Investing

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

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Deal Addict
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Feb 1, 2012
2214 posts
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Thunder Bay, ON
retireat50 wrote:
So in other words, market timing? Think of the tax implications as well for someone holding hundreds of thousands in xaw at time of retirement. It's not feasible to do what you propose.
It is not market timing for an investor to adjust their portfolio in response to changes in their investing timeline.

If the holdings are in tax-deferred or tax-exempt accounts there would not be any tax implications. In a taxable account they could spread the change over several years, depending on the amount of capital gains that would be realized, to manage any change in marginal tax rate. It's called planning.


retireat50 wrote:
So if you had a million in this stuff just a 25,000 currency impact or about 10 times the management fee. Yup no big deal. Anyone who buys xaw is a currency trader by default. That's fine, it's your choice just be aware of how fx will impact this investment

Imagine 2008 scenario where cad goes to par or more vs usd. You would be down 30 percent on fx and down 40 or whatever we ended up down on the stocks themself in those dark years. Nearly wiped out if you had saved for decades
International investors are not currency traders. They have currency exposure, for diversification.

You are suggesting a hypothetical situation where the C$ would rise against all of the >20 currencies of the countries of which XAW holds securities, at the same time as global stock markets dropped 30-40%, and at the same time the investor needed to sell all of their holdings, thereby wiping out decades of savings? An intelligent investor would not hold 100% of their portfolio in ex-Canada equities if there was any chance of needing to cash out all of it in the near future. Smart investors align their portfolio holdings with their risk tolerance and investing timeline. It's called planning.


retireat50 wrote: Anyone expecting a positive return on CCP this year is delusional. Your beloved XAW will get hammered with rising CAD$ (fairly obvious why oil will rip higher in the next 3-9 months). US markets still very over-valued and bonds will decline with 1-3 rate hikes in 2019.
XAW is up 12.41% YTD as of Oct 22. I suppose with 2.5 months left this year there is still time for it to "get hammered". But investors with broadly diversified holdings would not be worried over the long term.
When I was young, I was poor. Now, after years of hard work, I'm no longer young.
Deal Addict
Mar 16, 2018
1530 posts
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Hamilton
retireat50 wrote: So no browbeating of the folks talking about hedging? Funny, when I do it the pitchforks come out.
It's funny, whenever CDO's and the 2008 financial crisis come up, people love to dunk on derivatives and synthetics, but at the same time are happy to fill their portfolio up with currency derivatives.
Deal Fanatic
Mar 24, 2008
6278 posts
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Toronto
retireat50 wrote: So if you had a million in this stuff just a 25,000 currency impact or about 10 times the management fee. Yup no big deal. Anyone who buys xaw is a currency trader by default. That's fine, it's your choice just be aware of how fx will impact this investment

Imagine 2008 scenario where cad goes to par or more vs usd. You would be down 30 percent on fx and down 40 or whatever we ended up down on the stocks themself in those dark years. Nearly wiped out if you had saved for decades
Honey, if I had a million invested in an (any) equity ETF, I wouldn't lose sleep over 25k in volatility when the overall return is over a 100k for the year. To your second point, if I were worried about losing this money, I wouldn't have invested 100% in equities.

To answer your question directly, 2.5% is a rounding error for my personal investments.
Last edited by ksgill on Nov 1st, 2019 12:54 pm, edited 1 time in total.
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Sr. Member
Sep 29, 2007
762 posts
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ksgill wrote: Honey, if I had a million invested in an (any) equity ETF, I wouldn't lose sleep over 25k in volatility when the overall return is over a 100k for the year. To your second point, if I were worried about losing this money, I wouldn't have invested 100% in equities.

What's your point, Debbie Downer? To answer your question directly, 2.5% is a rounding error for my personal investments.
Performance is relative though. You could say the same about TSX return the last 10 years - yea it's not too bad but then compare it to S&P 500 and you start crying. Sadly speaking from personal experience as was way too heavy on Canadian stocks - literally has cost me several hundred thousand dollars. I am now mainly ETF so I want to ensure I pick the right ones
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Dec 31, 2018
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retireat50 wrote: Performance is relative though. You could say the same about TSX return the last 10 years - yea it's not too bad but then compare it to S&P 500 and you start crying. Sadly speaking from personal experience as was way too heavy on Canadian stocks - literally has cost me several hundred thousand dollars. I am now mainly ETF so I want to ensure I pick the right ones
It seems like you're still being too active around your investments, trying to 'pick' stuff as you put it.
Deal Addict
Mar 16, 2018
1530 posts
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Hamilton
retireat50 wrote: Performance is relative though. You could say the same about TSX return the last 10 years - yea it's not too bad but then compare it to S&P 500 and you start crying. Sadly speaking from personal experience as was way too heavy on Canadian stocks - literally has cost me several hundred thousand dollars. I am now mainly ETF so I want to ensure I pick the right ones
There have been time periods over the last 50 years where the Canadian market outperformed the USA. The only reason I'd "start crying" is if my time machine was broken, otherwise you can't change the past.
Deal Fanatic
Mar 24, 2008
6278 posts
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Toronto
retireat50 wrote: Performance is relative though. You could say the same about TSX return the last 10 years - yea it's not too bad but then compare it to S&P 500 and you start crying. Sadly speaking from personal experience as was way too heavy on Canadian stocks - literally has cost me several hundred thousand dollars. I am now mainly ETF so I want to ensure I pick the right ones
What's wrong with setting a personal goal and pursuing it? If you think S&P500 is going to outperform, invest in it... Why bash a perfectly good product (XAW)? Performance is not relative unless you like to compare yourself to others... which is a thief of happiness. It will rob you of joy in your life. Oh well, to each their own... Good luck!
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Deal Fanatic
Jul 23, 2007
5134 posts
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stanleyinfrared wrote: Hi,

A question to everyone on the thread. How did your lifestyle change after entering the real estate market (buying a principal residence)? Do you regret it (for doing so too early)? Did it drain your budget a lot and decreased the efficiency of the CP investing?

Thanks,
Stan
We bought our house in a nice part of town twenty years ago. The housing market was stagnant for the decade before. It wasn't me who wanted to purchase the house, but my wife insisted. She won. I had to sell all our stocks in the taxable portfolio in order to have a huge down payment on the property. A year or two after we bought, the stock market crumbled with the tech, dot.com, telecom crisis. Just over three years after purchasing the house I could start building our taxable equity portfolio again since by then the mortgage was fully paid off. The equities now provide us with a nice, growing income stream, so I'm not complaining.

Now we're both happily retired in our wee two bedroom bungalow with pensions and investments to look after our annual spending and some savings left over. My wife and I have always believed in living within our means. Perhaps that's why around the age of fifty at the time we were rather late in entering the housing market. We add to the TFSA's each and every year, and this and the RRSP's are solidly invested in a mix of TD e-Series index funds/ETF's.
Deal Addict
Apr 13, 2017
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GTA
Sorry, noob questions. Which investment / trading product is OP using to buy / sell ? Also, what exactly is OP buying ? Are they stocks / mutual funds/ index funds?

My only investment is a house (for rental income) and savings ~300k in bank savings account, which I'm planning to diversify.

Sorry, I've 0 knowledge in trading and appreciate if anyone can point me to resource that can give investment 101.
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Jul 15, 2009
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headleygrange wrote: Sorry, noob questions. Which investment / trading product is OP using to buy / sell ? Also, what exactly is OP buying ? Are they stocks / mutual funds/ index funds?

My only investment is a house (for rental income) and savings ~300k in bank savings account, which I'm planning to diversify.

Sorry, I've 0 knowledge in trading and appreciate if anyone can point me to resource that can give investment 101.
One place to get started might be here:
https://canadiancouchpotato.com/model-portfolios/
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User avatar
Feb 1, 2012
2214 posts
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Thunder Bay, ON
headleygrange wrote: Sorry, I've 0 knowledge in trading and appreciate if anyone can point me to resource that can give investment 101.
Finiki, the Canadian Financial Wiki is a great financial and investment resource:
https://www.finiki.org/wiki/Getting_started
https://www.finiki.org/wiki/Investment_style
https://www.finiki.org/wiki/Portfolio_d ... nstruction
When I was young, I was poor. Now, after years of hard work, I'm no longer young.
Deal Addict
Jan 18, 2014
1537 posts
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Rouyn-Noranda
Stryker wrote: We bought our house in a nice part of town twenty years ago. The housing market was stagnant for the decade before. It wasn't me who wanted to purchase the house, but my wife insisted. She won. I had to sell all our stocks in the taxable portfolio in order to have a huge down payment on the property. A year or two after we bought, the stock market crumbled with the tech, dot.com, telecom crisis. Just over three years after purchasing the house I could start building our taxable equity portfolio again since by then the mortgage was fully paid off. The equities now provide us with a nice, growing income stream, so I'm not complaining.

Now we're both happily retired in our wee two bedroom bungalow with pensions and investments to look after our annual spending and some savings left over. My wife and I have always believed in living within our means. Perhaps that's why around the age of fifty at the time we were rather late in entering the housing market. We add to the TFSA's each and every year, and this and the RRSP's are solidly invested in a mix of TD e-Series index funds/ETF's.
How did you pay off the mortgage in three years?
Deal Fanatic
Jul 23, 2007
5134 posts
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John47 wrote: How did you pay off the mortgage in three years?
Well John, we could of paid off the house when we first bought it. Even after having a professional home inspection done, I was still worried that he might of missed something that could have resulted in major repairs. We took out a small mortgage, just in case. Three years later when we wanted to pay it off in full, this time I was concerned about a heavy penalty from the bank. I can't remember what it was now, but it was just a pittance. Even in a low interest environment, my wife and I hate debt of any kind. We've been debt free ever since. The only other debt I've ever had in my lifetime was when I bought my first (used) car in 1970. Paid that off early too.
Jr. Member
Jun 30, 2019
151 posts
236 upvotes
This thread has inspired me to live at a low cost, and invest passively for the past few years.

Last night, I checked the total portfolio value ( I last checked it a year ago) and I just passed 500k. :) It's a pleasant surprise especially since I just came back from a 3 week vacation.

I am excited to see how quicker the portfolio will grow over the next few years.
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Jul 23, 2007
5134 posts
4928 upvotes
Every year I try to make it a habit to check the performance of the U.S. college endowments against a simple index portfolio of 60 percent U.S. stocks and 40 percent U.S. bonds.

Well another good year for the simple.

https://www.institutionalinvestor.com/a ... olio-Again

A simple portfolio of 60 percent U.S. stocks and 40 percent U.S. bonds — know as a 60-40 — would have delivered almost 10 percent in fiscal 2019.

But the average Ivy League endowment, which have portfolios filled with public and private investments sourced from around the world, only racked up a 6.7 percent return for the 12 months ending June 30.

MPI’s analysis finds that over the longer term, the sophisticated endowment model slightly underperformed a 60-40 investment strategy. The average Ivy returned 10.3 percent annualized over the last decade, versus 10.5 percent for a 40-60. Dartmouth tied the passive portfolio, whereas Princeton and Yale beat it with 11.6 and 11.1 percent annualized returns, respectively.

But those gains came with substantial risks. Many “argue that the Yale model of active management, private market exposures, absolute return strategies, and high fees is outdated, especially when we factor in the potential risk involved in achieving such gains,” reported MPI.
Deal Addict
Oct 25, 2007
3032 posts
1083 upvotes
Mississauga
Stryker wrote: Well John, we could of paid off the house when we first bought it. Even after having a professional home inspection done, I was still worried that he might of missed something that could have resulted in major repairs. We took out a small mortgage, just in case. Three years later when we wanted to pay it off in full, this time I was concerned about a heavy penalty from the bank. I can't remember what it was now, but it was just a pittance. Even in a low interest environment, my wife and I hate debt of any kind. We've been debt free ever since. The only other debt I've ever had in my lifetime was when I bought my first (used) car in 1970. Paid that off early too.
we are on the same boat Stryker,
i hate debt and the only time i took when we purchased home 6 years back and paid off in 5 years when it came for renewal.
since then i passevely invested in low cost index funds AT 80E-20B ratio (VAB, VCN, VUN, XEC, XEF).
We finally hit the $500k mark savings last month (yet to decide for early retirement or not) where 300k in the Questrade above portfolio and 200k in high interest savings (swaping between different banks to get more than 3% interest).

Now i am in dilema, whether to pull out the 200k at one shot and pump in to QT portfolio or let it earn 3.3% interest in savings accounts and hoping to get the market crash to buy again.

I know no one has crystal ball, but i am kind of disappointed to see the dividend yield from my 300k portfolio is not even generating 2.5% though there was a growth of 5% overall portfolio.

Appreciate anyone's take on my situation.
Deal Guru
Feb 4, 2015
10332 posts
6699 upvotes
Canada, Eh!!
mkannuri wrote: we are on the same boat Stryker,
i hate debt and the only time i took when we purchased home 6 years back and paid off in 5 years when it came for renewal.
since then i passevely invested in low cost index funds AT 80E-20B ratio (VAB, VCN, VUN, XEC, XEF).
We finally hit the $500k mark savings last month (yet to decide for early retirement or not) where 300k in the Questrade above portfolio and 200k in high interest savings (swaping between different banks to get more than 3% interest).

Now i am in dilema, whether to pull out the 200k at one shot and pump in to QT portfolio or let it earn 3.3% interest in savings accounts and hoping to get the market crash to buy again.

I know no one has crystal ball, but i am kind of disappointed to see the dividend yield from my 300k portfolio is not even generating 2.5% though there was a growth of 5% overall portfolio.

Appreciate anyone's take on my situation.
I generally use a hybrid approach of several strategies... you got the index side perhaps look at some dividend plays [have a couple of threads dedicated to it]... no need to jump in with all 200k if not comfortable.

Recently [summer] sold CIBC USD money mkt that was yielding over 2% when bought initially [now less] to several dividend paying stocks. Some were Canadian companies listed on US exchanges so still eligible for dividend tax credit. Not concerned with exchange loss on dividend payout as not wanting to exchange to CAD. Added risk but also more then doubled yield at better tax treatment.
2022/3: BOC raised 10 times and MCAP raised its prime next day.
2017,2018: BOC raised rates 5 times and MCAP raised its prime next day each time.
2020: BOC dropped rates 3 times and MCAP waited to drop its prime to include all 3 drops.
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Jan 18, 2014
1537 posts
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Rouyn-Noranda
georvu wrote: I generally use a hybrid approach of several strategies... you got the index side perhaps look at some dividend plays [have a couple of threads dedicated to it]... no need to jump in with all 200k if not comfortable.

Recently [summer] sold CIBC USD money mkt that was yielding over 2% when bought initially [now less] to several dividend paying stocks. Some were Canadian companies listed on US exchanges so still eligible for dividend tax credit. Not concerned with exchange loss on dividend payout as not wanting to exchange to CAD. Added risk but also more then doubled yield at better tax treatment.
Respectfully, not a good idea for someone who is only used to investing in index ETFs and who has no apparent knowledge to go for individual dividend stocks.

I understand you're referring to rodbarc's dividend stock thread ---- his portfolio has like 100 stocks --- it's not advisable or feasible for the average newbie to start doing what rodbarc is doing.

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