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Couch potato investing for the last 12 years - tracking my progress

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  • Sep 20th, 2017 8:52 am
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Deal Addict
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Sep 14, 2008
1523 posts
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Winnipeg
Germack wrote:
Jul 10th, 2017 9:31 pm
I would not do it. I do not take risks with my bonds holding. I want them to be ultra safe.
For bond holdings what would you recommend for those with e-series MFs , should I follow the model portfolio on ccp?
Currently just have cash sitting in rrsp. And not sure how to proceed.
Thanks in advance as always!
Jr. Member
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May 3, 2015
139 posts
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Germack wrote:
Jul 10th, 2017 9:31 pm
I would not do it. I do not take risks with my bonds holding. I want them to be ultra safe.
Are the % holdings on the first page your current target allocations? I know you mentioned you bought a house, so I assume perhaps XRE has been reduced? Maybe having updated #'s on the first page may be interesting? :)
[OP]
Deal Addict
Oct 1, 2006
1635 posts
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Montreal
bigjee wrote:
Jul 11th, 2017 3:45 pm
For bond holdings what would you recommend for those with e-series MFs , should I follow the model portfolio on ccp?
Currently just have cash sitting in rrsp. And not sure how to proceed.
Thanks in advance as always!
I would use TDB909 as listed in the ccp model portfolio.
[OP]
Deal Addict
Oct 1, 2006
1635 posts
565 upvotes
Montreal
MikeZ13 wrote:
Jul 11th, 2017 4:37 pm
Are the % holdings on the first page your current target allocations? I know you mentioned you bought a house, so I assume perhaps XRE has been reduced? Maybe having updated #'s on the first page may be interesting? :)
Good question. Here is my current asset allocation:
Target Allocation.png

I made the following changes:
- Bond target allocation reduced from 20% to 50k. No new money is invested into bonds. Instead I make extra payments against the mortgage. Both investments are tax free, but after tax returns on extra mortgage payments likely > than returns of bonds.
- The 20% target allocation for bonds got transferred to Canada, USA, International and emerging market equities (+5% for each asset class)

The current goal is to pay down the mortgage within the next 2.5 years. Each year I max my RRSP/TFSA after that everything goes towards extra mortgage payments.
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Jul 10, 2007
304 posts
190 upvotes
Edmonton
Crazy how the rise in the Canadian dollar is killing my xaw.to investment. I probably should of bought the a currency hedged etf when I bought into the couch potato portfolio. The CAD was pretty low when I started. :(
Newbie
Jun 6, 2012
38 posts
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Calgary, AB
golfcraze wrote:
Jul 12th, 2017 12:25 pm
Crazy how the rise in the Canadian dollar is killing my xaw.to investment. I probably should of bought the a currency hedged etf when I bought into the couch potato portfolio. The CAD was pretty low when I started. :(
Hedging is not perfect, there are situations where it doesn't quite work as expected - but hedging always costs you whenever it benefits you or not. Over a long period of time, the cost of hedging should be greater than it's benefits.
You're buying more stocks per invested dollar today than you were a few months ago, that's how I see it.

CCP has many articles with more details on his website, here's a few articles where he discusses hedging:

http://canadiancouchpotato.com/2016/03/ ... -currency/
http://canadiancouchpotato.com/2015/02/ ... the-hedge/
Newbie
Feb 5, 2017
64 posts
30 upvotes
golfcraze wrote:
Jul 12th, 2017 12:25 pm
Crazy how the rise in the Canadian dollar is killing my xaw.to investment. I probably should of bought the a currency hedged etf when I bought into the couch potato portfolio. The CAD was pretty low when I started. :(
Well it was a buying opportunity ! Bought another 50K of XAW right at the bottom yesterday. Had already 550K of it.
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Jul 10, 2007
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Edmonton
alexcalvado wrote:
Jul 13th, 2017 7:18 am
Well it was a buying opportunity ! Bought another 50K of XAW right at the bottom yesterday. Had already 550K of it.
Nice! I'm exactly opposite of you. Bought around the peak. Bought around 500K. So I'm down around 16K even tho most markets are at ATH. I know it's for long term investing....but it still hurts. Lol.
Deal Expert
Feb 29, 2008
15824 posts
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Montreal
golfcraze wrote:
Jul 12th, 2017 12:25 pm
Crazy how the rise in the Canadian dollar is killing my xaw.to investment. I probably should of bought the a currency hedged etf when I bought into the couch potato portfolio. The CAD was pretty low when I started. :(
Hindsight is 20 20. All my US and. Int'l holdings exploded in value after 2015. For every looser there is a winner.
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May 3, 2015
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mr_raider wrote:
Jul 13th, 2017 5:57 pm
Hindsight is 20 20. All my US and. Int'l holdings exploded in value after 2015. For every looser there is a winner.
Don't you mean a tighter? Face With Stuck-out Tongue And Tightly-closed EyesWinking Face
Newbie
Dec 16, 2012
69 posts
10 upvotes
Richmond Hill, ON
Hi Germack,

Finished reading/skimming through the entire thread and just want to thank you for sharing your journey and all your advice.

Just to clarify, why do you suggest to have bonds in an RRSP? Is it because equities typically have higher gains and they're better off sheltered? I'm only investing in TFSA as I'm no where near maxing it out. Just want to know for the future.

I am 23 and living with parents. Can't decide if I'll rent or buy when I move out as I live in the GTA. Only investments are a TFSA balanced portfolio (40% ZAG, 20% VCN, 20% XUU, 16% XEF, 4% XEC). I'll be opening an RRSP likely when the next tax season comes around.
Member
Nov 4, 2015
268 posts
61 upvotes
portraitofruin wrote:
Jul 16th, 2017 10:23 pm
Just to clarify, why do you suggest to have bonds in an RRSP? Is it because equities typically have higher gains and they're better off sheltered? I'm only investing in TFSA as I'm no where near maxing it out. Just want to know for the future.
Interest income has the least favourable tax treatment so you should just shelter that. Capital gains (only 50% is taxed) and dividends (dividend tax credit) have more favourable tax treatments so if you had to pay tax on one or the other, it's better to pay it on equity.

However, if you had US investments as well then you may want to consider putting them in your RRSP. There are some tax treaty rules too regarding US equities and withholding tax that might make holding them in an RRSP better than a TFSA so maybe someone else can chime in on that or you can do a quick Google search since I don't know it off the top of my head.
Deal Guru
Sep 2, 2008
10091 posts
555 upvotes
braveblade wrote:
Jul 7th, 2017 6:17 pm
Great job OP! I have a question and I'm sorry if similar question has been asked before:

I have been on Tangerine's balanced portfolio for TFSA. I just had a newborn so I think it's perfect time for me to switch to ETF for both TFSA and RESP. My plan is to open both ETF TFSA and ETF RESP with Questrade using CCP's balanced ETF portfolio: 40% in ZAG, 20% in VCN, and 40% in XAW. The total amount of these 2 will be > $15000 so I do not need to pay the $50/yr fee for RESP. I have 0 knowledge on either ETF or index funds but always want to try and learn. What are your opinion on my approach as a novice investor? Thanks!
Can you explain the $50/yr fee bit? I also have a newborn (on the way) and looking to start resp. Currently have TFSA ETFs.
Deal Expert
Feb 29, 2008
15824 posts
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Montreal
MikeZ13 wrote:
Jul 14th, 2017 10:18 am
Don't you mean a tighter? Face With Stuck-out Tongue And Tightly-closed EyesWinking Face
No. Loose like wizard's sleeve.
Deal Expert
Feb 29, 2008
15824 posts
1715 upvotes
Montreal
portraitofruin wrote:
Jul 16th, 2017 10:23 pm
Hi Germack,

Finished reading/skimming through the entire thread and just want to thank you for sharing your journey and all your advice.

Just to clarify, why do you suggest to have bonds in an RRSP? Is it because equities typically have higher gains and they're better off sheltered? I'm only investing in TFSA as I'm no where near maxing it out. Just want to know for the future.

I am 23 and living with parents. Can't decide if I'll rent or buy when I move out as I live in the GTA. Only investments are a TFSA balanced portfolio (40% ZAG, 20% VCN, 20% XUU, 16% XEF, 4% XEC). I'll be opening an RRSP likely when the next tax season comes around.
One caveat is that allocation rules (TFSA, vs RRSP vs Personal) only apply if you have more invested than the max in the two registered accounts. Until you fill up or your RRSP and TFSA, not a dime should be held unregistered. TFSA vs RRSP contributions should be guided by mostly future income and cash flow considerations, rather than optimizing with holding taxes, since that is minor.

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