Investing

Vanguard Funds - ETF

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  • Apr 25th, 2020 8:52 pm
[OP]
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Jul 4, 2018
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Vanguard Funds - ETF

Please advice if following Composition is good.

Monthly PAP (70% of portfolio)

50% - VDY - Canadian Dividend fund (approx 5% div)
50% - VFV - S&P 500 US

Rest of 30%, planning to invest in stocks selectively based on trend...


———-
Adjusted so far after suggestions

VCN - 10% Canada equity
VEE - 10% emerging markets
VFV - 30% spy
VSP - 10% spy hedged cad
XAW - 20% global
VGT - 20% technology
Last edited by Lavaris1 on Apr 25th, 2020 1:57 pm, edited 1 time in total.
17 replies
Newbie
Mar 17, 2020
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good conservative portfolio,

why invest in VFV that is US market only ?

VEQT etf has exposure to 4 equity indexes
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Jun 15, 2012
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Saskatoon
drwxr010 wrote: good conservative portfolio,

why invest in VFV that is US market only ?

VEQT etf has exposure to 4 equity indexes
It has 40% US [24%] and 30% Canadian equities[3% of world’s GDP] but China got 3% [~20% of world’s GDP]. Therefore VEQT hardly provides better diversity, it’s very North America heavy.
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drwxr010 wrote: good conservative portfolio,

why invest in VFV that is US market only ?

VEQT etf has exposure to 4 equity indexes
US market is better positioned for growth. Some may not be eager to invest in the economic wasteland that is Europe, for example.
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llpresident wrote: US market is better positioned for growth. Some may not be eager to invest in the economic wasteland that is Europe, for example.
US market is extremely, extremely overbought. It’s companies have way more publicity than any other.
Europe is actually much cheaper stocks, and better value.
No need to type thank you; upvote=thanks.
Buffett, investors are focusing “not on what an asset will produce but rather on what the next fellow will pay for it.”

“Because gold is honest money it is disliked by dishonest men.” – R. Paul
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VDY has an MER of 0.22% and allocation of 60% financials and 28% oil & gas. Compare that to VCN which has an MER of 0.05% and allocation of 37% financials and 14% oil & gas. Do you really want something as concentrated as VDY, with an MER that is 3x higher than a broad market ETF?

This blog discusses relative performance of US vs. international stocks and has a good chart of the performance going back 50 years. US has outperformed international for about a decade, which is about as long as many young investors' history and memories go back, hence why so many investors dismiss international stocks. If history repeats itself and US begins to underperform international as it has done many times in the past would you have the tenacity to hang on for a decade?
https://www.mymoneyblog.com/us-vs-inter ... mance.html

This is a great book that explains investment industry, theory and history in detail:
The Four Pillars of Investing: Lessons for Building a Winning Portfolio by William J. Bernstein
I solemnly swear, to never assume I have an inkling at which direction the market will head, and to never make any investments based on a timing strategy.
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ukrainiandude wrote: US market is extremely, extremely overbought. It’s companies have way more publicity than any other.
Europe is actually much cheaper stocks, and better value.
so by that context, is it a good idea to invest over 50% in european equities?
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breezy11 wrote: so by that context, is it a good idea to invest over 50% in european equities?
I’ve heard it every year for 6 years - and they underperformed every single year. Why would they do better any time soon beats me..
[OP]
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Deepwater wrote: VDY has an MER of 0.22% and allocation of 60% financials and 28% oil & gas. Compare that to VCN which has an MER of 0.05% and allocation of 37% financials and 14% oil & gas. Do you really want something as concentrated as VDY, with an MER that is 3x higher than a broad market ETF?

This blog discusses relative performance of US vs. international stocks and has a good chart of the performance going back 50 years. US has outperformed international for about a decade, which is about as long as many young investors' history and memories go back, hence why so many investors dismiss international stocks. If history repeats itself and US begins to underperform international as it has done many times in the past would you have the tenacity to hang on for a decade?
https://www.mymoneyblog.com/us-vs-inter ... mance.html

This is a great book that explains investment industry, theory and history in detail:
The Four Pillars of Investing: Lessons for Building a Winning Portfolio by William J. Bernstein
Thank you.

I thought VDY paying high dividend 5% or more so short listed
I will consider VCN too...

Is it better to start weekly investment or better to buy all at once now ? Say around 15000
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breezy11 wrote: so by that context, is it a good idea to invest over 50% in european equities?
It’s good idea to diversify one’s portfolio based on country’s GDP share contribution to the world, not on country’s past performance.
No need to type thank you; upvote=thanks.
Buffett, investors are focusing “not on what an asset will produce but rather on what the next fellow will pay for it.”

“Because gold is honest money it is disliked by dishonest men.” – R. Paul
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ukrainiandude wrote: US market is extremely, extremely overbought. It’s companies have way more publicity than any other.
Europe is actually much cheaper stocks, and better value.
Much of Europe is a 3rd world country walking around as “developed world”. Remember the PIGS? That’s what will continue to hold Europe back long term. Those issues have not gone away only swept under the rug. Zombie banks. Other than a few countries like Germany it really comes down to stock selection over there. US while appearing relatively overbought is the only country showing any growth via tech stocks....so the market is paying a premium for that. And the now tech heavy SP500 continues to outperform.

Canada is a dying wasteland of stocks. Banks? Ok for a trade back to normality but they were all showing signs of played out even while housing going strong.

Value stocks have been like trying to catch a falling knife. And the trade keeps getting killed.

Stocks in general wherever are fine for a longer term trade, but I think countries heavy weighting’s with growth sectors will continue to outperform. Caveat is that a 50/50 weight Cda/US as OP suggested is not reasonably diversified. If I wanted a more diversified basket I’d more likely go

90% XAW
10% XIC.
"It is in times of great fear or greed that the most opportunity exists."
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freilona wrote: I’ve heard it every year for 6 years - and they underperformed every single year. Why would they do better any time soon beats me..
Yep.

I’ve heard that for more than a decade. But the PIGS still are dragging things down. The drawn out process over Brexit also was an overhang. If that had been carried out right away, things would have probably gotten better sooner. But instead it was like a long political and economic war that continues to this day. Plus less focus on tech sectors. Same with buying Canada over US.....been a long time since that trade worked out,

I think it’s ok having a weighting in these less than spectacular countries as part of diversification. But the market pays a premium for growth. That will never change. I do own some XEU as part of diversification but not materially overweight.
"It is in times of great fear or greed that the most opportunity exists."
[OP]
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Jul 4, 2018
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cartfan123 wrote: Much of Europe is a 3rd world country walking around as “developed world”. Remember the PIGS? That’s what will continue to hold Europe back long term. Those issues have not gone away only swept under the rug. Zombie banks. Other than a few countries like Germany it really comes down to stock selection over there. US while appearing relatively overbought is the only country showing any growth via tech stocks....so the market is paying a premium for that. And the now tech heavy SP500 continues to outperform.

Canada is a dying wasteland of stocks. Banks? Ok for a trade back to normality but they were all showing signs of played out even while housing going strong.

Value stocks have been like trying to catch a falling knife. And the trade keeps getting killed.

Stocks in general wherever are fine for a longer term trade, but I think countries heavy weighting’s with growth sectors will continue to outperform. Caveat is that a 50/50 weight Cda/US as OP suggested is not reasonably diversified. If I wanted a more diversified basket I’d more likely go

90% XAW
10% XIC.
Understood
How about this composition ?

VCn - 20%
XAW-40%
VFV- 40%
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If my td eseries performance is any indication, I'd probably stick to just something like VUN or VFV. After holding the canadian, us,and international funds for over 5 years, I'm in the negative in canada and international but up over 40% in the US index.


There's going to be an overlap with XAW and VFV though. If you wanted international and canadian exposure, you could break it down to 3 different regions for more control:

XIC/VCN for canadian exposure
XEF/VIU for international exposure
VFV/ZSP for s&p 500 exposure. There's also VUN/XUU if you wanted the total US market which includes smaller and mid cap companies
[OP]
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Jul 4, 2018
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VCN - 10% Canada equity
VEE - 10% emerging markets
VFV - 30% spy
VSP - 10% spy hedged cad
XAW - 20% global
VGT - 20% technology

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