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Question about ETF portfolio

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  • Jul 2nd, 2015 9:49 pm
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[OP]
Deal Guru
User avatar
May 6, 2005
11515 posts
1487 upvotes
GVR

Question about ETF portfolio

I'm been using eFunds for a very long time but am going to be moving/putting some money into ETF portfolio as well. Thing is - I know a lot less about these and it seems the options are FAR greater.

Is this still regarded as a recommended couch potato portfolio?
http://canadiancouchpotato.com/wp-conte ... nguard.pdf

There is also this, which lists even more options:
http://www.canadianportfoliomanagerblog ... ortfolios/
They have more holdings, but lower MER...

Are there other better options to consider? Is there any hesitation I should have about adding an ETF couch potato portfolio to my holdings? (I also hold individual stocks so the whole buy/sell/etc. part is not a concern to me)
6 replies
Member
Feb 16, 2013
467 posts
64 upvotes
Couch potato strategy is great. I personally think that considering Greece default and fed rate increase sometime later this year, this is not the right time for etf's..
[OP]
Deal Guru
User avatar
May 6, 2005
11515 posts
1487 upvotes
GVR
saturnfan wrote: Couch potato strategy is great. I personally think that considering Greece default and fed rate increase sometime later this year, this is not the right time for etf's..
Why is that? ETFs are just the vehicle for the investment holding. There is nothing inherent about ETFs vs something else that would be affected by something like Greece?
Member
Feb 16, 2013
467 posts
64 upvotes
Kaitlyn wrote: Why is that? ETFs are just the vehicle for the investment holding. There is nothing inherent about ETFs vs something else that would be affected by something like Greece?
some ETF's still have stock holding....You can definitely buy if you are comfortable with risk and tolerance...TSX index (YTD) is down 0.5% right now ..it was well above around 2% before Greece default...I am not saying one can time market but IMO its better to hold for some time instead of investing, there is so much volatility at the moment...Its just my personal opinion..
Deal Addict
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Oct 9, 2005
1105 posts
382 upvotes
Toronto
Re: Hesitation in switching from (TD e-Series) index funds to ETFs, consider these reference materials:

http://canadiancouchpotato.com/2012/07/ ... -and-etfs/

http://canadianmoneyforum.com/showthrea ... es-to-ETFs
http://canadianmoneyforum.com/showthrea ... ds-gt-ETFs

You have to understand all the costs in making a switch (especially taxes for non-registered accounts) and compare that to the yearly MER savings to determine if you have enough investable assets in index funds to make the switch and benefit from the cost savings within the investment time horizon. If adding new positions, the MER savings are obvious and unless you're investing like $100 at a time, commissions on ETFs shouldn't be a stopping factor.

Even if you have an absolute cost savings within a reasonable time frame calculated, you should consider the psychological aspects. You already stated a lack of confidence in your understanding of ETFs, and investing in something you don't understand is usually a bad thing. If you like saturnfan have concerns with the current market value/volatility levels, that could play a factor in delaying a move (though if that were the case, you should be considering liquidating investments and buy your desired ETFs when the market is corrected/stabilized).

In regards to the specific ETFs you mentioned, those are all fine model portfolios for passive, widely available, dirt-cheap, broadly diversified, and easy-to-understand funds. There may be some other funds that could return an optimized result (e.g. weighting more to value/small cap equities, if you have USD to buy US-domiciled US-market ETFs within an RRSP for better MER and neutral withholding tax effect, swap-based ETFs for taxable accounts), but savings ~0.4% in MER by switching to ETFs is a lot of the advantage already for very little work.
Intricated
Deal Fanatic
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Jun 19, 2009
6133 posts
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Scarborough
Vanguard funds are one of the most recommended in Canada, and for good reason. They have some of the lowest MERs, cover broad markets using the FTSE indexes, and are owned by the shareholders of the funds themselves. Their holdings perform as well as you would expect them to (tracking their underlying index) and always remain competitive with new offerings every year. In fact, vxc and vcn, two of the recommended funds that are on the ccp website were released only a year or 2 ago.
Member
Jun 23, 2008
465 posts
100 upvotes
Toronto
op, why don't U email to Dan Bortolotti who created the couch potato portfolio directly, or post question at his site.
his email address: [email protected]
He replied my email within one week , quite nice people. And I am not his customer.

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