Main Menu

What can we do for you?

  • Identify the many Myths in the financial system, including the dream of “beating the market” through individual stock selection.
  • Identify the key factors to becoming better do-it-yourself investors AND identify those which are under your control, such as an optimum allocation of your investments across appropriate asset categories.
  • Accompany you each step of the way in the saving and investment process- see our User Guide.
  • Help self-investors to better control their costs, what Warren Buffett calls the financial system’s friction costs.
  • Help you better use your tax-exempt (RRSP) account.
  • Show you how to minimize your tax-related investment costs.
  • Give you access to information to help you better manage a portfolio intended to constitute an important source of retirement income.
  • Identify areas where the financial system does not adequately take into account the interests of independent investors.
  • Encourage reforms to the regulatory system.


Help us to help you become a better independent investor. Your comments are appreciated and welcomed on our commentaries or on any other aspect of the site- not only what you find but also how it is presented. In addition, we specifically ask for your input at various points throughout our site. TopOfBlogs Technorati Profile

Stock Quotes

For more details on the choice and meaning of the symbols click here.
S&P/TSX  14089.68 tooltip

Dow Jones  N/A tooltip

S&P500  2097.43 tooltip

Dollar  N/A tooltip

XIU.TO  20.775 tooltip

IVV  210.88 tooltip

EFA  58.4073 tooltip

EEM  33.14 tooltip

XBB.TO  31.8100 tooltip

Website : Get Symbol Info(s)...



WELCOME to our site for the independent investor which was officially launched March 18, 2008. Become a member (it’s free) and enjoy full access to the site + receive on a preferred basis our weekly newsletters. Our site has been described as one of the few educational websites that offer the unbiased, clearly written material that busy investors need (The Globe & Mail 30 05 2008) and as a site dedicated to providing individual investors with independent, objective, free advice and information (The Gazette, Montreal 31 03 2008). See In the Media under the tab Media on our home page. MEMBERS-PLEASE NOTE: Depending on your software and internet provider, it may be necessary for you to add to your list of safe contacts in your spam filters. Otherwise, you may not receive our newsletters. Our newsletters notify our members in priority of our commentaries on current events and other topics of interest. If you miss a newsletter, it will eventually be filed on the site at a later date under Information on the home page. We are also on Twitter under DIYInvestor.



The financial markets in 2011: how did your portfolio do? Print
2011images_150x150.jpgThe beginning of a new year is the ideal time for all of us to critically review the performance and composition of our portfolio. In this commentary on the year 2011, we look at how the various financial markets behaved, and the performance that would have been produced by a portfolio created following some admittedly arbitrary criteria but which are nevertheless based on the philosophy of our site. We hope it will encourage you to look at the returns and composition of your own portfolio, and consider what changes might be appropriate.

First, a recap: 2007 to 2010 financial markets
Many of the factors at work in 2011 are the same ones that affected prior years. So let’s start with a recap of those years.

We performed the same exercise for the years 2010, 2009, 2008 and 2007, and it is interesting to note how the same factors influenced results in those years, but not always in the same direction; see for example  The financial markets in 2010: how did your portfolio do?  

  • The equity markets, while performing positively but modestly in 2007, were directly affected by rising oil prices with the resulting dramatic increase in the Canadian dollar against the U.S. dollar and to a lesser extent against the euro.
  • In 2008, just the opposite: the equity markets plunged, and the price of oil plummeted, causing a sharp fall in the Canadian dollar against the USD and against the euro; this sharp drop cushioned equity losses for Canadian investors.  
  • In 2009 the price of oil rebounded sharply (without threatening the historic highs of 2008), the Canadian bond market remained relatively stable, the housing market hit its low in May and ended up for the year in Canada, the Canadian dollar rose against almost all currencies, and global equity markets, after hitting rock bottom in March 2009, made a spectacular recovery.
  • In 2010, the price of oil rebounded  sharply towards year-end ( without threatening the historic highs of 2008), the Canadian bond and residential real estate markets remained strong, the Canadian dollar, propelled by the comparatively better economic performance of the Canadian economy and by rising oil prices rose against almost all currencies, and the canadian and most other equity markets for a second year experienced strong numbers.

2011 financial markets

In 2011, the price of oil and of gold were up 10%, the Canadian bond and residential real estate markets remained strong, the Canadian dollar did not benefit remaining essentially flat against the US dollar and Euro, and the canadian and most other equity markets had negative total returns, while the US equity market total; return was marginally positive..
When the dust had settled here are the numbers for the year 2011:


Reference index recommended by our site

Returns in 2010

 ( %)

debt- Canada

DEX Universe Bond Index


Equity- Canada

S&P/TSX composite 




2.1% (in $USA) (2.1% in CDN $)

Equity- other developed countries 


-12.1% (in $USA) (-12.0% in CDN $)

Equity- emerging markets 


-18.4% (in $USA) (-18.3% in CDN $)







Sources: Bank of Canada US$- Bank of Canada Euro; Standard & Poors 500; Standard & Poors TSX Composite; " target="_blank">MSCI EAFE & EM; PC Bond Analytics PDF doc.2079. Gold was up 10.1% (US$) and oil (WTI- US$) was up 10.0%; source The Capital Spectator . For other discussions of 20112, see Bloomberg (2nd also here ), Capital Spectator , Abnormal Returns , Ritholtz (2nd also here ), OldProf.Typepad , and CanadianCapitalist (also 2nd here ).

NB- For the returns of the various markets for the past 10 years, and for more information on the major indexes, see Investment Returns and Indexes on our site. Before discussing the figures for 2011, we want to draw the attention of our readers to a free and very useful Canadian source where you can find centralized financial data of historical data since 1982: it is the site of Libra Investment Management (see on their website under Links-Research. Libra describes itself as a fee-only adviser who draws its compensation solely from its clients, an approach favored by our site; see the section Independent Adviser on our site. {mospagebreak

Structure of our model portfolio
Given the above results of the various markets, what was a realistic performance in 2011 for a Canadian investor?

First, our site does not believe that the average investor can regularly and in the long-term, beat the market; for more, see the sections Our Philosophy and Beat the Market? on our site. Under this approach, for investments in stocks, exchange traded funds or index mutual funds are ideal; see on our site Index Funds (ETF’s and index mutual funds) . With these products, you will realize long-term returns approximating the returns they track (less management fees, which are typically modest for these products). For investments in debt securities, to minimize costs and portfolio volatility, we recommend avoiding if possible bond funds and to invest in individual debt securities using the bond ladder method; we consider provincial bonds as the ideal product for this approach. See Building a ladder on our site. 
But what percentage of your portfolio should be invested in the various markets? This issue is by far the most important factor in determining the performance of your portfolio; we discuss it in detail in the following sections of our site; Asset Allocation and Geographic diversification . For the purpose of our annual reviews we assume that our hypothetical portfolio is composed of the following:

  • The portfolio is divided 50-50 between stocks and bonds (a division which we recognize to be conservative)
  • bonds are limited to the Canadian market (non-Canadian readers: beware); 
  • the equity portion is invested 25% in Canada (which is a heavy weighting given the small size of the Canadian equity market in global terms); 
  • the balance of the equity portion is invested equally between the U.S. market and other foreign markets, which roughly corresponds to their respective weights in global markets; and
  • investments in those foreign non-USA markets are divided equally between developed and emerging countries.

 NB: It goes without saying that such a portfolio will probably not be appropriate for you as an investor, but it nevertheless gives you a starting point when analyzing your own portfolio. Calculating returns is not the easy exercise it might appear at first glance; see CanadianCouchPotato or as a PDF doc.1967 or on our site Investment Return Measurement .

Returns in 2011 of our model portfolio

In 2011, our model portfolio would have achieved a positive return of 1.4% for a DIY Canadian investor. Why?
In 2011, the portfolio was saved by the 50% weighting in bonds, which offset poor equity returns in Canada and most places outside Canada; the Canadian dollar had little impact. In comparison, in 2010  the portfolio was penalized by the same 50% weighting in bonds and by the dollar impact on foreign equities.

For the previous 4 years this hypothetical portfolio had produced the following results: 0.0% in 2007, (12.28) % in 2008, 15.1% in 2009 and 8.6% in 2010. For those interested, The Capital Spectator doc.1968 has presented not only annual returns for various markets in 2010, but also for the past decade. The big picture  is a very modest, annual return of 2.4% over the past 5 years for our model portfolio- not a very encoraging result, but a correct reflection of poor markets over that period.
Other comments on our calculations:

  • some of our figures and calculations may be imprecise, but the trends and overall message remain the same.
  • the theoretical portfolio contains no management fees; in reality investments in equity index funds require payment of modest management fees, and equities and bonds involve transaction costs. For the major ETFs, see our commentary Portfolio Management 5 - ETFs for your portfolio . The trick is to minimize costs; see Costs of investing on our site.

Last Updated ( Saturday, 28 April 2012 )
< Prev   Next >

No account yet? Register


Your efforts have paid off. You have ended up on a site which is focused on delivering investment information, not selling you financial services or products.

Our site is not associated with, and accepts no financing, advertising or other financial assistance from:
  • Banks
  • Insurance companies
  • Investment dealers or
  • Financial advisors.


  • Help you become a better independent self investor.
  • Be a source of free, objective, independent and unbiased investment information for self-investors.
  • Build on our past to earn the trust of Canadian and non-Canadian do-it-yourself investors. Our founder has several years experience with a securities regulatory agency and over a quarter century of experience with two blue chip Canadian securities issuers.
  • For more, see Who are we?

Learn more about us

  • we are on Twitter under DIYInvestor
  • Take 15 minutes to read the Summary.
  • To assess the credibility of our site. It’s the best investment decision you will make today.
  • The information on self investing is divided into 44 sections (and counting) which are organized under eleven main headings or topics. Click on Themes at the top of this page for a short summary of the information covered under all of the topics.
  • For a list of the sections under any particular theme, click on the name of that theme at the top of this page.

Who should visit our site?

  • You are an independent investor looking for investment information focused on the needs of  do-it-yourself investors.
  • You are a novice in investment matters, but are considering becoming more independent in your investing.
  • You trade in reliance on a financial advisor, but wish to better use his services, or perhaps understand the other alternative trading methods.
  • Perhaps you see self investing as a retirement project, or are merely curious about the world of investing.
  • Perhaps as a result of your professional activities (institutional investor, broker, professor or journalist), you seek access to a non-industry source of objective investment information.

We intend to regularly circulate by email newsletters to our members. To access our newsletter, click here. We are also on Twitter at Our Newsletters typically contain an in-depth commentary on a timely subject. The most recent commentaries are on our home page. Older commentaries can be found in our Archives, where they can be found by scrolling through the headings or by using the Search function.