Successful, long-term investing comes from diversifying across asset classes - bonds & equities - and within equity classes - domestic stocks & foreign stocks. One can slice & dice - large cap, small cap, growth, value, etc. or one can keep the mix fairly simple. Re-balancing annually to maintain a target asset mix is important because it forces you to buy low and sell high. This is a far from easy task and would have required you to sell equities and buy bonds through much of the dot.com bubble market and buy equities and sell bonds through much of the post bubble collapse. To get around this problem, you could arrange with an advisor to rebalance your portfolio of index funds in exchange for a very small fee or buy a balanced fund. You surrender control over the asset mix and you assume manager risk. An alternative would be TD's Managed Index ePortfolios where you can select from among 10 asset mixes and thus avoid manager risk while hopefully finding an asset mix close to your preference.

Cost is important and will significantly affect your long term results. The average mutual fund in Canada has a MER of around 2.5%. That means that over ten years your total return has been reduced by 22.4%! And the majority of managers do not beat the relevant index. Some do but there is not way of knowing who they are in advance. "Only with information beyond historical performance should investors choose active managers." Using index funds is the only way to keep costs down and avoid underperforming.

If one wishes to buy individual stocks as part of a long-term strategy, then a disciplined & conservative approach that focuses on risk rather than return will be the most successful one for most investors. That is the focus of this website.