Investing

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

  • Last Updated:
  • Mar 22nd, 2024 3:36 pm
Tags:
None
Deal Addict
Feb 21, 2004
1584 posts
378 upvotes
Montreal
Lots of folks are replacing extra ZAG contributions with extra mortgage prepayments with the rising rates. Guaranteed 100% return (depending on which bracket you're in)

With the new trade deal, it is a virtual certainty BOC will raise rates twice to keep inflation in check now that the clouds have dissipated. Might even raise a 3rd if the Leafs win the cup (according to NHL '19)
Sr. Member
User avatar
Feb 5, 2017
910 posts
913 upvotes
HoTiCE_ wrote: Lots of folks are replacing extra ZAG contributions with extra mortgage prepayments with the rising rates. Guaranteed 100% return (depending on which bracket you're in)

With the new trade deal, it is a virtual certainty BOC will raise rates twice to keep inflation in check now that the clouds have dissipated. Might even raise a 3rd if the Leafs win the cup (according to NHL '19)
go with rate reset preferred shares as an alternative.
Deal Addict
Oct 1, 2006
3249 posts
4472 upvotes
Montreal
braveblade wrote: Currently I have 50% xaw, 25% vcn and 25% zag. Thinking about replace zag with another etf. The performance of zag is just terrible. Could you recommend an eft to replace zag? Thanks.
Please don't do this. Basing your investment strategy on past performance (especially recent performance) is a very bad strategy.

Good investing is all about coming up with a sound investing strategy (as you did) and sticking to it in good and bad times.

Portfolios are like a bar of soap. The more you touch it the smaller it gets" - Preet Banerjee
Deal Guru
Mar 20, 2003
10476 posts
656 upvotes
New-Brunswick
I thought this was an interesting read: https://www.moneysense.ca/save/the-pot- ... t-to-bust/

I don't contest the money to be made on pot, I made 148% myself according to Questrade but I would never consider it a long term investment strategy.

I like the quote Germack posted, I've been re-jiggering my portfolio after I sold the weed stocks and every time I change something it shrinks just a little bit.
Deal Addict
Mar 4, 2009
1841 posts
654 upvotes
Toronto
I don't know about replacing ZAG with another bond ETF.
Now if you told me that you will be replacing ZAG with GIC than it might make sense as long as you don't plan to re balance your portfolio until GIC's maturity date.
Or use HISA if you need the fund to be liquid.

In the end, index investing is about long term investing. Just contribute following your allocation ratio and don't get caught up in the day to day (or year to year) fluctuation.
Bond ETFs will probably get hit again when the interest rate go up, stocks will have a bear market soon or later. But if your planning to save for 15+ years, it should be fine in the end.
Newbie
May 1, 2014
11 posts
3 upvotes
Richmond Hill, ON
Hi Germack, thanks for sharing your experience, it's amazing how disciplined you were on saving up and sticking with your plan. Congratulations on your achievements!
I would like to start investing on my own like you did but I am already in my mid 30s and have a RSP account ($35k) managed by a financial advisor at TD. The MER I think is between 2-3%. Should I leave the money where it is and start fresh with a self directed account following the e-series model from couch potato? or I should transfer everything over to self-direct side / leave everything as is and have only one account?
Deal Addict
Oct 1, 2006
3249 posts
4472 upvotes
Montreal
Hi NewOwner,

Thank you for the kind words.

I would sell your Mutual funds and invest the money using a self directed account following the e-series model from couch potato or purchase one of the following ETFs: VCNS, VBAL or VGRO.

The potential savings for you by doing this are enormous >500k. For example if you would have done a one time investment of $35K in 1974 into the S&P500 and held your investment for 40 years you would have ended up with $1,088k assuming 0% fees. If you would have paid a MER of 2.5% per year you would have only ended up with $380k per year. Huge difference. The damage an MER of 2-3% does over the long term are enormous.

See graph below for more info.
MER 35K.png
Newbie
May 1, 2014
11 posts
3 upvotes
Richmond Hill, ON
Thank you Germack for your advise. I looked up on the couch potato e-Series and will go to open up a TD self direct account today. Do i just buy exactly as listed on the website? (TDB909, 900, 902 and 911)? Sorry i really have zero knowledge about investing. Another question i have is, you mentioned you have 'investment income', does the index fund pays you? is there a page i can go read up on the basics? (for example..what is ETFs etc). Sorry for all the questions.
Deal Addict
Dec 4, 2016
2011 posts
1030 upvotes
HoTiCE_ wrote: Lots of folks are replacing extra ZAG contributions with extra mortgage prepayments with the rising rates. Guaranteed 100% return (depending on which bracket you're in)

With the new trade deal, it is a virtual certainty BOC will raise rates twice to keep inflation in check now that the clouds have dissipated. Might even raise a 3rd if the Leafs win the cup (according to NHL '19)
Replacing ZAG contribution with extra mortgage prepayments is a personal choice. I don't own any bond funds or GIC or HISA, other than a small and liquid emergency bank account, for things like unexpected car repairs. I see mortgage pay down as the bond portion of my portfolio.
Deal Addict
User avatar
Apr 12, 2009
1356 posts
344 upvotes
Hi Germack, love your content. Thank you for sharing your journey with us (and totally adding that Preet quote to my signature). Which financial institution do you invest with?

For someone slowly building up their portfolio, wouldn't it make more sense to go with a mutual fund/portfolio like the Tangerine Equity portfolio (pay the 1.07% MER) than pay a commission fee each time they trade an ETF/index fund? Not everyone wants to go with Questrade, so each trade would incur a commission fee.

Are there recommended ETFs/Index Funds that's commission free? I know Scotia iTrade (which I currently use) have 50 commission free ETFs. But the ones I'm interested in (similar to CPP) are all swap based ETFs. I'd prefer something basic and vanilla.
"Portfolios are like a bar of soap. The more you touch it the smaller it gets" - Preet Banerjee
"You don't have to make it back the way you lost it." - Warren Buffett
Jr. Member
Apr 23, 2011
132 posts
81 upvotes
Toronto
@ECBomb

An option to reduce fees in registered accounts is using TD e-series funds with TDDI. They are free to buy and sell so you can buy weekly/monthly etc, then once a year, you sell and buy swap based ETF’s.
Deal Addict
Jan 18, 2014
1537 posts
512 upvotes
Rouyn-Noranda
ECBomb wrote: Hi Germack, love your content. Thank you for sharing your journey with us (and totally adding that Preet quote to my signature). Which financial institution do you invest with?

For someone slowly building up their portfolio, wouldn't it make more sense to go with a mutual fund/portfolio like the Tangerine Equity portfolio (pay the 1.07% MER) than pay a commission fee each time they trade an ETF/index fund? Not everyone wants to go with Questrade, so each trade would incur a commission fee.

Are there recommended ETFs/Index Funds that's commission free? I know Scotia iTrade (which I currently use) have 50 commission free ETFs. But the ones I'm interested in (similar to CPP) are all swap based ETFs. I'd prefer something basic and vanilla.
Curious as to why? Convenience?

I'm not even with Questrade myself, but from everything I've read, if you're starting out doing a CCP portfolio, Questrade seems like the best option.
Deal Addict
User avatar
Apr 12, 2009
1356 posts
344 upvotes
someguy23 wrote: @ECBomb

An option to reduce fees in registered accounts is using TD e-series funds with TDDI. They are free to buy and sell so you can buy weekly/monthly etc, then once a year, you sell and buy swap based ETF’s.
I'm aware of the TD e-series, but prefer not to open another brokerage account outside of what I'm already using (Scotia iTrade). Too bad there isn't a way to purchase TD e-series outside of TDDI. I'm looking for something more universal (everyone has access to it regardless of brokerage) but doesn't seem like it exists.

You hear a lot about how index investing and ETFs are MUCH better than mutual funds, but no one ever highlights how commission fees factor into the equation ($9.99/trade).
John47 wrote: Curious as to why? Convenience?

I'm not even with Questrade myself, but from everything I've read, if you're starting out doing a CCP portfolio, Questrade seems like the best option.
Convenience is the biggest part. I've used BMO InvestorLine before and it can take 2-3 business days to move money. The ease and convenience is worth it to stick with one place IMO.

The more I read now, I think the CCP portfolio essentially requires you to go with Questrade. Once you have a big enough nest egg, you can move it over to another brokerage.

I currently have it set up where I'm doing my own stock picking through iTrade and an auto weekly contribution to Tangerine's Equity Growth Portfolio. I have the Tangerine one where I'm starting off with a small amount and forcing myself to save, while giving myself the international exposure.
"Portfolios are like a bar of soap. The more you touch it the smaller it gets" - Preet Banerjee
"You don't have to make it back the way you lost it." - Warren Buffett
Deal Addict
Jul 15, 2009
3653 posts
3047 upvotes
ECBomb wrote: I'm aware of the TD e-series, but prefer not to open another brokerage account outside of what I'm already using (Scotia iTrade). Too bad there isn't a way to purchase TD e-series outside of TDDI. I'm looking for something more universal (everyone has access to it regardless of brokerage) but doesn't seem like it exists.
I'm using iTrade as well. I just buy their free ETFs with small amounts and then transfer to the ETF I actually want once I have $3k or so.

They used to have commission-free mutual funds as well but I don't know if they still do.

You suggested Tangerine. Wouldn't that require opening yet another account? If I was going to open another account, I'd go for TD MF over Tangerine. You can get e-series in TD MF. It doesn't have to be a brokerage account (TDDI).
Deal Addict
User avatar
Apr 12, 2009
1356 posts
344 upvotes
bubak wrote: I'm using iTrade as well. I just buy their free ETFs with small amounts and then transfer to the ETF I actually want once I have $3k or so.

They used to have commission-free mutual funds as well but I don't know if they still do.

You suggested Tangerine. Wouldn't that require opening yet another account? If I was going to open another account, I'd go for TD MF over Tangerine. You can get e-series in TD MF. It doesn't have to be a brokerage account (TDDI).
I like that suggestion of buying the free ETFs then transitioning over to your preferred options once you build a sizeable amount. I'll keep that in mind.

The part I left out is that I'm also a Tangerine client (which is also owned by Scotiabank). Since I was already a client, the TFSA account took me minutes to set up. From what I've read online, it's easier to access the funds through Tangerine than TD e-series (if I set it up through the branch level and not TDDI).

It's interesting to see how the CCP recommends the Tangerine funds as an option, but I see many more user reviews preferring TD e-series. I prefer the auto contribution, rebalancing, all inclusive fund, international exposure, and ease of access to my funds with the Tangerine option.
"Portfolios are like a bar of soap. The more you touch it the smaller it gets" - Preet Banerjee
"You don't have to make it back the way you lost it." - Warren Buffett
Deal Addict
Jul 15, 2009
3653 posts
3047 upvotes
ECBomb wrote: I like that suggestion of buying the free ETFs then transitioning over to your preferred options once you build a sizeable amount. I'll keep that in mind.

The part I left out is that I'm also a Tangerine client (which is also owned by Scotiabank). Since I was already a client, the TFSA account took me minutes to set up. From what I've read online, it's easier to access the funds through Tangerine than TD e-series (if I set it up through the branch level and not TDDI).

It's interesting to see how the CCP recommends the Tangerine funds as an option, but I see many more user reviews preferring TD e-series. I prefer the auto contribution, rebalancing, all inclusive fund, international exposure, and ease of access to my funds with the Tangerine option.
I don't mean to dissuade you from Tangerine. It's a fine choice. Tangerine is definitely easier than TD e-series or a brokerage. Just keep the fees in mind: it's about 1% for Tangerine, 0.5% for TD, so the difference is $125 a year if you have $25k, $250 a year once you have $50k. Up to you to decide how much is too much.
Deal Addict
Oct 1, 2006
3249 posts
4472 upvotes
Montreal
NewOwner wrote: Thank you Germack for your advise. I looked up on the couch potato e-Series and will go to open up a TD self direct account today. Do i just buy exactly as listed on the website? (TDB909, 900, 902 and 911)? Sorry i really have zero knowledge about investing. Another question i have is, you mentioned you have 'investment income', does the index fund pays you? is there a page i can go read up on the basics? (for example..what is ETFs etc). Sorry for all the questions.
Yes, you can do this. Another option would be to just buy VCNS, VBAL or VGRO. Both options will work well.

Yes, the funds pay dividends. Around 2-2.5% per year if I remember correctly.

I like the "The MoneySense Guide to the Perfect Portfolio". it will teach you everything you need to know about investing.
Deal Addict
Oct 1, 2006
3249 posts
4472 upvotes
Montreal
ECBomb wrote: Hi Germack, love your content. Thank you for sharing your journey with us (and totally adding that Preet quote to my signature). Which financial institution do you invest with?

For someone slowly building up their portfolio, wouldn't it make more sense to go with a mutual fund/portfolio like the Tangerine Equity portfolio (pay the 1.07% MER) than pay a commission fee each time they trade an ETF/index fund? Not everyone wants to go with Questrade, so each trade would incur a commission fee.

Are there recommended ETFs/Index Funds that's commission free? I know Scotia iTrade (which I currently use) have 50 commission free ETFs. But the ones I'm interested in (similar to CPP) are all swap based ETFs. I'd prefer something basic and vanilla.
I invest with TD Direct Investing. You may want to look at just purchasing VCNS, VBAL VGRO instead of Tangerine funds because it may be the cheaper option. Just do the math.
Deal Addict
Mar 4, 2009
1841 posts
654 upvotes
Toronto
Is there an ETF that is all Canada index but excludes big 6 banks?
Basically, VCN/ZCN/XIC minus big 6 banks.

The reason is, I like the strategy used by HCB/RBNK (basically buying banks that are oversold/have high yields and selling banks that are overbought/have low yields) over market cap for 6 banks. Which is strategy used by many CAN bank stock holders (buy the bank stock that is "low")

If I own both HCB/RBNK + VCN/ZCN/XIC, I would be double dipping on the 6 banks.

EDIT: XCG does cover some large cap Canada without 6 banks but it has limited number of holdings and have high MER.
Last edited by last_sd on Oct 9th, 2018 1:55 pm, edited 1 time in total.
Deal Addict
Jan 18, 2014
1537 posts
512 upvotes
Rouyn-Noranda
last_sd wrote: Is there an ETF that is all Canada index but excludes big 6 banks?
Basically, VCN/ZCN/XIC minus big 6 banks.

The reason is, I like the strategy used by HCB/RBNK (basically buying banks that are oversold/have high yields and selling banks that are overbought/have low yields) over market cap for 6 banks. Which is strategy used by many CAN bank stock holders (buy the bank stock that is "low")

If I own both HCB/RBNK + VCN/ZCN/XIC, I would be double dipping on the 6 banks.
But if you want to be invested in banks, that's not a big deal.

To answer your first question, I doubt it.

Top

Thread Information

There is currently 1 user viewing this thread. (0 members and 1 guest)