What is going on you guys and welcome back to the channel. Today's topic of the video is should you be investing in ETFs or individual stocks? And this is an interesting one for me to speak on because as of today, I just checked my portfolio is 96% ETFs. I'm almost entirely passively investing at this point, a passive investing strategy. You guys know if you've been following the channel for a while, that wasn't always the case. About a year ago now, my portfolio was 100% individual stocks. And over my lifetime as an investor, I've essentially gone from mutual funds to entirely individual stocks to now entirely ETFs. And I feel like I have a bit of experience now to share seeing both sides. If you're curious why, oh, why are you filming this video from a car? I didn't go into the office today. In fact, I didn't go into the office this week because we did uh welcome baby number two to the family. And there's my big, I guess, personal life announcement for you guys. Super excited to see the family growing. And thank you in advance for all of the, you know, maybe messages or comments down in the comment section. I know a lot of those who have heard it heard about it or seen about it maybe on our Instagram have already reached out. And thank you guys so much. This was one that we did decide to keep like kind of closer to the to the vest. You know, we weren't like too public about this. Yeah. We just wanted to keep it a little more personal. That said, everything is healthy. Everyone's healthy. Mom's healthy. Baby's healthy. Ava's loving being a big sister. And yeah, I've been a bit obviously away from the computer, away from the video camera for the most part, but I do intend to get back to to work pretty soon here, but I did just want to shoot a quick video for my car because yeah, one of the questions I got recently was like, so should I be buying individual stocks or or ETFs? And it's so interesting to me how that's that that's such a pressing question because I think there's actually a very easy answer. I'm going to share with you guys what the way I would do it, the way I would approach it. Obviously, make your own decisions. But I think before you answer that question, ET ETFs verse stocks, we have to bring it back as a DIY investor to what's foundational before that. There's a foundational question or you know, uh there's a question we have to ask and that's more so related to what our particular goals are like what are we aiming for as an investor? What are our goals? What's the objective with our investment? You guys know this very typical, but what's the time frame we're investing for? Ultimately, trying to boil down to what your asset allocation is and what is the appropriate asset mix. When I say asset mix, I'm talking here really like are you going to be striving for more growth, striving for a little bit more safety, security, conservative? What's that breakdown between equities and let's just call it fixed income to be very, very simple. Once you've deemed that, whether you go stocks or ETFs, that's almost like the the followup, right? Whether you're going to go stocks or whether you're going to go ETFs, that's just a product of it's the vehicle that you choose to hit the targets that you set. And I'll give you I guess my case as my using myself as an example. I am now 30 years old. I've deemed that I want to be 100% equities. So in my portfolio, I currently have zero exposure to bonds or fixed income. Actually, I don't have any real exposure to cash either. I'm pretty much fully invested uh in equities. I'm striving for growth. I have a roughly 30 to 40year time frame before I plan on tapping into this money. This is truly my money for retirement. And all the data, I guess, would suggest for me that I'm okay with the volatility. I'm okay with the ups and downs of the stock market. I want my money to be fully exposed to growing assets such as, you know, large cap US stocks, Canadian stocks, global stocks, whatever that may be. I can then therefore choose whether I want to go ETFs to do that or I want or I can choose to go with individual stocks. You may be watching this video and you're, you know, a 50-year-old or maybe you're even older or for whatever reason, maybe you're not older, but you just have more of a conservative approach on the market. Well, maybe you want to go for a 60/40 split or a 7030 split or an 8020 split between equities and fixed income. That's your prerogative and that's all for you to decide. But then you're essentially just slotting in that exposure with either the ETFs or either the um individual stocks. Now, I want to talk and share now that I've been in ETFs for over a year or probably just coming up on a year. The major major benefit of this passive investing approach or passive index investing, whatever you want to call it, essentially where your portfolio is situated in a ETF or maybe a couple ETFs that are broadly tracking the market. I personally at this phase of my life don't have to monitor what's going on in the markets and this is a very very different situation than I think of even just a year ago right when I had my portfolio of individual stocks but certainly when I was like working with my father if we go back a number of years when I was actually licensed and working managing a portfolio of 26 I believe it was individual stocks it's night and day the amount of attention and mental energy that you have to commit to um the stock market or at least not necessarily stock market but keeping up with your holdings, keeping up with in in general some I guess economical factors and what's going on with our world. There is a spectrum and if you're going to go the route of individual stocks, if you want to do it responsibly and if you want to do it accurately and and well, you do have to commit and you do have to dedicate x amount of time and mental energy to keeping up with those stocks, looking at the different opportunities, looking at um what's happening out in our world versus the passive approach going full ETFs. Honestly, once you've picked the ETFs and you've kind of set those targets that you want to go for and you've taken, you know, done your research and picked the funds that you that's going to help get you to that goal, very honestly, you don't really have to look at it at all. And I like I thought this would be a really good timely video with the announcement of the new kid and then looking at my situation as a great example where as you go through life, I think different life phases and different like time frames of your life may call for something very very different. And obviously family being a big one that does take a lot of time. That to me is a very logical reason why taking the more passive ETF approach may be more logical. Maybe it's something to do with work. Maybe your work picks up. Maybe you um are getting pretty focused or invested in your career. Whether that be, you know, at your 9 toive job, maybe that's like starting a business of some sort where you just need to allocate a lot of your attention and uh mental energy towards that. Basically, if you're in a situation in life where you don't have the time or flatout interest, I will say to be managing a portfolio of individual stocks, defaulting to the ETFs, that's where the the the many benefits of a lowcost indexing strategy really come to come to light. And again, from doing this for for a year now, I will tell you it's it it truly is night and day. If you're an investor who on the other hand has time on your hands, you maybe just graduated college, maybe you're in college, maybe you're someone who is retired and you have a ton of time on your hands, maybe you're someone who just genuinely, you know, throughout the day, throughout the, you know, going about your life, you you want to spend the time researching, keeping up with the threads, seeing what's happening on Reddit, Blossom, whatever the case is. If that's a true passion and interest for yourself, in my opinion, that certainly leans you more towards the root of individual stocks. One of the big questions I think a lot of people get is like performance, like, oh well, what's going to give me the best performance or what's going to get me the best return? We've chatted about this much uh on the channel before, so I don't think we need to go back to like really the bare basics of it, but essentially, if you're going to replicate uh and just track the index, which is essentially what my portfolio does, if you look at my portfolio, it's basically S&P 500 about 50%. Uh, I have an all-in-one ETF in ZQT, which gives me my global exposure. And then I personally have about 13% of the portfolio allocated to uh, the Asian markets to China. Let's just call that like a broad global exposure. You're going to just track and accept the return of the benchmark or accept the return of the index. You're not really going to outperform. You don't really have the chance to outperform. You don't really have the chance to underperform unless you as an investor are doing something poorly in terms of your behavior, like you're pulling money in and out. If you were to just literally set it and forget it and leave it, you're accepting the return of the markets. And essentially, let's just call it, you're taking the average. Now, again, in my case, it's slightly different because I I'm slightly more active where I have the higher Asian Chinese exposure, tipping a little bit more on the active scale, but at the end of the day, it's still a very passive approach, but let's just call that if you default to ETFs, you can expect or plan to expect the average market benchmark uh benchmark return. And there's nothing wrong with that. It's funny when you kind of talk about that and you say like, "Oh, the average return." It does almost have like a negative um sound to it like, "Oh, you're just accepting to be average." I remember one of my favorite quotes who which I believe was from Warren Buffett. It might not be Buffett, but it was from someone and he said, "One of the best skills or one of the best traits you can exhibit as an investor is learning to be okay with being average." So accepting the fact that as an investor being average is okay if you can be average time and time again and essentially be consistently average over the course of your your life, right? And in my case, again, I'm a 30-year-old here. If I were to consistently accept the average return of of the let's just call large cap equities of 7, 8%, 10%, again, depends on the market you're looking at, that's where you can get the power of compounding working for you is when you can just be happy with being average. So, all that to say, the passive investing approach, you don't necessarily have the opportunity to outperform. You're not really going to underperform. You're going to be average, but there's nothing wrong with that. And in my opinion, that's actually one of the best things we can do as an investor. Of course, especially nowadays, I don't know if you guys are following certain companies and certain stocks, but over the past number of years, and not just number of years, this is at any given point in the stock market's history, if you are an individual stock investor and you're building a portfolio of individual stocks, you absolutely have the opportunity to outperform and all it takes is one good stock or skewing your portfolio in such and such way to really ride um and benefit from a stock's good performance. There's a million examples we can think about in recent history, whether it's an Nvidia, whether it's a Tesla or more recently a Palanteer, it it doesn't matter what the stock is, there will always be opportunities. And if you're an investor who wants to essentially play a more active role and be involved in that process, then up to you. you absolutely have the opportunity there. Of course, what comes with that is the opportunity and the chance at underperforming. I guess if the data if the data tells us anything, this is where I think um before I wrap it up the video and talk about what I would do, like if I were starting from scratch or if I was in your shoes, how would you go about doing this? I think the data suggests that for the vast majority of people, like literally, let's just call it the masses, likelihood, well maybe not likelihood if you're watching this video and investing is part of what you care for and are highly interested in, but for the vast vast majority of people, trying to build a portfolio and outperform the market with individual stocks is likely is likely going to come back to bite you in the butt. And when I say bite you in the butt, does that mean you're going to lose all your money? Does it mean you're going to go bankrupt? You're going to go broke? Obviously, if you're dealing in, you know, meme stocks and penny stocks, in my opinion, it probably will uh come back to bite you in the butt. But just for the vast majority of people, you're you're likely going to be better off just taking that average return than trying to be um you know, shoot for outperformance by building a portfolio of let's say all individual stocks or at least even skewing significantly more into individual stocks. It doesn't mean that it can't be done. And you guys know for 10 years I managed and loved like loved enjoy uh enjoyed managing a portfolio manual stocks. Keep in mind what I was doing full-time as a career, you know, working when I was working with my father for four years. And when I went out and got my license, my 9-to-f5 was looking at companies and look at earning reports, earnings reports, staying up to date with what's happening in our world. And that was just like fully consuming, you know, that was I was fully consumed by that lifestyle. So of course it's a lot more logical for someone in that in that position to be more involved and be more active. That's a decision that you have to make again a from an interest level and from a time perspective like is it realistic that you can can and want to dedicate that time. You need to pick a strategy or pick the vehicles like the investment vehicles. And when I say vehicles I'm talking here about what assets you choose to buy. You have to pick one that suits your lifestyle. And interestingly again different phases of life may call for something very different. And although you know you may over your lifestyle over your lifetime change the different investments you choose the objective doesn't change right the objective doesn't change when you're striving for long-term you know growth for retirement or if you're an income investor those objectives and those goals stay the same but the vehicles whether you're buying dividend stocks or a dividend ETF that absolutely can change. What I'll finish off with is if I were kind of just giving my my opinion on it, how would I go about building a portfolio from scratch or if I was new and I was making this decision, I would certainly follow what's known as the core satellite strategy. Now, the core satellite strategy essentially takes your your money. Let's say you have $100,000, $10,000, doesn't matter. But when you break it down, you have the core or the foundation of your portfolio set and dedicated to ETFs. certainly if you're a beginner. Now, this core satellite mix can skew and it can change, but the concept is you have the vast majority. I would go as far as saying, let's call it 90%. Um, again, if you want to be a little more aggressive, it could be 70% ETFs. It could be 50/50. Think about the core satellite. You want it to be the core. You want it to be the vast majority. Yeah. The foundation of your portfolio is in these broad-based ETFs where you know you can accept the average return. That's something like the S&P. That's something like uh the NASDAQ, whatever that may be, maybe more of a balanced fund if you're maybe an older investor, that represents, let's call it, 90% of your portfolio. Then with the other 10%, you can go out and have some fun and buy your individual stock. Buy a company that has the chance at driving your portfolio return up. To me, that is like literally if someone were ask me how would I go about starting right now, I would say you either go 100% ETFs to start or if you do have that itch and that desire to go individual stocks, um, work them in in that satellite component. And I guess I never really explained it, but if you kind of have a satellite, that's kind of like the, um, peripheral part of the portfolio, but you know, your foundation is set and laid with the ETFs. At the end of the day, it's as simple as that, you guys. with time. Like if if you're watching this video and you're a new investor or you're a beginner investor, you will be able to tell like you'll know whether you're enjoying and you know loving the process of learning more about companies and you're getting deeper and more intertwined in the investing field with time as your experience grows and as your knowledge grows, you can start to work in more and more individual stocks. Again, I'll bring it back to my time frame that I kind of touched on at the top of this video. When I started investing, I started investing in mutual funds. So that's I guess how long ago it was. ETFs weren't even I don't even think they were available. They certainly weren't popular uh when I first started investing. I did, you know, thanks to my dad, buy two individual stocks. So that was McDonald's and Coke. You guys know that story. But those were just kind of like fun holds. My portfolio was mutual funds until it got to the point where I gradually wanted to transition that into individual stocks. Again, I've gone really a full circle moment. um bringing it back to the ETFs and um yeah all that to say you guys can have success as an investor in many different ways and I think it what's most important is just finding what works for you what works for you or what's working for me may not work for XY Z person that's the magic and that's the fun about DIY investing is that every single person can find a different strategy or approach that works for them it takes time to kind of identify exactly what that is but as a base default. I think you it's very hard to go wrong if you, you know, fall back or lean on those ETFs to start and then work in individual individual stocks. Apologies if I'm rambling if I'm tired. I have a 4-day old uh at home who's up all night long. And surprisingly, it's actually not the four-day old that's more tricky. It's the three-year-old. So, it's uh it's Ava that's giving me the um the the troubles. So, yeah. I apologize for the lack of sleep, but I did wanted to come and just shoot a quick video. A to give you guys an update and b to talk about this topic. I'm very curious to hear what you guys think or what you guys do. Do you guys uh agree or disagree with what I'm saying? Uh definitely like open to any thoughts down below. I am also curious, you know, maybe for someone who's been through a similar situation where life changes or your your situation changes, have you also made those, you know, changes to your portfolio as well? I'm curious. Leave a comment down below you guys, but I will wrap up here. Hey, if you enjoyed the video, give it a thumbs up, share your thoughts, and as always, I thank you for watching. I hope you enjoyed, and I'll see you in the next video.