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

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  • Mar 22nd, 2024 3:36 pm
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Jr. Member
Feb 1, 2005
102 posts
35 upvotes
Richmond
Jedi14 wrote:
I still struggle in putting money in international stocks (ex US and Canada) due to its relative poor performance the past decade compared to US and Canada. Most of my equities are in US stocks (70%). Canadian stocks and REITS, 25%. International stocks are at 5%. Equities to fixed income is 60/40. I'm currently reading up on this topic to convince myself I need to increase my international allocation. It doesn't help that the TD International Index fund I bought in 2000 has given me an IRR of 1.66% lol.
With Canada being such a small portion of the global equity market, diversifying internationally is very important. My target is 25% US and 25% International + 5% Emerging.

I use VTI and VWO for US and Emerging. At the time, there were relatively few options for low cost International but I ended up selecting Mawer International which has been more than acceptable even with a MER of 1.4%. 10 year return has been just over 11% and 15 year is around 10%. International has done well over the longer term. If I was starting now, I would use one of the low cost ETF's to get your international exposure.
Deal Addict
Oct 1, 2006
3249 posts
4472 upvotes
Montreal
Deepwater wrote: Here is an article I came across recently: Will the U.S. Continue to Dominate?

Also starting in the year 2000 the US had a significant period of below average returns. You can see that here in a periodic table of returns: http://www.ndir.com/cgi-bin/PeriodicTab ... pYear=2008

It is hard to invest in other markets when the US has been so strong, but nobody really knows the future, so I prefer broad diversification if it is available at reasonable cost, even if it lowers my return a bit.
+1 Very well said Deepwater
Deal Addict
Jun 15, 2012
2837 posts
1011 upvotes
Saskatoon
Couch potato aka indexing(represented by best performing simple index with its divs reinvested) vs dividend stocks/ETFs
Image

Go figure.
No need to type thank you; upvote=thanks.
Buffett, investors are focusing “not on what an asset will produce but rather on what the next fellow will pay for it.”

“Because gold is honest money it is disliked by dishonest men.” – R. Paul
Newbie
Aug 1, 2018
24 posts
5 upvotes
Hi All,

I am opening my RRSP with Questrade. What ETFs should I start purchasing. I am aiming to keep it for 25+ years. I want to start purchasing ETFs that saves FWT rightaway. Especially, not want to buy all allocation etf now and sell them later and buy US based etfs after portfolio gets bigger. So, please suggest some diversified US based etfs. Currently, I'm purchasing 50% VGRO and 50% XGRO in my TFSA.

Another question is do I need to convert CAD to USD in order to buy US based ETFs? what would be best way of doing it? norbert's gambit?

Thanks,
Deal Addict
Oct 1, 2006
3249 posts
4472 upvotes
Montreal
DoOrDie wrote: Hi All,

I am opening my RRSP with Questrade. What ETFs should I start purchasing. I am aiming to keep it for 25+ years. I want to start purchasing ETFs that saves FWT rightaway. Especially, not want to buy all allocation etf now and sell them later and buy US based etfs after portfolio gets bigger. So, please suggest some diversified US based etfs. Currently, I'm purchasing 50% VGRO and 50% XGRO in my TFSA.

Another question is do I need to convert CAD to USD in order to buy US based ETFs? what would be best way of doing it? norbert's gambit?

Thanks,
Here are some US based ETFs:
VTI (US equity); VEA (Global Developed - US); VWO (Emerging market)

Yes, you need to convert CAD to USD to buy these ETFs. Norbert's gambit is a good way to cheaply convert CAD/USD.
Jr. Member
Nov 18, 2017
150 posts
128 upvotes
Anyone own SPDR Dow Jones ? Input is appreciated

MER for the SPDR Dow Jones Industrial Average ETF is 0.17%; it yields 0.9%.
Jr. Member
Nov 18, 2017
150 posts
128 upvotes
I want a ETF with maximum growth as possible. MER risk is not as important. Any suggestions ?
Deal Addict
User avatar
Apr 12, 2009
1356 posts
344 upvotes
Scorpionking999 wrote: I want a ETF with maximum growth as possible. MER risk is not as important. Any suggestions ?
VEQT. All equity 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
Oct 1, 2006
3249 posts
4472 upvotes
Montreal
Scorpionking999 wrote: Anyone own SPDR Dow Jones ? Input is appreciated

MER for the SPDR Dow Jones Industrial Average ETF is 0.17%; it yields 0.9%.
I prefer VTI over SPDR Dow Jones. VTI is better diversified and also contains mid and small cap companies. 3573 companies in total, while SPDR Dow Jones contains "only" 30 large cap companies.
Sr. Member
User avatar
Dec 2, 2017
753 posts
868 upvotes
Scorpionking999 wrote: I want a ETF with maximum growth as possible. MER risk is not as important. Any suggestions ?
If MER is not an issue and you are looking at maximum growth by using US listed ETFs, why not to try leveraged ones like SSO and TQQQ.
Not the best choice when market this high, but it gives you much better return than DIA
Deal Addict
Feb 26, 2017
2902 posts
4581 upvotes
EuRaFree wrote: If MER is not an issue and you are looking at maximum growth by using US listed ETFs, why not to try leveraged ones like SSO and TQQQ.
Not the best choice when market this high, but it gives you much better return than DIA
The risk you take with leverage is that you can wipe out almost all the value of your portfolio. A 30% loss with a fund that is 2x leveraged leads to a 60% loss. To recover from a 60% loss you would need a 150% gain.
Deal Fanatic
User avatar
May 11, 2014
6582 posts
9090 upvotes
Rankin Inlet, NU
EuRaFree wrote: If MER is not an issue and you are looking at maximum growth by using US listed ETFs, why not to try leveraged ones like SSO and TQQQ.
Not the best choice when market this high, but it gives you much better return than DIA
Chance7652 wrote: The risk you take with leverage is that you can wipe out almost all the value of your portfolio. A 30% loss with a fund that is 2x leveraged leads to a 60% loss. To recover from a 60% loss you would need a 150% gain.
Leveraged ETFs are really only meant for short term trades. As @Chance7652 has shown, decay is a significant issue, especially overtime.
https://study.com/academy/lesson/what-i ... ility.html . And remember, these ETFs are priced daily, so any small down day slowly overtime will reduce the price even though over time the index tracked may grow.

The "safer" form of leveraging over longer term is margin or borrowing to invest. You have a set loan, and set interest you pay and similarily can have the return of 2x, 3x without the issue of decay. Of course, interest and fees are an issue and margin is of course subject to margin calls. Used responsibly with even a payment plan intwined can help reduce risk even further.

Of course the use of leverage on it's own is risky, and I wouldn't recommend those starting out doIng it from the get go.
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Jr. Member
Nov 18, 2017
150 posts
128 upvotes
Thanks everyone for the input. Will look into VEQT and VTI

Does anyone own Vanguard S&P 500 ETF (VOO) ?

Warren Buffet recommended this and has good reviews. Low MER. Looks good.
Deal Fanatic
Jul 4, 2004
7534 posts
792 upvotes
Toronto
Scorpionking999 wrote: Thanks everyone for the input. Will look into VEQT and VTI

Does anyone own Vanguard S&P 500 ETF (VOO) ?

Warren Buffet recommended this and has good reviews. Low MER. Looks good.
VOO is a USD fund, but that works to your advantage because withholding taxes are recoverable in registered accounts.

VFV is the Canadian version, without the recoverable withholding taxes - but this probably won't drag your portfolio much anyways....
Deal Addict
User avatar
Apr 12, 2009
1356 posts
344 upvotes
While VOO “could” provide higher returns, it’s still mainly US focused. Something like VGRO/XGRO/VEQT has better geographical diversification if you’re only looking to invest in one ETF.

Not saying VOO is a bad choice, but just be aware of the drawbacks.
"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
Jun 15, 2012
2837 posts
1011 upvotes
Saskatoon
Interesting view
Image
No need to type thank you; upvote=thanks.
Buffett, investors are focusing “not on what an asset will produce but rather on what the next fellow will pay for it.”

“Because gold is honest money it is disliked by dishonest men.” – R. Paul
Deal Guru
Aug 17, 2008
10991 posts
13540 upvotes
@ukrainiandude, did you come up with this snip on your own or did you just take @twowood's post from another thread from 8 hours earlier without giving credit where credit is due?
twowood wrote: I'll just leave this here then.
Image
ukrainiandude wrote: Interesting view
Image
Answer not a fool according to his folly, lest thou also be like unto him = Never argue with an idiot, they'll only bring you down to their level & beat you with experience
Member
Jan 18, 2016
241 posts
76 upvotes
Winnipeg, MB
MrMom wrote: @ukrainiandude, did you come up with this snip on your own or did you just take @twowood's post from another thread from 8 hours earlier without giving credit where credit is due?
relax MrMom, attribution is due to JP Morgan, not the dude who has mastered ctrl-c, ctrl-v.
Jr. Member
Nov 18, 2017
150 posts
128 upvotes
Drew_W wrote: VOO is a USD fund, but that works to your advantage because withholding taxes are recoverable in registered accounts.

VFV is the Canadian version, without the recoverable withholding taxes - but this probably won't drag your portfolio much anyways....
Thanks for your input. How can one recover withholding taxes ? Is it tax deductible or how is it recoverable if you buy ETF ?

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