Our hypothetical Stock Portfolio consisting of just VTI ETFs

We’ve been invested in the NYSE and TSX since August 2020. We’ve have only recently started to partake investments in Vanguards Total Stock Market Index Fund ETF (Ticker: VTI). I have increased my learnings multi-fold since I first started investing. An interesting thing that I read recently was that a Low-Cost Index fund will likely outgrow handpicked stocks in the long run. I am here today to test this over a period of about 1.5 years on my own investments in the TSX and NYSE.

I am still new to investing but I do enjoy working with data. And thus, could not give up this chance to test this what-if scenario!

The Question to be answered

Would we be making more money (unrealized) if we were invested in just VTI as opposed to the multiple stocks we own?

Our Assumptions

There are several assumptions that go into this analysis to make this exercise easier for us:

  • The purchase of the VTI stock would be at the exact end of day when we made my stock purchase
  • The results are as of January 30th, 2021
  • This exercise does not consider Dividend payouts but pure unrealized growth
  • CAD is 1.23 times USD at all points in time. This exercise shows results in CAD
  • The exercise allows me to purchase partial VTI ETFs which my trading platform currently does not permit
  • The cost of Commissions of purchasing individual stocks is not included in this exercise

Our Current Portfolio

Our stock portfolio has a current value of $36,086.71. The portfolio consists of 12 stocks and 1 ETF which is VTI (surprise surprise) itself. VTI currently makes up 7% of our portfolio. At the time of writing this, we have an unrealized gain of about 2% (~$700) across my portfolio plus $635 that we made in selling a few shares in 2020.

If we held those sold-off stocks today, our current portfolio would be $37,378. We invested $37,643 since inception across these 13 holdings. And our unrealized loss would be about $265 at this time. Expressed as a percentage, this would be an unrealized loss of 0.70% if we did not sell any investments since inception.  

Our Portfolio if we invested in just VTI ETFs

This is where the data magic happened. We brought in the cost of VTI ETFs into our existing transactions summary. If we bought VTI ETFs on the exact same dates that we bought our 13 equities/ETFs, we would have had 122.92 VTI units on January 30th. VTI is trading at $222.09 USD (or roughly $273.17 CAD) at the time of writing this post.

Our total invested amount (CAD) would be $37,643. Our current investment value (CAD) would be 122.92 * 273.17 which is $33,579. This would mean an unrealized loss of (-$4,065) or about -11%.

In Conclusion !

Had we purchased VTI units (fractional purchases included) on the same dates that we purchased our investments, we would have an unrealized loss of about 11% as opposed to breaking even. This exercise was conducted not to show our stock picking capabilities but purely on a what-if curiosity basis. I will continue to invest in VTI periodically based on the availability of funds while continue to dollar cost average our other blue-chip investments.

Thank you for reading through and please, invest with research and caution.

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