Investing

Canadian Couch Potato - ETF Model Portfolio

  • Last Updated:
  • Sep 20th, 2017 9:54 am
[OP]
Jr. Member
Dec 26, 2010
173 posts
27 upvotes

Canadian Couch Potato - ETF Model Portfolio

I wanted to hear comments from others following the canadian couch potato - ETF Model Portfolio. I am investing on aggressive model
BMO Aggregate Bond Index ETF ZAG 10%
Vanguard FTSE Canada All Cap Index ETF VCN 30%
iShared Core MSCI All Country World Ex Canada ETF XAW 60%

I invested a large amount on this portfolio in 16/03/2017.
Today after 6 months I have a net loss of 1.94% !!!!!!!!

I understand the market goes up/down and above is "mathematical result" of my portfolio.

I assume I was unlucky on my timing and just need to suck up?
Do others have had this portfolio and adjusted to a different model?
Any insight is appreciated (especially if you are a couch potato investor)
27 replies
Newbie
Feb 11, 2016
61 posts
62 upvotes
You were not unlucky. -2% is noise. -50% is unlucky timing.

Based on your post , you don't have the risk tolerance for such a high equity allocation. You should perhaps reconsider 90% now, rather than abandon ship later when you have significant losses.

Keep in mind, seeing your portfolio drop by 20-30% some time during the next 3-5 years is a very likely event based on your portfolio and historical data.

PS. Most of the 2% drop is due to Canadian dollar strengthening. You should actually be glad your buying power is significantly higher now (buying investments or goods for consumption). Pray it keeps going up :)
Member
Sep 7, 2009
350 posts
107 upvotes
OP, check back in this thread in 10+ years.
Deal Addict
May 31, 2007
4076 posts
1187 upvotes
Seeing a lot of these threads here lately. Remember you need at least 10 years min time to make any judgements. We might have a few years of low returns, then some with high returns. Its never perfectly even annual return.


If history is a guide over the last 20 years, 25% allocation to bonds, 4-5 years lost money, 15-16 years made money, end result was almost a quadruple your money or approx 250%

The worst 10 year period in that cycle produced a total return of about 43%, or 3.6% annualized (approx), with 3-5 years being rather flat.

Remember the last 20 years includes dot com bust, 2008 crash. So pretty good considering all that.
Member
Oct 27, 2014
344 posts
241 upvotes
Toronto, ON
garce wrote:
Sep 12th, 2017 10:05 pm
I wanted to hear comments from others following the canadian couch potato - ETF Model Portfolio. I am investing on aggressive model
BMO Aggregate Bond Index ETF ZAG 10%
Vanguard FTSE Canada All Cap Index ETF VCN 30%
iShared Core MSCI All Country World Ex Canada ETF XAW 60%

I invested a large amount on this portfolio in 16/03/2017.
Today after 6 months I have a net loss of 1.94% !!!!!!!!

I understand the market goes up/down and above is "mathematical result" of my portfolio.

I assume I was unlucky on my timing and just need to suck up?
Do others have had this portfolio and adjusted to a different model?
Any insight is appreciated (especially if you are a couch potato investor)
I remember the days when I freaked out over 1.94% loss.
Deal Addict
Feb 4, 2015
2405 posts
394 upvotes
garce wrote:
Sep 12th, 2017 10:05 pm

I assume I was unlucky on my timing and just need to suck up? Timing not in vocabulary for CCP rather TIME is in vocabulary like Time in mkt more important then timing or investments [% in VCN, ZAG, XAW]
Do others have had this portfolio and adjusted to a different model? CCP results based on consistent adherence to model; you may tweak once in a while but not like 6 months later
Any insight is appreciated (especially if you are a couch potato investor) Relax, you've picked a proven model, need TIME for results
Member
Aug 14, 2010
356 posts
135 upvotes
Toronto
*face palm* Some people just shouldn't invest in the stock market.

Your portfolio is aggressive, and you're worried about a 2% drop in 6 months? You clearly don't have the stomach for risk.
Member
Jul 27, 2017
288 posts
63 upvotes
GTA
garce wrote:
Sep 12th, 2017 10:05 pm
I assume I was unlucky on my timing and just need to suck up?
Do others have had this portfolio and adjusted to a different model?
Any insight is appreciated (especially if you are a couch potato investor)
Where did you get your portfolio from or how did you choose/pick what you did?

Was it from

http://canadiancouchpotato.com/model-portfolios-2/

What is your time horizon & the yield that you are targeting?

As a poster suggested, give it minimum 10 years
My crystal ball is broken
Deal Fanatic
Mar 24, 2008
5067 posts
1146 upvotes
Toronto
I have no clue what my portfolio is up to... Is it really that bad? A whole 2% loss, or is it 7%? Not sure if I should check....
Illegitimi non carborundum
Member
User avatar
Oct 19, 2016
350 posts
118 upvotes
Toronto
Personally I would not consider your portfolio aggressive... Your portfolio seems bit too diversified specially with heavy XAW..

garce wrote:
Sep 12th, 2017 10:05 pm
I wanted to hear comments from others following the canadian couch potato - ETF Model Portfolio. I am investing on aggressive model
BMO Aggregate Bond Index ETF ZAG 10%
Vanguard FTSE Canada All Cap Index ETF VCN 30%
iShared Core MSCI All Country World Ex Canada ETF XAW 60%

I invested a large amount on this portfolio in 16/03/2017.
Today after 6 months I have a net loss of 1.94% !!!!!!!!

I understand the market goes up/down and above is "mathematical result" of my portfolio.

I assume I was unlucky on my timing and just need to suck up?
Do others have had this portfolio and adjusted to a different model?
Any insight is appreciated (especially if you are a couch potato investor)
Deal Addict
User avatar
Dec 9, 2008
1988 posts
78 upvotes
mrtrump wrote:
Sep 14th, 2017 10:43 am
Personally I would not consider your portfolio aggressive... Your portfolio seems bit too diversified specially with heavy XAW..
Can you elaborate please? How is this too diversified?

I have the same allocation for my LRRSP.
Deal Addict
User avatar
Jun 19, 2009
4482 posts
718 upvotes
Scarborough
You need to have stronger resolve than what you've shown in this thread. Long term is measured in years, not months.
Jr. Member
Feb 26, 2017
199 posts
46 upvotes
SkimGuy wrote:
Sep 14th, 2017 1:08 pm
You need to have stronger resolve than what you've shown in this thread. Long term is measured in years, not months.
I think its alright to not feel great about your portfolio going down. The key is to not actually act on those emotions and to stick with your plan.
[OP]
Jr. Member
Dec 26, 2010
173 posts
27 upvotes
Ok, sorry. I shouldnt have started the thread before searching more. Maybe other lazy investors can learn from my mistake.
I have been spoiled with good//longrun/somewhat stable returns before (with a very generic, accidentlal, unsophisticated and hands free strategy).
I switched to this coach potato portfolio, saw the negative returns and started to question myself.
I just did a comparison against my previous "good" portfolio and I can see I wouldnt have gotten good returns either (Actually a little worst). Because of my lack of following the market (just checked my portfolio very irregularly) I didnt notice we were going through a relatively bad period.
I am ok with market fluctuations and I was not trying to time the market. In fact when I switched portfolios, I researched the point in the month/day of week/hour with the least fluctuations. I am planning to rebalance once a year.
I am not planning to get the money out of my portfolio and do have a long horizon. I just thought that a check at 6 month mark was worthwhile.
Deal Addict
Nov 24, 2013
4053 posts
1102 upvotes
Kingston, ON
mrtrump wrote:
Sep 14th, 2017 10:43 am
Personally I would not consider your portfolio aggressive... Your portfolio seems bit too diversified specially with heavy XAW..
CCP (and I'm sure others) consider 90% Equities, 10% Bonds to be "Aggressive." It's heavy in equities, looking for returns, risking some capital. It's also well diversified as far as holding a broad swath of companies in Canada and globally. "Aggressive" and "diversified" mean different things, but are not mutually exclusive.

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