https://www.alainguillot.com/why-passive-investing-feels-wrong-but-is-actually-right-for-your-portfolio/ At one point in my life, I worked as a financial advisor. Supposedly my job was to help people manage their finances, offer advice on investments, and guide them toward financial security. However, it didn’t take long for me to realize that the financial industry was heavily tilted in favor of institutions and advisors—leaving the clients, the very people we were supposed to help, at a disadvantage. I saw how complex financial products were often pushed, not because they were in the client’s best interest, but because they generated the most fees for the advisor or the firm. It was disheartening, and it wasn’t the kind of impact I wanted to have. So, I made the decision to leave the industry and became a personal finance blogger, where I could share my ideas and insights without any conflict of interest. My Simple Approach to Investing: The S&P 500 Index I have been blogging now for fifteen years and since then, many friends and acquaintances have come to me with questions about investing. They’re eager to know where they should put their money, and they were often expecting some intricate advice or a secret strategy. My answer, however has always been simple and straightforward: “Just buy the S&P 500 index, don’t trade, don’t watch the news, don’t try to outsmart the market. Just let your money grow over time.” Why This Approach Works The S&P 500 index represents the 500 largest companies in the U.S. It’s diversified, has a strong track record of long-term performance, and, most importantly, it’s passive, which keeps expenses low and avoids triggering taxable events. You’re not trying to beat the market, time it, or chase the latest trends. Instead, you’re simply investing in the long-term growth of the economy. This strategy avoids unnecessary fees, emotional decision-making, and the high risks that come with attempting to outguess the market. History has shown that passive investing in an index like the S&P 500 consistently outperforms most active strategies over time. The Reality: Few People Follow This Advice Unfortunately, very few of the people who come to me for advice have followed through with this simple strategy. Some ignore it entirely, convinced they can pick the next winning stock or sector. Others believe they are smarter than the market and dive into stock trading. Many have been drawn into the excitement of cryptocurrencies, where some have won big, but many have also lost significant amounts of money. The idea of “doing nothing” when it comes to investing seems too counterintuitive. As humans, we’re often wired to act, to make changes, and to react to every piece of news we hear. It’s difficult for many to accept that, sometimes, the best course of action is no action at all. The Long-Term Results Over time, I am almost certain that those who have taken my advice—putting their money into a simple, passive fund like the S&P 500—have done much better than those who thought they could outsmart the market. Those who stuck to a straightforward strategy have avoided costly mistakes, high fees, and the stress of constantly managing their investments. Investing doesn’t need to be complicated. Sometimes, the simplest strategies are the most effective. If there’s one lesson I hope more people take from my experience, it’s this: In the long run, the market rewards patience and consistency far more than it rewards excitement and risk-taking.

https://www.alainguillot.com/what-would-i-do-with-1000000/ Have you ever imagined what you would do if you suddenly had one million dollars in your bank account? One of the first milestones in financial achievement is reaching one million dollars. Although inflation has diminished its value over time, it remains a significant sum. It’s not just about the money—it’s about the security, freedom, and opportunities it represents. When I came to Canada as an immigrant (24 years ago) I had nothing, no money, no education, no connections, but I had a head full of dreams and ambitions and I was determined to achieve a life of economic and social success. I was then and I remain now a dreamer and an optimist. I think that pessimists people always sound smart, they always find the shortcomings of any plan, but the world has been built by optimist, by people who did things that have never been done before. One of my first goals was to become a millionaire but along the way I discovered that I didn’t have to be a millionaire to have a happy and fulfilling life and becoming a millionaire was no longer my main priority. Recently, however, something changed in my life that made me refocus on my initial financial goal to become a millionaire. The building where I have been living for the past 10 years was sold, and because I’m one of the tenants paying the lowest rent, the new landlord has asked me to move out. So I started searching for new rental properties and I realized how fortunate I’ve been to pay such low rent. The apartments I’m seeing now they are crap, they are very expensive for what they offer. This experience has made it clear that I need to increase my income to maintain my current lifestyle. So, I asked myself: Would my predicament go away if I had a million dollars? What would I do with one million dollars? What Would I Do with $1,000,000? I live in Le Plateau, a trendy neighborhood in Montreal, and I’d like to continue living here. With a million dollars, I would buy a one-bedroom condo, which in Montreal is called a 3½—one bedroom, a living room, a kitchen, and a bathroom. The condos I like cost around $400,000 CAD. I would invest the remaining $600,000 in the S&P 500 index. Assuming the market grows at 6% per year, that would generate around $36,000 annually, or $3,000 per month. Since the property would be paid off, that income would allow me to live comfortably for the rest of my life. I am not looking for fancy-cars, brand-name clothing, or five-star restaurants. What I am looking for is freedom to stay in a neighborhood that I like, in a place that is not ugly, and just enough income to pay for my basic living expenses such as food, heat, and internet connection. What would you do with $1,000,000 Achieve Financial Independence: One million dollars is enough to achieve financial independence. Following the 4% rule, you could withdraw about $40,000 per year indefinitely. Real Estate Investing: With one million dollars, you could buy up to five million dollars in real estate by putting 20% down on each property. That could create a steady stream of rental income while giving you plenty of leisure time. Start a Business: Some businesses require significant startup capital. Alternatively, you could buy into an expensive franchise and grow it from there. Travel in Luxury: If your basic living expenses are covered by a pension or other income, why not enjoy life? Travel to your favorite destinations, fly first class, and stay in the finest hotels—until the money runs out. Give Back to the Community: For some people, the greatest joy comes from giving. There are countless causes that need support, from education and healthcare to environmental conservation and social justice. The community speaks My friend Cheryl Williams, who is in a similar situation as me, said she would do something similar—buy a condo and invest the rest.

https://www.alainguillot.com/whats-the-next-mega-trend/ Throughout history, several major economic trends have shaped the world. These include: Agricultural Revolution (~10,000 BCE): The transition from hunter-gatherer societies to settled agricultural communities, leading to the rise of the first civilizations. Invention of the Printing Press (1440s): By Johannes Gutenberg¹, revolutionizing communication and spreading knowledge, which fueled the Renaissance² and Reformation³. Industrial Revolution (18th-19th Century): The introduction of machinery, including the steam engine, transformed manufacturing and transportation. Electrification (Late 19th Century): The widespread adoption of electricity transformed industries, homes, and cities. Invention of the Internet (1960s-1990s): This development revolutionized global communication, commerce, and information access. While many companies have emerged since the Internet’s inception, notable winners include Amazon, Google, and Microsoft. While past performance is no guarantee of future results, studying historical trends and outcomes can help us make better decisions. Which are the trends of the present Artificial Intelligence (AI): Investments in AI-driven companies continue to be a major trend, creating significant changes in how we work and study. Companies like Nvidia, Microsoft, Open AI (the creator of ChatGPT), and Alphabet (Google) are leaders in AI innovation. Pharmaceuticals: New weight loss drugs like Wegovy and Ozempic are attracting significant investor attention. Companies like Novo Nordisk and Eli Lilly, the creators of these drugs, have seen their stock prices increase by approximately 100% per year. Which are the trends of the future This raises an intriguing question: Are there investments that haven’t yet entered the mainstream where early adopters could reap substantial returns? No one can predict the future, but I will put my money on Technology Select Sector SPDR Fund (XLK) ($209.35) which is heavily weighted toward companies like Apple, Microsoft, and Nvidia and Communication Services Select Sector SPDR Fund (XLC) ($85.56) which include companies such as Alphabet (Google), Meta Platforms (Facebook), and Disney. With the exception of Disney, all of those companies have have huge networking effects, and monopoly powers that only the government could derail their dominance. During the past 12 months XLK is up 21.87%, the S&P 500 is up 20%, and XLC is up 27.51% Which industries do you think will lead in the next 12 months?

https://www.alainguillot.com/from-the-roman-empire-to-today-how-the-u-s-became-the-worlds-economic-leader/

For the past 20 years that I have been investing in the stock market, I’ve learned from numerous finance books and blogs that the best way to grow and preserve capital is to diversify across different types of securities (bonds, stocks, cash, etc.) and, within the equity portion of the portfolio, to diversify globally.

However, I soon realized that if I wanted to accelerate the growth of my portfolio, the best approach was to disregard bonds, cash, gold, and other esoteric securities and focus solely on stocks.

When it comes to stocks, the conventional advice has been to invest globally, spreading capital across various geographic regions. Buy some U.S. stocks, some Canadian, some European, and so on.

But over the years, I’ve noticed that my U.S. holdings consistently outperform my investments in other regions.

At first, I thought this might be due to a temporary cycle that happened to favor the U.S. However, more than ten years have passed, and the U.S. continues to outperform all other regions.

So, the question is: Why?

Many people would attribute this to factors like natural resources, work ethic, political stability, the legal system, or Protestant work ethics.

Personally, I believe the primary reason is the culture, is the innovative spirit of the U.S. and the willingness of its entrepreneurs to take risks, fail, and try again until they succeed.

I think the U.S. was colonized by risk-takers—people who self-selected as adventurers, willing to risk their lives and abandon the status quo in exchange for the opportunity to find riches. Failure became an everyday event that didn’t deter new volunteers from giving it a try. Many people failed repeatedly, but those who succeeded, succeeded big.

Europe and Asia, on the other hand, also have natural resources, political stability, and strong work ethics, but they view failure differently. In many of these places, failure is seen as shameful. If you fail once, that’s it—people won’t trust you anymore. This creates an environment where most entrepreneurs are afraid to try. And if they do try and fail, they’re unlikely to try again—unless they come to the U.S.

The U.S. attracts both capital and talent, and the result is prosperity and innovation.

Other civilizations have experienced similar levels of success in the past, and their dominance often lasted for centuries.

The Roman Empire’s economic dominance, for example, lasted from the 1st century BCE to the 5th century CE.

Florence became a major financial and cultural center during the Renaissance, dominating the world economy from the 14th to the 16th centuries.

During the Dutch Golden Age, Amsterdam emerged as one of the richest cities in the world due to its dominance in global trade, finance, and shipping. It was home to the first stock exchange and became a major banking and financial hub, making Amsterdam the world’s strongest economy in the 17th century.

London became the financial and political capital of the British Empire during the 19th century and was also the birthplace of the Industrial Revolution.

And now, since the end of World War II, the U.S. has become the world’s financial leader. Since the Bretton Woods Conference in 1944, the U.S. dollar has been the global currency.

Silicon Valley is the largest wealth generator in the world, home to companies like Apple, Google, Facebook, Nvidia, and Tesla, along with thousands of startups.

New York City is home to Wall Street, the center of global finance, and the New York Stock Exchange (NYSE), the world’s largest stock market.

Los Angeles is the global hub of the entertainment industry, particularly in film, television, and music. Hollywood generates significant wealth through content production and distribution, and major studios and media companies are based there.

https://www.alainguillot.com/global-diversification-is-a-myth/ Why I am giving up on global diversification and putting all my money in the U.S. stock market exclusively. Early in my journey as an investor, I was led to believe that the smartest thing I could do for my portfolio was to diversify globally. So, I did. I had a bit of everything in my portfolio: Canadian stocks, U.S. stocks, European stocks, and Asian stocks—you get the idea. Eventually, I realized that it didn’t make much difference. Everything is correlated. I couldn’t protect my portfolio form what’s called “country risk.” If one market goes down, they all go down. More specifically, if the U.S. market goes down, everyone else follows. So, what’s the point of diversification? Let’s start with some random facts. The U.S. market now accounts for 50% of the global market. From that perspective, everyone in the world should have 50% of their portfolio in U.S. stocks if they want their portfolio to truly represent global equity. Consider this: Nvidia, a U.S. company with a market capitalization of $3.4 trillion, is larger than the market capitalization of the German, French, or U.K. stock markets. Germany (DAX Index): Around $2.3 trillion France (CAC 40 Index): Around $2.8 trillion United Kingdom (FTSE 100 Index): Around $2.5 trillion The U.S. is home to some of the most innovative companies—Apple, Microsoft, Nvidia, Amazon, Google, Tesla, Facebook, Airbnb, and Uber. Most of these companies are manufacturers of ideas. For example, Apple and Nvidia design their products in the U.S. but produce them elsewhere. Airbnb and Uber are hospitality and transportation companies that don’t own any buildings or cars. Amazon is a double marketplace where others do the buying and selling. Microsoft, Google, and Facebook are essentially built from code on the internet. Only Tesla manufactures physical products, which are produced in the U.S., Germany, and China, and sold globally. The globalists have won. The world is too interconnected to untangle. If you invest exclusively in the U.S. stock market, most of the revenues and manufacturing still comes from other countries. For example, if you own Apple stock and there’s a labor dispute in China (where most of the phones are manufactured), your Apple stock could suffer. Similarly, Saudi Aramco is a global company with very little to do with Saudi Arabia’s economy, just as Rio Tinto from Australia has minimal connection to the Australian economy. Those two companies can influence global markets. If something bad happens in the U.S., its effects are felt—and magnified—elsewhere. A 2% decline in the U.S. stock market could result in a 3% to 4% decline in Brazil or India. Changes in U.S. interest rates also affect many countries that depend on the U.S. dollar to finance their operations. Economists like David Ricardo (18 April 1772 – 11 September 1823) was the first economist to promote the idea of globalism with his theory of comparative advantage and Thomas Friedman, author of The World is Flat, have long promoted the idea of an interconnected world, and they’ve been proven right. Over the past 20 years, every major economic crisis has spread globally: the 2008 financial crisis, COVID-19, and more. The conclusion? There’s no real benefit in global diversification. Everything is so interconnected that you might as well invest in the most efficient market—the one with the most liquidity and transparency. The U.S. stock market isn’t just the U.S. stock market anymore. It’s the world’s stock market. The S&P 500 is no longer just a U.S. equity index—it’s a global equity index. All of the companies within it are multinationals, with the only commonality being that they’re all incorporated in the U.S.

https://www.alainguillot.com/career-day/

today a am answering a question from a YouTube subscriber. If you have a question about any of the topics that I cover on my channel, please send a voice mail or better yet a video file to the email address on my YouTube channel and I will try my best to answer it.

Here is Anthony from Paris. France.

Here is a question I got from one of my readers:

My daughter is graduating from high school next year, she is what we call Generation Z. How should she approach her career choices, specially when deciding between jobs that she wants to do and jobs that pay well.

Generation Z, or zoomers, I think their age range is from 14 to 24 years old, is graduating from college and thinking about what to study or what to do with their lives.

Here are some career thoughts in regards to Generation Z.

1. She has a long life ahead of her. Her life expectancy is between 80 to 100 years old, and most likely she will change careers many times over her lifetime, so whichever career she chooses now, most likely will not be the career that she will do 10 or 20 years from today. She will discover what she is good at, she will discover new careers that don’t even exist right now, and she will quit jobs that she doesn’t like or that don’t pay her well enough. Whichever career she chooses, it will not be definitive. It’s important but it’s not as important and most people make it out to be.
2. There is a lot of competition for jobs that people consider to be “cool” for example, social media influencer, and there is not a lot of competition for jobs that are considered boring, for example, accounting. There is a balance between making lots of money and finding a job that she is passionate about. If she wants to work in something that she’s passionate about, finds challenging, believes is important, and feels she’s good at, she might have to accept a lower income. And that’s OK as long as she is aware of these tradeoff.
3. Trade jobs can also be rewarding and many of them pay well. Not everyone needs a four-year degree to be happy or successful. A dental hygienist, for example, typically completes a two-year associate degree program and she can expect a salary of about $75,000. It’s not sexy but it pays well and it has regular hours.
4. If she gets into student debt, she should make sure she can pay it back. One common rule of thumb is: Don’t borrow more than her expected first-year salary after graduation. For example, if she thinks that in her first year of work after graduation she will get paid $50,000, then she shouldn’t borrow more than $50,000.

In conclusion, as technology advances, Generation Z will have challenges and opportunities that previous generations have never seen before, but some things never change. She should take advantage of the experience of those who have participated in the job market before her to craft a better life for herself.

https://www.alainguillot.com/finding-strength-in-routine/ Finding Strength in Routine: My Journey Through Financial Turmoil in Personal Finance How to keep your head down when everything around you is falling apart. Three years ago, I got caught cheating on my taxes. About eight years ago, I ran an Airbnb business and didn’t declare all my income. I truly believed I could get away with it, but somehow, the government found out and asked me to explain my income discrepancies. I had no explanation, and after several letters requesting more information, the government determined that I owed a significant amount of money and they gave me 12 months to pay it all back. The first emotion I felt was overwhelming anxiety. I was constantly worried about how I would manage to repay the debt. When I went to bed, my mind was racing trying to find a solution. The more I tried to force myself to sleep the more elusive sleep became. My bed, once a place of rest, felt like a battleground where my thoughts would not let me in peace. I felt helpless, alone, in the dark knowing that the debt would still be there the next day. Then I felt shame and guilt. I confined on my friends and family, I cried on their shoulders. I felt so embarrassed and questioned my bad judgement every day.

https://www.alainguillot.com/bullying-on-high-achievers/

Did you know that if you had some trauma in your childhood, that can influence your goals and ambitions for the rest of your life?

When I was a child growing up in Colombia, I got into a lot of fights and, regrettably, I bullied a few kids. It’s a part of my past that I deeply regret, and I wish I could go back and say “I’m sorry” to those I hurt.

Fighting was a sign of my lack of self-confidence. I wanted to appear strong in front of others. Fortunately, that phase of my life didn’t last too long, and I eventually learned to respect myself and others.

However, for those who are on the receiving end of bullying, the impact can be much deeper. Being bullied can leave emotional scars that carry into adulthood, influencing decisions and driving a strong desire to prove oneself. The pain and rejection experienced in childhood often transform into a powerful motivation to succeed, pushing individuals to overcome their past and strive for greatness.

Take Elon Musk, for example. In the video below, he shares a story about being bullied as a child. His experience, like that of many others, has likely played a role in shaping the determined and relentless entrepreneur he is today.

We all have the power to use the pain of past traumas as fuel to become a better versions of ourselves. Whether it’s childhood bullying or other challenges, our struggles can be the driving force behind our greatest successes.