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

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  • Dec 12th, 2019 3:42 pm
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Deal Fanatic
Mar 24, 2008
5718 posts
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Toronto
ukrainiandude wrote:
Nov 27th, 2016 11:42 pm
Royal Bank also increased their prime, I believe.
It is not up to them, they just followed the bonds lead.
In my opinion, the prime rates will go up again after December's rate increase by Federal reserve.
My HELOC is still showing Prime as 2.7%... I think they simply increases the mortgage interest rate without touching the prime.
Illegitimi non carborundum
[OP]
Deal Addict
Oct 1, 2006
1976 posts
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Montreal
RBC did not increase their prime rate, only TD did.
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Jun 15, 2012
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Saskatoon
Deleted
'The rich get richer and the poor get - children.'
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Jan 20, 2016
2028 posts
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Houston, TX
Germack wrote:
Nov 29th, 2016 2:48 pm
RBC did not increase their prime rate, only TD did.
TD did NOT increase Prime rate (used to calculate ALL related rates on cards, loc etc). They raised only "mortgage prime" used ONLY for variable rate mortgages
Make the face great again
[OP]
Deal Addict
Oct 1, 2006
1976 posts
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Montreal
JarJar wrote:
Nov 28th, 2016 9:35 pm
So just to clarify your responses to the bolded above:
2. Based on this method - are you also hitting your TFSA/ RRSP maximum contribution for the year as well? Or is your method independent of that? (i.e. are you taking $500 bi-weekly and putting it wherever the account deviates from your targets, or are you focused on each balancing each account)? Are you just using excel to determine where to put the contribution amount?
4. Ok good to know - so the 10% I allocated to Bonds can just be used to pay out my mortgage. Thanks for the tip!

I'm also wondering if I should just keep my VCN allocation in my TFSA rather than a non-registered since I will have the room available.

Thanks.
2. Yes, my TFSA/RRSP accounts are maxed. I do not balance each account. My target allocation goal is across all accounts combined. Each year my savings are first used to max my TFSA/RRSP accounts. After the money is invested in my non-registered account.

4. Yes.

You should hold VCN in your TFSA if you have contribution room available.
Jr. Member
Jan 16, 2009
172 posts
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Germack wrote:
Nov 29th, 2016 9:05 pm
2. Yes, my TFSA/RRSP accounts are maxed. I do not balance each account. My target allocation goal is across all accounts combined. Each year my savings are first used to max my TFSA/RRSP accounts. After the money is invested in my non-registered account.
Hey Germack. Do you adhere to tax efficient investing whenever possible?

For example if your RRSP/TFSA was maxed with US, Intl and emerging market equities and you saw that Intl equities were furthest away from their asset allocation would you purchase Intl equities in your non-registered account with new money? Or would you purchase US equities in your non-reg with the new money, sell US equity in your TFSA /RRSP and use the freed up cash to buy Intl equity? Therefore housing the least tax-efficient equity in your registered account?

I'm thinking of doing this with my own portfolio for tax efficiency but am unsure if I'm missing any details as to why this would not be a good idea.
[OP]
Deal Addict
Oct 1, 2006
1976 posts
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Montreal
I try to invest as tax efficient as possible, but this is not always easy.

In your example I would purchase Intl equities in my non-registered account with new money.

Canadian, US, Intl equities and REITS are all OK to hold in your non registered account. The only asset class I would not hold in my non-registered account are bonds.
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Feb 1, 2012
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Thunder Bay, ON
Germack wrote:
Nov 30th, 2016 9:57 pm
I try to invest as tax efficient as possible, but this is not always easy.
Yes it can be a challenge sometimes. I have 5 accounts (non-registered, TFSA, RRSP & 2 LIRAs). Put most of my Can equities in non-registered and all fixed income in RRSP & LIRA.

The one exception is I try to put a some of all asset classes in my RRSP. That way I should always be able to sell whatever I need to rebalance, without incurring a taxable gain. For example if equities go up a lot and I need to sell some to rebalance I can do so without getting hit with capital gains taxes.
Invest your time actively and your money passively.
Deal Addict
Nov 4, 2007
1358 posts
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Toronto
Question for Couch Potato Investors who have a portion of their portfolio in bonds ETF's like VAB. With interest rates at an all time low, and really no where to go but up. Do you see bond valuation going down? If so does it make sense to get rid of your position of VAB and put it into something else? If so, what?
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Jun 15, 2012
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Saskatoon
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Last edited by ukrainiandude on Dec 1st, 2016 10:10 pm, edited 1 time in total.
'The rich get richer and the poor get - children.'
Deal Addict
Jun 15, 2012
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Saskatoon
kasm wrote:
Dec 1st, 2016 10:06 pm
Question for Couch Potato Investors who have a portion of their portfolio in bonds ETF's like VAB. With interest rates at an all time low, and really no where to go but up. Do you see bond valuation going down? If so does it make sense to get rid of your position of VAB and put it into something else? If so, what?
Short term bonds.
'The rich get richer and the poor get - children.'
Deal Addict
Mar 28, 2007
3031 posts
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I got out of my VAB position today - so done with it! It keels declining every day...
Positive Investing!
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Jan 20, 2016
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Houston, TX
blackdragon12 wrote:
Dec 1st, 2016 10:13 pm
I got out of my VAB position today - so done with it! It keels declining every day...
Well, a bit too late imo, classical sell low, but once you still need exposure to bonds, here's good short-term alternative - XHB
https://www.blackrock.com/ca/individual ... -index-etf

A bit higher yield and a bit lower MER than XSB...

personally I'll keep 25% tdb909 in RESP account for now, imo with reinvesting distribution on higher yield and lower price it will overcome temporary drop eventually and selling it now and buying another bonds will not work much better
Make the face great again
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Feb 1, 2012
1085 posts
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Thunder Bay, ON
asa1973 wrote:
Dec 2nd, 2016 10:17 am
personally I'll keep 25% tdb909 in RESP account for now, imo with reinvesting distribution on higher yield and lower price it will overcome temporary drop eventually and selling it now and buying another bonds will not work much better
This, especially the part I put in bold. When evaluating bond ETF returns remember not to focus just on price, but look at total return including price and distributions. As rates rise, the yield of the fund will increase because newer bonds will have higher interest rates. Investors should not hold aggregate or long-term bond funds if their planned holding period is short-term.

Holding Your Bond Fund for the Duration
Invest your time actively and your money passively.
[OP]
Deal Addict
Oct 1, 2006
1976 posts
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Montreal
blackdragon12 wrote:
Dec 1st, 2016 10:13 pm
I got out of my VAB position today - so done with it! It keels declining every day...
Sigh :(

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