Need some advice

[Sampson]

For quarterly contributions, that brings up the question, wouldn't I miss out on growth by having money sitting around doing nothing for 3 months?
....
Or does the frequency not matter because it's a long-term investment? Just trying to grasp the idea of contributions.

Remember that diversification does not provide the best returns and you money is idle. I suggest you invest every month.

Month 1: Buy $3000 each of product 1&2
Month 2: Buy $3000 each of product 3&4
Month 3: Buy $3000 each of product 5&6

Every 3 months you will achieve target asset allocation.

I look at % variance from my target allocation as an indicator to make changes. Initially, if your portfolio is small, then the monthly $6000 will cause larger deviations from target, but even after a year, the effect will be minimal.

This plan is a simple one for you to get started. In the future, after your portfolio is larger, just buy into the two funds that are deviating the furthest away from your target.

Keep it simple, keep it systematic, and you'll reap the most benefits from diversification.

[wwwkp84]

Okay, that sounds good.

Now as I mentioned in my original post. I had $2k going into a TD managed MF, where the MER's are huge, the average I am paying is 2.5%. I am thinking of stopping this and pulling the money that has been invested into those funds into this new strategy. This means I will have approximately $55k to move. Is it a smart move to divy that up into the new strategy that I have set up?

Initial Buy: $55,000

$8,250 - 15% - iShares MSCI Canada Index
$8,250 - 15% - Vanguard Total Stock Market ETF
$5,500 - 10% - Vanguard Small-Cap ETF
$5,500 - 10% - Vanguard MSCI Emerging Markets ETF
$5,500 - 10% - Vanguard REIT ETF
$22,000 - 40% - Vanguard Total Bond Market ETF

After this, then start the monthly contributions of 2 funds per month on a 3 month top up basis like mentioned above?

And also, is there a bad time to do the initial buy? For example, the market is pretty high right now, so is it wise to wait or it doesn't matter due to the long-term nature of this investment strategy?

[Sampson]

Is it a smart move to divy that up into the new strategy that I have set up?

Initial Buy: $55,000

$8,250 - 15% - iShares MSCI Canada Index
$8,250 - 15% - Vanguard Total Stock Market ETF
$5,500 - 10% - Vanguard Small-Cap ETF
$5,500 - 10% - Vanguard MSCI Emerging Markets ETF
$5,500 - 10% - Vanguard REIT ETF
$22,000 - 40% - Vanguard Total Bond Market ETF

This is the best thing to do IMO, since you will establish your initial portfolio under your target allocations.

After this, then start the monthly contributions of 2 funds per month on a 3 month top up basis like mentioned above?

Yes.

And also, is there a bad time to do the initial buy? For example, the market is pretty high right now, so is it wise to wait or it doesn't matter due to the long-term nature of this investment strategy?

Don't worry about this. Because your monies are already in the market, you are effectively transferring the assets from high fee products into low fee products and assuming your MF holdings are similar, there should be no effect of the market on your total returns (from when you made the initial investment)

[wwwkp84]

Great. This helps me a lot. I am finally getting a hang of the idea. With this strategy, I will be more diversified than I am with my non-registered Mutual Funds over at TD. It will give me the control but won't leave me dealing with this all day -- I can finally focus on my core strength's and just be a lazy investor.

I should probably take my high MER TFSA Mutal Funds and switch them to low cost e-Series funds (as these are in CDN funds). As for my RRSP, I should get rid of my high MER TD Mutual Funds and replace them with low cost ETF's, etc. Or should I let the "pro's" handle the retirement stuff?

Now that I've got the basics down and will continue to do so. Is this what every one does or are there other options to growing your money?

[Soils4Peace]

VCE, purchased in Canadian funds has a much lower MER (0.09%) than EWC

[Soils4Peace]

VCE, purchased in Canadian funds has a much lower MER (0.09%) than EWC (0.52%).

[eulogy]

$8,250 - 15% - iShares MSCI Canada Index
$8,250 - 15% - Vanguard Total Stock Market ETF
$5,500 - 10% - Vanguard Small-Cap ETF
$5,500 - 10% - Vanguard MSCI Emerging Markets ETF
$5,500 - 10% - Vanguard REIT ETF
$22,000 - 40% - Vanguard Total Bond Market ETF

I personally don't like the portfolio. I think it has gaps and over laps.

US:
Why not cut out the small cap ETF and just have 25% of VTI (total US Stock market). VTI holds the small cap stocks, so you're overlapping.

Canada: Fine

International: You're just appear to have emerging markets. You don't have any real international holdings, like the MSCI EAFE Index. Why not pick up VXUS, which is Total International Stock Market (so it has emerging markets and all the developed international). It does hold a little bit of Canadian, but one fund to hold the entire world (minus the US) is great.

I personally don't like REITs but to each their own.

And the bonds are fine too.

If I were you, I'd have it simple as I could.

30% VTI
15% VXUS
15% EWC (find a lower MER Canadian equity ETF if you can)
40% BND

[Belguy]

"It's the traditional or passive strategies that often outperform over the long run. According to Vanguard, only one out of 20 investors can build an active portfolio of individual stocks that can outperform the market index over any 20-year period."

--Kim Inglis, Financial Post, September 5, 2012

[wwwkp84]

I personally don't like the portfolio. I think it has gaps and over laps.

US:
Why not cut out the small cap ETF and just have 25% of VTI (total US Stock market). VTI holds the small cap stocks, so you're overlapping.

Canada: Fine

International: You're just appear to have emerging markets. You don't have any real international holdings, like the MSCI EAFE Index. Why not pick up VXUS, which is Total International Stock Market (so it has emerging markets and all the developed international). It does hold a little bit of Canadian, but one fund to hold the entire world (minus the US) is great.

Thanks. You do make sense with that and I've made the adjustment. I've also have decided that I want to go a bit more heavy on the equities because I am young. Here's what I am at right now:


35% - US Equities (VTI) - 0.06% MER
25% - CAD Equities (EWC) - 0.52% MER -- I'm looking for a lower MER ETF.
10% - Internalational+Emerging (VXUS) - 0.10%
10% - REIT (VNQ) - 0.10%
20% - Bonds (BND) - 0.10%

This brings me to a 80% equities, 20% bonds portfolio with an average 0.192% expense ratio.