Money Matters - Investing Part 2: The Why

Introduction
Welcome (back) to Money Matters, a weekly-ish discussion group relating to topics of personal finance and financial education/literacy.

Attendees are encouraged to share their personal experiences related to finances to help others learn and achieve their financial goals.
It is planned to repeat all the sessions from last year for those new to the group in the last 6 months, or those who couldn't attend.

Topic
The topic will be Investing Part 2: The Why.
Now that we have some idea about the domain of investing, we need to figure out what actions should be taken.
A proposal will be made on what the average investor "should" (in my opinion) be investing in. Supporting arguments, research, and statistics will be presented and discussed.

Discussion Prompts / Questions

• Diversification is referred to as "the only free lunch in investing". What does this mean, and why is diversification useful?
• Is it common sense to invest in passively managed, index-based funds?
• Are there financial theories that support passive investing?
• SPIVA (Standard & Poors Index Versus Active) research contains over 20 years of data comparing the performance of actively-managed funds and passively-managed funds. Do you think one management style outperforms the other?
• Do you know how big bank (RBC, TD, etc) mutual fund fees compare to those of passively-managed ETFs? How much of an effect does this have on your portfolio over a long period of time?

Additional Materials
Some materials relating to this topic are:

• (reference) Efficient-market hypothesis and Random walk hypothesis
• (reference) SPIVA Research
• (video) International Diversification
• (book) The Little Book of Common Sense Investing
• (book) A Random Walk Down Wall Street

Soliciting Notice
Any attempts to advertise, promote, or sell financial products and/or services will not be tolerated.

Financial Advice Disclaimer
The information provided is for general informational purposes only and should not be considered personalized financial advice. Consult with a qualified financial professional before making financial decisions.