episode: 11

Lessons for the Long-Term / A Tale of Two Decades

September 10, 2020

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About This Episode

For the past ten episodes, we’ve highlighted the key factors you need to understand to be able to achieve financial security. Today, we’re moving in a new direction and talking about current market conditions. The goal of today’s episode is to shed some light on how you can move forward as an empowered investor.

As the end of summer approaches, we’re almost 6 months into the COVID-19 pandemic. Markets have rebounded from the lows we saw in March but while some stocks are booming, others are floundering. In these unprecedented times, it can be difficult to look too far into the future, but we want to encourage you not to get caught up in the short term. We’re going to explore what stocks and sectors are hot, the implications of the current state of the markets, as well as the lessons and tools we can learn from the past two decades.

On this episode, Keith and Marcelo discuss the current state of the stock market, the surprising results of our 1-year and 20-year rankings of 5 major benchmarks, the massive divergence between small company and mega-cap technology stocks, the lessons we can learn from the market cycles of the past 20 years, and so much more!

Thank you for listening!

Key Topics:

  • An overview of current market conditions (1:31)
  • Reviewing the one-year return rankings for our benchmarks as of June 30, 2020 (3:45)
  • The five benchmarks we chose for our review (4:45)
  • Why we’ve seen a massive divergence between small company and mega-cap technology stocks (6:00)
  • What are fractional units? (7:11)
  • How fractional shares have changed the accessibility to capital markets (7:34)
  • The impact of stories on investor behavior (9:37))
  • How the market cycles of the last 20 years can help us (11:13)
  • The surprising twenty-year return rankings for our benchmarks (13:02)
  • Why it’s important to look at compound returns (14:12)
  • What you need to know about the NASDAQ (16:57)
  • NASDAQ performance over the last 20 years (17:23)
  • Comparing Toyota and Tesla (18:57)
  • Zooming in on the trends in the NASDAQ performance in the 2000s and 2010s (20:39)
  • What you need to know about the S&P 500 (22:26)
  • How did the lost decade affect the S&P 500? (23:03)
  • Why having a long-term mindset benefitted investors over the last 20 years (23:47)
  • What is the Teranet House Price Index? (25:39)
  • The implications of the current state of the Canadian housing market (26:39)
  • Trends in Canadian bond performance since the 1940s (27:10)
  • Why small company stocks still have a place in a diversified portfolio (29:40)
  • How Odysseus can help you to protect your portfolio (31:24)
  • What the movie Gladiator can teach you about the value of following a strategy (33:49)
  • Why we recommend having and following an investment policy to help with discipline (35:57)
  • The significance of maintaining a diversified portfolio and patience (36:35)
  • Marcelo’s reflections on his podcasting experience so far (37:20)
  • And much more!

Meet your hosts

Keith Matthews

Keith Matthews

Partner & Portfolio Manager

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Ruben Antoine

Ruben Antoine

Portfolio Manager

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Marcelo Taboada

Marcelo Taboada

Associate Portfolio Manager

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Thanks for Listening!

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