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

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Deal Fanatic
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May 11, 2014
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Scorpionking999 wrote: With markets being high now, is it a good time to invest in ETF now?
The answer to your question is "it depends," and in some ways is not even the right kind of question to ask. Rather you should look it at whether it fits your investment strategy. Also, ETFs come in a vast array of investment types and strategies that you shouldn't group them as one kind of investment.

What I mean by depends is that the answer changes based on what you are trying to achieve. For example, if I am trying to time and make short term trades in the market place, then a high market prices might be a bad time to buy an ETF because I would be trying to time trades based on momentum. If you are a longer term investor, the short term movements of what goes on doesn't really matter. It is important to understand that most of the returns on any investmemts overtime is the income/dividends that are produced. While you might be able to buy the sames funds for cheaper 2 or 3 months from now, that isnt a guarantee and the opposite could also could also occur.

The most important issue is to define your needs first as an investor. In general, most beginners should ignore market noises and go with a well diversified, balanced portfolio strategy, buying as they go. Overtime, you could develop your knowledge and try individual stocks or more specialty etf funds if you like. If you are planning to invest short term and require the funds immediately, all equity or bond ETFs in general are inappropriate as you take on risk of falling prices which could happen easily.

And remember, in general there is no right/wrong strategy. As investors, we all have different needs and strategies. It is important to remember that what is appropriate for one investor might not be appropriate for someone else. Some people have an idea that their strategy and only their way of investing is correct. While it might work for you, dont necessarily go with that. There are also those that think the world is ending, but I think you need no further warning on that and they are pretty easy to pickout.

If you would respond with what you are tryiny to achieve, you probably will get a better response than what I wrote.
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Deal Addict
Oct 1, 2006
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Montreal
Scorpionking999 wrote: With markets being high now, is it a good time to invest in ETF now?
Hi Scorpionking999,

Yes, it is definitely a good time to invest now. The stock market will fluctuate over time, but you can't pinpoint when it will tumble or shoot up. If you have allocated your assets properly there is no need to worry. Time in the market, not timing the market is what counts.

Ben Carlson wrote a great article about Bob the worst market timer ever, who only invested after market peaks. The article can be found here:
https://awealthofcommonsense.com/2014/0 ... ket-timer/

Bob was very unlucky. He lump-sum invested his money 1 day before each of the last 4 big stock market crashes.
Bob.png

Even though he only bought at the very top of the market, Bob still ended up a millionaire with $1.1 million.

Buy and hold index ETFs/funds is a very dull strategy. It lacks glamour and doesn't inspire much admiration at parties, but is has one little advantage: It works, very profitably and very consistently.
Last edited by Germack on Apr 16th, 2019 9:57 am, edited 3 times in total.
Sr. Member
Oct 21, 2016
946 posts
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I recently (couple months ago ) switched my RRSP to USD account via norberts gambit . I went with 70 percent VUG and 30 percent VGT some overlap but there are some key difference in weightings and holdings which I like . I covered my bases with a growth ETF and tech ETF by vanguard very low mer and around 1 percent dividend for both. Looking long term risk tolerant . I want to focus on the US market in my RRSP due to tax considerations with an emphasis on tech and long term for growth. My TFSA hold my Canadian equity etc.
Jr. Member
Nov 18, 2017
150 posts
128 upvotes
Germack wrote: Hi Scorpionking999,

Yes, it is definitely a good time to invest now. The stock market will fluctuate over time, but you can't pinpoint when it will tumble or shoot up. If you have allocated your assets properly there is no need to worry. Time in the market, not timing the market is what counts.

Ben Carlson wrote a great article about Bob the worst market timer ever, who only invested after market peaks. The article can be found here:
https://awealthofcommonsense.com/2014/0 ... ket-timer/

Bob was very unlucky. He lump-sum invested his money 1 day before each of the last 4 big stock market crashes.

Bob.png


Even though he only bought at the very top of the market, Bob still ended up a millionaire with $1.1 million.

Buy and hold index ETFs/funds is a very dull strategy. It lacks glamour and doesn't inspire much admiration at parties, but is has one little advantage: It works, very profitably and very consistently.
Thanks for your reply and the article.
Deal Fanatic
Jun 3, 2009
5735 posts
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Montreal
Hi guys,

What are some of easiest ETF's for non-reg accounts for tax purposes? I prefer to hold individual US-listed equities in my RRSP and TFSA.

Thanks!
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Aug 4, 2014
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@cn_habs HXT was the usual choice (and I hold it in our non-reg), but hesitant to recommend it now while Horizons ETFs Assessing Impact of Proposed Federal Tax Changes.. I would probably still keep it even if I have to start paying taxes on dividends since it tracks TSX60 that doesn’t contain any REITs (at least it didn’t last time I checked :)), so no RoC/ACB tracking headache like with “regular” ETFs that track TSX Compoite (XIC, VCN, ZCN). You can google “Horizon swap ETFs” (there’s a bunch of them, not just TSX) to see if it’s something you’ll be interested in, read for example What are the pros and cons of swap-based ETFs? (note the date of the articles as the tax review was just announced this year..)
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Mar 19, 2016
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canada
ownthesky wrote: Anybody here using Passiv with Questrade? I've been really enjoying the service so far, not sure if I'll keep the premium account when my trial runs out until my account is large enough to justify the fees. $54 a year (found a promo code) really only makes sense when your portfolio is >$50K.
I tried passiv out. I even chatted with one of the creators. I like the site. But much like you I have a hard time justifying the fee since it's really not that hard to just use my spreadsheet.

He did mention that they will be rolling out some additional features. That could possibly make me a subscriber but who knows.

I believe he said it was possibly ACB tracking, the ability to link multiple accounts into one portfolio for weightings and a few other things.

I think passiv is good for people who kinda want to be diy'ers but only sorts. Like it's more hands on then a robo advisor, but still not totally independent.
Jr. Member
Jul 20, 2009
128 posts
9 upvotes
Montreal
Hi experts,
I have been doing a bit of both passive and active investing last 3 years. Right now I am invested in registered accounts as under.
TD e-series / Couch potato
US Index- : 20%
Canadian Index: 24%
International index: 15%
Canadian bonds 22%

Active:
TD Science & tech: 11%
TD Global entertainment and communication 3%
TD dividend growth: 5%

I can invest around 50K in the next month or so. What's your suggestion? How do I balance it? Do I need to add something else to the mix?

Thanks for your suggestions,

Raw
Deal Addict
Oct 1, 2006
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Hi @Raww

I would just invest your 50k all into 1 ETF, VBAL or VGRO, depending on your risk tolerance. I believe there is a lot of value in keeping things simple.
Jr. Member
Jul 20, 2009
128 posts
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Montreal
Thanks Germack and Mark. As I have never bought ETF before, how do I buy it online? I just registered to TD direct investing. Can I buy using that?
Sr. Member
Feb 9, 2018
606 posts
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Raww wrote: Thanks Germack and Mark. As I have never bought ETF before, how do I buy it online? I just registered to TD direct investing. Can I buy using that?
Yes, you can. TD direct investing is a brokerage account so you should be able to buy any ETF. Keep in mind that there is a transaction fee of ~10 bucks for buying and selling ETFs on TD direct investing. To keep your costs low, only buy when you have significant cash. Below is a video that talks about how to buy ETFs on TD direct investing. You dont have to buy the ETFs in video but procedure to buy XGRO/XBAL should be same. Other thing to note about ETFs is that they trade like stocks. You can only buy them during market hours i.e. Monday to Friday 9:30 AM to 4:30 PM. You can place orders after market hours but they will only get filled during market hours. Also you cannot buy ETFs in fractions unlike mutual funds. For example: if you have $1000 to invest and ETF you want to buy has a current price of $25.53, then you can only buy: 1000-10 (transaction fee)=$990/25.53=38 shares not 38.77



Other options to consider if you are buying in small amounts and dont want to pay transaction fees are brokerages like Questrade, Virtual Brokers and many others (google them) where there is no transaction fee to buy any ETF, only a transaction fee to sell. Since most investors will usually buy and sell rarely, its a good option especially if you only intend to buy ETFs.
Newbie
Apr 2, 2019
77 posts
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Open a self invest brokerage account with National Bank and you can trade Canadian ETFs for free, both Buy and Sell as long as you purchase in lots of 100. XGRO will cost $2074 to buy a lot of 100 at today's close.
Jr. Member
Jul 20, 2009
128 posts
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Montreal
sunbat wrote: Yes, you can. TD direct investing is a brokerage account so you should be able to buy any ETF. Keep in mind that there is a transaction fee of ~10 bucks for buying and selling ETFs on TD direct investing. To keep your costs low, only buy when you have significant cash. Below is a video that talks about how to buy ETFs on TD direct investing. You dont have to buy the ETFs in video but procedure to buy XGRO/XBAL should be same. Other thing to note about ETFs is that they trade like stocks. You can only buy them during market hours i.e. Monday to Friday 9:30 AM to 4:30 PM. You can place orders after market hours but they will only get filled during market hours. Also you cannot buy ETFs in fractions unlike mutual funds. For example: if you have $1000 to invest and ETF you want to buy has a current price of $25.53, then you can only buy: 1000-10 (transaction fee)=$990/25.53=38 shares not 38.77



Other options to consider if you are buying in small amounts and dont want to pay transaction fees are brokerages like Questrade, Virtual Brokers and many others (google them) where there is no transaction fee to buy any ETF, only a transaction fee to sell. Since most investors will usually buy and sell rarely, its a good option especially if you only intend to buy ETFs.
Thanks, this was very informative.
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Mar 27, 2011
954 posts
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Toronto
Hi CCPers,

I've just got a newborn baby girl and we got some gift money that we plan to contribute towards her RESP.

I was thinking of doing a CCP strategy for the first decade or so, and when it comes towards withdrawal time, allocate more towards fixed income (GICs).

I guess the conversion can start at Year 13 onwards, assuming withdrawal starts at 18? Thoughts?

Kind of related to this, awhile ago I came across an article on the methodology as to how one would balance cash, ETFs, and GICs when appproaching (and during) retirement. It was a really good one but unfortunately, I cannot find it anymore. Does anyone have something that would explain this?

Thank you in advance.
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Feb 1, 2012
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gekaizer wrote: Hi CCPers,

I've just got a newborn baby girl and we got some gift money that we plan to contribute towards her RESP.

I was thinking of doing a CCP strategy for the first decade or so, and when it comes towards withdrawal time, allocate more towards fixed income (GICs).

I guess the conversion can start at Year 13 onwards, assuming withdrawal starts at 18? Thoughts?

Kind of related to this, awhile ago I came across an article on the methodology as to how one would balance cash, ETFs, and GICs when appproaching (and during) retirement. It was a really good one but unfortunately, I cannot find it anymore. Does anyone have something that would explain this?
Yes I think starting to build a GIC ladder in a RESP about 5 years prior to beginning withdrawals makes sense to de-risk the portfolio and insulate it from a possible crash when the money is needed. You might lose some investment return, but that's a fair trade off IMO to know the money will be available when needed. Also consider keeping some in short-term bond fund or HISA to give liquidity and flexibility in timing.

Is this the article you were thinking of? A better way to generate retirement income by Dan Bortolotti in MoneySense.
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Mar 27, 2011
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Deepwater wrote: Yes I think starting to build a GIC ladder in a RESP about 5 years prior to beginning withdrawals makes sense to de-risk the portfolio and insulate it from a possible crash when the money is needed. You might lose some investment return, but that's a fair trade off IMO to know the money will be available when needed. Also consider keeping some in short-term bond fund or HISA to give liquidity and flexibility in timing.

Is this the article you were thinking of? A better way to generate retirement income by Dan Bortolotti in MoneySense.
@Deepwater, thank you so very much! That is the exact article I was looking for! I knew it was one of Dan's but just couldn't find it. Saving it as a PDF so I won't ever lose it again!

Regarding the GIC ladder, thank you for the feedback. I do realize there might be a loss in return but security takes priority for an RESP.
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Nov 4, 2007
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Regarding a GIC ladder within an RESP, I was planning on setting this up this year as my kids are early teens, but with interest rates so low, it is difficult to justify. I'm with Scotia itrade and the highest 5 yr GIC is 2.77% with Hometrust. The highest 5yr AA rated GIC is only 2.5%. I can get 3.35% interest in my HISA Manulife bank account and it's not locked in for 5 years. I am now planning on keeping my RESPs in Equity and investing "other" money into my HISA at 3.35%. That "other" money would have been invested in equities anyways so the overall portfolio will still have the right balance of Fixed Income to Equities.

When it comes time to fund the education, I can always supplement the money from the RESP account with my "other" non registered account if the market goes down. In the meantime, I'm getting a better return overall.
Newbie
Mar 14, 2019
13 posts
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Does anyone know about CIBC Canadian Bank Index Autocallable Notes (Index of 5 major banks) ? The returns are at 9% 1 yr, 18% 2 yrs, 27% 3yrs, 36% 4yrs, 45% 5yrs if the Reference Index Return (Index at buying date) is greater than or equal to 0.0%. If Reference Index Return is negative at maturity but equal or greater than -30%, the principle is paid. If it is less than -30%, the principle could be paid at a minimum $1 per Note. The note is sold by CIBC Wood Gundy which is an investment firm bought by CIBC 10 or 20 yrs ago. I just heard this from a bank advisor but feel it's too good to be true.

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