Investing

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

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  • Jan 21st, 2019 4:30 pm
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[OP]
Deal Addict
Oct 1, 2006
1858 posts
967 upvotes
Montreal
bubak wrote:
Jan 4th, 2019 7:58 am
What inputs are you using to get these results?

When I input January 1976 to December 2018 adjusted for inflation, it says a 1679% gain so $1k would become $17.8k.

When not adjusted for inflation, it says 7944%, so how did Germack get 9217%?
I used end month = Nov. You used end month = Dec.
Deal Addict
User avatar
Aug 4, 2014
1645 posts
750 upvotes
Toronto, ON
alexcalvado wrote:
Jan 3rd, 2019 11:55 pm
couldnt have said it better myself..
sold XAW back in june at 26.60$ (you do not want to know how much tax I will have to pay on that transaction but let's just say that it was well worth it in retrospect) and VCN as well.

if you want to trade (not invest in) the SP500, my suggestion is to go with XSP and not XUS for now
Hope you started tracking your portfolio performance properly, otherwise you might fall into the same "the loss is greater on the other side" fallacy as my favourite market timer guy :)

Yesterday he posted: "ValueTrend will be posting our performance on Friday of this week. Although the numbers aren’t official yet, it looks like we’ve had substantially less market downside than markets had in 2018. This again illustrates that one can indeed limit your risk, and keep your money through the use of Technical Analysis. A major benefit to loss minimization is that you have less of a hole to dig out of when trading to recover. Remember, a 10% drop requires a 12% gain to break even. A 3% drop only requires a 3.1% gain to break even. The math is exponential. Those who bought and held last year with little activity will likely be looking at near 10% losses to recover from."

Today the results are in.. and nothing to brag about, for all those tireless market-movement predictions & trading efforts (and 1.75% management fee):

Image

Our DIY (and mostly Passive Buy & Hold) portfolio rate of return:

1 month -3.9%
3 months -6.5%
6 months -5.2%
1 year -2.2%
3 years 6.9%

But hey.. "fear sells":
Buy and Hold vs Active Trading

A natural stock-market cycle should inform good investment analysis and portfolio management, not guide it. A blanket “buy and hold” at-all-costs mentality is actually a riskier and costlier investment strategy than a carefully planned system of buying and selling assets.
...
We don’t know the future, but we can increase our odds of success. Our investment analysis and portfolio management approach employs true “market timing”: we buy securities when the risk of holding them is low, and sell when the risk of holding them outweighs their potential return. We don’t pick tops and bottoms – that’s a strategy that relies on blind luck. We measure the risk in the market, and act accordingly to protect your capital.
https://www.valuetrend.ca/our-approach- ... trategies/
Jr. Member
Dec 1, 2006
100 posts
12 upvotes
great thread thanks for everyone's contribution -
Deal Addict
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Dec 27, 2011
2713 posts
1122 upvotes
Waterloo
amal1595 wrote:
Jan 4th, 2019 1:43 am
And then we need to add inflation, 2018 US dollar is 4.4 times cheaper than 1976 dollar..
Means 5670$ in 2018 for 1000$ invested in 1976
Please show us how you got $5670...
Newbie
Jan 6, 2019
4 posts
Hi Germack,
new to the forums and fellow Montrealer. Congrats on your investments!! I've been reading alot of pages in your thread. Learned alot of new things. I've got about 50K with Tangerine balanced TFSA and looking to lower MER to maximize returns over 15-20+ years.
I would like to keep it simple, but don't mind also buying three ETF with Questrade since I already have an account there. I'm undecided with VGRO, XGRO or just do XAW-VCN-ZAG. I'm steering towards XGRO since it has a lower MER of 0.21 compared to VGRO and slightly more US exposure. Money sense pretty much says they are mostly equal and returned pretty much the same over the last 20 years as calculated by Justin bender at Canadian portfolio manager. Obviously can't base the future with past performance.

I'm not planning to touch the money and will contribute at least 5000$+ every year. Total MER if I buy the three seperate ETF is 0.15. Is it really worth it compared to buying VGRO, XGRO which is simpler, but have less control. Will the management modify the allocations over time, etc... IF i'm not mistaken, Questrade doesn't charge to buy ETF, only when you sell.

I would like to know your and other members thoughts on this.

Thanks!
Newbie
User avatar
Sep 20, 2015
89 posts
54 upvotes
Ottawa, ON
ferra27 wrote:
Jan 7th, 2019 10:56 pm
Hi Germack,
new to the forums and fellow Montrealer. Congrats on your investments!! I've been reading alot of pages in your thread. Learned alot of new things. I've got about 50K with Tangerine balanced TFSA and looking to lower MER to maximize returns over 15-20+ years.
I would like to keep it simple, but don't mind also buying three ETF with Questrade since I already have an account there. I'm undecided with VGRO, XGRO or just do XAW-VCN-ZAG. I'm steering towards XGRO since it has a lower MER of 0.21 compared to VGRO and slightly more US exposure. Money sense pretty much says they are mostly equal and returned pretty much the same over the last 20 years as calculated by Justin bender at Canadian portfolio manager. Obviously can't base the future with past performance.

I'm not planning to touch the money and will contribute at least 5000$+ every year. Total MER if I buy the three seperate ETF is 0.15. Is it really worth it compared to buying VGRO, XGRO which is simpler, but have less control. Will the management modify the allocations over time, etc... IF i'm not mistaken, Questrade doesn't charge to buy ETF, only when you sell.

I would like to know your and other members thoughts on this.

Thanks!
I am also in the same boat and was thinking to switch to one ETF (VGRO or XGRO) from XAW-VCN-ZAG that I currently have. I decided not to do at this point because:
1) Since I am putting new money (via auto deposit) each month into portfolio, same as you planning to put $5000+ a year, i just buy the ETFs that I need to keep the portfolio balanced [XAW(60%)-VCN(30%)-ZAG(10%)].
2) Buying one vs three does not add much more time and complexity.
3) It pays (via saving of MER 0.15 vs 0.21 - not much I know but still) to keep three ETFs.
4) Once I stop contributing to portfolio then I may switch to one ETF to get auto re-balancing.
Member
User avatar
May 3, 2015
298 posts
105 upvotes
Toronto, ON
Germack wrote:
Jan 1st, 2019 10:37 am
Year End Update

Networth 30.12.2017: $1,220,831 (Family NW: $2,035,393)
Networth 31.12.2018: $1,237,361 (Family NW: $2,103,686)

Increase: $16,530 (Family: $68,292)

Rate of return (investments): -3.4%

Networth graph:

NW 31DEC2018.png


Savings vs. Investment Gains:

Savings vs Investment Gains 31122018.png
Just wanted to say thanks for keeping on posting these! Much appreciated :)
Deal Addict
Jan 20, 2016
1856 posts
819 upvotes
Houston, TX
amal1595 wrote:
Jan 5th, 2019 12:29 am
It says "in local currency". How much RUB lost again USD? When you add up, you will see negative ROI..
-30% currency drop over year, so yes, in USD it rather loss
Make the Trudeau drama teacher again!
Newbie
Sep 18, 2017
64 posts
53 upvotes
My 95-5 couch potato portfolio ended the year down 5%. 2019 will mark 10 years since I went fully self directed and started looking at couch potato, lower fees, dumping mutual funds and buying ETFs.

Net worth (combined with spouse) was up 20% to $4,921,679.58. Why up 20%? My business had a great year with record revenue and significant retained earnings, made a ton of money via salary and dividends through the business (paid way too much income tax in the process), reduced mortgage on commercial property with lump sum and larger monthly payments, shares in a private co went public and went up significantly (not included in couch potato above), etc. Basically due to diversification.

Looking forward to 2019 and hopefully another great year. Looking forward to shooting past that $5M mark and far beyond.
[OP]
Deal Addict
Oct 1, 2006
1858 posts
967 upvotes
Montreal
MikeZ13 wrote:
Jan 8th, 2019 12:08 pm
Just wanted to say thanks for keeping on posting these! Much appreciated :)
Thank you for the kind words. It makes me happy that you find this thread useful.
Sr. Member
Apr 14, 2017
577 posts
201 upvotes
DT Calgary
Lots of ballers in here. And yet most don’t seem to make much money off this DIY investing method; most would have done better with a high interest savings account.
[OP]
Deal Addict
Oct 1, 2006
1858 posts
967 upvotes
Montreal
ferra27 wrote:
Jan 7th, 2019 10:56 pm
Hi Germack,
new to the forums and fellow Montrealer. Congrats on your investments!! I've been reading alot of pages in your thread. Learned alot of new things. I've got about 50K with Tangerine balanced TFSA and looking to lower MER to maximize returns over 15-20+ years.
I would like to keep it simple, but don't mind also buying three ETF with Questrade since I already have an account there. I'm undecided with VGRO, XGRO or just do XAW-VCN-ZAG. I'm steering towards XGRO since it has a lower MER of 0.21 compared to VGRO and slightly more US exposure. Money sense pretty much says they are mostly equal and returned pretty much the same over the last 20 years as calculated by Justin bender at Canadian portfolio manager. Obviously can't base the future with past performance.

I'm not planning to touch the money and will contribute at least 5000$+ every year. Total MER if I buy the three seperate ETF is 0.15. Is it really worth it compared to buying VGRO, XGRO which is simpler, but have less control. Will the management modify the allocations over time, etc... IF i'm not mistaken, Questrade doesn't charge to buy ETF, only when you sell.

I would like to know your and other members thoughts on this.

Thanks!
Hi ferra27,

Welcome to the RFD forum. All three options are very good.

I believe there is a lot of value in simplicity, therefore I would go with VGRO or XGRO.
Sr. Member
Nov 17, 2014
774 posts
229 upvotes
FUMONEY wrote:
Jan 8th, 2019 2:24 pm
My 95-5 couch potato portfolio ended the year down 5%. 2019 will mark 10 years since I went fully self directed and started looking at couch potato, lower fees, dumping mutual funds and buying ETFs.

Net worth (combined with spouse) was up 20% to $4,921,679.58. Why up 20%? My business had a great year with record revenue and significant retained earnings, made a ton of money via salary and dividends through the business (paid way too much income tax in the process), reduced mortgage on commercial property with lump sum and larger monthly payments, shares in a private co went public and went up significantly (not included in couch potato above), etc. Basically due to diversification.
You win. You beat "alexcalvado" with higher net worth and more income tax paid. Smiling Face With Open Mouth
Deal Addict
Nov 9, 2013
2619 posts
1358 upvotes
Edmonton, AB
FreshCo wrote:
Jan 8th, 2019 7:41 pm
Lots of ballers in here. And yet most don’t seem to make much money off this DIY investing method; most would have done better with a high interest savings account.
Uhhh are you aware of the long term returns of index investing? Sorry but can you show me the savings account where over decades you get 7-9% annualized?

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