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Couch potato investing for the last 18 years - tracking my progress

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Member
Dec 4, 2016
269 posts
124 upvotes
Not sure if everyone's seen it yet, but the returns for CCP are up the high rates of returns are almost scaring me a bit. How long is this bull market going to keep going? Guess this is what my PPP is for though.
Member
Sep 25, 2007
303 posts
322 upvotes
GTA
If you're following the true CP strategy - and you've allocated correctly, based on your risk tolerance and investment horizon - then it shouldn't really matter how long the market strength continues. Just stay the course. Low is a buying opportunity.

I'd only be nervous if I was not investing correctly based on the factors mentioned above.
Deal Addict
Oct 1, 2006
3249 posts
4472 upvotes
Montreal
frankc92 wrote: All my bonds are tied up in VAB ATM... and it's been in the red (overall loss of like 1.5% or something like that). Is it worthwhile at all to liquidate this and buy into ZAG instead? Or just keep it the way it is?
I would not liquidate. The advantage of ZAG over VAB is very small.
Deal Expert
User avatar
Oct 26, 2003
39343 posts
6342 upvotes
Winnipeg
Germack wrote: I love it! Sounds like a great plan. Good luck.
so i just started reading canadian couch potato 10 minutes ago, it seems they recommend quest trade and buy 50% ETF and 50% bond, seems a good start for me? i bank at rbc/cibc and have rrsp with industrial alliance. do you hold any rrsp or just purely tsfa?
i'm registering for tsfa and rrsp on questrade.
Deal Addict
Jan 18, 2014
1537 posts
512 upvotes
Rouyn-Noranda
kithid wrote: Not sure if everyone's seen it yet, but the returns for CCP are up the high rates of returns are almost scaring me a bit. How long is this bull market going to keep going? Guess this is what my PPP is for though.
Thanks for posting the link!
Deal Addict
Oct 1, 2006
3249 posts
4472 upvotes
Montreal
divx wrote: so i just started reading canadian couch potato 10 minutes ago, it seems they recommend quest trade and buy 50% ETF and 50% bond, seems a good start for me? i bank at rbc/cibc and have rrsp with industrial alliance. do you hold any rrsp or just purely tsfa?
i'm registering for tsfa and rrsp on questrade.
Your asset allocation depends on your risk tolerance. If you are just starting investing 50/50, 40/60, 30/70 bonds/equity sounds about right. Questrade is good because they allow to buy certain ETFs commision free. I am with TD, but service/platform has been seriously lacking in the last few months.

I have my TFSA/RRSP maxed and some money invested in my non-registered accounts.
Deal Expert
User avatar
Oct 26, 2003
39343 posts
6342 upvotes
Winnipeg
Germack wrote: Your asset allocation depends on your risk tolerance. If you are just starting investing 50/50, 40/60, 30/70 bonds/equity sounds about right. Questrade is good because they allow to buy certain ETFs commision free. I am with TD, but service/platform has been seriously lacking in the last few months.

I have my TFSA/RRSP maxed and some money invested in my non-registered accounts.
what is MER and what do you think the upcoming rate hike will do to ETF?
Deal Addict
Oct 1, 2006
3249 posts
4472 upvotes
Montreal
divx wrote: what is MER and what do you think the upcoming rate hike will do to ETF?
The MER is between 0.12 and 0.16 if you are using ZAG, VCN and XAW. For the exact MER have a look at the canadiancouchpotato blog.

I have no idea what the rate hike will do to ETFs neither do I care.
Deal Fanatic
May 31, 2007
5018 posts
2175 upvotes
Dynasty12345 wrote: Go search Canadian couch potato blog on swap etf.

Tldr pro is tax efficient as above, tracks index very close

Con government might stop structure so forced to sell at time you don't want, and risk of bank (national Bank) that is in the swap agreement defaults (very low risk)
@imclumzy

Ccp gives these funds a bad name, they have proven track record now and definitely valuable in a non reg if your concern about distributions. Now they have all the funds to make a simple cp.

I have been using Hxt many times and is probably the highlight of their total return funds. It outperforms xiu btw. The others are very cheap and minimal tracking error, what you save by not having taxable distributions is the bonus and less headache to figure out acb.

To my knowledge the gov has never made any intention to crack down on such funds. They still get capital gains likely when you sell after a long time.
Deal Fanatic
May 31, 2007
5018 posts
2175 upvotes
kithid wrote: Not sure if everyone's seen it yet, but the returns for CCP are up the high rates of returns are almost scaring me a bit. How long is this bull market going to keep going? Guess this is what my PPP is for though.
I wouldn't be scared but at some point, we have to understand and expect there will be a correction.

For this reason I too and seeing a mature bull market and would be more comfortable rebalancing bond allocation from about 20 to 30% next year.

Then if things get really bad with equity, I will rebalance back.
Banned
Jan 20, 2017
584 posts
148 upvotes
Jungle wrote: For this reason I too and seeing a mature bull market and would be more comfortable rebalancing bond allocation from about 20 to 30% next year.
But bonds can drop too specially in a market correction. Why not keep cash or HISA? why bonds?
Deal Fanatic
May 31, 2007
5018 posts
2175 upvotes
jaguaar wrote: But bonds can drop too specially in a market correction. Why not keep cash or HISA? why bonds?
Looking back at the last few crashes, bond ETFS have actually increased as everyone floods to safety. At one point, bond etf was up 6% during last crash.

HISA today not paying much of anything, bond etf still retuning more. GIC is locking money in, unless you do ladder, to complicated just use a bond ETF for liquidity.
Sr. Member
Sep 29, 2007
762 posts
247 upvotes
Jungle wrote: Looking back at the last few crashes, bond ETFS have actually increased as everyone floods to safety. At one point, bond etf was up 6% during last crash.

HISA today not paying much of anything, bond etf still retuning more. GIC is locking money in, unless you do ladder, to complicated just use a bond ETF for liquidity.
That was because we were in a declining interest rate environment so lower yields = higher bond prices. So far have not seen these bond ETF's increase their distributions despite rate increases in both Canada and the US so we are getting slammed with declining NAV's and continued crappy payouts.
Deal Fanatic
May 31, 2007
5018 posts
2175 upvotes
retireat50 wrote: That was because we were in a declining interest rate environment so lower yields = higher bond prices. So far have not seen these bond ETF's increase their distributions despite rate increases in both Canada and the US so we are getting slammed with declining NAV's and continued crappy payouts.
Actually yields have been increasing over the last year and are not controlled by the BOC, (but market influenced somewhat by them and policy), but ultimately are controlled as a result of the bond market.

Bond funds hold mix bag of different durations, some long, some short. Different styles, Corp bonds (usually 30%) Gov bonds(70%) etc. So direct change in yields not going to be so relative.

Regardless, it's more about the total return of those funds and the of huge benefit it provides to asset allocation in stock market crashes and bear markets.

Check the 20 and 30 year returns of an all equity couch potato vs one with 25% bonds. Return is about the same, but with less risk! This is because stock market crashes are brutal, and bonds allow you to recover faster. And probably sleep better too.

What I like is the ammunition it gives to rebalance during market crash, and can easily boost CAGR almost risk free IMO
Banned
Nov 1, 2013
304 posts
42 upvotes
Jungle wrote: Check the 20 and 30 year returns of an all equity couch potato vs one with 25% bonds. Return is about the same, but with less risk! This is because stock market crashes are brutal, and bonds allow you to recover faster. And probably sleep better too.
OKAY, so what are your two favorite bond funds/etfs to hold for long time?
Deal Fanatic
May 31, 2007
5018 posts
2175 upvotes
Louking wrote: OKAY, so what are your two favorite bond funds/etfs to hold for long time?
My fav is Xbb, because they are the biggest, and they just lowered management fee. Also they been in the market for a long time.
Jr. Member
Jul 20, 2009
128 posts
9 upvotes
Montreal
Hi Guys,
I started investing in couch potato strategy 6 months ago. I have a couple of funds not part of the e-series but all others are. Here is the result as of today. What do you experts think I should do? Tried but could not format it better. Hope it is still readable.

FUND NO.OF SHARES PRICE VALUE PURCH PRICE PURCH VALUE $ CHANGE % CHANGE
TD CDN Bond Index-e** 901.833 $11.41 $10,289.91 23.02 $10,643.40
TD CDN Bond Index-e** 107.508 $11.41 $1,226.67 9.81 $1,267.09
TD CDN Bond Index-e** 319.068 $11.41 $3,640.57 29.68 $3,760.57
TD CDN Bond Index-e** 483.238 $11.41 $5,513.75 28.04 $5,702.23
TOTAL $20,670.90 $21,373.29 -702.39 -3.29
TD CDN Index-e** 303.467 $26.80 $8,132.92 18.19 $7,674.50
TD CDN Index-e** 149.718 $26.80 $4,012.44 32.09 $3,790.82
TD CDN Index-e** 103.675 $26.80 $2,778.49 22.65 $2,615.53
TD CDN Index-e** 228.033 $26.80 $6,111.28 31.08 $5,800.13
TOTAL $21,035.13 $19,880.98 1154.15 5.81
TD Dividend Growth** 27.398 $87.77 $2,404.72 5.38 $2,214.40
TOTAL $2,404.72 $2,214.40 190.32 8.59
TD Int'l Index-e** 1070.147 $14.68 $15,709.76 35.14 $14,824.91
TD Int'l Index-e** 92.53 $14.68 $1,358.34 10.86 $1,278.09
TD Int'l Index-e** 92.53 $14.68 $1,358.34 11.07 $1,278.09
TD Int'l Index-e** 274.383 $14.68 $4,027.94 20.48 $3,870.25
TOTAL $22,454.38 $21,251.34 1203.04 5.66
TD Science &Tech** 38.227 $81.52 $3,116.27 24.93 $2,400.00
TD Science &Tech** 38.227 $81.52 $3,116.27 25.4 $2,400.00
TOTAL $6,232.54 $4,800.00 1432.54 29.84
TD US Index-e** 133.029 $61.37 $8,163.99 18.26 $7,598.32
TD US Index-e** 45.441 $61.37 $2,788.71 22.31 $2,589.49
TD US Index-e** 22.395 $61.37 $1,374.38 11.2 $1,266.55
TD US Index-e** 65.351 $61.37 $4,010.59 20.4 $3,717.30
TOTAL $16,337.67 $15,171.66 1166.01 7.69
GRAND TOTAL $89,135.34 $84,691.67 4443.67 5.25
Deal Addict
Nov 8, 2011
1876 posts
1154 upvotes
Not NEPEAN
Good morning Everyone,

I am thinking about moving my Sunlife RRSP to Questrade and taking a CCP approach with ETFs (which are free to buy on QT). I am 30 years old, pay into a defined-benefit pension, and think of my RRSP as a "bonus" fund for when my wife and I retire. I plan to live comfortably off my pension and use the RRSP for extra income. I make bi-weekly contributions to my RRSP all year.

Right now I am paying 1.45% management fee for holding (1) fund - Sunlife Granite Growth. At the same time I am hesitant as I have had good returns so starting my RRSP a few years ago.

1YR: 9.2%
2YR: 6.4%
3YR: 5.9%

The breakdown of the fund I hold is:

30% Fixed Income
19% Canadian Equity
18.5% US Equity
22.5% International Equity
10% Other

I was considering moving to Questrade and going with the Assertive ETF option:

25% ZAG
25% VCN
50% XAW

My questions I hope you can help me with are:

1. In the event of a slow down or down turn in the market, how much would I be impacted moving from 60% securities (current SLF fund) to 70% securities (CCP Assertive)?

2. Is CCP Assertive a risky play if the market sours over the next year or two?

3. Any better allocation of ZAG, VCN, and XAW I should consider?


Thanks for any advice.
Deal Addict
User avatar
Feb 1, 2012
2214 posts
3798 upvotes
Thunder Bay, ON
nickwa wrote: Good morning Everyone,

I am thinking about moving my Sunlife RRSP to Questrade and taking a CCP approach with ETFs (which are free to buy on QT). I am 30 years old, pay into a defined-benefit pension, and think of my RRSP as a "bonus" fund for when my wife and I retire. I plan to live comfortably off my pension and use the RRSP for extra income. I make bi-weekly contributions to my RRSP all year.

Right now I am paying 1.45% management fee for holding (1) fund - Sunlife Granite Growth. At the same time I am hesitant as I have had good returns so starting my RRSP a few years ago.

1YR: 9.2%
2YR: 6.4%
3YR: 5.9%
Those are good returns, but the CCP returns were better.
The breakdown of the fund I hold is:

30% Fixed Income
19% Canadian Equity
18.5% US Equity
22.5% International Equity
10% Other

I was considering moving to Questrade and going with the Assertive ETF option:

25% ZAG
25% VCN
50% XAW

My questions I hope you can help me with are:

1. In the event of a slow down or down turn in the market, how much would I be impacted moving from 60% securities (current SLF fund) to 70% securities (CCP Assertive)?
Bonds are also securities. When you say securities you mean stocks or equities.

Say your stocks dropped 20% and bonds stayed flat. With 60% stocks your portfolio would drop 12%. With 70% stocks your portfolio would drop 14%. Not much of a difference.
2. Is CCP Assertive a risky play if the market sours over the next year or two?
It could have significant volatility. Check this link: http://canadiancouchpotato.com/wp-conte ... s-2017.pdf. Look at the Lowest 12 Month Return. How would you feel if your portfolio dropped that much? Have you felt anxious about your current portfolio? As per above 60% vs 70% is not that much different. Stocks have demonstrated a long-term upward trend with a lot of volatility. If this is retirement money you won't touch for decades then the next year or two is not a relevant time period to evaluate performance.
3. Any better allocation of ZAG, VCN, and XAW I should consider?
Those are all good funds. Since you are asking the question, you don't have the knowledge you need to select other funds, so for now at least, just go with CCP recommendations.
When I was young, I was poor. Now, after years of hard work, I'm no longer young.
Deal Addict
Nov 8, 2011
1876 posts
1154 upvotes
Not NEPEAN
Deepwater wrote:
Those are all good funds. Since you are asking the question, you don't have the knowledge you need to select other funds, so for now at least, just go with CCP recommendations.
Thank you for the reply. This is retirement money so I am really concerned with long-term growth. I would like to move from Sunlife to CCP, keep making bi-weekly contributions (free ETF purchases through QT), and re-balance 2 or 3 times a year, that's it.

I guess my question should have read, how close does the assertive CCP portfolio match with my current SLF Granite Fund holdings? I'd hate to move right now, see another 10% increase in the SLF fund this year, and not see something similar or better in the CCP assertive holdings. I know it's impossible to predict but if the allocations are similar, at least I can save on the fees and still hold a similar 'type' of portfolio.

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