Investing

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

  • Last Updated:
  • Oct 23rd, 2017 10:48 am
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Newbie
Sep 25, 2007
40 posts
3 upvotes
Newmarket
One thing I never liked was CPP suggestion to make accounts tax efficient and base allocation as "one big portfolio"
I found this to get complicated after 8 accounts (2X RSP, 2X TFSA, 2Xpension, 1X joint non-reg + RESP this just was not simple enough for me. Some problems I ran into

RSP got bigger than I want because CPP white paper said to put USD etf inside it. (tax efficient, right?) Well the s&p500 in CAD went over 4/fold since 2008, so now I have large RSP and TFSA is smaller.
Not sure how this is tax "optimized" but everything balanced would have been so much easier.

Also without all funds in each account, I found it sometimes hard or impossible to rebalance.

and I question the tax savings from doing norbet's gambit and using USD listed ETFS I don't even think is worth it because CAD etf track SO well now and they convert currency for fraction of the cost. I've tried to look at historical returns of USD vs CAD efts, but it's extremely hard to narrow down because not every ETF tracks index perfect every year (but almost and over long period of time)

So this year I finally said "forget it" and finally did what I wanted to do: make each account simple, and balanced. SO much easier to keep track and for making contributions.

This is what I have and suggest (all 25% weighting)

TFSA

XIU
XEF
XUS
XBB

RSP

VTI
VEA
XBB
XIU

RESP has legacy vanguard, I shares, and horizon.

I chose ISHARES because I believe they are the biggest (most AUM) and liquid. I've seen huge spreads on ETFS before that are new(er) to the market. Liquidity is important to me and I don't want the market to be gouging on a huge spread between bid and ask should I have to rebalance one day or during a stock market crash.

I left legacy USD in RSP because I don't wan to pay converting it back right now. But I don't even suggest using USD funds anymore because of the complexity of conversion. (norbert's gambit) and unflattering and uncertain results from doing it over the long run.

I will be done soon to fill the non-reg back up, this is what I'm using to lower distribution tax as it cuts into my CTB:

HXT
HBB
HXS
XEF

Good luck and try to get into those efts I suggested above (TFSA)
Last edited by Jungle on Jul 26th, 2017 5:00 am, edited 1 time in total.
One thing that I've been on the hunt for is a nice clear and concise tutorial for purchasing ETF's. I mean, a plain language, straight forward primer on purchasing them via an online brokerage (or online banking). Have you ever come across anything like that? I like your suggestion re: balancing for each account - again, simplicity (for me) is key, and the savings are moot if I'm not consistently following a plan due to doubt or confusion regarding balancing across all accounts.

Thanks for the info - definitely going to look into the ETFs you've mentioned.
Sr. Member
User avatar
Apr 16, 2009
832 posts
185 upvotes
Vancouver
Elendil wrote:
Jul 28th, 2017 12:34 pm
One thing that I've been on the hunt for is a nice clear and concise tutorial for purchasing ETF's. I mean, a plain language, straight forward primer on purchasing them via an online brokerage (or online banking). Have you ever come across anything like that? I like your suggestion re: balancing for each account - again, simplicity (for me) is key, and the savings are moot if I'm not consistently following a plan due to doubt or confusion regarding balancing across all accounts.

Thanks for the info - definitely going to look into the ETFs you've mentioned.
PWL Capital has produced a bunch of youtube videos of this exact process Winking Face

https://www.pwlcapital.com/en/Advisor/T ... -Questrade

Deal Addict
Jul 15, 2006
2965 posts
204 upvotes
Awesome contributions all around to this thread.
In preparation for moving to the couch potato strategy, I'm planning to move some of my current RSP funds from my employer based vendor to a direct investing platform. Following that, I'm planning to grab the Aggressive model (60% XAW, 30% VCN and 10% ZAG) and sticking to it for the next little while. I am hoping you guys can help me answer a couple of questions.
  1. Do you guys see any concerns with just doing three big transactions and get it all invested right off (three transaction fees) or should I plan this over a period of time? We're talking just about 100K?
  2. I'm planning to repeat this and move money once every couple of years or so once I get enough to justify a transfer (say over 10 to 15K).
Is this a sound strategy or should I forget about the yearly transfers and just try and do more frequent contributions and just suck up the fees?

Thanks in advance.
Sr. Member
Dec 3, 2014
987 posts
172 upvotes
Ontario
Cress wrote:
Aug 12th, 2017 10:36 am
Awesome contributions all around to this thread.
In preparation for moving to the couch potato strategy, I'm planning to move some of my current RSP funds from my employer based vendor to a direct investing platform. Following that, I'm planning to grab the Aggressive model (60% XAW, 30% VCN and 10% ZAG) and sticking to it for the next little while. I am hoping you guys can help me answer a couple of questions.
  1. Do you guys see any concerns with just doing three big transactions and get it all invested right off (three transaction fees) or should I plan this over a period of time? We're talking just about 100K?
  2. I'm planning to repeat this and move money once every couple of years or so once I get enough to justify a transfer (say over 10 to 15K).
Is this a sound strategy or should I forget about the yearly transfers and just try and do more frequent contributions and just suck up the fees?

Thanks in advance.
More frequent. There are essentially no fees buying ETFs with Questrade
Newbie
Feb 11, 2016
65 posts
64 upvotes
Cress wrote:
Aug 12th, 2017 10:36 am
Awesome contributions all around to this thread.
In preparation for moving to the couch potato strategy, I'm planning to move some of my current RSP funds from my employer based vendor to a direct investing platform. Following that, I'm planning to grab the Aggressive model (60% XAW, 30% VCN and 10% ZAG) and sticking to it for the next little while. I am hoping you guys can help me answer a couple of questions.
  1. Do you guys see any concerns with just doing three big transactions and get it all invested right off (three transaction fees) or should I plan this over a period of time? We're talking just about 100K?
  2. I'm planning to repeat this and move money once every couple of years or so once I get enough to justify a transfer (say over 10 to 15K).
Is this a sound strategy or should I forget about the yearly transfers and just try and do more frequent contributions and just suck up the fees?

Thanks in advance.
I'm with RBC, so my fee to buy is $10. No issues with 3 big purchases. I've done that before. Just make sure you don't do it around market open or close times when trading volume is low.

I also accumulate 10k before making a purchase. That usually means buying once a month for me so it makes sense. You can decide based on your accumulation rate. $10 on 5k even isn't so bad. 0.2%. Remember your expected return is 6% a year or so.

Don't accumulate for too long. You'll start getting tempted to hold on and time the market. Contribute every month or 2.
Deal Addict
Jul 15, 2006
2965 posts
204 upvotes
Thanks for the responses, this is good info. Sounds like I'll have to tweak the contribution schedule.
[OP]
Deal Addict
Oct 1, 2006
1656 posts
586 upvotes
Montreal
Cress wrote:
Aug 12th, 2017 10:36 am
Awesome contributions all around to this thread.
In preparation for moving to the couch potato strategy, I'm planning to move some of my current RSP funds from my employer based vendor to a direct investing platform. Following that, I'm planning to grab the Aggressive model (60% XAW, 30% VCN and 10% ZAG) and sticking to it for the next little while. I am hoping you guys can help me answer a couple of questions.
  1. Do you guys see any concerns with just doing three big transactions and get it all invested right off (three transaction fees) or should I plan this over a period of time? We're talking just about 100K?
  2. I'm planning to repeat this and move money once every couple of years or so once I get enough to justify a transfer (say over 10 to 15K).
Is this a sound strategy or should I forget about the yearly transfers and just try and do more frequent contributions and just suck up the fees?

Thanks in advance.
No concerns with just doing three big transactions and get it all invested right off. Based on historical data it has the higher expected value as compared to slowly investing the money over time.
Jr. Member
Mar 30, 2006
121 posts
83 upvotes
Edmonton
Why not chose VFV over XUS if you won't like the spread of XUU?
Jr. Member
Jan 13, 2016
144 posts
39 upvotes
Vancouver, BC
I know when i compared XUS and VFV you needed a lot less to drip with XUS. You don't need a lot to drip XAW eiether. Still i find calculating drips confusing so i could be wrong.
Deal Addict
User avatar
Dec 14, 2006
2872 posts
148 upvotes
Montreal
Hello folks,

I invested following the CCP strategy, i went 25% VCN, 50% XAW and 25% ZAG, this is for a TFSA and i'm in my low 30s.
It's been around 6 months and my P&L is negative all across the board since almost the beginning. I bought at mkt price at the time.

Should I change my strategy ? Invest in other ETFs ?
I was there at the 32$ price error at dell.ca day AND at the 150$ off price error at fs.ca
RFD price error moto: "Buy now, think later." -Ahzuz
Deal Addict
User avatar
Sep 1, 2013
1392 posts
313 upvotes
New Tecumseth, ON
Ahzuz wrote:
Aug 22nd, 2017 7:05 pm
Hello folks,

I invested following the CCP strategy, i went 25% VCN, 50% XAW and 25% ZAG, this is for a TFSA and i'm in my low 30s.
It's been around 6 months and my P&L is negative all across the board since almost the beginning. I bought at mkt price at the time.

Should I change my strategy ? Invest in other ETFs ?
Everything is on sale, buy more.
Just because you can doesn't mean you should.
Jr. Member
Jan 16, 2009
150 posts
67 upvotes
Ahzuz wrote:
Aug 22nd, 2017 7:05 pm
Hello folks,

I invested following the CCP strategy, i went 25% VCN, 50% XAW and 25% ZAG, this is for a TFSA and i'm in my low 30s.
It's been around 6 months and my P&L is negative all across the board since almost the beginning. I bought at mkt price at the time.

Should I change my strategy ? Invest in other ETFs ?

Hey Ahzuz. What you are describing is the perfect example of behavioural finance. You are overthinking things and paying too much attention to your investments. Remember, it's called "passive" investing for a reason.

As mentioned previously in this thread the Canadian dollar has been doing well this year compared to the USD so even though the S&P 500 may have posted a return it was wiped away by the appreciating dollar. The idea is to just keep on investing and follow your plan through the thick and thin (just like Germack did thought 2008).

Remember, the largest factor in determining investment success is your savings rate, not necessarily the products you choose. Hell, there are people that went their entire working career invested in actively managed mutual funds charging 2.5% per year and they are currently enjoying a comfortable retirement due to their high savings rate.
Deal Addict
User avatar
Aug 1, 2007
1279 posts
129 upvotes
Ahzuz wrote:
Aug 22nd, 2017 7:05 pm
Hello folks,

I invested following the CCP strategy, i went 25% VCN, 50% XAW and 25% ZAG, this is for a TFSA and i'm in my low 30s.
It's been around 6 months and my P&L is negative all across the board since almost the beginning. I bought at mkt price at the time.

Should I change my strategy ? Invest in other ETFs ?
Be patient and understand that you will see losses from time to time. Stay disciplined, rebalance when making deposits or once or twice a year. Stick to the plan.
Deal Addict
User avatar
Dec 14, 2006
2872 posts
148 upvotes
Montreal
Thanks everyone.

I'm making a 10k deposit now - will stick to the strategy.
I was there at the 32$ price error at dell.ca day AND at the 150$ off price error at fs.ca
RFD price error moto: "Buy now, think later." -Ahzuz

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