividends so far, along with the share price increase, and I see that TA now has a total return since Nov 08 of 15.71%. It's the leader of the pack - go figure. :roll:

ltr
like_to_retire
Veteran Contributor
Veteran Contributor
Posts: 5923
Joined: 27 Feb 2005 07:14
Location: Canada

Re: Dogs of the TSE

Post by like_to_retire »

Not a lot of discussion lately about the Dogs of The TSX because everyone at FWF is convinced it's fruitless to try and beat the Index, but there is an interesting article by Ross Grant in this months Canadian Money Saver (he took over the BTSX duties from David Stanley this last year after 29 years).

We've already discussed the changes Ross Grant made to Stanley's rules, and now he discusses another rule in this article that I was quite interested in with regard to dealing with BTSX constituents' dividend cuts.

Stanley always waited until the anniversary date each year, and if a dividend cut through the year resulted in the stock moving out of the top ten, then it didn't get included in the next year - fairly simple. Ross Grant has decided to immediately remove the stock from the BTSX after a dividend cut and add the next available stock in the sorted list.

It's particularly interesting for me since last year when TA cut its dividend I debated with myself about this type of rule.
Then again this year, when CVE cut its dividend, I thought about it again, but didn't because, well, those are the rules I set out for myself.

Grant makes a good point that from experience (and mine also), holding onto dividend-cutting stocks tends to be a poor choice. There are often follow-on dividend cuts and a continual slide in price with these stocks. They don't generally climb back, and if they do, it takes many years.

He sites his personal BTSX examples of TA, TCK.b, and CVE in his recent years' BTSX, and the results have certainly moved in his favour by selling the offender. My own BTSX has suffered from the TA and CVE dividend cuts, and thankfully CVE won't make the top ten list this November anniversary and TA has thankfully been cut from the Index completely - good riddance. (This of course is not to say that the Index has gotten the better of me, because beating the Index is a slam dunk - this is about maximizing the return of how much you can beat the Index over the long term).

Certainly if I look back and test how this rule would have helped me, it's a no brainer, so I'm considering next year to add it. Generally, if a stock cuts it's dividend, then on the next anniversary date it will not make the top ten cut anyway, so it's a rule tweak that makes a lot of sense to me.

I know that Taggart would approve, except he seems to be able to sell those candidates before they cut their dividend - amazing - what's the secret? - hehe.

ltr
User avatar
deaddog
Veteran Contributor
Veteran Contributor
Posts: 3422
Joined: 19 Jan 2008 19:59
Location: Central BC/Arizona

Re: Dogs of the TSE

Post by deaddog »

like_to_retire wrote:Not a lot of discussion lately about the Dogs of The TSX because everyone at FWF is convinced it's fruitless to try and beat the Index,
ltr
Not everyone. :)
"And the days that I keep my gratitude higher than my expectations, well, I have really good days" RW Hubbard
User avatar
IdOp
Veteran Contributor
Veteran Contributor
Posts: 3873
Joined: 16 Feb 2006 11:27
Location: On the Pacific sea bed, 100 mi off the CA coast.
Contact:

Re: Dogs of the TSE

Post by IdOp »

Maybe it comes down to what the purpose of a particular BTSX strategy is.

If the purpose is just to show (hypothetically) how simple it is to beat the TSX, then the simplicity principle may hold sway and require that the portfolio only be reconstituted once a year.

If the purpose is to make as much real money for oneself with it as one can, and one believes that dropping the dividend-cutters right away will do that, then one would go more active.

(I'm not endorsing these strategies.)
like_to_retire
Veteran Contributor
Veteran Contributor
Posts: 5923
Joined: 27 Feb 2005 07:14
Location: Canada

Re: Dogs of the TSE

Post by like_to_retire »

Time to report on my Dogs of the TSX portfolio for 2015. I will refer to it as BTSX-ltr. I've now started my fifth year.

The Total Compounded Return for the BTSX-ltr after four years is now 43.66% versus the S&P/TSX 60 Index at 26.32%.

The Average Annual Total Return for 4 years of the BTSX-ltr is now 9.48% versus S&P/TSX 60 Index at 6.01%. An increase of 57.7% over the index.

The results are graphed and tabled below.

Note, this is the TXLX-I S&P/TSX 60 Index that I use as a comparison in all my calculations. Since it's non-investable, in the real world you would need to use an ETF such as XIU (along with its expenses).

TABLE BTSX-ltr vs TSX60.PNG
GRAPH TSX60 vs BTSX-ltr.PNG

Previously, I made no direct comparisons to the original David Stanley BTSX for a few reasons. Those being that his BTSX which runs from June to June doesn't match my Nov to Nov time period, so it's hard to make a direct comparison each year. The S&P/TSX 60 Index is my target competitor and not Stanley's BTSX portfolio. But, this year after Stanley passed the BTSX torch to someone else (that uses a different method), I changed my mind. The original reason I chose not to follow the original David Stanley BTSX rules is because I felt I may have a better method for a conservative investor like myself by using a sectorization approach, so it seems appropriate that I make a direct comparison and since I had all the back data to do it, I began to graph the results. Not a lot of work and it's kinda fun.

It would have been quite a poor year for the David Stanley BTSX this year if not for Talisman (TLM) which was dropped from the index April 30 after the Repsol takeover (that paid a handsome takeout price). The 3 material stocks in the David Stanley BTSX did very poorly as predicted last year. This of course is the very reason that I use my sectorization rules rather than the standard BTSX rules. The same thing happened last year when materials IMG-T suspended its dividend, and ABX-T reduced its dividend from $0.20 to $0.05 in September. My method hopes to avoid such events, although Energy can offer volatility as we've seen this year.

The graph below shows the S&P/TSX 60 Index compared to my BTSX-ltr and includes the BTSX-original over the last 4 years.
GRAPH TSX60 vs BTSX-ltr vs BTSX-original.PNG
This year's results (Nov 2014-Nov 2015) were interesting because it's the first experience with a down market. The BTSX is essentially a value play, which historically does somewhat better during a bear market than a growth strategy . In addition, stocks that pay dividends also tend to do a little better during bear markets. I was hoping for a big score. Well, so much for that rule of thumb because even though I did beat the Index this year, it was no barn burner. As I assume everyone knows already, the goal is to enjoy a long term average return that betters the Index. You can't expect to knock it out of the park or even beat the Index each and every year. So far I am meeting my objective.

Anyway, for this year, the BTSX-ltr Total Return was -0.85%, while the S&P/TSX 60 Index Total Return was -3.85%. So I beat the Index by 3.00%.

As far as my modification to the standard BTSX is concerned, I usually take a small hit to the dividend payout, but really don't mind, as I feel it's a small price to pay for risk control. It removes the chance of ending up with overweight of any one sector (think financial, as is the case for the coming year) and also removes volatile sectors like Materials that can temporarily jump into (and out of) the top ten list (as evidenced in this last two years poor standard BTSX results) and hopes to avoid dividend cuts. My modification is an attempt to avoid the very situation that occurred with the standard BTSX this last two years.

I'll rehash my rules. The filter screening remains the same for BTSX-ltr and is carried out each year on the anniversary date.

Filter 1 - Sort the S&P/TSX 60 Index by dividend yield from high to low. (Same as standard BTSX)
Filter 2 - Eliminate the former income trusts from the sorted list. (Same as standard BTSX)
Filter 3 - Eliminate any US$ dividend payers. (BTSX-ltr)
Filter 4 - Choose the highest 10 dividend payers using the sectors below (sectors as per XIU definitions) and invest equal dollar amounts: (BTSX-ltr)
. Two Financial Bank.
. Two Financial non-Bank.
. Two Energy.
. Two Telecom.
. One Utility.
. One Consumer Discretionary.
Then reconstitute once a year. Simple.

Examining the BTSX-ltr portfolio over this last year, the starting yield-on-cost Nov 2014 was 4.24%, and ended the year in Nov 2015 with a yield-on-cost of 4.24% (and a yield-on-market of 4.47%). The yield-on-cost, which would normally increase over the year, lost ground after taking a large hit from the Cenovus dividend cut, but made up ground with 11 dividend increases from the other participants to an end result of the same yield at the start of the year.

With respect to next years BTSX-ltr list, there are quite a few changes required to start the new year (Nov 2015-Nov 2016).

TRP (TransCanada Corporation) replaced CVE (Cenovus Energy Inc) for one of the the energy sector participants; T (Telus Corporation) replaced RCI.B (Rogers Communications Inc.) for one of the telecom sector participants; NA (National Bank) replaced BMO (Bank of Montreal) for one of the financial bank sector participants, and thankfully TA (TransAlta) was replaced by FTS (Fortis) for the utilities sector because TA (TransAlta) was dropped from the index. TA was without a doubt one of the biggest dogs I've ever owned - good riddance. And finally HSE (Husky Energy) was dropped and replaced by ENB (Enbridge) after HSE stopped paying cash dividends in lieu of stock.

This brings up the point again that the new proprietor of the BTSX is Ross Grant, and along with his own set of rules that allows some active involvement, he also drops any stock that reduces or cuts its dividend (read CVE, HSE and TA). I have debated with myself on this point and I decided through the year to adopt that rule. My hesitation was that sometimes a dividend cut is seen as a responsible and positive move by a company, and can help the share price, but more often than not, it's a bad sign and reason enough to drop a share and simply pick up the next one in the list. So, for the BTSX-ltr, if any stock drops or reduces its dividend, or if a stock is dropped from the index, it's immediately out and the next candidate on the list is added at that point with the funds from the sale of the dropped stock.

I try to comply with the rule of starting each year with an equal 10% slice for each of the 10 stocks, but I restrict myself to block purchases and sales (100 share boundaries), with the result that each slice isn't exactly 10%, but it's close enough for me, keeping in mind that the market changes the allocations by itself fairly quick. My software does continually track the percentage return difference between my actual slice percentages versus a perfect ten slices of 10%, and it's surprisingly close by year end, as sometimes I'm winning and sometimes I'm losing, but the results that I post at year end are the actual returns that I experience with the portions that I actually own. The returns I post aren't theoretical - I'm eating my own cooking. It would be quite easy to track a perfect theoretical portfolio of shares, but you have to be realistic if you own these shares in real life. It would be silly to 'break the block' and add or subtract a few shares each anniversary to shore up the slice percentages, not to mention what it would do to tax inefficiency in an open account, but I do my best to keep it close.

I also don't calculate the returns with re-invested dividends as the Index TRIV does (Total Return Index Value). Instead I simply use the share price increase plus dividends received as my total return (same as the standard BTSX). Yes, it gives the Index TRIV a bit of an advantage, but I'm confident enough to spot the Index a few points ;) . In addition, using the pure index as my comparison frees it of any expenses that would be incurred in real life when purchasing an index fund or ETF, and of course I don't consider the extra taxation that an ETF or fund is subjected to, so I feel I'm being pretty generous to the base TXLX-I index as my comparison. If I ended a year even with the TXLX-I index, then I might consider that a win, because you can't buy the TXLX-I index without expenses.

To maintain a standard BTSX portfolio or any derivation of it, takes only an hour or two of time each year, so for those that don't want to own individual stocks versus an ETF Index because it takes a lot of work, it just ain't so in this case. I'm just pleased not to have to sort out the tax T3's for ETF's at year end that I am now able to avoid. With a BTSX, the taxes are simple, and the stock management is easy - you just follow the simple filter rules and repeat once a year.

The BTSX-ltr is just part of my overall strategy to beat the index (it represents about half my equities). I also maintain an actively managed CORE portfolio that compliments the sector strategy of the BTSX-ltr. I add the Consumer Staples and Industrial sectors and round up the Utilities and Consumer Discretionary sectors so that the BTSX-ltr plus the CORE stocks represent 8 of the 11 sectors in Canada. I never buy stocks in the Materials, Information Tech or Health Care sectors. This gives me approximately 12.5% in each of the 8 sectors..

The CORE stocks didn't do well this year and by themselves ended with a -3.58% Total Return over the same Nov - Nov time period, and when the CORE and BTSX-ltr are considered as one portfolio of stocks, the result was a Total Return of -2.4% (beating the index by +1.45 percentage points), which of course is my ultimate goal.

As David Stanley says: "Let's see what happens in the coming year".

ltr
nisser
Veteran Contributor
Veteran Contributor
Posts: 2079
Joined: 11 Nov 2007 21:24

Re: Dogs of the TSE

Post by nisser »

Thanks for the update. I suspect 2016 will be a fairly extreme year. Either you beat the index remarkably well (if oil stays low) or you get beat out of the water (if oil bounces back up) given that you've dropped the energy producers in lieu of the pipelines.
User avatar
AltaRed
Veteran Contributor
Veteran Contributor
Posts: 33398
Joined: 05 Mar 2005 20:04
Location: Ogopogo Land

Re: Dogs of the TSE

Post by AltaRed »

Seems like good performance and logical tweaks to me. As Nisser suggested, 2016 could be an interesting year if oils bounce back, but that is a big 'if' and I wouldn't be playing that poker hand beyond the sector allocation LTR already gives it. This is about balancing good performance with lower volatility. Screw the home runs. The side players in Energy such as infrastucture will be partially swept up in an oil price tsunami should that occur simply because the pipes have become more realistically priced (valuations) recently. IMO, it has been a healthy correction for all investors.
Imagefiniki, the Canadian financial wiki The go-to place to bolster your financial freedom
User avatar
deaddog
Veteran Contributor
Veteran Contributor
Posts: 3422
Joined: 19 Jan 2008 19:59
Location: Central BC/Arizona

Re: Dogs of the TSE

Post by deaddog »

LTR:
Haven’t you been paying attention?

Don’t you know that you can’t beat the index with a simple strategy? :D :D :D
"And the days that I keep my gratitude higher than my expectations, well, I have really good days" RW Hubbard
ockham
Veteran Contributor
Veteran Contributor
Posts: 2214
Joined: 04 Apr 2006 21:50
Location: The Prairies

Re: Dogs of the TSE

Post by ockham »

LTR,
What is the rationale for filter 3 -- eliminating US$ div payers?? Just to avoid a currency conversion hassle??

(And if you don't mind, your claim that's it's all oh-so-simple is disingenuous. There's a lot of thought and experience that lies behind what you're doing.)
like_to_retire
Veteran Contributor
Veteran Contributor
Posts: 5923
Joined: 27 Feb 2005 07:14
Location: Canada

Re: Dogs of the TSE

Post by like_to_retire »

ockham wrote:LTR,
What is the rationale for filter 3 -- eliminating US$ div payers?? Just to avoid a currency conversion hassle??

(And if you don't mind, your claim that's it's all oh-so-simple is disingenuous. There's a lot of thought and experience that lies behind what you're doing.)
I live in Canada, and spend all my money in Canadian dollars. I'm not interested in forex problems with foreign countries. If a Canadian company wants my investment, then offer your dividend in Canadian dollars. Is this Canada or not. It's that simple.

Well, in the last week, I've already been accused of being "smug" by a major FWF contributor, so your accusation of being "disingenuous" is right in line. What can I say. I'm just trying to make money. Any other FWF members want to insult me?

ltr
chufinora
Contributor
Contributor
Posts: 769
Joined: 12 Oct 2009 15:03
Location: Ottawa

Re: Dogs of the TSE

Post by chufinora »

LTR do you know the rationale for filter #2? Given it has been a number of years now since the former income trusts were IT's and they are now playing by the same rules as other corporations does it make sense to exclude them still? (offhand do you know if you dropped that filter whether your selections would change at all?). (Sorry for too many questions).
ockham
Veteran Contributor
Veteran Contributor
Posts: 2214
Joined: 04 Apr 2006 21:50
Location: The Prairies

Re: Dogs of the TSE

Post by ockham »

like_to_retire wrote:
ockham wrote:LTR,
What is the rationale for filter 3 -- eliminating US$ div payers?? Just to avoid a currency conversion hassle??

(And if you don't mind, your claim that's it's all oh-so-simple is disingenuous. There's a lot of thought and experience that lies behind what you're doing.)
I live in Canada, and spend all my money in Canadian dollars. I'm not interested in forex problems with foreign countries. If a Canadian company wants my investment, then offer your dividend in Canadian dollars. Is this Canada or not. It's that simple.

Well, in the last week, I've already been accused of being "smug" by a major FWF contributor, so your accusation of being "disingenuous" is right in line. What can I say. I'm just trying to make money. Any other FWF members want to insult me?

ltr
Thx for your reply. And sorry if I was misunderstood. I intended a compliment, actually, not an insult.
Spudd
Veteran Contributor
Veteran Contributor
Posts: 1518
Joined: 22 Sep 2013 14:52

Re: Dogs of the TSE

Post by Spudd »

LTR,

I'm wondering what your logistics will be if/when you have to drop someone because they cut their dividend. Will you use the list generated today to choose the replacement, or will you re-generate a fresh list at the time?
like_to_retire
Veteran Contributor
Veteran Contributor
Posts: 5923
Joined: 27 Feb 2005 07:14
Location: Canada

Re: Dogs of the TSE

Post by like_to_retire »

chufinora wrote:LTR do you know the rationale for filter #2? Given it has been a number of years now since the former income trusts were IT's and they are now playing by the same rules as other corporations does it make sense to exclude them still? (offhand do you know if you dropped that filter whether your selections would change at all?)..
I haven't done any back testing on your question, but the original idea from Stanley was that these Income Trusts hadn't proven themselves yet as dividend paying corporations, and so he cut them out. Quite a few years have gone by, and maybe they deserve a closer look. They are of course all former Energy Trusts and still pay a high payout ratio, so they wouldn't make it too far past my sector gate and may swamp the original BTSX because of their high dividend payout, so I don't know. We'll have to see what Ross Grant does in the future.

ltr
like_to_retire
Veteran Contributor
Veteran Contributor
Posts: 5923
Joined: 27 Feb 2005 07:14
Location: Canada

Re: Dogs of the TSE

Post by like_to_retire »

Spudd wrote:LTR,

I'm wondering what your logistics will be if/when you have to drop someone because they cut their dividend. Will you use the list generated today to choose the replacement, or will you re-generate a fresh list at the time?
This year I generated a new list on the day I dropped the stock(s) in question and picked the new candidate, and will likely continue to do that in the future if it happens again. It just seems like the reasonable way to go. I think that's what Ross Grant is doing.

ltr
User avatar
Shakespeare
Veteran Contributor
Veteran Contributor
Posts: 23396
Joined: 15 Feb 2005 23:25
Location: Calgary, AB

Re: Dogs of the TSE

Post by Shakespeare »

My own approach, which I follow intermittently (I prefer to hold on to solid stocks, although I like to trade around a central position for something like TRP) is simpler: I don't buy direct resource holdings or minor pipelines.

From Norm's site: High Yield TSX60 Stocks

I get
60scr.png
Incidentally, I own all of these but POW.

For comparison, here are my current TFSA holdings (current IRR 9.2%):
Atco
Bell Canada
Bank of Montreal
Bank of Nova Scotia
Canadian Imperial Bank of Commerce
Canadian Utilities
Enbridge
Fortis
National Bank
Saputo
Shaw Communications
Telus
Trans Canada Corp
Sic transit gloria mundi. Tuesday is usually worse. - Robert A. Heinlein, Starman Jones
like_to_retire
Veteran Contributor
Veteran Contributor
Posts: 5923
Joined: 27 Feb 2005 07:14
Location: Canada

Re: Dogs of the TSE

Post by like_to_retire »

deaddog wrote:Haven’t you been paying attention?

Don’t you know that you can’t beat the index with a simple strategy?
I can try anyway. Yeah, the index is unfortunately filled with some duds that you would never invest in, so I think there are a number of simple methods that can be used to beat the index (contrary to popular belief). Value systems appear to be the best options. The trick is to come up with a system that doesn't take a bunch of work or involve pouring over company reports, because if that's the solution, I would take the index every time (even with its onerous ACB calculations and tracking of year end Re-invested distributions and T3 reporting of Eligible Dividends, Non Eligible Dividends, special dividends, Other Income, Capital Gains, Return of Capital, Foreign Income, Foreign Tax Paid, etc.) It was actually the fact that all this could be replaced with a simple T5 of dividends with no other complications that initially led me to the BTSX after I read how after so many years it had beat the index.

Anyway, speaking of beating the index over the long term, in the July 2015 edition of MoneySaver magazine David Stanley in his final article on the BTSX after 29 years (handed over to Ross Grant and a more actively managed set of rules) produced an interesting chart called the Telltale chart that he took from Jack Bogle in an article here. It's an interesting read on reversion to mean.

The Telltale Chart as published in the MoneySaver magazine is the result of dividing the cumulative returns of the BTSX by that of the Total Return S&P/TSX 60 Index benchmark. Bogle says a Telltale chart helps determine whether there are any real practical differences between two data sets. The 29 year BTSX Telltale chart as shown below never drops below a ratio of 1.00 and its overall direction over the 29 years is positive ending around 1.75. That's real good.

For fun, since the data is there, I've started the Telltale graphing in my BTSX-ltr spreadsheet, and for comparison, it basically starts at year 25 of Stanley's chart (2011,2012,2013,2014,2015). You can see it generally follows the same path over those years except for the last year (and thankfully has never dropped below 1.00). Hopefully, my luck will continue as well as Stanleys did. :)
GRAPH BTSX vs TSX60 Telltale.jpg
GRAPH Telltale TSX60 vs BTSX-ltr.PNG
GRAPH Telltale TSX60 vs BTSX-ltr.PNG (8.79 KiB) Viewed 1069 times
ltr
gsp_
Veteran Contributor
Veteran Contributor
Posts: 2318
Joined: 12 Apr 2011 17:48
Location: Montreal

Re: Dogs of the TSE

Post by gsp_ »

and of course I don't consider the extra taxation that an ETF or fund is subjected to, so I feel I'm being pretty generous to the base TXLX-I index as my comparison.
I find this talk of "extra taxation" peculiar when there doesn't appear to be any attempt made at calculating after tax returns. This is especially noteworthy in light of 50% portfolio turnover. Does that not bring about larger "extra taxation", particularly over long investing horizons?

Buy and hold forever indexing would appear to be much more tax efficient. What am I missing?
ockham
Veteran Contributor
Veteran Contributor
Posts: 2214
Joined: 04 Apr 2006 21:50
Location: The Prairies

Re: Dogs of the TSE

Post by ockham »

Jack Bogle is always interesting. The linked speech on RTM from June 2002 is no exception. Thanks for the link.

A line in the fourth paragraph captures the thought I attempted upthread:

"I've learned that to discover the priceless jewels of simplicity, it's often necessary to cut through a swath of complexity."
like_to_retire
Veteran Contributor
Veteran Contributor
Posts: 5923
Joined: 27 Feb 2005 07:14
Location: Canada

Re: Dogs of the TSE

Post by like_to_retire »

gsp_ wrote:
and of course I don't consider the extra taxation that an ETF or fund is subjected to, so I feel I'm being pretty generous to the base TXLX-I index as my comparison.
I find this talk of "extra taxation" peculiar when there doesn't appear to be any attempt made at calculating after tax returns. This is especially noteworthy in light of 50% portfolio turnover. Does that not bring about larger "extra taxation", particularly over long investing horizons?

Buy and hold forever indexing would appear to be much more tax efficient. What am I missing?
Yeah perhaps, hard to say. Certainly the capital gain on the index share price would be deferred and would work to its advantage over the long term.

Although, I've been hit with some pretty nasty re-invested distributions with ETF's in the past, and not to mention the index churning creates taxable capital gains on the T3 every year, along with regular income generated by the index and foreign income that don't enjoy any dividend tax credit.

Hard to say. The BTSX generally doesn't churn 50% on a regular basis. Some years nothing happens.

ltr
Post Reply