I really don’t get the tendency of investors these days—whether it’s ETFs or meme stocks—to form parasocial communities built around communal shareholder (or bagholding) misery.
For the love of everything sacred, investing is not a team sport. If I could screw over 1,000 of you to earn a better return, you better believe I would. None of this "ape together strong" or "diamond hands" nonsense. Investing is a zero-sum game, and you’re not helping anyone by pretending otherwise.
Even Bogleheads—the people who swear by low-cost indexing—are guilty of this. Take something as straightforward as the iShares Core Equity Portfolio (TSX:XEQT).
On paper, it’s a great investment: a diversified portfolio of over 8,500 stocks across the U.S., Canada, internationally developed, and emerging markets, all wrapped up for a 0.20% MER. But even XEQT isn’t immune to this groupthink.
There’s now a Reddit community—r/JustBuyXEQT—that’s slowly turning into a full-blown cult, and the recent market correction has only made things worse.
The whole "DIY with index funds" movement might have started with good intentions, but at this point, it’s probably doing more harm than good. Here are some examples.
Recency Bias
Recency bias is when investors put too much weight on recent events and assume current trends will continue indefinitely. Right now, it’s manifesting as investors fleeing U.S. stocks and shifting into international markets after Donald Trump’s policies impact the economy.
Case in point: A poster on r/JustBuyXEQT recently asked, “If the United States becomes less powerful as a market, can BlackRock (NYSE:BLK) rebalance XEQT to include less U.S. and more Europe?”
This completely misses the point of XEQT in the first place. It provides a static asset allocation, currently 25% Canadian equities, 45% U.S. equities, 25% international developed market equities, and 5% emerging market equities.
BlackRock even states in its documentation that while frequent changes to XEQT’s long-term strategic asset allocation are not expected, it technically has the discretion to make adjustments.
So yes, BlackRock can change the allocation if it ever sees fit. No, it would be stupid to do so right now just because people are chasing recent performance.
The whole point of this ETF is to set it and forget it. If you’re glued to the news cycle and worrying about rebalancing every time a political event shakes the market, you’ve completely defeated the purpose of buying it in the first place.
Communal Bagholding
I understand the tendency for human beings to seek out like-minded others, especially when times are rough. But constantly checking your investments and commiserating over paper losses helps no one.
Case in point: Another post on r/JustBuyXEQT asking, “How much you down today? I’m down $14,000. Who has me beat?” with dozens of comments sharing their losses and cope.
Again, the whole point of XEQT is to set it and forget it. If a small 4% correction at the start of the year has you this stressed, anxiously checking your portfolio, and posting about losses, maybe it’s time to reassess your risk tolerance and add some bonds.
Over-Estimating Risk Tolerance
I still believe XEQT is a safe bet over the long term—two, three decades—because, barring some planet-ending catastrophe, the global economy, represented by over 8,500 equities, will likely trend upwards.
But that doesn’t make it a safe investment for the short or even medium term. It’s still 100% equities, meaning you’re fully exposed to risks like market crashes, recessions, rising interest rates, geopolitical instability, and sector-specific downturns.
And yet, here we are, with a small 4% year-to-date correction, and some investors are already panicking. Take this recent post:
"When will XEQT start to recover? I invested my FHSA funds into XEQT, but with its recent significant decline in value, withdrawing now would be far from ideal—just as I’m looking to buy a property."
If you’re investing in a First Home Savings Account (FHSA) for a down payment soon, why are you in 100% equities? Forget even bonds—you should’ve bought GICs.
This is one of the pitfalls of DIY investing. You have no idea how to properly quantify volatility and drawdowns, all of which are necessary to gauge your actual risk tolerance truly.
Trying to Time the Market
The entire point of an all-in-one global equity ETF like XEQT is to stay the course long-term and trust that, over time, the companies within it will grow earnings, buy back shares, pay dividends, and make you money.
So it absolutely baffles me when people who have built their entire online investing identity around this ETF start asking things like this:
"I know, people always say timing the market usually does not work out. But I have a question. Hypothetically, if I’m invested in XEQT right now with an average share value of $33.00 and we are currently seeing this downswing of a month that doesn’t seem to be ending anytime soon, would it even make sense to hold as the price dips below my average share price? If I sell at $33, I technically didn’t lose any $ and can monitor the price and possibly buy back in when lower? Why would I go below my average price?"
Let me painstakingly explain why this is dumb and suboptimal:
First, this is textbook loss aversion, a well-documented behavioral bias where people feel the pain of losses far more intensely than the pleasure of gains.
This investor is anchoring their decisions to their cost basis—as if it has any bearing on what happens next. The market does not care that they bought at $33.00.
Second, this is an attempt at market timing, which doesn’t work for one simple reason: nobody knows the bottom. Let’s say they sell at $33.00 and the price drops to $31.50—great, right? Now they need to decide when to buy back in.
What if the price keeps dropping? Or worse, what if it rebounds to $35.00 overnight while they’re still waiting for the “perfect” entry point? Now they have to buy back at a higher price, locking in a real loss, all because they got spooked by short-term noise.
Finally, this contradicts the entire purpose of XEQT. This ETF is designed for passive investors who don’t want to constantly tinker with their portfolio. The strategy is simple: buy, hold, and let time do the work. If you’re obsessing over short-term price swings, then you’re defeating the purpose of owning a broad market index ETF in the first place.
If you don’t trust your own investment strategy enough to stay invested through a minor correction, then the problem isn’t XEQT—it’s you.
I’m Not Dissing XEQT, I’m Dissing XEQT Investors
If you read this and felt a flood of righteous anger as you rush to comment about how I’m just another investment industry shill trying to put down passive indexing, congrats—you’re already off the rails and going about this wrong.
Again, I think XEQT is a fine ETF. It’s cheap and diversified, which gets you 80% of the way there already. The problem isn’t XEQT—it’s XEQT investors.
Especially the ones who started post-COVID and have never experienced a prolonged bear market or a severe crash. They’ve convinced themselves they can handle volatility, but as soon as the market dips a few percentage points, they’re checking balances daily, commiserating over paper losses, trying to time the market, or reassessing their entire investment strategy because of a single year-to-date drawdown.
The issue isn’t the ETF—it’s behavioral biases. Recency bias, loss aversion, overestimating risk tolerance, and herd mentality are all at play. None of these problems disappear just because you’ve chosen a passive strategy. If anything, they get worse because you convince yourself you’re immune to them.
This is exactly why so many studies show that investors’ money-weighted returns—which factor in when people actually buy and sell—lag behind their funds’ time-weighted returns. Investors don’t just buy and hold. They panic, tinker, chase performance, and sell at the worst possible times. The biggest threat to XEQT investors isn’t the market—it’s themselves.