I have been buying individual companies with my own money for more than 20 years. I have also helped family and friends do the same. Over that time I have learned one thing that nobody in the investing videos likes to say out loud: you are not supposed to beat the market. Most professionals can’t do it either.
If you can pick your own companies and get close to the market over a decade, you should be proud of yourself. I am, even though I haven’t beaten it.
The pros don’t beat the market either
Every six months, S&P Dow Jones Indices publishes the SPIVA scorecard. It compares actively managed funds against the index they are trying to beat, after fees. The numbers are humbling.
In the SPIVA Canada Mid-Year 2026 Scorecard, with data to June 30, 2026:
- 98.8% of Canadian Equity funds underperformed the S&P/TSX Composite over 10 years.
- Over 5 years it was 96.0%, and over just one year, 93.3%.
- Over each of the past 10 calendar years, an average of 81.8% of Canadian Equity funds failed to beat the TSX.
- In the first half of 2026, the TSX Composite returned 11.2% while the average Canadian Equity fund returned 8.8%.
The US is not much better. In the SPIVA U.S. Mid-Year 2026 Scorecard, 83.3% of all large-cap US funds trailed the S&P 500 over 10 years, 90.5% over 15 years and 92.6% over 20 years.
These are people with research teams, Bloomberg terminals and full-time jobs doing nothing else. Fees are a big part of the gap. But the lesson for you and me is simple: the market average is a very high bar.
What “the market” actually means
When I say “the market,” I mean a broad index like the S&P/TSX Composite for Canada or the S&P 500 for the US. And I mean total return, which includes dividends reinvested, not just the price you see on the news.
This matters. If your portfolio went up 7% a year and you compare it to the TSX price alone, you might think you won. Add back the dividends and the index may have done better. Be honest with yourself and compare apples to apples. Also compare in the same currency, since the Canadian dollar moves a lot against the US dollar.
My own record: great years, miserable years
Here is the honest version of my 20+ years.
Some years I beat the market by a lot. My best year was 2021, when my portfolio returned +38.07% while the S&P 500 returned +28.70% (total return, which is the benchmark I use for my own numbers). Those years feel amazing. You start to think you are a genius.
Then the market humbles you. My worst year was 2022, when my portfolio fell −29.25% while the S&P 500 fell −19.64%. Being under the market while everyone around you seems to be making easy money is its own kind of misery. You question every company you own.
When I average it out over the past 10 years, my portfolio returned 12.43% per year, while the S&P 500 returned 15.03% per year. So no, I did not beat the market. I trailed it by about 2.6 points a year. But I earned double-digit annual returns for a decade, close to the market, and most professional funds trailed their index too.
I am proud of that result, and of how I got there. I did it by picking and buying companies I believe have real value, no matter what price the market puts on them on any given day. When the price dropped and I still believed in the business, I held, and sometimes I bought more. That is value investing, and it is the part I enjoy.
Behaviour beats brilliance
If you take one thing from my experience, let it be this: your behaviour matters more than your stock picks.
Hold through the bad years. 2022 was the year I most wanted to sell everything and start over. I stayed the course. Most of the time, selling would have locked in the loss and missed the recovery.
Don’t chase what just went up. The stock everyone is talking about at the barbecue has usually already made its move. Buying because something is hot is how you buy high.
Judge yourself over a decade, not a year. One great year means nothing. One bad year means nothing. Ten years starts to tell you something.
Know why you own each company. If you can’t explain in two sentences why a business is worth more than you paid, you are guessing, not investing.
Keep score honestly. Track your real returns, including fees and dividends, against the right index. Many people who think they beat the market have simply never checked.
The honest alternative: index ETFs are fine
I love picking companies. It is a hobby, a passion and part of how I think about money. But I will be honest with you: for most people, a low-cost index ETF is a perfectly good answer.
If you buy a broad Canadian or global index ETF, you get the market return minus a small fee. Based on the SPIVA numbers above, that alone puts you ahead of most professional funds over 10 years. You don’t need to read annual reports or sit through ugly years wondering if you made a mistake.
Picking your own stocks only makes sense if you enjoy it, you have the patience for the bad years, and you accept that the realistic goal is to get close to the market, not crush it. Whether you hold ETFs or individual stocks, the account matters too. A TFSA or RRSP lets that growth compound with tax benefits, which is a topic for another day.
Be proud of the decade
Getting close to the market over a decade by picking your own companies is a real accomplishment. Remember that the large majority of professional fund managers, with all their resources, trailed their index too.
So if your 10-year number is close to the TSX or the S&P 500, stop beating yourself up about the years you were behind. Look at the full decade. Look at the companies you own and why. And be proud of it.
I’m not a licensed financial advisor. This article shares my personal experience as an individual investor and is not a recommendation to buy or sell any security. Talk to a qualified professional about your own situation.
