Investing

Couch potato investing for the last 14 years - tracking my progress

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  • Jan 24th, 2020 7:09 am
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Newbie
Dec 31, 2018
59 posts
47 upvotes
Germack wrote:
Jan 8th, 2020 9:08 pm
Starting early definitely helped. Hower, the returns for my investing period have been nothing out of the ordinary. 10-year and 20-year annualized returns of an aggressive couch potato portfolio have been 9.57% and 5.25%, respectively as of 31DEC2018 (Could not find newer data). These are not abnormal high returns as can be seen in the graph below showing rolling 35-year returns of the S&P 500 which have surprisingly been quite stable over almost 100 years now.
Also, your portfolio is global, and the returns from Canada, international and developing have not been anything out of the ordinary the last 10 years (if not below historical average)...
Deal Fanatic
Mar 24, 2008
5729 posts
1851 upvotes
Toronto
TrickleDownEconomics wrote:
Jan 9th, 2020 10:43 pm
Also, your portfolio is global, and the returns from Canada, international and developing have not been anything out of the ordinary the last 10 years (if not below historical average)...
Were you just investing for the last 10 years? Not sure how it's relevant what happened in the past 10 years if you are investing for a long term horizon.
Illegitimi non carborundum
Jr. Member
Apr 5, 2017
162 posts
20 upvotes
Hi Folks,
Can anyone suggest me a good investing option in simple (layman) terms . I have a TD direct investing account and have $15,000 CAD in my kids RESP and $30,000 CAD in my RRSP account. Need to invest as early as possible for long term. I have this amount sitting as cash for at least 2 years as I have 0 knowledge about investments. My kids have at least 12-15 years for University and I have minimum 30 years to retire. I'll be contributing $2500 per child (3 kids) in their RESP account every year.
TIA.
Sr. Member
User avatar
Mar 20, 2013
779 posts
262 upvotes
Scarborough
MK1986 wrote:
Jan 20th, 2020 9:20 am
Hi Folks,
Can anyone suggest me a good investing option in simple (layman) terms . I have a TD direct investing account and have $15,000 CAD in my kids RESP and $30,000 CAD in my RRSP account. Need to invest as early as possible for long term. I have this amount sitting as cash for at least 2 years as I have 0 knowledge about investments. My kids have at least 12-15 years for University and I have minimum 30 years to retire. I'll be contributing $2500 per child (3 kids) in their RESP account every year.
TIA.
That looks very close to my situation. I'm looking to see the answers. Let's hope for help for the rookies.
Sr. Member
Feb 22, 2013
574 posts
427 upvotes
@Harpagon @MK1986 I think you would be well served by approaching a financial advisor at the bank and buy some of their mutual funds. With zero knowledge of Investing, I don't think you should start investing without some professional assistance. Don't be penny wise and pound foolish.

With mutual funds, you may pay a 2% management fee but bad advise can cost a lot more in terms of realized capital losses.
Member
Jun 10, 2010
242 posts
22 upvotes
Sorry if this has already been asked (I haven't found it), but are there any way to automate this process other than using robo-advisers?

I'm using wealthsimple making daily contribution to my RRSP and TFSA. I am not using them because I am confused about investing, but simply because it is convenient as they pull on my bank account and invest the money on a daily basis (well, they accumulate a few days worth before investing so it is not perfect...).

However, as the balance grows, it becomes quite expensive simply to get that automation benefit... I thought about accumulating about $1,000 free of charge in wealthsimple and transferring it to wealthsimple trade every few weeks, but they obviously did not make that possibility a simple one (especially for registered accounts).

To me, the benefit of automation are that it reduces the potential timing impact, it goes on even if I don't have time to take care of it, and, to be honest, when I do it myself I tend to be overly price sensitive, especially as I would invest less often, so bigger amount every time... (even if I know that it doesn't matter in the long run...)

Any alternative?
Deal Addict
User avatar
Mar 14, 2006
4302 posts
533 upvotes
Looking to transfer my RRSP from Manulife mutual funds to Questrade. Gotta pay DSC fee of $360, It should be worth it long term.

edit: code received
Jr. Member
Apr 5, 2017
162 posts
20 upvotes
sparkaction wrote:
Jan 20th, 2020 10:44 am
@Harpagon @MK1986 I think you would be well served by approaching a financial advisor at the bank and buy some of their mutual funds. With zero knowledge of Investing, I don't think you should start investing without some professional assistance. Don't be penny wise and pound foolish.

With mutual funds, you may pay a 2% management fee but bad advise can cost a lot more in terms of realized capital losses.
Tried few, most of them are talking for their own benefit (commission, sales etc..) not for customer's benefit sadly !
Member
Aug 8, 2019
339 posts
187 upvotes
MK1986 wrote:
Jan 20th, 2020 1:57 pm
Tried few, most of them are talking for their own benefit (commission, sales etc..) not for customer's benefit sadly !
Have you already taken a look at the ccp models that this whole thread talks about?
Why not just go with any of those as listed here https://canadiancouchpotato.com/model-portfolios/
Newbie
Dec 1, 2019
62 posts
53 upvotes
sparkaction wrote:
Jan 20th, 2020 10:44 am
Harpagon MK1986 I think you would be well served by approaching a financial advisor at the bank and buy some of their mutual funds. With zero knowledge of Investing, I don't think you should start investing without some professional assistance. Don't be penny wise and pound foolish.

With mutual funds, you may pay a 2% management fee but bad advise can cost a lot more in terms of realized capital losses.

Or @Harpagon @MK1986 could spend the time and money they were going to spend with what's really a mutual funds salesperson at the bank, and check out Investopedia, CCP, CPM, and MMM.

https://www.investopedia.com/ask/answer ... nd-etf.asp
https://www.investopedia.com/ask/answer ... nd-etf.asp
https://canadiancouchpotato.com/about/
https://www.canadianportfoliomanagerblo ... ortfolios/
https://canadiancouchpotato.com/model-portfolios/
https://www.mrmoneymustache.com/2012/01 ... etirement/

Investing in the stock market means you've chosen to believe that the world isn't gonna end tomorrow, and want to tie the growth of your savings to the growth of the (world) economy. Which means instead of buying gold or stocking up on weapons, ammo, and food, you buy a low-fee, globally diversified ETF of cap weighted, total stock market index funds.

Investment firms have made this easy by creating ETFs that try to cover most aspects of the economy, and consist of thousands of publicly listed companies. These ETFs trade like stocks, and can be bought through a (discount) brokerage, as well as at your bank, acting as a middleman in the stock market for you.

Your risk tolerance (how much of your portfolio's value you can stomach losing in a year or two) will determine the ratio of you owning stocks (or ETFs) to bonds (or bond ETFs). Bonds are loans you give to (mainly) the government, and they pay you interest, plus the original loan amount after the term is up. Bonds help buffer the amount your portfolio loses in a recession, but the downside is that in a booming economy, bonds don't also give you alot of portfolio growth (bonds rarely lose value at the same time as stocks).

https://i.imgur.com/MK51lLe.png

Vanguard, Blackrock, and BMO have all created low-fee one-fund ETFs that have different ratios of stocks to bonds, available to Canadians who want something between going totally DIY and trusting their bank to do it for them.

VGRO, XGRO, and ZGRO all invest in 80% total market index ETFs and 20% in bond ETFs.

https://www.vanguardcanada.ca/individua ... nnaire.htm
https://cdn.canadianportfoliomanagerblo ... -Light.pdf
https://cdn.canadianportfoliomanagerblo ... -Light.pdf
Last edited by 095179005 on Jan 21st, 2020 11:00 am, edited 2 times in total.
[OP]
Deal Addict
Oct 1, 2006
2004 posts
1341 upvotes
Montreal
PPiL wrote:
Jan 20th, 2020 11:26 am
Sorry if this has already been asked (I haven't found it), but are there any way to automate this process other than using robo-advisers?

I'm using wealthsimple making daily contribution to my RRSP and TFSA. I am not using them because I am confused about investing, but simply because it is convenient as they pull on my bank account and invest the money on a daily basis (well, they accumulate a few days worth before investing so it is not perfect...).

However, as the balance grows, it becomes quite expensive simply to get that automation benefit... I thought about accumulating about $1,000 free of charge in wealthsimple and transferring it to wealthsimple trade every few weeks, but they obviously did not make that possibility a simple one (especially for registered accounts).

To me, the benefit of automation are that it reduces the potential timing impact, it goes on even if I don't have time to take care of it, and, to be honest, when I do it myself I tend to be overly price sensitive, especially as I would invest less often, so bigger amount every time... (even if I know that it doesn't matter in the long run...)

Any alternative?
You can set-up a Pre-Authorized Purchase Plan for TD e series funds with TDDI. To set this up you have to call in. You can't do it online. TDDI can do an automatic debit from your chequing account at TD or another bank.
Jr. Member
Apr 5, 2017
162 posts
20 upvotes
095179005 wrote:
Jan 20th, 2020 9:04 pm
Or @Harpagon @MK1986 could spend the time and money they were going to spend with what's really a mutual funds salesperson at the bank, and check out Investopedia, CCP, CPM, and MMM.

https://www.investopedia.com/ask/answer ... nd-etf.asp
https://www.investopedia.com/ask/answer ... nd-etf.asp
https://canadiancouchpotato.com/about/
https://www.canadianportfoliomanagerblo ... ortfolios/
https://canadiancouchpotato.com/model-portfolios/
https://www.mrmoneymustache.com/2012/01 ... etirement/

Investing in the stock market means you've chosen to believe that the world isn't gonna end tomorrow, and want to tie the growth of your savings to the growth of the (world) economy. Which means instead of buying gold or stocking up on weapons, ammo, and food, you buy a low-fee, globally diversified ETF of cap weighted, total stock market index funds.

Investment firms have made this easy by creating ETFs that try to cover most aspects of the economy, and consist of thousands of publicly listed companies. These ETFs trade like stocks, and can be bought through a (discount) brokerage, as well as at your bank, acting as a middleman in the stock market for you.

Your risk tolerance (how much of your portfolio's value you can stomach losing in a year or two) will determine the ratio of you owning stocks (or ETFs) to bonds (or bond ETFs). Bonds are loans you give to (mainly) the government, and they pay you interest, plus the original loan amount after the term is up. Bonds help buffer the amount your portfolio loses in a recession, but the downside is that in a booming economy, bonds don't also give you alot of portfolio growth (bonds rarely lose value at the same time as stocks).

https://i.imgur.com/MK51lLe.png

Vanguard, Blackrock, and BMO have all created low-fee one-fund ETFs that have different ratios of stocks to bonds, available to Canadians who want something between going totally DIY and trusting their bank to do it for them.

VGRO, XGRO, and ZGRO all invest in 80% total market index ETFs and 20% in bond ETFs.

https://www.vanguardcanada.ca/individua ... nnaire.htm
https://cdn.canadianportfoliomanagerblo ... -Light.pdf
https://cdn.canadianportfoliomanagerblo ... -Light.pdf
Thanks a lot for the detailed explanation. Appreciate your valuable time ! You have explained it quite well and in simple terms !

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