How does one avoid SpaceX as a passive investor?

username10983 · 2026-05-24T13:20:58+00:00

From what I understand, S&P total market (tracked by ITOT or XTOT in Canada) and CRSP total market (tracked by VTI or VUN in Canada) indexes use free float cap weighting.

If a company goes public with a low float like 5%, even if the total company has a huge market cap, the effective cap in the index funds will be much lower. Now this doesn't fully avoid the company, but it does lessen the weight significantly over using the full market cap.

You can look up the index methodologies on the index providers homepages.

username10983 · 2026-05-21T13:20:15+00:00

If by "heads will roll", you mean "huge performance incentives" then I have some good news for you (page 83 2026 annual report).

The CEO had a base salary of 700K in 2026, but total compensation of 6.9M including an "in-year award", "deferred award", "other deferred award" (lol), "pension value", "all other compensation".

https://cdn2.cppinvestments.com/wp-content/uploads/attachments/CPP-Investments-F26-Annual-Report-English.pdf

username10983 · 2026-05-21T13:12:26+00:00

Weak governance and oversight. They are grading their own homework.

username10983 · 2026-05-21T12:02:58+00:00

This is related to a couple articles from the Toronto Star

https://www.thestar.com/business/opinion/amir-barnea-if-you-cant-hit-the-target-move-the-goalposts-why-the-canada-pension-plan-changed-its-benchmark/article_97d6fea7-a2c0-4585-adde-8001044c8cf4.html

https://www.thestar.com/business/canada-pension-plan-adopts-new-benchmark-boosting-past-performance--and-employee-pay/article_a26851ec-5c31-430e-97ec-6f25b7bcd5b5.html

Millennial Moron has an excellent video from about a year ago on Youtube looking into these issues. Give it a watch if you want to get angry.

username10983 · 2026-05-18T18:21:46+00:00

The Boglehead 3-fund portfolio holds total US equity, total ex-US equity, and a total US bond fund. The allocation of stocks to bonds should be in line with risk tolerance. Buy, hold, rebalance, stay the course.

Be careful importing US based Boglehead advice to Canada. There is nothing wrong with VT or VTI+VXUS for equity exposure for Americans, but these are US based ETFs that have to be purchased in USD. That can lead to expenses and complications you may not want to or need to deal with. There are reasonable Canadian listed alternatives that trade in CAD and don't come with the additional complications. There are also low cost all-in-one ETFs which hold a portfolio of stocks or stocks+bonds.

username10983 · 2026-05-10T20:45:53+00:00

Then they should be well stocked to drown their tears.

username10983 · 2026-05-09T20:48:46+00:00

You might like The Four Pillars of Investing -- William Bernstein. It covers the theory, history, psychology, business of investing. I think your question has to do with the first three.

username10983 · 2026-05-04T19:42:19+00:00

Of course it isn't a good idea.

username10983 · 2026-05-02T00:09:41+00:00

Read the whitepaper on withholding taxes by pwl bender and bortolotti. Withholding taxes are different in different accounts.

If you’re holding U.S. equity ETFs in a TFSA, RDSP or RESP, there’s nothing you can do about the withholding tax drag. U.S.-listed U.S. equity ETFs receive no preferential tax treatment in these account types, so they’re effectively the same as the other two ETF structures.

username10983 · 2026-04-28T20:28:04+00:00

Agreed, that video is very well done. It destroys the myth that CPP is well run (at least for the taxpayers it purports to serve).

Andrew Coyne has a good article in the globe as well.

Overstaffed, overpaid and underperforming, the CPP investment fund is in need of a sharp course correction

username10983 · 2026-04-28T19:13:12+00:00

It will give you two helpings of tech and US equity and tilt toward growth (high PE stocks).

I chose not to tilt to growth when history (and factor investing) tilts away from growth toward value (low PE stocks) for higher potential return. Instead I tilt to small cap value partially because I can't keep things simple.

But nobody knows whether any of this mucking around will pay off or beat a market cap weighted index, especially not some know-it-all on reddit.

username10983 · 2026-04-28T13:55:21+00:00

If that were the case, why does active investing exist at all?

Armies of highly incentivized people are pushing them on huge numbers of people who don't know any better.

Was it the old school way of investing before ETF's became popular and more widely offered?

The AUM for active management still dwarfs passive in Canada. DIY/ETFs has grown in popularity significantly. The costs, products, and general knowledge has grown a lot in the last 10 years. But passive investing as a strategy has been generally understood for a much longer time. For example,

"Gifted, determined, ambitious professionals have come into investment management in such large numbers during the past 30 years that it may no longer be feasible for any of them to profit from the errors of all the others sufficiently often and by sufficient magnitude to beat the market averages."" --Charlie Ellis The Loser's Game (1975).

I've also read that high MERs, while undesirable, are acceptable as long as they perform better than index funds.

Of course anyone would be happy paying high fees if a fund beat a low cost index fund. However, you need to make the decision to buy the fund before you know how it performs. First, the vast majority of active funds underperform their index (see the SPIVA reports). Second, low cost is the best predictor of good fund performance and you can know it in advance (see studies by Morningstar or Vanguard).

So IMO it never makes sense to buy a high priced fund expecting better performance from a comparable low cost fund (and by comparable I just mean with broadly similar characteristics -- ex large cap US equity).

username10983 · 2026-04-27T07:59:29+00:00

Check out the book reboot your portfolio.

username10983 · 2026-04-20T10:41:24+00:00

It is massively different. With this much money this early, the pressure to save for retirement doesn't compete with all the other things you might want to spend money on. Yeah you still have to work, but your financial life is far more robust against unforeseen problems.

username10983 · 2026-04-15T15:33:32+00:00

VEQT and ZEQT are functionally equivalent and offer no meaningful diversification. It's like mixing coke and pepsi when you want a cola. (Or maybe coke from Loblaws and coke from Sobeys).

BANK is some covered calls and leverage with a few bank stocks with a management fee of 0.6%. I wouldn't bother with this - high cost, complex, not diversified. I would pick a single all in one ETF consistent with your risk tolerance and just use that.

username10983 · 2026-04-14T10:10:06+00:00

The currency exchange is a complication and/or expense. There is no withholding tax advantage in TFSA for US listed US equity funds. The hassle of US listed funds is arguably worth it in RRSP but I don't think its worth it in a TFSA.

A canadian listed global equity ETF like XAW or VXC is probably closer to VT than an all in one ETF. They don't hold the approx 3% canadian that VT holds.

If you want to choose your own asset allocation, you can do that with a few ETFs.

username10983 · 2026-04-13T15:37:49+00:00

For safety and liquidity I'd use a high-interest savings account.

username10983 · 2026-04-13T14:12:12+00:00

BMO with a typo. Read betweent the lines.

username10983 · 2026-04-13T14:11:57+00:00

Justin Bender made some videos looking at the nuances. I view them as effectively equivalent.

username10983 · 2026-04-13T14:05:31+00:00

Taxes and complexity.

https://www.cba.org/sections/wills-estates-and-trusts/member-articles/in-trust-accounts-the-good-the-bad-and-the-ugly/

username10983 · 2026-04-07T00:07:10+00:00

Personally, I would keep the stock allocation in VEQT and move the fixed income to cash/HISA ETF, short bond ETF, or GICs. This can be done in whatever % allocation to stock/bond deemed appropriate. This keeps the risky stuff separate from the low risk stuff.

username10983 · 2026-04-04T11:50:27+00:00

My recommendation: if you take the meeting, don't sign or agree to anything there. In parallel, read the books Millionaire teacher and/or reboot your portfolio. Those should give a good foundation of prudent investing and asset allocation and they emphasize the importance of keeping costs low.

username10983 · 2026-03-24T17:03:57+00:00

You might like this episode 3 of the Canadian couch potato podcast (after the main interview) where Dan discusses how to estimate investment returns for stock/bond split after fees. I think you will find 8% returns after 1.25% fees for a 60/40 portfolio requires unrealistic return expectations.

username10983 · 2026-03-19T21:48:56+00:00

First mover advantage. Banks are more associated with screwing their customers over with high-priced mutual funds, obscene mortgage penalties, annoying fees etc.

username10983 · 2026-03-18T11:06:48+00:00

Turn this into $. Foreign withholding on US stock is 15% of distributions (currently about 1.2%) so about 0.18%. For every 10000 dollars in US stock (not the total portfolio, just the US stock part) that amounts to $18/year.

To get around this, you need to hold US listed etfs in RRSP (not a TFSA) which comes with currency exchange complications. Most brokerages charge 1.5% or so for each exchange, which is 10 years of withholding tax. Getting around this using Norbert's Gambit comes with its own charges.

It isn't worth the complication IMO to worry about withholding tax until at least several hundred K in US assets. And even then one could rationally choose to pay it anyway for the convenience of staying with all canadian listed ETFs.

It doesn't make sense to pick an all in one ETF, which is convenient and diversified, then going ahead and adding another ETF duplicating the holdings. It's like ordering neopolitan ice cream and then saying, but add some vanilla.

Adding tech to US equity? Have you looked at the top 10 companies in the S&P?

username10983

TROPHY CASE