Mid Year Rebalancing Questions

[Belguy]

And so, my target asset allocation is moving towards a 40 per cent equity/40 per cent fixed income/20 per cent cash position (HISA)

Should I stick with just three or four broad-based funds (VCE, VTI, VXUS, and PH&N Bond Fund D or break out emerging markets (VWO), precious metals (RBC Global Precious Metals Fund D), Reit's (ZRE), and real return bonds (XRB) into separate investments?

Also, do you consider RRB's to be part of a fixed income allocation?

[leoc2]

The third letter in XRB is BOND. Thus it is fixed income. VTI, VXUS has VWO covered. VCE has precious metals covered. Unless you are trying to tilt your allocation there is no need for anything else.

[Cal]

Belguy, out of curiosity, I think you should sit down and calculate, were you to cash out of your diversified portfolio, and invest in dividend paying companies, how much cash flow it would provide, and whether it would be sufficient for you to live off of in retirement.

I am not recommending changing your investing goals. Invest in a way that you are comfortable with. I am just curious to know if the portfolio (reasonably invested, not by picking high yielding companies) would be able to provide you with the necessary income you require in retirement or not.

I am not sure what type of work you do, but perhaps you could do some contract work, to supplement your retirement to a point that you feel more financially comfortable.

[Belguy]

Cal, the vast majority of my investments are in a RSP which I will be converting to a RIF in the relatively near future. Also, I have no plans on returning to the working world.

leoc2, OK, with VCE, I don't need to breakout precious metals.

With VXUS, do I need to break out emerging markets?

What about REITS?

[leoc2]

Try these links from our neighbour to the south...when they talk about mutual funds just remember we cannot buy them and then be jealous of their tiny mutual fund MER's.

http://www.bogleheads.org/forum/viewtopic.php?p=811031

http://www.bogleheads.org/forum/view...mrr=1321114453

http://www.bogleheads.org/forum/viewtopic.php?t=70171

http://www.bogleheads.org/forum/viewtopic.php?t=67640

http://www.bogleheads.org/forum/view...mrr=1300133415

http://www.bogleheads.org/forum/view...hp?f=1&t=92932

[Navigate Sensibly]

Belguy, simply check out canadiancouchpotato.com and follow the sample portfolio. Done! LOL

[Soils4Peace]

Belguy, you are getting close to David Swensen's recommended portfolio for non-billionaires. Just split the US equity part into two equal parts - US and Canadian equity; Canadianize the REITs and bonds and you get:

15% Canadian equity (VCE)
15% US equity (VTI)
15% Developed equity (VEA)
10% Emerging equity (VWO)
15% REIT (ZRE)
15% 'long treasury' bonds (but use a broad index: VAB)
15% real return bonds (XRB)

EDIT: note he has real return bonds as a separate asset class.

[Belguy]

Thank you to all for your suggestions and positive comments which are much appreciated. Thanks to leoc2 for the links which I found most interesting.

CC has already indicated to me that a 10 per cent allocation to emerging markets is perhaps not appropriate and too aggressive for a retired investor.

Also, I would not feel comfortable with only a 30% allocation to fixed income. I would also like a cash component in the way of a HISA. Maybe I could have the HISA as a 20 per cent component and the bond ETF's as a 30 per cent component but that only leaves a 50 per cent allocation for equities to split up proportionately as indicated.

I realize that there is no definitive answer as to the best allocation for retired investors but I feel that I am zeroing in on my target allocations going forward with help from all of you.

Thanks again!!

The Business Week suggested allocations for a retired investor also recommends 2.5% breakouts for each of either a Canadian or U.S. value ETF and a Canadian or U.S. smallcap ETF although I have to wonder how necessary this would be.

[Belguy]

Gold ETF's to consider for your portfolio:

http://www.theglobeandmail.com/globe...rticle4423063/

[londoncalling]

Thank you to all for your suggestions and positive comments which are much appreciated. Thanks to leoc2 for the links which I found most interesting.

CC has already indicated to me that a 10 per cent allocation to emerging markets is perhaps not appropriate and too aggressive for a retired investor.

Also, I would not feel comfortable with only a 30% allocation to fixed income. I would also like a cash component in the way of a HISA. Maybe I could have the HISA as a 20 per cent component and the bond ETF's as a 30 per cent component but that only leaves a 50 per cent allocation for equities to split up proportionately as indicated.

I realize that there is no definitive answer as to the best allocation for retired investors but I feel that I am zeroing in on my target allocations going forward with help from all of you.

Thanks again!!

The Business Week suggested allocations for a retired investor also recommends 2.5% breakouts for each of either a Canadian or U.S. value ETF and a Canadian or U.S. smallcap ETF although I have to wonder how necessary this would be.

Grats Belguy! Looks like you are finding an allocation that fits your comfort level...