What do You Think about my new Retirement Investment Portfolio?

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Jun 24th, 2020 1:27 pm

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Jun 22nd, 2020 1:44 pm

OldForqignMoose [OP]: Newbie; Jun 9, 2020; 12 posts; 5 upvotes

Jun 22nd, 2020 1:44 pm

What do You Think about my new Retirement Investment Portfolio?

Hi,

New to index investing, I recently decided to review my finances and move all my assets from Sunlife to Questrade to rebuild a new portfolio.
Below is my new asset allocation:

edit 1: (thx craftsman)
risk profile: medium-high (agressive)
Expected return: > 8%
time frame: 15 years

TFSA

XFN.TO => 7%
VAB.TO => 7.25%
VGRO.TO => 20%

RRSP
QQC.F => 12.85%
VGRO.TO => 30%
VAB.TO => 10%

Taxable
VGRO.TO => 6%
Stocks => 7%

Any thoughts?

Last edited by OldForqignMoose on Jun 22nd, 2020 4:39 pm, edited 1 time in total.

15 replies

Jun 22nd, 2020 4:11 pm

craftsman: Deal Expert; Jan 27, 2006; 15382 posts; 8260 upvotes; Vancouver, BC

Jun 22nd, 2020 4:11 pm

Before anyone can really pass judgement on your work, you need to tell us 3 things:

1. What are your return expectations?
2. What is your risk tolerance?
3. What is your time frame?

Without those 3 bits of knowledge, we would just be guessing if the portfolio is good, bad, or meh...

+2

Jun 22nd, 2020 4:34 pm

xgbsSS: Deal Addict; May 11, 2014; 4272 posts; 4860 upvotes; Iqaluit, NU

Jun 22nd, 2020 4:34 pm

Agree with @craftsman .

One thing I can say is mixing VGRO with a VAB is overlapping. With VGRO you get US and Global bond coverage, although one can argue whether having fixed income ex-Canadian is worthwhile or not.

So instead of VGRO, you could buy VEQT, and just buy more VAB. If adding the foreign bonds is important, you could look at adding VGAB as well.

Keeping these sectors separate will allow you to control the rebalancing on your own time and terms.

Support your local Credit Union!

Sask Pension Plan Upto $6600/yr in Credit Card spending on RRSP contributions
http://forums.redflagdeals.com/sask-pen ... ns-2167222

+1

Jun 22nd, 2020 4:40 pm

OldForqignMoose [OP]: Newbie; Jun 9, 2020; 12 posts; 5 upvotes

Jun 22nd, 2020 4:40 pm

craftsman wrote: ↑ Before anyone can really pass judgement on your work, you need to tell us 3 things:

1. What are your return expectations?
2. What is your risk tolerance?
3. What is your time frame?

Without those 3 bits of knowledge, we would just be guessing if the portfolio is good, bad, or meh...

You are right, I just modified my post.
risk profile: medium-high (agressive)
Expected return: > 8%
time frame: 15 years

Jun 22nd, 2020 5:26 pm

Shaun80: Sr. Member; Oct 21, 2016; 852 posts; 621 upvotes

Jun 22nd, 2020 5:26 pm

OldForqignMoose wrote: ↑ You are right, I just modified my post.
risk profile: medium-high (agressive)
Expected return: > 8%
time frame: 15 years

RRSP 50 /50 QQQ and VGT and TFSA MSFT , AMZN , GOOG , APPL , V , MA and NVDA and leave it for 25 years you will be very happy imo . Wait for a dip if you can as these holdings are at ATH but will continue to grow perhaps slowly but steadily .

Jun 22nd, 2020 7:49 pm

craftsman: Deal Expert; Jan 27, 2006; 15382 posts; 8260 upvotes; Vancouver, BC

Jun 22nd, 2020 7:49 pm

OldForqignMoose wrote: ↑ You are right, I just modified my post.
risk profile: medium-high (agressive)
Expected return: > 8%
time frame: 15 years

With that bit of information and at this stage in the interest cycle, I don't know why you would have any bonds... let alone aggressive bonds. You would be much better off to break down those 'portfolio' ETFs like VGRO into its basic components so that you can adjust the fixed/equity positions as your needs change (especially as you get closer to retirement).

I would also adjust your idea of a greater than 8% annual return on your portfolio over the next 15 years especially if you include any measure of bonds in a portfolio (the S&P 10 year average was 8.11% and the US Bond Index was 4.62). Also, I would say that your risk profile is not medium-high but just high since you have return expectations that exceed historical market averages.

+1

Jun 22nd, 2020 8:05 pm

craftsman: Deal Expert; Jan 27, 2006; 15382 posts; 8260 upvotes; Vancouver, BC

Jun 22nd, 2020 8:05 pm

Shaun80 wrote: ↑ RRSP 50 /50 QQQ and VGT and TFSA MSFT , AMZN , GOOG , APPL , V , MA and NVDA and leave it for 25 years you will be very happy imo . Wait for a dip if you can as these holdings are at ATH but will continue to grow perhaps slowly but steadily .

History is not on your side about leaving any investment for 25 years and you'll be happy especially individual companies as a lot can happen in 25 years! At the turn of the century, everyone was thinking technology stocks were the way to go and buying into the large technology companies back then would leave you a happy person in 25 years! That would mean that MSFT, CSCO, IBM, INTC, and ORCL would be the mainstay of the portfolio.

So, let's see how they performed after 20 years... (6/22/200 to 6/22/2020) - this is pure stock price so any dividends were not included.

MSFT - $40 -> $200
CSCO - $65 -> $45
IBM - $112 --> $121
INTC - $66 -> $60
ORCL - $38 -> $55

In short, the only one that really made any money was MSFT and ORCL while the rest either was up slightly or down.

+5

Jun 22nd, 2020 10:59 pm

Shaun80: Sr. Member; Oct 21, 2016; 852 posts; 621 upvotes

Jun 22nd, 2020 10:59 pm

craftsman wrote: ↑
History is not on your side about leaving any investment for 25 years and you'll be happy especially individual companies as a lot can happen in 25 years! At the turn of the century, everyone was thinking technology stocks were the way to go and buying into the large technology companies back then would leave you a happy person in 25 years! That would mean that MSFT, CSCO, IBM, INTC, and ORCL would be the mainstay of the portfolio.

So, let's see how they performed after 20 years... (6/22/200 to 6/22/2020) - this is pure stock price so any dividends were not included.

MSFT - $40 -> $200
CSCO - $65 -> $45
IBM - $112 --> $121
INTC - $66 -> $60
ORCL - $38 -> $55

In short, the only one that really made any money was MSFT and ORCL while the rest either was up slightly or down.

Apple has an extremely loyal hardware and software clientele and is moving into subscription services , amazon cloud leader and subscription services , MSFT software and cloud leader , v and ma fintech been around forever not going anywhere as we move into a cashless society , google massive advertising revenue, mobile OS monopoly with apple, cloud computing and together with Nvidia leader in AI , automation and robotics. 25 years may be looking too far ahead but next 10 to 15 years there will be slow steady growth with all these companies imo . Also I did mention QQQ and Vgt in the RRSP they will automatically include exclude holdings as per the index they follow .

Jun 23rd, 2020 12:04 am

craftsman: Deal Expert; Jan 27, 2006; 15382 posts; 8260 upvotes; Vancouver, BC

Jun 23rd, 2020 12:04 am

Shaun80 wrote: ↑ Apple has an extremely loyal hardware and software clientele and is moving into subscription services , amazon cloud leader and subscription services , MSFT software and cloud leader , v and ma fintech been around forever not going anywhere as we move into a cashless society , google massive advertising revenue, mobile OS monopoly with apple, cloud computing and together with Nvidia leader in AI , automation and robotics. 25 years may be looking too far ahead but next 10 to 15 years there will be slow steady growth with all these companies imo . Also I did mention QQQ and Vgt in the RRSP they will automatically include exclude holdings as per the index they follow .

CSCO cornered the networking market and since everything was going to be connected, everything needed CSCO.
IBM was the goto name for anything that had to do with computing whether that was heavy iron, desktop or server.
INTC was powering the computer revolution with an INTC box on every desktop and server on the back end.... After all, INTEL was inside.
ORCL was needed due to the large amounts of data that was created by everyone so the database company was where the action was.

Notice that if you remove the company name, the themes themselves are as true today as they were 20 years ago. The same can be said about your descriptions and the companies involved. The themes will continue but there is no guarantee that these companies will be heading those themes in 15 or even 10 years from now.

As for indexing, I believe I've made my views known on the subject so let's not rehash them again.

+3

Jun 23rd, 2020 8:34 pm

OldForqignMoose [OP]: Newbie; Jun 9, 2020; 12 posts; 5 upvotes

Jun 23rd, 2020 8:34 pm

Thanks for the review!

xgbsSS wrote: ↑Agree with @craftsman .

One thing I can say is mixing VGRO with a VAB is overlapping. With VGRO you get US and Global bond coverage, although one can argue whether having fixed income ex-Canadian is worthwhile or not.

So instead of VGRO, you could buy VEQT, and just buy more VAB. If adding the foreign bonds is important, you could look at adding VGAB as well.

Keeping these sectors separate will allow you to control the rebalancing on your own time and terms.

Good catch, VEQT + VAB looks simple and I will adjust the weighting of fixed income in my portfolios.

craftsman wrote: ↑ With that bit of information and at this stage in the interest cycle, I don't know why you would have any bonds... let alone aggressive bonds. You would be much better off to break down those 'portfolio' ETFs like VGRO into its basic components so that you can adjust the fixed/equity positions as your needs change (especially as you get closer to retirement).

I would also adjust your idea of a greater than 8% annual return on your portfolio over the next 15 years especially if you include any measure of bonds in a portfolio (the S&P 10 year average was 8.11% and the US Bond Index was 4.62). Also, I would say that your risk profile is not medium-high but just high since you have return expectations that exceed historical market averages.

I wanted to have an increasing percentage of bonds for the long term, however I agree that now it is not the right time to buy VAB.TO.
As for the annual return of 8% +, no one knows the future, I hope my knowledge on investing will improve.

Jun 23rd, 2020 8:38 pm

OldForqignMoose [OP]: Newbie; Jun 9, 2020; 12 posts; 5 upvotes

Jun 23rd, 2020 8:38 pm

Shaun80 wrote: ↑ RRSP 50 /50 QQQ and VGT and TFSA MSFT , AMZN , GOOG , APPL , V , MA and NVDA and leave it for 25 years you will be very happy imo . Wait for a dip if you can as these holdings are at ATH but will continue to grow perhaps slowly but steadily .

Why do you prefer those individual stocks to be held in the TFSA, although they are already included in ETFs QQQ + VGT?

Jun 23rd, 2020 9:24 pm

Clacker: Deal Addict; Mar 10, 2010; 1382 posts; 368 upvotes

Jun 23rd, 2020 9:24 pm

I have nothing constructive to add, but I have to say that with a nickname like yours your investments can't possibly go wrong!

Jun 23rd, 2020 11:42 pm

Handcake: Member; Jan 17, 2018; 279 posts; 196 upvotes

Jun 23rd, 2020 11:42 pm

craftsman wrote: ↑ History is not on your side about leaving any investment for 25 years and you'll be happy especially individual companies as a lot can happen in 25 years! At the turn of the century, everyone was thinking technology stocks were the way to go and buying into the large technology companies back then would leave you a happy person in 25 years! That would mean that MSFT, CSCO, IBM, INTC, and ORCL would be the mainstay of the portfolio.

So, let's see how they performed after 20 years... (6/22/200 to 6/22/2020) - this is pure stock price so any dividends were not included.

MSFT - $40 -> $200
CSCO - $65 -> $45
IBM - $112 --> $121
INTC - $66 -> $60
ORCL - $38 -> $55

In short, the only one that really made any money was MSFT and ORCL while the rest either was up slightly or down.

Did any of these stocks split? That would be an important thing to look at as well.

Jun 24th, 2020 8:08 am

Shaun80: Sr. Member; Oct 21, 2016; 852 posts; 621 upvotes

Jun 24th, 2020 8:08 am

OldForqignMoose wrote: ↑ Why do you prefer those individual stocks to be held in the TFSA, although they are already included in ETFs QQQ + VGT?

I didn't want to purchase all the individual holdings again in the RRSP so I bought ETFs (lazy and save in buying fees ) . Vgt does not contain amazon , FB , goog and QQQ does not contain ma or v so I feel they complement each other despite the overlap in holdings .

Jun 24th, 2020 9:06 am

xgbsSS: Deal Addict; May 11, 2014; 4272 posts; 4860 upvotes; Iqaluit, NU

Jun 24th, 2020 9:06 am

Handcake wrote: ↑ Did any of these stocks split? That would be an important thing to look at as well.

No splits in these numbers. Any graph worth it's weight corrects for this and @craftsman would most certainly not miss this kind of detail.

Support your local Credit Union!

Sask Pension Plan Upto $6600/yr in Credit Card spending on RRSP contributions
http://forums.redflagdeals.com/sask-pen ... ns-2167222

+2

Jun 24th, 2020 1:27 pm

craftsman: Deal Expert; Jan 27, 2006; 15382 posts; 8260 upvotes; Vancouver, BC

Jun 24th, 2020 1:27 pm

Handcake wrote: ↑ Did any of these stocks split? That would be an important thing to look at as well.

Those numbers would be split-adjusted.

+1

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