# Couch potato/lazy portfolio - tracking my progress



## BoringInvestor

Hi CMF,

Over the past few years I've read numerous articles and academic studies which point out most actively managed funds under perform the index. 
I'm convinced a couch potato/lazy portfolio is the best way my family can secure financial independence.

And yet, for all the media and internet chatter touting the benefits of this investment strategy, I find there are few real-world users who publicly share their results. 
As such I want to share my progress to inspire others who are thinking about following a similar approach, and to learn from veterans who have been doing this for a while.


*About us*
My wife and I are in our early 30s with a young child [follow her RESP account]. We make a decent household income and have no debts other than our mortgage. 
We put aside ~15% of our net income towards our investment accounts.

*Portfolio setup*
We're following the Complete Couch Potato Portfolio that was previously detailed on CanadianCouchPotato.com (before newer portfolios were created, and this older portfolio was removed from the website), with some modifications:

We're using XIC as our Canadian ETF instead of the recommended ZCN. The six ETFs we hold are: XIC.T, VTI, VXUS, ZRE.T, XRB.T, and XBB.T.
Our bond allocation % is: [(my age) - 10]. i.e., when I'm 30 the bond allocation is 20% of the portfolio.
I've made adjustments to the weightings based on which account type (RRSP, TFSA, Margin, etc.) holds the ETF.
I make no attempts to time the market. I rebalance quarterly by buying the ETFs we're underweight in; for now I'm not selling anything to rebalance. 
All distributions/dividends/return-of-capital received are set to DRIP additional ETF shares.

*Portfolio tracking*
We started our portfolio in Dec 2012 - around the same time there was talk of a U.S. government shutdown and assurances from experts that the U.S. market was doomed in 2013. . Here's how we've done so far:

*Month -- Monthly growth (decline)*

December 2012: 1.09%

January 2013: 2.84%
February 2013: 2.06%
March 2013: 0.29%
April 2013: 1.07%
May 2013: 0.85%
June 2013: -2.62%
July 2013: 1.83%
August 2013: -0.20%
September 2013: 1.71%
October 2013: 4.28%
November 2013: 1.18%
December 2013: 1.38%

January 2014: 1.29%
February 2014: 3.14%
March 2014: 0.55%
April 2014: 0.74%
May 2014: 0.71%
June 2014: 1.26%
July 2014: 0.59%
August 2014: 2.10%
September 2014: -1.64%
October 2014: 1.09%
November 2014: 1.64%
December 2014: -0.81%

January 2015: 6.23%
February 2015: 2.71%
March 2015: -0.63%
April 2015: -0.85%
May 2015: 0.79%
June 2015: -1.94%
July 2015: 3.15%
August 2015: -4.52%
September 2015: -1.73%
October 2015: 2.81%
November 2015: 0.71%
December 2015: -0.04%

January 2016: -2.20%
February 2016: -1.71%
March 2016: 3.45%
April 2016: -0.04%
May 2016: 2.81%
June 2016: 0.13%
July 2016: 3.68%
August 2016: -0.12%
September 2016: 0.73%


_You can log in to view the three attachments below._

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## james4beach

Thanks for sharing. How are you tracking and doing the calculation of the "Overall account growth" (I presume that's a total return number?)

I ask because you mention you're regularly adding to these portfolios. The only feasible approach I have found to calculate returns properly, when there are cashflows in/out of the account, is a spreadsheet with XIRR formula.


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## BoringInvestor

Overall account growth is total return; I've updated my post to that terminology.

I'm not expecting any outflows of cash from these accounts - doesn't XIRR require at least one negative number in the data? 

The calculation I'm using for total return is: *[(total equity - net deposits) / net deposits]*.


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## james4beach

I think when you're adding money like that you really have to use XIRR to get the correct rate of return (it will spit out an annualized rate of return number) rather than the equation you have

Writing this in a hurry, someone else please correct me if I'm wrong

With XIRR the last line in your spreadsheet (the negative one) is just the current value as of today. Think of it like an action to liquidate the whole portfolio.



Code:


2012-01-01  1000
2012-08-01  1000
2013-03-01  1000
2013-09-13  -3200

XIRR        5.90%

Where the 1000's are cash additions to the (total) portfolio and 3200 is the total value today. I get 5.90% annualized rate of return with this example. For this to work properly you have to record any cashflow into or out of the accounts along with the date. Things that happen internal to the account (like dividends or interest) don't have to be recorded as long as they stay within the portfolio.

If you have only been adding cash, and never withdrew, then the only negative number will be your current value on the last line.


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## BoringInvestor

Thanks! Using XIRR my annualized rate of return up to today (September 13) is 10.56%.


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## BoringInvestor

I've updated the first post to include returns up to today, and to add a chart tracking net deposits, total equity, and monthly returns over time.

My intention is to update this information in the first post once a month.


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## Jungle

Just so you know come Jan 1 there is a thread on here and financialwebring.org where people share their investment returns. So you get a more real world idea of how everyone's doing. I discovered this a few years ago and it inspired me to track our performance. 

And usually for the most part people are posting their XIRR and not just the best stock pick.


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## BoringInvestor

Thanks Jungle. 
I'm a long-time lurker on CMF so I've seen and read through those threads in the past.

it will be an interesting exercise to see how my couch potato portfolio preforms relative to others couch potato and more actively traded accounts.


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## BoringInvestor

I've updated the first post based on September and partial October results.

September was a good month as the portfolio was up 1.71%.
October is so far equally good as the portfolio is up 1.78%.

Overall return is: 9.25%.
XIRR (annual rate of return) since inception is: 12.67%.


The portfolio was rebalanced in September. The next quarterly rebalnacing is going to take place in December.


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## BoringInvestor

_Looks like a system restore on the board wiped out my 1st post, so here's the re-post:_

I've updated the first post based on October's and partial November results.

October was the best month ever for the portfolio, as it was up 4.28%.
Thus far November is looking like another positive month, up 0.54%.

Overall return is: 12.33%.
XIRR (annual rate of return) since inception is: 15.08%.


The portfolio was last rebalanced in September. 
The next quarterly rebalancing is going to take place in December.


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## Franky Jr

How's your YTD XIRR doing?


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## BoringInvestor

As of right now: 2013 XIRR = 15.25%


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## BoringInvestor

A late November update.

November was a positive month for the portfolio as it was up 1.18%.

I'll post a conclusive December/end of year update once I receive the final statements.
Tentatively, in 2013 the portfolio XIRR was 15.55%, and the overall return was 13.34%.


Overall XIRR (annual rate of return) since inception [Dec 2012] is: 14.86%.


The portfolio was rebalanced in December. 
The next quarterly rebalancing is going to take place in March.


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## BoringInvestor

*December update*

To cap off 2013, in December the portfolio was rebalanced and grew by 1.38%.


*Final 2013 portfolio update*

In 2013 the portfolio XIRR was 15.56%.
Yearly % growth was 13.36%.

Overall my portfolio size increased 56.75% from Jan 1 to Dec 31, 2013.
67.5% of the increase came from new deposits, and 32.5% came from growth.

View attachment 390



*Overall growth*

Since the inception of the portfolio in December 2012 (i.e., 13 months of growth) the portfolio XIRR is 15.65% and the total % growth is 14.25%.
Yearly portfolio yield (on market value) is: 2.74%


On an individual position basis, my stock-index-tracking ETFs have provided all the gains as my REIT and bond funds are in a loss.


XIC.TO (Canadian equities):
- Capital gain of 10.01%
- Net gain (including dividends): 12.82%
- XIRR: 14.04%

VTI (U.S. equities):
- Capital gain of 29.66%
- Net gain (including dividends): 33.46%
- XIRR: 32.65%

VXUS (international equities):
- Capital gain of 11.92%
- Net gain (including dividends): 15.59%
- XIRR: 17.54%

ZRE.TO (REIT):
- Capital loss of (5.77)%
- Net loss (including dividends): (2.13)%
- XIRR: (2.57)%

XRB.TO (Real-return bonds):
- Capital loss of (10.79)%
- Net loss (including dividends): (9.86)%
- XIRR: (12.77)%

XBB.TO (Canadian bonds):
- Capital loss of (3.85)%
- Net loss (including dividends): (1.54)%
- XIRR: (1.86)%


--------

I had a request from a forum member to share the spreadsheet I use to track my portfolio & positions. 
Look for something over the coming months after I make a few modifications.


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## BoringInvestor

First update of 2014:


January was a very volatile time in the markets and with the portfolio.
For the month the portfolio finished up 1.29%.


*Commentary*

Compared to previous months the return was perfectly average (1.29% v. simple monthly average of 1.22%).
Most of the portfolio gains were from the strengthening U.S. dollar v. the Canadian dollar.

My REITs and bonds funds all had a good month, with my XBB ETF finally showing a positive net return (XIRR of 1.42%).


*XIRRs*

2014 XIRR = 16.88%
Total XIRR (since December 2012) = 15.70%


*Growth chart*
View attachment 411


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## uptoolate

Just looking at your calculation on VTI and you have given your results in USD I think. You also gained a fair bit on the drop in the CAD. Same would be true on VXUS. I tend to look at returns in CAD for better or worse. You can do it anyway you want of course.


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## BoringInvestor

*uptoolate*: in my end of year summary detailing the capital gains, XIRR, and total returns by each position, I valued my U.S. positions (i.e., VTI and VXUS) in U.S. dollars.

For my monthly calculations and in the chart that details my gains/losses, I value my U.S. positions and cash in Canadian dollars using the end of month exchange rate.


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## uptoolate

Got it. Was a good year to be holding USD.


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## BoringInvestor

For sure. If it wasn't for the movement in the USD v CAD in January I probably would have had a negative growth month.


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## BoringInvestor

February was the second best month ever since the inception of the portfolio.
For the month the portfolio was up 3.14%. 

In 2014 the portfolio is up 4.45%.
Since inception the portfolio is up 18.80%.


*Commentary*

February started off quite volatile, but throughout the month it picked up strength and had a string of several positive days to close out the month. 
February's return topped the previous 2nd-best return from January 2013 (3.14% vs. 2.84%), but fell well short of the all-time high from October 2013 (4.28%).

My REIT fund (ZRE.TO) is back to showing a positive net return (1.19%). The fund has been at a loss since about June of 2013.
My real return bond fund (XRB.TO) is the only ETF still in the negative (-3.8% net loss).


*XIRRs (annualized rates of return)*

2014 XIRR = 31.84%
Total XIRR (since December 2012) = 17.89%


Growth chart
View attachment 449


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## RBull

Nice results so far Boringinvestor.


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## BoringInvestor

Thank you.
It's always fun to do these updates when the results are positive.


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## BoringInvestor

As a new feature, on a monthly basis I'll be updating the following table showing:

Returns for the most recent month, year, previous year, and since inception
XIRR for the year, previous year, and since inception
Deposits for the most recent month, year, previous year, and since inception (original deposit scaled to $100)
Growth for the most recent month, year, previous year, and since inception
Total balance for the previous year, and since inception

View attachment 480


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## olivaw

Thanks for posting. I follow this thread with interest.


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## jcgd

You said above your 2014 XIRR is 31.84%. It's fine if that's how you want to monitor things but it appears you have the current date for the portfolio liquidation value. If you set this date to the last day of the year it will give you the XIRR as if your current YTD return is your return for the year (as if you went it cash today and earned no more returns). I believe the way you've set it up, so that the liquidation value is matched with the current date, it's taking your YTD return of 2-6% or whatever and calculating an annualized return of 31.84% which isn't what you've actually earned to date. It's your annualized return if your portfolio continues to grow at the same rate as it has these first few months, for the remainder of the year. 

Hopefully this is helpful and makes sense.


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## BoringInvestor

Thanks olivaw. 

jcjd - you're right, I am using the current date for XIRR calculations. I show my actual returns in the 'return', row. 
Is there a common way to use XIRR? There seem to be pros and cons to using either date.


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## My Own Advisor

Nice work BoringInvestor. Proof indexing works if you don't tinker with it.


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## BoringInvestor

*My Own Advisor* - indeed, I believe in the long-term viability of the portfolio, and I think more Canadians should do it.

It was dumb luck I started the portfolio when I did, as I was able to capture spectacular market gains in 2013... it was also a bit of my own doing too as I was able to ignore the nay-sayers who were predicting doom and gloom in 2013 due to the U.S. political situation.

I'll post my March results in a couple of days. It's been very volatile, but I'm still hoping I can squeak out a gain.


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## jcgd

BoringInvestor said:


> Thanks olivaw.
> 
> jcjd - you're right, I am using the current date for XIRR calculations. I show my actual returns in the 'return', row.
> Is there a common way to use XIRR? There seem to be pros and cons to using either date.


Well, as long as you know how your using XIRR I don't see any problem. Personally, I like to use the end of the current year as my date so I see my true current return. Using today's date doesn't give me a number that has any relevance for me, but if it has meaning to you than go for it.

This is a thorough journal, it's going to be nice to be able to look back after a few years and see the progression to wherever you end up.


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## BoringInvestor

*March 2014 update*


In March I restructured the portfolio by closing my margin account and transferring all holdings to either my RRSP or TFSA.
March was also my first quarterly rebalancing of 2014.

Just like February, March was very volatile - I was at a monthly loss up to the last day, at which point a market rally plus dividends & DRIPs received produced an overall net gain.
Overall the portfolio was up 0.55%.

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## BoringInvestor

*April 2014 update*

*Commentary*
For the first time in over a year, April saw no new deposits into the portfolio - I've restructured my accounts and will be making my regular contributions on a quarterly basis.
To sound like a broken record - once again the month was very volatile with numerous swings between profitability and loss.

*Results*
The portfolio rose 0.74% in April, pushing my overall gain to within a hair of 20%.
YTD in 2014 I'm up 5.72%, with an annualized return of 18.88%.

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## BoringInvestor

*May 2014 update*

*Commentary*
May was the third month in a row with below average results (avg. 1.23% / month). 
The portfolio is ~77% larger than my initial deposit, with ~60% of the increase via deposits, and ~40% from market gains.

For the first time, (perhaps ever), all my holdings are showing a positive net gain and XIRR. 
The last holdout - XRB.T (real-return bonds), finally turned positive.

The portfolio will receive additional deposits, and be rebalanced in June.


*Results*
The portfolio rose 0.71% in May, pushing my overall gain to 20.79%.
YTD in 2014 I'm up 6.47%, with an annualized return of 16.67%.

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## BoringInvestor

*June 2014 update*

*Commentary*
In June the portfolio saw a relatively large quarterly deposit into the account, and was rebalanced. 
The portfolio has had positive gains for 10 months in a row. 

June saw all 6 ETFs pay dividends, with cash received automatically DRIPing new shares.
The overall gain was quite ordinary (1.26% versus a simple monthly average of 1.23%). 


*Results*
The portfolio rose 1.26% in June, pushing my overall gain to 20.62%.
YTD in 2014 I'm up 7.34%, with an annualized return of 16.67%.

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## BoringInvestor

*July 2014 update*

*Commentary*
July was a banner month... right up to the last day of the month when the portfolio suffered a >1% decline. 
Though the portfolio gained value in July, the overall result ended up below average.

*Results*
The portfolio rose 0.59% July, pushing my overall gain to 21.34%, and my overall annualized rate of return to 15.42%.
YTD in 2014 I'm up 7.98%, with an annualized return of 15.14%.

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## BoringInvestor

*August 2014 update*

*Commentary*
August saw a streak of monthly gains extend to 12 consecutive months. The last time the portfolio saw an asset decline was August of 2013.
Results were well above average, as August ended up as the 4th best month since inception.

The portfolio is very close to being double its initial size (97.88% above the starting value).
61% of the increase have come via deposits, with 39% from asset growth.

The portfolio will see new deposits, and be rebalanced in September. 


*Results*
The portfolio rose 2.10% in August, pushing my overall gain to 23.89%, and my overall annualized rate of return to 16.11%.
YTD in 2014 I'm up 10.25%, with an annualized return of 16.77%.


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## BoringInvestor

Nerdy bump - when filtering threads by # of views, this thread now appears on the first page. 

For everyone following my journey - join in and share your results too. 
Let's inspire others to get aboard the 'boring investment train'.


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## davebliz

*Sharing spreadsheet*

Hi, I'm new to the forum so just reading this thread. Did you ever share the spreadsheet you use, I'm looking to set one up and an example would be very useful.
Also I was not able to view any of the attachments in your posts, something about I do not have proper permission. Anyone know what the problem is?
Thanks.



BoringInvestor said:


> *December update*
> 
> 
> --------
> 
> I had a request from a forum member to share the spreadsheet I use to track my portfolio & positions.
> Look for something over the coming months after I make a few modifications.


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## davebliz

*Spreadsheet to track portfolio*



BoringInvestor said:


> *December update*
> 
> 
> I had a request from a forum member to share the spreadsheet I use to track my portfolio & positions.
> Look for something over the coming months after I make a few modifications.


Did you ever share the spreadsheet, I would be very interested in seeing it?
Thanks.


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## davebliz

*Can not view the attachment*

Ignore my question, I can now view the attachments, I was not a verified member but am now.




BoringInvestor said:


> *August 2014 update*
> 
> 
> 
> View attachment 1721
> 
> 
> View attachment 1713


I can not view the attachments, anyone else have this problem. Thanks.


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## davebliz

*Sharing your spreadsheet*

At one point, you were going to share your portfolio spreadsheet. I haven't seen that, did you share it? If not, do you plan on?
Thanks.


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## BoringInvestor

*September 2014 update*

*Commentary*
September was the first down month in over a year, and the second worst month (on a percentage basis) since the portfolio was started.
However, as the value of the deposits was larger than the asset decline, the portfolio has risen in total value every month since inception.

The portfolio surpassed a milestone and is now >100% larger than my starting balance; 67.3% of the increase has come from deposits, with 32.7% coming from asset growth.
The portfolio grew from my normal quarterly deposit, plus a transfer-in of a matured GIC from another institution.


*Results*
The portfolio declined 1.64% in September, bringing down my overall gain to 20.24%, and my overall annualized rate of return to 13.81%.
YTD in 2014 I'm up 7.82%, with an annualized return of 11.81%.


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## BoringInvestor

davebliz said:


> Ignore my question, I can now view the attachments, I was not a verified member but am now.
> 
> I can not view the attachments, anyone else have this problem. Thanks.



Good point - in order to view the attachments I add each month (a tabled summary and chart of the overall portfolio results), you'll need to sign up and be logged in as a member.


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## BoringInvestor

davebliz said:


> At one point, you were going to share your portfolio spreadsheet. I haven't seen that, did you share it? If not, do you plan on?
> Thanks.


Yes, it's still my intention to do so, I find I'm still tinkering with my spreadsheet.
I'm tempted to start a new sheet to make it more efficient, and more adaptable for other users.

When I have it in a place I'm happy with, I'll share it on this thread.


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## BoringInvestor

*October 2014 update*

*Commentary*
October was on track to be a horrible month, the worst month in the history of the portfolio, as it was down 3.6% at one point...... before markets rebounded, swinging my portfolio up ~4.7% in the final weeks.

The ending monthly result was quite typical (up 1.09% vs a simple average of 1.11%), and so far the portfolio has never seen an overall decline in value month over month. You can view this constant rise as the blue line in the chart below; [you have to be logged in to see the attachment].

This constant rise is attributed only to luck. In the three months the overall value of my positions has dropped, the amount of deposits was greater than the decline. 
This trend - of the portfolio never seeing an overall decline - surely can't last, but it's interesting to note for now. 

*Results*
The portfolio rose 1.09% in October, bringing up my overall gain to 21.55%, and my overall annualized rate of return to 13.83%.
YTD in 2014 I'm up an even 9.00%, with an annualized return of 12.06%.

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## BoringInvestor

Minor update - I finally worked out my time weighted rate of return: 14.31%
As my money weighted rate of return (13.83%) is lower, the timing of deposits have been subtracting value from my portfolio.

Ultimately I'm not too hung up on which one to use, but I'll present both to give a more complete benchmark as to the portfolio's performance.


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## BoringInvestor

*November 2014 update*

*Commentary*
In November a relatively sizable GIC matured and was transferred into my RSP account. This was the last external RSP account held, and the last to be transferred into the investment portfolio. The funds transferred in will be combined with my quarterly deposits to rebalance the portfolio in December.

This month also marked the two year anniversary of the inception of the portfolio. 

The ending monthly result was a bit over average, up 1.64% vs a simple monthly average of 1.13%.


*Results*
The portfolio rose 1.64% in November, bringing up my overall gain to 22.15%, and my overall annualized rate of return to 14.25%.
YTD in 2014 I'm up 10.26%, with an annualized return of 13.04%.


*Goal target*
This month I've added some new data to the portfolio table, most importantly is a _% of goal_ row.
My target is to be able to retire comfortably the year I turn 55, by living off passive income generated by the portfolio. 

Thus far I've achieved 2.55% of my goal, and I have 277 months left to get there.



_Please log into to view the attachments_

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## BoringInvestor

FYI for anyone wondering how a fully-invested couch-potato portfolio is holding up in this recent market turbulence: as of right now (approx midday on the 15th) the portfolio is down 3.31% this month.

Full summary, as always, after the month ends.


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## BoringInvestor

Quick end of year summary.

In 2014 the portfolio's: 

overall return was ~9%.
annualized money weighted return (XIRR) was ~10.5%.
time weighted return was ~11%.


The full summary, including the normal graphs, tables, and stats will be added in the near future.


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## BoringInvestor

*December 2014 update*

*Commentary*
In December I made my final quarterly deposit and rebalanced the portfolio. 
The month was comparatively volatile as the portfolio was down >3% at times, before settling on a smaller loss. It was the third worst month since the portfolio was created.

*Results*
The portfolio fell 0.81% in December, reducing my overall 2014 gain to 8.95%, with an annualized rate of return (XIRR) of 10.65%.


*Goal target*
My goal is to generate enough dividend income to allow me to retire the year I turn 55.
Thus far I've achieved 2.84% of my goal, with 23 years left to go.

_Please login to view the attachments_

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*2014 recap*

In 2014 my portfolio crossed a milestone - the ending balance was well over double the amount of my initial starting value.

There are three ways to evaluate how the portfolio performed:
- The simplest way to look at it is to say *the overall return was up 8.95%*. This was the actual return I saw on my portfolio based upon the starting value on January 1st, all deposits into the portfolio, and the ending value on December 31st.
- The *annualized rate of return (XIRR) was 10.65%*. This is the return I would expect over a 365 day period, aka if all deposits were made on January 1st. This rate is higher than the overall return because the deposits I made throughout the year did not have an opportunity to grow over a full year. 
- The *time weighted return was 11.19%*. The time weighted return ignores the amount of money in each deposit, and instead focuses on how my portfolio grew between each deposit. As my time weighted return is higher than my XIRR, the timing of deposits was dragging down my performance.



*Overall recap*

Overall my portfolio size has increased 130.62% from December 2012 to December 2014 (25 months).
70.4% of the increase came from new deposits, and 29.6% came from growth.

My overall return is 20.17%.

The annualized money weighted return (XIRR) is 12.86%.
The annual time weighted return is 13.54%.

The 1 year trailing yield, based on market values, is 2.92%.


Since the inception of the portfolio, all six of my positions have been profitable when including dividends, though three of my positions are currently showing a capital loss.
The portfolio has mainly risen on the strength and weighting in the Canadian and U.S. index tracking funds.


XIC.TO (Canadian equities):
- Capital gain of 16.16%
- Net gain (including dividends): 21.92%
- XIRR: 12.01%

VTI (U.S. equities; _gains expressed in U.S. dollars_):
- Capital gain of 37.69%
- Net gain (including dividends): 44.63%
- XIRR: 22.21%

VXUS (International equities; _gains expressed in U.S. dollars_):
- Capital loss of (1.84)%
- Net gain (including dividends): 2.57%
- XIRR: 2.16%

ZRE.TO (Real estate income trusts [REITs]):
- Capital loss of (2.07)%
- Net gain (including dividends): 5.43%
- XIRR: 3.48%

XRB.TO (Real-return bonds):
- Capital loss of (0.88)%
- Net gain (including dividends): 1.61%
- XIRR: 1.14%

XBB.TO (Canadian bonds):
- Capital gain of 1.23%
- Net gain (including dividends): 5.38%
- XIRR: 3.96%


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## My Own Advisor

@BoringInvestor,

Am I reading your tables correctly?

You basically started with about $100,000 in Nov. 2011, and now you're approaching $250,000?

Your savings rate must be off the charts. Well done.

On the subject of your goal; "My goal is to generate enough dividend income to allow me to retire the year I turn 55.
Thus far I've achieved 2.84% of my goal, with 23 years left to go."

How much capital do you think that will be? Curious.

Keep up the great work.


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## BoringInvestor

My Own Advisor said:


> @BoringInvestor,
> 
> Am I reading your tables correctly?
> 
> You basically started with about $100,000 in Nov. 2011, and now you're approaching $250,000?
> 
> Your savings rate must be off the charts. Well done.
> 
> On the subject of your goal; "My goal is to generate enough dividend income to allow me to retire the year I turn 55.
> Thus far I've achieved 2.84% of my goal, with 23 years left to go."
> 
> How much capital do you think that will be? Curious.
> 
> Keep up the great work.


@My Own Advisor,

Essentially yes. 
For relative privacy, I'm not revealing my total portfolio value, rather I scaled my initial deposit to $100.

If my starting balance was $100,000, I'd be just over $230,000.
It's also equally true that if my starting balance was $5,000, my current value would be just over $11,500.

My savings rate is likely high compared to the 'average Canadian', but it's in line with others on CMF: ~ 15% of net income, or ~10% of gross income.


My goal planning works on a few assumptions:
- I plan for what I'd need each month, in today's dollars, to retire, then calculate the future value of that figure with an inflation rate
- I assume a steady rise in deposit growth each year
- I assume a larger rise in deposits once my mortgage is paid off
- I forecast my future growth in my portfolio using my long term annualized rate of growth (XIRR)
- I carry forward my current dividend yield to calculate the expected dividends off the future portfolio value

Using all these assumptions I calculate the % of my goal reached, and if I'm on track or off track to meet the target.
Presently I'm off track, but I'm not losing any sleep over it as 23 years is a long time to make up any shortfall.


----------



## HaroldCrump

BoringInvestor said:


> My savings rate is likely high compared to the 'average Canadian', but it's in line with others on CMF: ~ 10% of net income, or ~15% of gross income.


Shouldn't it be the other way around, since gross income > net income.
Your savings as a % of gross income should be lower than % of net income.


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## BoringInvestor

HaroldCrump said:


> Shouldn't it be the other way around, since gross income > net income.
> Your savings as a % of gross income should be lower than % of net income.


You're absolutely right - thanks.
I'll edit my post.


----------



## BoringInvestor

Quick mid-month update: the recent rally has tentatively made this the best month ever for the portfolio.
As of today, the portfolio is up >5% this month.


----------



## BoringInvestor

*January 2015 update*

*Commentary*
What a start to 2015! The portfolio posted its best ever result, up 6.23%. 
The monthly result passed the previous high of 4.28% made back in October of 2013.

The great start to the year has made my 2015 annualized, and time-weighted, rates of return ridiculously high; as my calculations assume the same rate of growth will continue until the end of the year. These figures will no doubt come back to a reasonable rate as the year progresses.

For now, my total 2015 growth is almost equal the total growth from either of the past two years (2014 or 2013).
With the gain in January, my overall growth has surpassed half of my initial investment (aka, if I started my portfolio with $100, my total growth to date is >$50).

The strong monthly result can be attributed to:
- dividends earned in December, but paid in January
- the strengthening US dollar vs the Canadian dollar (increasing the value of my investments in VTI and VXUS)
- strong price appreciation from my REIT (ZRE.T), and bonds funds (XRB.T, and XBB.T).


*Results*
The portfolio rose 6.23% in January, bringing up my overall gain to 27.65%, and my overall annualized rate of return to 16.36%.
My 2015 annualized rate of return is a _stupidly_ high 108.64%. Look for this number to significantly drop in the near-future.


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## BoringInvestor

After digging deeper into my holdings, I was surprised just how much the changing USD/CAD exchange rate has had on my VTI and VXUS positions.

My Canadian holdings are fairly straightforward in terms of calculating the total returns since December 2012:

XIC.T (S&P TSX Capped Composite Index) - 28.84%
ZRE.T (Equal Weight REITS Index) - 13.21%
XBB.T (Canadian Bonds) - 9.00%
XRB.T (Real Return Canadian Bonds) - 7.43%


My U.S. holdings, expressed in U.S. dollars, have the following returns:

VTI (Total U.S. Stock Market) - 48.23%
VXUS (Total International Stock) - 7.42%

But, when accounting for the appreciation in the U.S. dollar vs the Canadian dollar, my U.S. holdings have effectively provided the following total returns, in Canadian dollars:

VTI (Total U.S. Stock Market) - 84.29%
VXUS (Total International Stock) - 26.80%



My hope is in the long run I'll be better off, net of exchange costs, to buy and sell VTI and VXUS using U.S. funds.... but only time will tell.
I'm willing to accept the currency risk with my U.S. holdings, as I prefer to avoid the extra costs and tracking errors of CAD hedged ETFs. 
For now, the changing rate has been a huge lift to the overall portfolio's performance.


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## Ihatetaxes

Its pretty amazing how well VTI has done when you factor in the exchange! Looks like you have a solid portfolio set up.


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## BoringInvestor

Ihatetaxes said:


> Its pretty amazing how well VTI has done when you factor in the exchange! Looks like you have a solid portfolio set up.


Thanks for the feedback. 

It truly is remarkable how well it has done in so little time. I was especially surprised on the large impact the U.S. dollar had on my total return for VXUS. 

Hopefully my fellow couch potatoes out there have been enjoying equal, or better, gains on their US ETF positions too.


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## snowbeavers

Unless you are close to retirement, you should be upset at the increase in value of your portfolio so that you can take advantage in cheap prices. I've learned to think the opposite about my portfolio, excited when the prices drop (think sale!) and upset when the value goes up.


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## BoringInvestor

snowbeavers said:


> Unless you are close to retirement, you should be upset at the increase in value of your portfolio so that you can take advantage in cheap prices. I've learned to think the opposite about my portfolio, excited when the prices drop (think sale!) and upset when the value goes up.


You're right, in that in an ideal world I would like to see my investments flat-line for 20-30+ years, then spike up exponentially as I approach retirement. 
Buffet's hamburger quote comes to mind. 

I also look at it pragmatically, if the markets flat-lined for 20+ years, would it be seen as a good investment to the next generation? 
Would other assets dominate investments (housing, land, physical commodities, etc.?)
Would the news media convince investors to avoid the markets entirely and justify that viewpoint by the sub-par market returns over the previous decades?

As such, I try to be happy in all scenarios:
- Markets are up: "Yay! I made some money"
- Markets are down: "Yay! I can buy more the next time I rebalance my account"


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## BoringInvestor

*February 2015 update*

*Commentary*
2015 continues strong. The portfolio posted its 5th best result, up 2.71% (compared to a simple monthly average of 1.31%).
However, in terms of dollar growth, it was the 2nd best month, as the dollar size of the increase surpassed all other months other that January. 

With February done, there are a couple of milestones to note:
- the portfolio is now 150% larger than my initial deposit (i.e., if my initial deposit was $100, my account value is now >$250)
- my overall return has surpassed 30% (31.12%)
- my year-to-date 2015 dollar gain is larger than the gain made in either 2014 or 2013


*Results*
The portfolio rose 2.71% in February, bringing up my overall gain to 31.12%, and my overall annualized rate of return to 17.38%.

Just looking at 2015, my return is 9.11%, with an annualized rate of return that is still _stupidly_ high at 73.14%. No doubt this number will continue to trend down as the year progresses.


_Log in to view the two attachments below_

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## RBull

Great work. A shining example of how a simple approach (but well executed) can work so well. All newbies (and experienced folks) should have a look here.


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## Ihatetaxes

Looks good. Our portfolios are similar and I am at 8.53% Jan 1 to March 1. Your XBB vs my XSB is the difference that gives you the slightly better total gain I think.


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## BoringInvestor

RBull said:


> Great work. A shining example of how a simple approach (but well executed) can work so well. All newbies (and experienced folks) should have a look here.


Thanks RBull. 

It's important to point out for newer investors reading this thread that the portfolio is only 'working' - i.e., rising in value - mainly because the markets have been rising. 
If my portfolio was losing money, it's not necessarily a sign the couch potato is a wrong model to follow, only that the markets have generally been lower and my portfolio has been following that result.

As you and I know, we as individuals have no control over how the market will move; but, by keeping my costs low and my assets diversified, it's my belief that in the long-run I'll see a positive return on my investments in the range of 6-9% per year.

I started, and maintain this thread to inspire others who are thinking of getting started, those that are looking to move from active to passive investing, and to preserve historical performance of how a couch potato portfolio performs when real dollars are at stake.


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## BoringInvestor

Ihatetaxes said:


> Looks good. Our portfolios are similar and I am at 8.53% Jan 1 to March 1. Your XBB vs my XSB is the difference that gives you the slightly better total gain I think.


Our portfolios are very similar - with the one exception being my real estate investment trust holding of ZRE.T. 
I'd expect our monthly results will track each other very closely.

Cheers!


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## RBull

BoringInvestor said:


> Thanks RBull.
> 
> It's important to point out for newer investors reading this thread that the portfolio is only 'working' - i.e., rising in value - mainly because the markets have been rising.
> If my portfolio was losing money, it's not necessarily a sign the couch potato is a wrong model to follow, only that the markets have generally been lower and my portfolio has been following that result.
> 
> As you and I know, we as individuals have no control over how the market will move; but, by keeping my costs low and my assets diversified, it's my belief that in the long-run I'll see a positive return on my investments in the range of 6-9% per year.
> 
> I started, and maintain this thread to inspire others who are thinking of getting started, those that are looking to move from active to passive investing, and to preserve historical performance of how a couch potato portfolio performs when real dollars are at stake.


All good points. I wish I had found indexing back in the early 80's when I started investing. Newer investors haven't seen or had the feeling when markets get tumultuous and turn badly for the worse, amplified as your holdings value increases and retirement looms closer. 

According to an interesting report I read from PWL * your 80/20 portfolio should have an expected return of 6.5%. The largest annual loss you should incur is -21.9%.

* https://www.pwlcapital.com/en/The-Firm/White-Papers


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## BoringInvestor

RBull said:


> All good points. I wish I had found indexing back in the early 80's when I started investing. Newer investors haven't seen or had the feeling when markets get tumultuous and turn badly for the worse, amplified as your holdings value increases and retirement looms closer.
> 
> According to an interesting report I read from PWL * your 80/20 portfolio should have an expected return of 6.5%. The largest annual loss you should incur is -21.9%.
> 
> * https://www.pwlcapital.com/en/The-Firm/White-Papers


This looks to be the report in question: https://www.pwlcapital.com/pwl/medi...i_Great-Expectations_Hyperlinked.pdf?ext=.pdf


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## gladaki

BoringInvestor said:


> @My Own Advisor,
> 
> Essentially yes.
> For relative privacy, I'm not revealing my total portfolio value, rather I scaled my initial deposit to $100.
> 
> If my starting balance was $100,000, I'd be just over $230,000.
> It's also equally true that if my starting balance was $5,000, my current value would be just over $11,500.
> 
> My savings rate is likely high compared to the 'average Canadian', but it's in line with others on CMF: ~ 15% of net income, or ~10% of gross income.
> 
> 
> My goal planning works on a few assumptions:
> - I plan for what I'd need each month, in today's dollars, to retire, then calculate the future value of that figure with an inflation rate
> - I assume a steady rise in deposit growth each year
> - I assume a larger rise in deposits once my mortgage is paid off
> - I forecast my future growth in my portfolio using my long term annualized rate of growth (XIRR)
> - I carry forward my current dividend yield to calculate the expected dividends off the future portfolio value
> 
> Using all these assumptions I calculate the % of my goal reached, and if I'm on track or off track to meet the target.
> Presently I'm off track, but I'm not losing any sleep over it as 23 years is a long time to make up any shortfall.



So, If I am correct you save 15% of your net income other than RRSP


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## RBull

BoringInvestor said:


> This looks to be the report in question: https://www.pwlcapital.com/pwl/medi...i_Great-Expectations_Hyperlinked.pdf?ext=.pdf


Yes, thanks. I didn't know how to get directly to it, with my elementary tech skills.


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## BoringInvestor

gladaki said:


> So, If I am correct you save 15% of your net income other than RRSP


Hi gladaki,

We save 15% of our net income for our long-term retirement goals. These funds are invested in both RRSPs and TFSAs.

In addition to this savings, we also put aside funds for goals such as vacations, home renovations, furniture and electronics, etc.


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## Dufresne

*Thanks, and great work*

Hi all,

My first post- long time lurker here. I wanted to thank you for posting your results. I am using this info, along with some mutual fund software to track my own portfolio against these benchmarks. I was inspired to gently introduce passive investing (TDW e series) for about a third of my portfolio a few years ago after reading many of your comments.
From what I can tell since I've been tracking the results, I have under performed the indexes/benchmark by about 1.0%/year for the last three years that I have been keeping score. I attribute this solely to the high embedded fees of my mutual and seg fund holdings. There is a lot of debate about passive vs. active investing results. i have found indexing is like religion, you either believe in it, or you don't. I would also like to add that so much of investors' results rely on proper asset allocation and investor behavior during the market cycles. Reducing costs seems the obvious area for me to concentrate on next.
This is a great forum, I hope to make many positive contributions to it. I love how members are respectful and not flaming each other as I've seen on other forums.
Full disclosure- I am a financial advisor and licensed insurance agent practacing for 25 years.


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## BoringInvestor

Dufresne said:


> Hi all,
> 
> My first post- long time lurker here. I wanted to thank you for posting your results. I am using this info, along with some mutual fund software to track my own portfolio against these benchmarks. I was inspired to gently introduce passive investing (TDW e series) for about a third of my portfolio a few years ago after reading many of your comments.
> From what I can tell since I've been tracking the results, I have under performed the indexes/benchmark by about 1.0%/year for the last three years that I have been keeping score. I attribute this solely to the high embedded fees of my mutual and seg fund holdings. There is a lot of debate about passive vs. active investing results. i have found indexing is like religion, you either believe in it, or you don't. I would also like to add that so much of investors' results rely on proper asset allocation and investor behavior during the market cycles. Reducing costs seems the obvious area for me to concentrate on next.
> This is a great forum, I hope to make many positive contributions to it. I love how members are respectful and not flaming each other as I've seen on other forums.
> Full disclosure- I am a financial advisor and licensed insurance agent practacing for 25 years.


Thank you Dufresne. 
It makes me feel good to know this thread has been useful to you in your quest for financial stability and independence in retirement.

I found your 'religion' comparison very interesting, but I would slightly tweak it. 
Generally religious belief rest upon 'faith' - a faith on something that cannot be proven. Using this broad definition, 'active investing' is a closer parallel to a religious belief as its proponents hold out hope and sing its praises despite study after study pointing to the superior long-term results of passive investing.

I'm happy to see you focus on cost-reduction; it's something we as investors can control, and it can be a huge drag on our long-term performance.


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## BoringInvestor

FYI - my March update will likely be delayed by a couple of weeks.


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## none

As for the passive / active & managed/index debate.

I actually make a point of NOT tracking performance because really performance is irrelevant - you can't control it so why does it matter?

For example, when my sister-in-law asks me how my potato is doing (I assume she's referring to my portfolio) I simply say 1-2% better than managed mutual funds or active investors over time. That basically sums it up.


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## BoringInvestor

*March 2015 update*

*Commentary*
March saw a quarterly deposit and rebalancing across the accounts. 
This month was the first negative month of 2015, and slowed the strong momentum generated over the first two months. The portfolio fell -0.63%.

Despite the overall decline in assets, new assets deposited to the accounts were greater than the decline in the value of my securities; thus, the overall value of the portfolio once again rose month-over-month. 
This now marks 28 straight months, since the inception of the portfolio, of the month-ending overall portfolio value rising - but this is merely a coincidental fluke as all months when our asset declined there were new deposits that were greater than the loss. 
I feel confident saying that at some point in 2015, the trend will end and the overall portfolio value will drop month-end over month-end.


*Results*
The portfolio fell -0.63% in March, lowering my overall gain to 29.66%, and my overall annualized rate of return to 16.08%.

Just looking at 2015, my return is 8.27%, with an annualized rate of return that is still quite high at 39.06%.


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## jetsfan

Do you account for trading fees in calculating the returns?


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## BoringInvestor

jetsfan said:


> Do you account for trading fees in calculating the returns?


Hi jetsfan - yes. 
All results are net of fees.


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## jetsfan

BoringInvestor said:


> Hi jetsfan - yes.
> All results are net of fees.


What relative % do fees make up / cut out of your growth? What do you use to trade? (Sorry if I missed it in your thread already)

Just curious what the impact of fees have on a real-world couch potato approach. I know you've normalized your numbers for privacy reasons, but a ballpark would be great.

This is a great thread to follow, thanks for sharing.


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## BoringInvestor

jetsfan said:


> BoringInvestor said:
> 
> 
> 
> Hi jetsfan - yes.
> All results are net of fees.
> 
> 
> 
> What relative % do fees make up / cut out of your growth? What do you use to trade? (Sorry if I missed it in your thread already)
> 
> Just curious what the impact of fees have on a real-world couch potato approach. I know you've normalized your numbers for privacy reasons, but a ballpark would be great.
> 
> This is a great thread to follow, thanks for sharing.
Click to expand...

Non-MER commission fees make up an insignificant amount. I buy all ETFs commission-free, and sometimes pay a small ECN fee when I purchase additional shares. By a small fee - I mean pennies. 

If I rebalanced my portfolio by selling securities then commissions would start to count; but as I only rebalance through purchases it has practically no impact. 


When we look at the costs of holding the ETFs (i.e., the total management expense ratios) the forward looking annual cost is shown in the table - 0.24%. You can use this to compare to a typical mutual fund portfolio cost of ~2%.


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## jetsfan

BoringInvestor said:


> Non-MER commission fees make up an insignificant amount. I buy all ETFs commission-free, and sometimes pay a small ECN fee when I purchase additional shares. By a small fee - I mean pennies.
> 
> If I rebalanced my portfolio by selling securities then commissions would start to count; but as I only rebalance through purchases it has practically no impact.


Gotcha - that answered the question. Looks like you're using a discount broker and the lack of selling makes the fees marginal.

Have you ever tried to estimate what % the commissions and trade fees will cost you if you had to access any funds in the short term?


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## BoringInvestor

jetsfan said:


> Gotcha - that answered the question. Looks like you're using a discount broker and the lack of selling makes the fees marginal.
> 
> Have you ever tried to estimate what % the commissions and trade fees will cost you if you had to access any funds in the short term?


As these funds are meant to sit and grow for decades, no, I haven't concerned myself with those calculations.
If it gets to a point where I need this money in a crunch, then that means a lot has gone wrong with my financial health (and overall financial plan), so the cost of accessing the money won't matter.


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## gladaki

BoringInvestor said:


> Non-MER commission fees make up an insignificant amount. I buy all ETFs commission-free, and sometimes pay a small ECN fee when I purchase additional shares. By a small fee - I mean pennies.
> 
> If I rebalanced my portfolio by selling securities then commissions would start to count; but as I only rebalance through purchases it has practically no impact.
> 
> 
> When we look at the costs of holding the ETFs (i.e., the total management expense ratios) the forward looking annual cost is shown in the table - 0.24%. You can use this to compare to a typical mutual fund portfolio cost of ~2%.



How come there is NO Commission fee on ETF..I assume if I buy any of these ETF from TDW , I have to pay commisons


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## BoringInvestor

gladaki said:


> BoringInvestor said:
> 
> 
> 
> Non-MER commission fees make up an insignificant amount. I buy all ETFs commission-free, and sometimes pay a small ECN fee when I purchase additional shares. By a small fee - I mean pennies.
> 
> If I rebalanced my portfolio by selling securities then commissions would start to count; but as I only rebalance through purchases it has practically no impact.
> 
> 
> When we look at the costs of holding the ETFs (i.e., the total management expense ratios) the forward looking annual cost is shown in the table - 0.24%. You can use this to compare to a typical mutual fund portfolio cost of ~2%.
> 
> 
> 
> 
> How come there is NO Commission fee on ETF..I assume if I buy any of these ETF from TDW , I have to pay commisons
Click to expand...

Different brokers have different commissions. It may be worth exploring other options.


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## BoringInvestor

*April 2015 update*

*Commentary*
April was a historic month for the portfolio - for the first time (and certainly not the last time) the ending monthly balance was lower than the previous monthly balance - this is shown on the blue line in the chart.

Unlike previous months - where the overall value of ETFs in the portfolio lost value, there were no deposits into the accounts to boost the ending balance higher.


*Results*
The portfolio fell -0.85% in April, lowering my overall gain to 28.56%, and my overall annualized rate of return to 14.77%.

Just looking at 2015, my return is 7.35%, with an annualized rate of return of 24.31%.


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## OnlyMyOpinion

Nice format and plot.
I expect some choppy months ahead after years of growth. This is when it is really important to stay the course and not try to second guess monthly gyrations in account value. We need to be thinking years out. If you are DRIP'ing your account proceeds or dollar cost averaging with monthly contributions it can really help to turn your thinking around and look at the down months as good news because it means in 10 years my account will have taken advantage of those.


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## none

BoringInvestor said:


> *April 2015 update*
> 
> *Commentary*
> April was a historic month for the portfolio - for the first time (and certainly not the last time) the ending monthly balance was lower than the previous monthly balance - this is shown on the blue line in the chart.
> 
> Unlike previous months - where the overall value of ETFs in the portfolio lost value, there were no deposits into the accounts to boost the ending balance higher.


Get used to it. Couch potatoes certainly don't 'always go up.

I do my best to not actively track my progress because it encourages bad behaviour. My mind set is that my potato on average makes about 2.5% more than actively managed funds. That's all I need to know. Rebalance accordingly. Done.


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## BoringInvestor

OnlyMyOpinion said:


> Nice format and plot.
> I expect some choppy months ahead after years of growth. This is when it is really important to stay the course and not try to second guess monthly gyrations in account value. We need to be thinking years out. If you are DRIP'ing your account proceeds or dollar cost averaging with monthly contributions it can really help to turn your thinking around and look at the down months as good news because it means in 10 years my account will have taken advantage of those.


For sure - we have to stay focused on the long-term. Month-to-month fluctuations, and even year-to-year, mean very little in the span of decades.

Our accounts are set to DRIP all distributions, so that definitely helps lower the adjusted cost basis during dips in the market.


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## BoringInvestor

none said:


> Get used to it. Couch potatoes certainly don't 'always go up.
> 
> I do my best to not actively track my progress because it encourages bad behaviour. My mind set is that my potato on average makes about 2.5% more than actively managed funds. That's all I need to know. Rebalance accordingly. Done.


Absolutely - anyone who thinks couch potato portfolios only go up have a lot to learn and need to moderate their expectations.
Often times people ask for a 'safe' investment with a higher return than a GIC; though a couch potato portfolio may be suitable it really depends on the person's ability to tolerate risk and their time horizon.

It will certainly be interesting to compare this portfolio's 10 year performance vs other mutual funds/other users actively traded portfolios. 
The time (29 months) since this portfolio's inception is far too short to fairly compare against other strategies.


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## lukie

BoringInvestor said:


> Different brokers have different commissions. It may be worth exploring other options.


I've been exploring less expensive options than my current RBC, which charges 9.95 for all trades, including ETFs. I found one that, like yours, has free ETF transfers. Could you tell how much institutions like RBC typically charge to transfer investment accounts out of their institutions?


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## none

BoringInvestor said:


> It will certainly be interesting to compare this portfolio's 10 year performance vs other mutual funds/other users actively traded portfolios.
> The time (29 months) since this portfolio's inception is far too short to fairly compare against other strategies.


Not really - I can tell you the answer now. This portfolio will probably do about 2.5% better than actively traded portfolios. There, you're done. It's hard to separate signal from noise with these sorts of things.


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## BoringInvestor

lukie said:


> BoringInvestor said:
> 
> 
> 
> Different brokers have different commissions. It may be worth exploring other options.
> 
> 
> 
> I've been exploring less expensive options than my current RBC, which charges 9.95 for all trades, including ETFs. I found one that, like yours, has free ETF transfers. Could you tell how much institutions like RBC typically charge to transfer investment accounts out of their institutions?
Click to expand...

Typically firms charge $125 to $150 per account. The receiving institution may cover the cost - it's worth contacting them and asking.


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## BoringInvestor

none said:


> BoringInvestor said:
> 
> 
> 
> It will certainly be interesting to compare this portfolio's 10 year performance vs other mutual funds/other users actively traded portfolios.
> The time (29 months) since this portfolio's inception is far too short to fairly compare against other strategies.
> 
> 
> 
> Not really - I can tell you the answer now. This portfolio will probably do about 2.5% better than actively traded portfolios. There, you're done. It's hard to separate signal from noise with these sorts of things.
Click to expand...

Probably. But I'm the type of person that'd I'd like to run the numbers and see.


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## lukie

BoringInvestor said:


> Typically firms charge $125 to $150 per account. The receiving institution may cover the cost - it's worth contacting them and asking.


That's steeper than I thought, then again in the short time I've been an investor, I've already paid nearly $100 in trading costs. Thanks for the advice and keep up the amazing work you do here.


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## BoringInvestor

lukie said:


> BoringInvestor said:
> 
> 
> 
> Typically firms charge $125 to $150 per account. The receiving institution may cover the cost - it's worth contacting them and asking.
> 
> 
> 
> That's steeper than I thought, then again in the short time I've been an investor, I've already paid nearly $100 in trading costs. Thanks for the advice and keep up the amazing work you do here.
Click to expand...

Cheers!
Good luck keeping your costs low and growing your portfolio. 
We can't control the markets - but we can control how much we pay to participate.


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## none

BoringInvestor said:


> Probably. But I'm the type of person that'd I'd like to run the numbers and see.


I'm the type of person that tries not to re-create the wheel. If the works been done (and the noise removed) then I think that gives a better description of reality compared to my personal experience.

have fun with it.


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## BoringInvestor

Update - I've recently started an RESP for my newborn daughter. 

In the next week or so I'll create a new thread to track the performance of the RESP, and I intend to show the real numbers along the way (as opposed to the way I'm reporting results in this thread by scaling the initial deposit to $100).

As with our retirement accounts, for her RESP I'll also be following a passive, index-tracking approach, and will be closly matching the portfolio detailed on CanadianCouchPotato.com (made up of three ETFs: VAB, VCN, and VXC), with adjustments to include GICs at she reaches post-secondary age.

Hopefully it will inspire and spur action from followers who with young children, or are planning to have some in the near future.


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## nobleea

BoringInvestor said:


> Update - I've recently started an RESP for my newborn daughter.
> 
> In the next week or so I'll create a new thread to track the performance of the RESP, and I intend to show the real numbers along the way (as opposed to the way I'm reporting results in this thread by scaling the initial deposit to $100).
> 
> As with our retirement accounts, for her RESP I'll also be following a passive, index-tracking approach, and will be closly matching the portfolio detailed on CanadianCouchPotato.com (made up of three ETFs: VAB, VCN, and VXC), with adjustments to include GICs at she reaches post-secondary age.
> 
> Hopefully it will inspire and spur action from followers who with young children, or are planning to have some in the near future.


Congrats on the growing family!
Will you be going directly to ETF's to start with or a low fee MF like e-series given the small dollars that it will start out with?


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## BoringInvestor

nobleea said:


> Congrats on the growing family!
> Will you be going directly to ETF's to start with or a low fee MF like e-series given the small dollars that it will start out with?


Thank you.

I'l be going straight to ETFs.
As I can buy them for free at my broker, there's no transnational cost difference between ETFs and eSeries, and no good reason not to immediately start with ETFs.


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## CPA Candidate

Don't put bonds in an RESP. You don't need this money for awhile.


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## BoringInvestor

CPA Candidate said:


> Don't put bonds in an RESP. You don't need this money for awhile.


I'll get more into my plan in the new thread I'll be creating, but the plan is to slowly increase my bond ETF holding (VAB) over time, before switching all my bond holdings to GICs.
As my main concern is protection of the principle, I'm aiming for as much asset growth as I can get before I get very conservative in my investing.


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## BoringInvestor

*May 2015 update*

*Commentary*
May saw the portfolio return to positive territory after two months of decline. 

Looking back over the past nine months, the portfolio has seen five months of positive returns, and four months of negative returns. 
This stat by itself doesn't tell the whole story, as two of those advancing months were among the best results ever. 

As it's the end of the quarter, the portfolio will see new funds deposited, and be rebalanced, in June.


*Results*
The portfolio rose 0.79% in May, raising my overall gain to 29.57%, and adjusting my overall annualized rate of return to 14.54%.

Just looking at 2015, my return is 8.19%, with an annualized rate of return of 21.13%.


_Log in to view the two attachments below_

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## RBull

^Great job.


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## BoringInvestor

For anyone looking for the new RESP money diary I mentioned earlier, you can find it here: http://canadianmoneyforum.com/showthread.php/45330-RESP-tracking-couch-potato-investing.


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## BoringInvestor

Just a note that I'll post June updates in both this thread, and the associated RESP thread, in mid-July.


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## astralx2

You inspire me! I just graduated this year and hope to follow your footstep soon!


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## BoringInvestor

astralx2 said:


> You inspire me! I just graduated this year and hope to follow your footstep soon!


Happy to hear it!
Feel free to post your getting started questions, and/or results in this thread. I'm happy to share the space and inspire more to follow a path to financial freedom.


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## yycwrangler

Hi BoringInvestor

Great thread on couch potato investing which I would like to mimic as I'm just starting out..Have you changed and of your etf's or are they still the same ones as you had at the beginning of the year.

Cheers
Al


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## BoringInvestor

yycwrangler said:


> Hi BoringInvestor
> 
> Great thread on couch potato investing which I would like to mimic as I'm just starting out..Have you changed and of your etf's or are they still the same ones as you had at the beginning of the year.
> 
> Cheers
> Al


Thanks - glad this thread helped to inspire you.

I'm still using the same 6 ETFs: 
- XIC.T (Canadian market)
- VTI (U.S. market)
- VXUS (International markets)
- ZRE.T (Canadian REITs)
- XRB.T (Canadian real-return bonds)
- XBB.T (Canadian bonds)
and continue to adjust the allocation over time, as I described in my first post

If I was starting a new retirement portfolio from scratch today, I'd likely just follow one of the updated portfolio on Canadian Couch Potato.


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## My Own Advisor

A good list of low-cost, long-term ETFs BoringInvestor...well done.

Any thoughts on eventually debundling your REITs?

Thoughts on eventually collapsing real-returns and moving assets, for simplicity into the all-in-one bond XBB?

Curious mind


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## BoringInvestor

My Own Advisor said:


> A good list of low-cost, long-term ETFs BoringInvestor...well done.
> 
> Any thoughts on eventually debundling your REITs?
> 
> Thoughts on eventually collapsing real-returns and moving assets, for simplicity into the all-in-one bond XBB?
> 
> Curious mind


Good questions - I do have some criteria in mind as to why I wouldn't switch, and if/when I would:

- I built this portfolio with the expectation of holding all of these funds for decades. If I were ever to switch a holding, I'd need a lot of convincing as to why.
- It's against the couch potato philosophy if I were to switch from one fund to another because I felt a particular ETF was underperforming, or, I expected another one of my holding to outperform. As such, I try to ignore all forecasts re: expectations of performance by sector/asset class.
- Trading 6 funds has been manageable, if I had gone for a portfolio with ~15-20 funds I might feel a need to pare down my holdings.

Realistically there are three situations I could see myself removing an ETF/switching fund; the first two situation are very unlikely to occur, with the third being the most probable:
- if there was some fundamental switch in how the economy operates, (i.e., a new financing mechanism has been introduced that replaces the need to finance with equity or bonds, or legislation is being introduced to make REITs illegal, etc.]
- if there was massive fraud suspected at one of the fund companies [i.e., Vanguard, BMO, iShares]
- if there was an equivalent, competing ETF, with a significantly lower MER, that would have a quick payback period once transaction fees/trading spreads are factored


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## BoringInvestor

I'll post a complete June update in a couple of weeks. 
The quick summary is the portfolio was down ~2% in June, making it the second worst month since inception.

Happy Canada Day everyone!


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## BoringInvestor

*June 2015 update*

*Commentary*
June was the second worst month since the portfolio began. 

The losses in June were steep enough to erase all gains the portfolio made since February. 
Essentially, the portfolio's gains/losses have been near flat for five months, and all 2015 gains are only from January.

At the beginning of the month new funds were added to the portfolio and the holdings were rebalanced; as well, a number of the ETFs paid dividends, and all available dividends are setup to automatically purchase (aka drip) new shares.


Lastly, you'll notice in the table below I slightly reorganized the data to better distinguish start of year, and end of year balances.


*Results*
The portfolio fell -1.94% in June, lowering my overall gain to 26.67%, and lowering my overall annualized rate of return to 12.82%.

Just looking at 2015, my return is 6.00%, with an annualized rate of return of 12.76%.


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## BoringInvestor

Just a note about how quickly things can change - whereas June was the 2nd worst month in the portfolio's history, as of today July is the 3rd best month (up almost 4%).

This is especially relevant for any newer traders who were looking to delay their investments into the markets due to fears of Greece, China, Canada recession, etc. This shows you never really know in the short run where the markets are going. All that said, perhaps tomorrow the markets will drop 10% and July will be my worst month ever.


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## none

A fun thing with couch potatoes is that it doesn't really matter when you buy - so I just pretend that I can predict things and try to buy on dips. When it fails I just shrug, when it works i feel like a genius.


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## gladaki

none said:


> A fun thing with couch potatoes is that it doesn't really matter when you buy - so I just pretend that I can predict things and try to buy on dips. When it fails I just shrug, when it works i feel like a genius.


I think I did ask this question before. You are using questtrade for buying ETF ? 
I dont think these are free under TD waterhouse.
Thank you for sharing it.


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## BoringInvestor

gladaki said:


> I think I did ask this question before. You are using questtrade for buying ETF ?
> I dont think these are free under TD waterhouse.
> Thank you for sharing it.


Hi gladaki, yes, I am. All ETF purchases are commission-free.


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## BoringInvestor

*July 2015 update*

*Commentary*
Reading recent comments on this board, many posters have been expressing their fears - fear that the markets are due for a large crash, and as such they're looking to delay their investments into the markets, or are looking to partially or fully pull out. China and/or Greece are often cited as the causes.

The point of this portfolio, and all couch potato portfolios, is to ignore the fears, greed, sentiments and forecasts, and remain fully invested at all times. Sometimes this 'passive-inaction' will see the portfolio suffer large drops, and at other times it will see the portfolio make large gains. 


July was the third best month since the portfolio began, finishing up 3.15%.


The overall portfolio has hit new highs for: 

overall return, expressed in $ ($60.88)
cumulative highest 2015 return, expressed as a % (9.35%)
and cumulative highest 2015 return, expressed in $ ($22.17)
Milestones that were hit in July are: 

for the first time the % of passive income goal achieved has surpassed 3% (3.03%)
for the first time the overall return, expressed in $, is above $60 ($60.88)
and for only the second time the overall return, expressed as a %, is back above 30% (30.66%)

All this aside, perhaps a large and sudden crash will instantly wipe out all my 2015 gains - it's possible, but I have no influence over the larger market movements.
When such a day comes, I hope I can keep my resolve by reminding myself that the 'good times' will come again and that I'll have decades to recover my losses.


*Results*
The portfolio rose 3.15% in July, raising my overall gain to 30.66%, and raising my overall annualized rate of return to 13.87%.

Just looking at 2015, my return is 9.35%, with an annualized rate of return of 16.61%.


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## Ihatetaxes

I'm also up 9% ytd but largely due to the fall of the Canadian dollar and subsequent increase in value of USD holdings.


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## BoringInvestor

Ihatetaxes said:


> I'm also up 9% ytd but largely due to the fall of the Canadian dollar and subsequent increase in value of USD holdings.


No doubt the changing rate plays a large part in my 2015 returns. 

Though I haven't calculated the impact of the changing rate on this year's figures, it has been responsible for about a third of my total asset gains since I started the portfolio.


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## BoringInvestor

Quick update: hard month so far - the portfolio is down ~6%.

As always, I'll post a full update at the end of the month.
I'll also start publishing a new table showing recent, and historical returns over select periods (1 month, 3 months, 6 months, 1 year, 2 years, and eventually 3, 5, and 10 years).


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## OnlyMyOpinion

I like your past tracking approach. 1,3,6 month returns are just potato static.


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## BoringInvestor

OnlyMyOpinion said:


> I like your past tracking approach. 1,3,6 month returns are just potato static.


Ha, perhaps.
I'll still be updating and displaying the same tables and charts, but this new one is to provide some hard data points to help answer variations of the question: "I'm looking to invest for 'x' months, should I put it into the markets?" 

The table will show recent, high, median, average, and low returns for each of those time periods.
It's my hope that over time, the data will be obvious and prove the maxim that anything less than 5 years is a total gamble, and it's only for periods of 5+ years that you can begin to expect a resonable-ish rate of return.


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## BoringInvestor

*August 2015 update*

*Commentary*
August was a volatile month; markets were down sharply before recovering a portion of their drop.
The month ended as the worst month in the history of the portfolio.

Moving forward, I'll be including a new chart showing recent returns over 1 month, 3 months, 6 months, 1 year, and 2 years (and eventually 3, 5, and 10 years).
The point of this table is to demonstrate what a 'typical' couch potato return looks like over any given period, and to provide evidence to the understanding that over the short-to-medium term market returns are unpredictable, but over the long-run history shows us we can expect a average annual return around 6-9% per year. 
Basically - it can be the source for answering the question often posed in these types of forums: "I have $x thousand that I'll need in one year, should I put it into the markets?". 

This is the first 6 month period that the portfolio has seen a negative return, and it is also the lowest 1 month, 3 month, and 1 year totals (though the 2 year return is a bit higher than the previous low point).


*Results*
The portfolio fell -4.52% in August, lowering my overall gain to 24.76%, and lowering my overall annualized rate of return to 10.95%.

Just looking at 2015, my return is 4.41%, with an annualized rate of return of 6.77%.


_Login to view the three attachments below_

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## BoringInvestor

*September 2015 update*

*Commentary*
September was to have seen a quarterly deposit into the accounts, but as a family we're currently preserving cash until work changes settle for my wife and I. My expectation is we can begin making quarterly deposits again in June. 
From an investment standpoint it seems a bit of a shame, as if we had we been investing today we'd be able to take advantage of the recent market pullback.

September ended as the worst 6 month (-5.15%), 1 year (4.36%), and 2 year (16.87%) periods since the portfolio started.


*Results*
The portfolio fell -1.73% in September, lowering my overall gain to 22.61%, and lowering my overall annualized rate of return to 9.68%.

Just looking at 2015, my return is 2.60%, with an annualized rate of return of 3.53%.


_Log in to view the three attachments below._

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## BoringInvestor

*October 2015 update*

*Commentary*
October was the 6th best month since the portfolio began. 
The amount of growth in October was greater than the entire growth from January to September 2015.

October ended as the worst 3 month (-3.53%), and 2 year (16.74%) rolling periods since the portfolio started.


*Results*
The portfolio rose 2.81% in October, raising my overall gain to 26.05%, and raising my overall annualized rate of return to 10.63%.

Just looking at 2015, my return is 5.49%, with an annualized rate of return of 6.90%.


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## scorpion_ca

I cannot view the attachment even though I already logged in.


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## BoringInvestor

Thanks scorpion_ca. I reattached the images, please let me know if you can view them now.


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## humble_pie

i am wondering whether yourself or another party with advanced couch potato knowledge could not take up & continue the Canadian Capitalist format. 

i ask because i believe a remarkable service is provided by simply offering the bare bones of a core couch portfolio, the way CC used to do with his quarterly sleepy portfolio updates.

i also believe that the "sleepy" style of couch reportage is popular. I often used to refer new investors to the quarterly sleepy posts because they covered the map in all directions, while remaining succinct & simple. Bref, they were an excellent introduction to the world of investing for every newcomer, while at the same time they provided a lifetime modality for all kinds of parties who would eschew the pick-your-own-stocks approach for whatever reason.

along these lines, i'm wondering wonder whether your graphics cannot be made public? there are undoubtedly thousands more lurkers than logged-in members. Part of the appeal of a couch potato approach is that it works for everybody, thus it's excellent for new investors, who are more likely to be the lurkers. Put another way, yours is a Word that should be Spread!

also, i'm personally disappointed to find no list of the actual ETF holdings. There's nothing that can replace Show and Tell. If you would not want to endorse any specific ETF fund house, you could name pairs of products, for example XIU or XIC plus its peer from vanguard, for example. 

thankx for any consideration you might be willing to give to my suggestions. My hope is to invoke a slightly more popular, less academic approach than yours is at the present moment, because i believe there's a growing market for it. CC himself seems to have dropped his sleepy portfolio years ago, so the forum would benefit greatly if someone like yourself could take up the cabinet portfolio. We are, after all, at a moment of huge political cabinet change in ottawa, in canada, so now is the time imho!


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## gladaki

From post, this is what you hold XIC.T, VTI, VXUS, ZRE.T, XRB.T, and XBB.T.
And, I assume you contribute regularly..Whats percentage of each of above ?
Also, you use virtual trader ? correct me if I am wrong


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## Virdent

*SYCAMORE ST*

Would you ever adjust your stock to bond ratio or vice versa depending on how you feel the market is valued?


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## BoringInvestor

Virdent said:


> Would you ever adjust your stock to bond ratio or vice versa depending on how you feel the market is valued?


Hi Virdent,

No, I wouldn't adjust my ratio based upon my market sentiment. 
Part of the reason I'm committed to the couch potato portfolio is my belief that no one, including myself, knows where the markets are heading, which areas of the economy will 'outperform' or 'underperform', and then be able to time the market to increase and decrease positions accordingly and maximize my returns relative to what I'm currently doing.

I have a set formula I go by (as stated in my original post, my bond allocation will always be: my age - 10), and I intend to stick with it for the foreseeable future.


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## BoringInvestor

gladaki said:


> From post, this is what you hold XIC.T, VTI, VXUS, ZRE.T, XRB.T, and XBB.T.
> And, I assume you contribute regularly..Whats percentage of each of above ?
> Also, you use virtual trader ? correct me if I am wrong


Hi gladaki,

Yes, I hold only those six ETFs.

I have been contributing regularly; at first I was making monthly contributions, then I moved to quarterly contributions (you can see this trend in the second attachment, as shown by the red line).
Recently I've been holding off on new contributions until our family income stabilizes, so I anticipate I'll start contributing again in June of 2016.

For my contributions I have a set amount of our family income that we contribute and I fully use this money to rebalance between our ETFs, with no regard paid to my overall market forecasts or my expectations for the individual funds.
You can see the yearly breakdown of our deposits in the first attachment, across the row marked: *Deposits*.

*Fund percentages*
I start off with a percentage for each fund that's based upon my age, and the ratio of bonds v. equity holdings.

ZRE.T (real estate income trust): 10% of the portfolio
XRB.T (real return bond fund): 25% of my bond allocation [bond allocation % = my age - 10]
XBB.T (Canadian bond fund): 75% of my bond allocation [bond allocation % = my age - 10]
VTI (U.S. market fund): 30% of my equity allocation [equity allocation % = 100% - 10% - my bond allocation %]
VXUS (International market fund): 30% of my equity allocation [equity allocation % = 100% - 10% - my bond allocation %]
XIC.T (Canadian fund): 40% of my equity allocation [equity allocation % = 100% - 10% - my bond allocation %]

I then make additional adjustments based upon the type of account that holds the fund (TFSA vs RRSP), and the eventual foreign exchange spread loss when I convert my U.S. dollar dividends back into Canadian dollars.


Lastly, I use Questrade as my broker.


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## BoringInvestor

humble_pie said:


> i am wondering whether yourself or another party with advanced couch potato knowledge could not take up & continue the Canadian Capitalist format.
> 
> i ask because i believe a remarkable service is provided by simply offering the bare bones of a core couch portfolio, the way CC used to do with his quarterly sleepy portfolio updates.
> 
> i also believe that the "sleepy" style of couch reportage is popular. I often used to refer new investors to the quarterly sleepy posts because they covered the map in all directions, while remaining succinct & simple. Bref, they were an excellent introduction to the world of investing for every newcomer, while at the same time they provided a lifetime modality for all kinds of parties who would eschew the pick-your-own-stocks approach for whatever reason.
> 
> along these lines, i'm wondering wonder whether your graphics cannot be made public? there are undoubtedly thousands more lurkers than logged-in members. Part of the appeal of a couch potato approach is that it works for everybody, thus it's excellent for new investors, who are more likely to be the lurkers. Put another way, yours is a Word that should be Spread!
> 
> also, i'm personally disappointed to find no list of the actual ETF holdings. There's nothing that can replace Show and Tell. If you would not want to endorse any specific ETF fund house, you could name pairs of products, for example XIU or XIC plus its peer from vanguard, for example.
> 
> thankx for any consideration you might be willing to give to my suggestions. My hope is to invoke a slightly more popular, less academic approach than yours is at the present moment, because i believe there's a growing market for it. CC himself seems to have dropped his sleepy portfolio years ago, so the forum would benefit greatly if someone like yourself could take up the cabinet portfolio. We are, after all, at a moment of huge political cabinet change in ottawa, in canada, so now is the time imho!


Hi humble_pie, thank you for your detailed reply, and for being an advocate and evangelist for the couch potato portfolio.

I've given some thought to your comments, and have decided to stick with my format. 
I'd be happy to hear your feedback on my thoughts below.


I was a huge fan of Canadian Capitalist's sleepy portfolio - it was a direct inspiration that lead to me start this thread, and I'm saddened to learn he hasn't been updating it regularly for some time. 
To me, part of what made his series of posts so interesting was his direct disclosure of the amounts he was investing each month and what he was holding. As I have purposely decided not to reveal my actual account balances, and instead only show scaled balances starting at a level of $100, I can't do a similar format as CC's posts. 
IMO my scaled numbers wouldn't work in the same way as seeing CC's actual dollars at work.


For the graphics themselves, the only reason they require a user to be logged in is because they're hosted by Canadian Money Form, and users can only view attachments when they're logged in. For the sake of convenience I prefer using this site to host my images.


Re: ETF holdings - I disclosed in my initial post that I hold six ETFs; ZRE.T, XRB.T, XBB.T, VTI, VXUS, and XIC.T. 
I purposely don't disclose the holdings of each ETF in my monthly recaps as I don't want to disclose my individual fund holdings are instead prefer to focus on the larger total portfolio changes.


Ultimately, I do take your feedback to heart, and I am torn as I do want to provide a record of performance, and encouragement to those looking to start their own couch potato portfolio, and to to be a voice of steadiness for those who waiver in their commitment; while at the same time I do want to take an 'academic' approach as I find there are few real world examples showing how a 'typical' couch potato portfolio would perform over time.
If I went for a more layman approach, I'd feel a need to have a blog's worth of articles providing supporting and supplementary materials, but I don't have the interest to start that venture.


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## humble_pie

BoringInvestor said:


> I've given some thought to your comments, and have decided to stick with my format.
> 
> I'd be happy to hear your feedback on my thoughts below.




good to hear from you on this matter, BInvestor.

we're still apart on the issue, but you had mentioned feedback would be OK!

as it happens, i had imagined a new Sleepy Gen 2 along the lines of the original, which was lean, brief, succinct. It set forth a basic core portfolio but nothing else, declared its holdings plus it showed one or at the most 2 graphics to all readers including non-logged-in visitors.

since your existing diary thread is also valuable & should not be changed IMHO, a new Sleepy Gen 2 would mean creating a 2nd thread. This is quite a burden i know, but at least so far you have not said No.

original sleepy worked as a wonderful go-to resource for all kinds of new investors because it was so simple. Everyone from young persons setting up with their first job to older persons who own significant portfolios yet wish to be prudent.

a novice investor could invest $100,000 with almost no fees or costs in an hour. A smaller investor could scale down to $10k, a bigger investor could scale up to $500k or $1 million. Each would be served equally well.

it's true there is the excellent canadian couch potato website, but there a novice investor has more to read & study, more questions to ask himself or herself, more reason to feel overwhelmed & intimidated.

thus i'm led on to wonder whether yourself, BInvestor, might consider the double burden of both threads? a popular Sleepy Gen 2 plus your own diary here, which is designed more for the advanced couch artist?

in any Sleepy Gen 2, there are a couple things that i feel are essential:

1) holdings should be specified, ETFs should be named. They could be named as pairs of alternates (ie 2 similar etfs from 2 different fund families,) but i believe a popular Sleepy Gen 2 needs concrete examples. Original sleepy had specific holdings.

in original sleepy, you'll remember that CC commenced by injecting a hypothetical $100,000. He never revealed or discussed his own personal holdings at any time. The sleepy model portfolio was not a personal diary.

2) i also feel that one basic graphic, visible to all viewers including public viewers, should accompany. In original sleepy, these were often simple bar charts showing progress.

3) i don't believe that any creator of a Sleepy Gen 2 needs to provide accompanying texts or documentation. There's plenty of explanation & commentary awash in the internet. 

one last thought. If such a thread were to be successfully created, we should ask the moderators & administrators for a Sticky. The thread would be a lovely addition to cmf forum's repertoire. It would be too valuable to risk losing.


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## BoringInvestor

*November 2015 update*

*Commentary*
November finished up 0.71%, just below the monthly average of 0.92%.
November ended as the worst 2 year (16.60%) rolling period since the portfolio started.


The month also marked the 3-year anniversary since the start of the portfolio.

Over the past three years the portfolio's investment gain is 26.94%.
Accounting for the timing of when deposits were made (aka the money-weighted annualized return), the portfolio is returning an average 10.55% each year.

The portfolio holds six funds, with the following total and money-weighted annualized returns, expressed in Canadian dollars:

*VTI* (a fund that holds large U.S. companies): 102.56% total return, 28.92% annualized money-weighted return.
*VXUS* (a fund that holds companies from around the world): 22.77% total return, 11.56% annualized money-weighted return.
*XIC.T* (a fund that holds large Canadian companies): 15.50% total return, 5.76% annualized money-weighted return.
*XBB.T* (a fund that holds Canadian bonds): 7.26% total return, 3.28% annualized money-weighted return.
*XRB.T* (a fund that holds Canadian bonds linked to the rate of inflation): 2.73% total return, 1.22% annualized money-weighted return.
*ZRE.T* (a fund that holds Canadian commercial real-estate properties): 2.04% total return, 0.86% annualized money-weighted return.

Currently, the dividends I'm receiving each year are equal to 3.08% of my passive income goal.
I have a further 22 years, and one month, to continue to grow my portfolio to reach my target of 100%.



*Results*
The portfolio rose 0.71% in November, raising my overall gain to 26.94%, and lowering my overall annualized rate of return to 10.55%.

Just looking at 2015, my return is 6.23%, with an annualized rate of return of 6.87%.


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## BoringInvestor

*December 2015 update*

*Commentary*
December was a dull cap to a wild year, as the portfolio value changed little over the month. The portfolio made all of its gains in January, and was near flat over the next 11 months.

December marked the lowest 2 year (15.40%), and 3 year (26.20%) rolling periods since the portfolio began.


*Results*
The portfolio fell -0.04% in December, reducing my overall 2015 gain to 6.19%, with an annualized rate of return (XIRR) of 6.26%.


*Goal target*
My goal is to generate enough dividend income to allow me to retire the year I turn 55.
Thus far I've achieved 3.11% of my goal, with 22 years left to go.

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*2015 recap*

In 2015 our portfolio saw comparatively little in the way of new deposits. 
This was a deliberate decision to preserve cash my wife and I welcomed the birth of our child during the year. We expect to begin making new deposits again in June of 2016.


There are three ways to evaluate how the portfolio performed in 2015:
- The simplest way to look at it is to say *the overall return was up 6.19%*. This was the actual return I saw on my portfolio based upon the starting value on January 1st, all deposits into the portfolio, and the ending value on December 31st.
- The *annualized rate of return (XIRR) was 6.26%*. This is the return I would expect over a 365 day period, aka if all deposits were made on January 1st. This rate is higher than the overall return because the deposits I made throughout the year did not have an opportunity to grow over a full year. 
- The *time weighted return was 6.42%*. The time weighted return ignores the amount of money in each deposit, and instead focuses on how my portfolio grew between each deposit. As my time weighted return is higher than my XIRR, the timing of deposits was dragging down my performance.



*Overall recap*

Overall my portfolio size has increased 151.90% from December 2012 to December 2014 (37 months).
64.9% of the increase came from new deposits, and 35.1% came from growth.

My overall return is 26.89%.
The overall annualized money weighted return (XIRR) is 10.18%.
The overall annual time weighted return is 11.16%.

The 1 year trailing yield, based on market values, is 2.95%.


Since the inception of the portfolio, five of my six positions have been profitable, when including dividends and changes in the USD/CAD exchange rate, though three of my positions are currently showing a capital loss.
The portfolio has mainly risen on the strength and weighting of my U.S. and International funds that are bought, sold, and valued using U.S. dollars.


*XIC.TO (Canadian equities):*
- Capital gain of 2.46%
- Net gain (including dividends): 11.02%
- XIRR: 4.03%



*VTI (U.S. equities; gains expressed in U.S. dollars):*
- Capital gain of 34.78%
- Net gain (including dividends): 45.48%
- XIRR: 14.08%

Calculating the results in Canadian dollars:
- Net gain (including dividends): 108.94%
- XIRR: 29.27%



*VXUS (International equities; gains expressed in U.S. dollars):*
- Capital loss of -8.32%
- Net loss (including dividends): -1.72%
- XIRR: -0.80%

Calculating the results in Canadian dollars:
- Net gain (including dividends): 23.64%
- XIRR: 11.47%



*ZRE.TO (Real estate income trusts [REITs]):*
- Capital loss of -11.89%
- Net loss (including dividends): -0.48%
- XIRR: -0.19%



*XRB.TO (Real-return bonds):*
- Capital loss of -0.70%
- Net gain (including dividends): 3.50%
- XIRR: 1.50%



*XBB.TO (Canadian bonds):*
- Capital gain of 1.15%
- Net gain (including dividends): 8.09%
- XIRR: 3.51%


----------



## BoringInvestor

*January 2016 update*

*Commentary*
Having been spoiled previous Januarys with over-sized positive returns, this January starts the year off in the red. 
As bad as this month was, it was only the third worse month since the portfolio began, and only the second worst in the past six months.

For the first time since the portfolio began, the rolling-1 year return is negative (-2.08%).
The month also saw the lowest rolling-2 year (11.80%), and 3 year (21.67%) returns since the portfolio started.


*Results*
The portfolio's return this month: down -2.20%

The portfolio's return since inception (December 2012): up 24.10%
The annualized money-weighted rate of return since inception: 8.87%


_Log in to view the three attachments below._

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View attachment 8634


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## mordko

BoringInvestor said:


> *January 2016 update*
> 
> *Commentary*
> Having been spoiled previous Januarys with over-sized positive returns, this January starts the year off in the red.
> As bad as this month was, it was only the third worse month since the portfolio began, and only the second worst in the past six months.
> 
> For the first time since the portfolio began, the rolling-1 year return is negative (-2.13%).
> The month also saw the lowest rolling-2 year (11.74%), and 3 year (21.61%) returns since the portfolio started.


That's not bad. My portfolio lost 6% in January, presumably because I have fewer bonds/REIT and more Emerging Markets.


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## BoringInvestor

mordko said:


> That's not bad. My portfolio lost 6% in January, presumably because I have fewer bonds/REIT and more Emerging Markets.


Seems like there must be a large difference in our portfolios. 

What are your portfolio's percentages of REITs and bonds?
Is your emerging markets fund Canadian hedged/Canadian-listed?


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## mordko

BoringInvestor said:


> Seems like there must be a large difference in our portfolios.
> 
> What are your portfolio's percentages of REITs and bonds?
> Is your emerging markets fund Canadian hedged/Canadian-listed?


For the fixed income my target is 15%, but it includes some preferred shares as well as bonds. 
My REIT allocation is so small - it's inconsequential. I already have a lot of $ tied in my house, so mostly avoid REIT.
I have a comparatively large % in EM; target 22%. None of it is Canadian. It includes VWO ETF and British Pension funds. 
My Canadian share allocation is comparatively small (6% in XIC). 
Also for US assets, a large chunk is in small value stocks (VBR), which underperformed large stocks in January.


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## gladaki

I am really interested in knowing Which broker you use for this ? I checked Scotia but they dont have above ETFs listed ? 
I remember you said some where that you buy these ETFs for free.

Is there any bank fee to transfer money to Broker accounts ?


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## BoringInvestor

gladaki said:


> I am really interested in knowing Which broker you use for this ? I checked Scotia but they dont have above ETFs listed ?
> I remember you said some where that you buy these ETFs for free.
> 
> Is there any bank fee to transfer money to Broker accounts ?


I use Questrade - all ETFs are commission-free to purchase.


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## gladaki

BoringInvestor said:


> I use Questrade - all ETFs are commission-free to purchase.


Thank you


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## BoringInvestor

*February 2016 update*

*Commentary*
February continued the year on a downward trend. Over the past twelve months only four have had positive returns, while the remaining eight have been negative.

The month saw the lowest rolling-3 month (-3.91%), 1 year (-6.23%), 2 year (7.35%), and 3 year (18.34%) returns since the portfolio started.


*Results*
The portfolio's return this month: down -1.71%

The portfolio's return since inception (December 2012): up 21.98%
How much do I make each year (aka the annualized money-weighted rate of return since inception): 7.87%


_Log in to view the three attachments below._

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View attachment 8698


View attachment 8706


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## mordko

@Boring Investor - Not bad. 

For February Time-weighted: -2.81%.
For February Money-weighted: -2.94%
Annual Compound Return since inception (12/31/2002): 6.98%


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## BoringInvestor

mordko said:


> @Boring Investor - Not bad.
> 
> For February Time-weighted: -2.81%.
> For February Money-weighted: -2.94%
> Annual Compound Return since inception (12/31/2002): 6.98%


Thanks for sharing your results. 
Have you been following a couch potato approach since 2002?


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## mordko

BoringInvestor said:


> Thanks for sharing your results.
> Have you been following a couch potato approach since 2002?


Nope. I was in Britain at the time and half of my investment is still with various British funds, some of them active. But I did follow the "buy the globe" and "hands off" approach. 

British pound tanked in the last few weeks, which is why my February return is particularly bad.


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## BoringInvestor

*March 2016 update*

Lately I've been captivated reading about the struggles of Valeant Pharmaceuticals. 
I find I just can't help myself thinking this stock is due for a massive rebound... so I took the plunge, sold out of my couch potato portfolio and put them all in Valeant shares at an average price of $37.84.

Wish me luck, and for all those sticking with their couch potato portfolios - hope my thread inspired you while I maintained it.



....


Happy April 1st.
I'll post my real update in a couple of days, but from an early look it seems March was one of my best months, and I'm approaching back to even on the year.


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## 97acuratl

Lol, I did think "What the hell is this person thinking!!!"


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## Moneytoo

Good one - I believed you for a second.. lol


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## mordko

Still negative YTD. About half of the funds are denominated in British pounds and a third in USD. So far in 2016 USD fell 3% and GBP fell 10% vs CAD.


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## BoringInvestor

mordko said:


> View attachment 9306
> 
> 
> Still negative YTD. About half of the funds are denominated in British pounds and a third in USD. So far in 2016 USD fell 3% and GBP fell 10% vs CAD.


Nearly 4%, not bad. My number will likely be somewhere south of 3%.


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## Prospector

I only discovered the Potato technique back in May. At the time I got all excited and jumped in right away. Unfortunately the day I did, VXC was at a crest and VCN wasn't far behind. Since then I've rode down into the trough, and am hoping to pop up on the next wave once my contributions have matched my initial investment and DCA kicks in. I am seeing light way off in the tunnel and hoping to get there soon-ish. As long as I keep making my boring little contributions each month, I think the formula will work.

Even if it doesn't, I keep telling myself the losses in this portfolio are a lot less than what the losses had been if I were still eating out every day instead of putting money in the funds.

My chart:


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## BoringInvestor

Prospector said:


> I only discovered the Potato technique back in May. At the time I got all excited and jumped in right away. Unfortunately the day I did, VXC was at a crest and VCN wasn't far behind. Since then I've rode down into the trough, and am hoping to pop up on the next wave once my contributions have matched my initial investment and DCA kicks in. I am seeing light way off in the tunnel and hoping to get there soon-ish. As long as I keep making my boring little contributions each month, I think the formula will work.
> 
> Even if it doesn't, I keep telling myself the losses in this portfolio are a lot less than what the losses had been if I were still eating out every day instead of putting money in the funds.
> 
> My chart:


It's interesting how the difference of a couple of months can make such a large difference (in the short-term).
Had you started a few months earlier, and captured similar gains as I made in January and February, you may be even, or a bit ahead.

For my part my worst 1-year period was a loss of -6.23% between March 2015 to February 2016.
How much are you down at this point?


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## Prospector

BoringInvestor said:


> It's interesting how the difference of a couple of months can make such a large difference (in the short-term).
> Had you started a few months earlier, and captured similar gains as I made in January and February, you may be even, or a bit ahead.
> 
> For my part my worst 1-year period was a loss of -6.23% between March 2015 to February 2016.
> How much are you down at this point?


Not enough to worry about. I've only just begun the journey and the whole portfolio is only worth $7,000. My losses are less than I just paid for roof racks on the car. In 5 years, I'll be wishing I had waited for February to start on this, but then if I had played that game, every dip would have looked like the right one and I'd still be waiting to get in. 

No worries, I'm digging upwards and that's what counts.


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## mordko

Prospector said:


> Not enough to worry about. I've only just begun the journey and the whole portfolio is only worth $7,000. My losses are less than I just paid for roof racks on the car. In 5 years, I'll be wishing I had waited for February to start on this, but then if I had played that game, every dip would have looked like the right one and I'd still be waiting to get in.
> 
> No worries, I'm digging upwards and that's what counts.


At this point you might as well hope for as large a drop as possible  It means you are acquiring at a lower price point, and pumping up your expected long-term returns


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## mordko

BoringInvestor said:


> Nearly 4%, not bad. My number will likely be somewhere south of 3%.


Right... 1-month return is kind of meaningless but one can't help being curious.


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## Prospector

mordko said:


> At this point you might as well hope for as large a drop as possible  It means you are acquiring at a lower price point, and pumping up your expected long-term returns


Yes! All that red is actually good news! It means I'm buying low - at least lower than my initial buy in! If you look at the green line on the graph, most of my contributions have coincided with dips in my P&L. This is just a happy accident, but it means I'm not hurting as bad as I could be. Today I pushed in another transfer, I'm hoping for another dip on Tuesday/Wednesday when it shows up at QT.


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## Video_Frank

BoringInvestor said:


> *March 2016 update*
> 
> ... sold out of my couch potato portfolio and put them all in Valeant shares at an average price of $37.84.


Nicely done, the best 'April Fools' trick I saw today - I bought it hook, line and sinker.


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## BoringInvestor

*March 2016 update*

*Commentary*
My returns in March were even higher than what I previously indicated. 
March turned out to be the third best month since I started the portfolio, and it also marks the 40th month since the portfolio began.

My portfolio is still down slightly in 2016 (despite all of my positions rising in price compared to their values at the start of January) due to the strengthening Canadian dollar vs the U.S. dollar, which in turn lowered the relative-Canadian value of my two ETFs held in U.S. dollars.


*Results*
The portfolio's return this month: up 3.45%

The portfolio's return since inception (December 2012): up 26.18%
How much do I make each year (aka the annualized money-weighted rate of return since inception): 8.98%


_Log in to view the three attachments below._

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View attachment 9354


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## BoringInvestor

BoringInvestor said:


> *March 2016 update*
> so I took the plunge, sold out of my couch potato portfolio and put them all in Valeant shares at an average price of $37.84.


FWIW: had I actually followed through on my April Fools' prank I'd be up 27%.


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## AnnaDanishek

You basically started with about $100,000 in Nov. 2011, and now you're approaching $250,000? Your savings rate must be off the charts. Well done!


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## BoringInvestor

AnnaDanishek said:


> You basically started with about $100,000 in Nov. 2011, and now you're approaching $250,000? Your savings rate must be off the charts. Well done!


Hi AnnaDanishek, 

Your math is right, though I'm choosing not to disclose the actual values.

So for example it'd also be equally true to say we started with $10,000, and now have $25,000; or that we started with $20,000 and now have $50,000, etc.


After starting out with an initial balance (for example, let's assume it was $10,000), the sum total of our subsequent deposits has nearly equaled our initial balance (aka we've put in another $10,000), with the gains on our portfolio equal to about half my starting balance (aka we've made $5,000, for a total balance of $25,000).

Previously we were saving around 15% of our family's net income.
After our daughter was born we temporarily stopped saving, but in the near future we'll start up again at a lower rate, with an aim to increase the rate over time.


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## mordko

@Boring Investor - how did your portfolio do in April?

Here is an update on my trailing portfolio return (time-weighted):

1 month: -0.4%
3 month: 0.6%
6 month: -5.4%
YTD: -5.7% (money-weighted return is slightly better). 

All returns in CAD.

Asset allocation: 16% - fixed income; the rest - equity. Equity allocations by regions: Canada - 7%, US - 26%, UK - 12%, Other developed - 16%, Emerging - 23%.

Not much movement in April. Canadian and emerging markets did well. UK dropped because of the Brexit fears. US went up in USD but dropped in CAD.


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## BoringInvestor

*April 2016 update*

*Commentary*
April turned out to be a flat, especially boring month. 
Though most of our ETFs rose in value, this gain was offset by the strengthening Canadian dollar that lowered the value of the two ETFs that trade in U.S. dollars.

*Results*
The portfolio's return this month: down -0.04%

The portfolio's return since inception (December 2012): up 26.12%
How much do I make each year (aka the annualized money-weighted rate of return since inception): 8.67%

View attachment 9842


View attachment 9850


View attachment 9858


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## BoringInvestor

mordko said:


> @Boring Investor - how did your portfolio do in April?
> 
> Here is an update on my trailing portfolio return (time-weighted):
> 
> 1 month: -0.4%
> 3 month: 0.6%
> 6 month: -5.4%
> YTD: -5.7% (money-weighted return is slightly better).
> 
> All returns in CAD.
> 
> Asset allocation: 16% - fixed income; the rest - equity. Equity allocations by regions: Canada - 7%, US - 26%, UK - 12%, Other developed - 16%, Emerging - 23%.
> 
> Not much movement in April. Canadian and emerging markets did well. UK dropped because of the Brexit fears. US went up in USD but dropped in CAD.


Pretty much in line.
Our portfolio ended up performing slightly better over those periods.

The key driver of change in our account was the strengthening Canadian dollar vs the U.S. dollar.


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## gladaki

Whats right way to calculate return specially when you put some amount biweekly and dividends are reinvested ?
Is XIRR is a right approach for td eseries ?


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## mordko

@Gladaki,

There are two ways of calculating returns: money-weighted and time-weighted. XIRR calculates money-weighted returns. Time-weighted return should be used for comparing portfolio returns.

This bogleheads wiki explains the basic concept and links the spreadsheet which you can use to calculate your returns: https://www.bogleheads.org/wiki/Calculating_personal_returns

Disclosure: I use a more automated version of the bogleheads spreadsheet.


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## mordko

Here is an update on my trailing portfolio return for the end of May (time-weighted):

1 month: 2.9%
3 month: 6.6%
6 month: -1.9%
YTD: -3.0% (money-weighted return is slightly better at -2.8%).

Money-weighted return since 2002: 7.4%

In May there has been good performance in the Canadian and US markets, weakness in the Emerging world. Sterling has recovered a bit as the likelihood of Brexit has receded. 

All returns in CAD.

Asset allocation: 16% - fixed income; the rest - equity. Equity allocations by regions: Canada - 7%, US - 26%, UK - 12%, Other developed - 16%, Emerging - 23%.


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## BoringInvestor

*May 2016 update*

*Commentary*
May's performance was the 8th best since the portfolio began. The strong return brought my 2016 result to positive territory, and was enough to edge my rolling 1-year above 0%.
Looking ahead, as long promised, June will see the first contributions made to the portfolio in a year.

*Results*
The portfolio's return this month: up 2.81%

The portfolio's return since inception (December 2012): up 29.66%
How much do I make each year (aka the annualized money-weighted rate of return since inception): 9.46%

View attachment 10353


View attachment 10361


View attachment 10369


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## mordko

Hi BI - Same results for May... What is your asset allocation?


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## BoringInvestor

mordko said:


> Hi BI - Same results for May... What is your asset allocation?


Currently, my portfolio is:
~18% Canadian securities (XIC.T)
~25% U.S. securities (VTI)
~22% International securities (VXUS)
~11% REITs (ZRE.T)
~4% Real-return bonds (XRB.T)
~20% Canadian bonds (XBB.T)


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## mordko

Makes sense. Mine are over 50 pc outside N America. This is parly for historic reasons, half of the total is with British pension funds. Also I have just 2.5 pc in REITs (VNQ) because my largest asset is a house in Canada.


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## BoringInvestor

mordko said:


> Makes sense. Mine are over 50 pc outside N America. This is parly for historic reasons, half of the total is with British pension funds. Also I have just 2.5 pc in REITs (VNQ) because my largest asset is a house in Canada.


I've never really understood the argument that one doesn't need, or can reduce their REIT holdings, because they own a property.
AFAIK REITs are primarily invested in income-producing commercial/industrial spaces, as such, I don't see how housing values are related.

For example, here are the top REIT holdings in ZRE, I don't see any residential properties in them:
http://www.piret.ca/
http://www.artisreit.com/
http://www.hr-reit.com/Home.aspx


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## mordko

@BI - Residential property prices are heavily correlated to the prices of REITs, including commercial property REITs. They respond to interest rates and other similar factors. VNQ dropped by a factor of 4 (!) at the peak of the US housing crisis in 2009. Now... This may not matter if you expect to live in the same property for the next 20 years, but I don't.


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## BoringInvestor

Just noticed a calculation error on my spreadsheet for my 2016 money-weighted and time-weighted returns.
They should each be ~5.7%. I won't correct previous tables, but moving forward the images will have the corrected returns.


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## BoringInvestor

I'll post my June recap in mid-July.
As of right now I'm down ~1.6% in June.


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## mordko

Portfolio return as of 30/06/16:

1 month: -2.02%
3 months: 0.46%
6 months/YTD: -4.92% 

These are time-weighted returns; money-weighted returns are a tad better.

Since 31/12/2002: 6.87% (annualized).

In June my North American and EM holdings did well, but over half of the total is in GBP and the pound dropped vs CAD by ~10%.


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## brajington

*CAD & USD*



BoringInvestor said:


> Pretty much in line.
> Our portfolio ended up performing slightly better over those periods.
> 
> The key driver of change in our account was the strengthening Canadian dollar vs the U.S. dollar.



Is there any specific reason you choose to hold your assets in a CAD/USD split? I thought an ETF representing the US Stock Market held in CAD will return the same as one held in USD? 

Also how do you happen to convert your funds? I assume it might be finicky and maybe costly to be doing Norbert's Gambit so often if that is the case. 

I'm interested in doing a very similar strategy to you, with less bonds as I am younger. I have all my cash in CAD, and I am debating whether it's worth the work to split it up as you have..

Thank you for your reporting on this! It is inspiring to see a strategy so commonly spoken about in PF blogs actually being shared in real-time.

First time poster, I hope to invest my first chunk soon.


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## mordko

@brajington:

The underlying shares will be moving up and down by the same amount whatever currency the fund is priced in. There are some differences though between holding CAD and US ETFs for American stocks:

- US ETFs are cheaper. Depending on the fund, you can easily get 0.2%/a difference from MER alone. 
- If you hold US ETFs in an RRSP in via a US-traded fund then Americans don't charge the withholding tax. Depending on the amount of dividend paid up by the fund, this could add another 0.1-0.2%/a cost if you hold the same funds via CAD/TSX ETFs. 

On the other hand you avoid exchange costs. It is also simpler to have everything in the same currency for balancing/reinvesting dividends, etc... Norbert's Gambit is really simple but not very helpful if the amount you are trying to change is small. 

To me, it's worth buying US/USD ETFs for American equities if you hold them in an RRSP and the amount involved is sufficiently large.


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## brajington

*Current Market*

To you who have been invested for a little while now.. I'm thinking of starting off with my CPP (figuring out allocations as well..) although its hard to pull the trigger with these current market highs, do you guys have any thoughts on this?


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## mordko

Sorry, I don't understand the question. What has CPP got to do with being invested? 

If you have a large some of money to invest, consider the following:

1 Timing the market is contrary to the Couch Potato method.
2 You do not know what the market is going to do tomorrow. Today's highs may be 15% below next years highs. 
3 You may want to "spread the risk" of investing at the peak just before the market drops by a large amount. Split the money into 2-3 portion and invest over a period of ~6 months.
4 On average market goes up, so using 3 will reduce not just the risk, but also your "average expected return".


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## brajington

mordko said:


> Sorry, I don't understand the question. What has CPP got to do with being invested?
> 
> If you have a large some of money to invest, consider the following:
> 
> 1 Timing the market is contrary to the Couch Potato method.
> 2 You do not know what the market is going to do tomorrow. Today's highs may be 15% below next years highs.
> 3 You may want to "spread the risk" of investing at the peak just before the market drops by a large amount. Split the money into 2-3 portion and invest over a period of ~6 months.
> 4 On average market goes up, so using 3 will reduce not just the risk, but also your "average expected return".


I see what you are saying and it makes plenty of sense logically. Intuitively it's just difficult to pull the trigger I guess (especially when the S&P is breaking records and it is considered 'overvalued'. It's not a large sum per say but large relative to my NW.


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## BoringInvestor

*June 2016 update*

*Commentary*
June ended pretty flat, after a volatile post-Brexit period.
After the Brexit vote the portfolio swung hard negative, before rebounding back.

June saw a quarterly deposit into the portfolio, and all six ETFs paid dividends.
As always, dividends are automatically set up to purchase additional ETF shares.

*Results*
The portfolio's return this month: up 0.13%

The portfolio's return since inception (December 2012): up 29.19%
How much do I make each year (aka the annualized money-weighted rate of return since inception): 9.24%

View attachment 10817


View attachment 10825


View attachment 10833


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## BoringInvestor

brajington said:


> I see what you are saying and it makes plenty of sense logically. Intuitively it's just difficult to pull the trigger I guess (especially when the S&P is breaking records and it is considered 'overvalued'. It's not a large sum per say but large relative to my NW.


Jumping in for the first time can be scary.

IMO there's no way to know if 'now' is the perfect time to invest, or if you should wait. 
If you have the funds ready to go, want to invest, and you plan to stay invested for the long-term - then _now_ is a great time to start.


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## mordko

Portfolio return as of 31/07/16:

1 month: 5.58%
3 months: 6.48%
6 months: 7.13%
YTD: 0.39% 

These are time-weighted returns; money-weighted returns are a tad better with YTD at 0.57%.

Since 31/12/2002: 7.75% (annualized).

In July the following holdings did particularly well: US, UK, Emerging markets.


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## BoringInvestor

*July 2016 update*

*Commentary*
July saw a big jump in the portfolio, up 3.68%. This was the third best month since the inception of the portfolio.
July also marked the best rolling 3-year return (29.07), and set a new record for total return at 33.95%.

For the 'rolling return' image below I've slightly updated it to show the total return line (in black), and colour-coded the 'since inception' box (to make it green when a new all-time-high is reached).

*Results*
The portfolio's return this month: up 3.68%

The portfolio's return since inception (December 2012): up 33.95%
How much do I make each year (aka the annualized money-weighted rate of return since inception): 10.26%

View attachment 11129


View attachment 11137


View attachment 11145


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## mordko

Interesting. BI's portfolio has been less volatile - and performed better overall so far in 2016. This is likely due to my large UK investments, which although somewhat recovered, are still down quite a bit for the year. Also BI's REITs will have done well in 2016.


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## BoringInvestor

This morning on my commute I was strongly considering writing covered calls on my positions, probably starting with my Canadian equities (XIC.T).

Are there any couch potatoes executing a similar strategy, or felt similar urges?


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## mordko

Considering is OK but the moment one starts trading options, he is no longer a "couch potato".


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## humble_pie

BoringInvestor said:


> This morning on my commute I was strongly considering writing covered calls on my positions, probably starting with my Canadian equities (XIC.T).
> 
> Are there any couch potatoes executing a similar strategy, or felt similar urges?




alas i believe that XIC is the wrong fund for this game. Won't you please look at the open interest figs on the montreal exchange. You'll see that XIU is *the* ETF of choice for all the institutional players. As a matter of fact, the institutions drive XIU options hard.

there's no liquidity in XIC options so they are far more difficult. Don't trade XIC, go with the crowd & trade XIU, is my suggestion.

i've held XIU since 2001. Not much, only 3000 shares. I've sold calls on all units of XIU non-stop since 2001. Fifteen years of short call positions, 365/7. So many calls, i've come to know the market makers' quirks like familiar cousins. They - the XIU market makers - are among the hardest noses on the montreal exchange

nevertheless, selling call options has boosted my XIU annual return by some 2-4%. It's a no-brainer. I look to XIU as a simple low-maintenance covered call strategy that yields 5-8% annualized on a current basis.

turning once again to XIC, the problem with illiquid XIC options markets will not sink in until it comes time to roll that first sold call forward. The very first call to be sold may indeed look easy, tempting & tasty. But an XIU holder who has big notional paper capital gains will not want to be exercised, since exercise means crystallizing & paying taxes on those gains.

accordingly, if XIC share price rises, such investor will want to roll his XIC call options forward & hopefully up an increment. At this point, the illiquidity of XIC options will trap him. He will find himself at the tender mercies of the one-eyed market maker. There will be no counterparties to his rollover trades & he will have to accept the market maker's brutal prices. The MM's spread between bids & asks will be so big our hapless investor could drive a truck between.

there are no other core canadian equity ETFs with liquid markets, other than XIU, so a canadian player wishing to sell calls on a bell-wether canadian ETF is stuck with XIU.


.


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## My Own Advisor

humble_pie said:


> alas i believe that XIC is the wrong fund for this game. Won't you please look at the open interest figs on the montreal exchange. You'll see that XIU is *the* ETF of choice for all the institutional players. As a matter of fact, the institutions drive XIU options hard.
> 
> there's no liquidity in XIC options so they are far more difficult. Don't trade XIC, go with the crowd & trade XIU, is my suggestion.
> 
> i've held XIU since 2001. Not much, only 3000 shares. I've sold calls on all units of XIU non-stop since 2001. Fifteen years of short call positions, 365/7. So many calls, i've come to know the market makers' quirks like familiar cousins. They - the XIU market makers - are among the hardest noses on the montreal exchange
> 
> nevertheless, selling call options has boosted my XIU annual return by some 2-4%. It's a no-brainer. I look to XIU as a simple low-maintenance covered call strategy that yields 5-8% annualized on a current basis.
> 
> turning once again to XIC, the problem with illiquid XIC options markets will not sink in until it comes time to roll that first sold call forward. The very first call to be sold may indeed look easy, tempting & tasty. But an XIU holder who has big notional paper capital gains will not want to be exercised, since exercise means crystallizing & paying taxes on those gains.
> 
> accordingly, if XIC share price rises, such investor will want to roll his XIC call options forward & hopefully up an increment. At this point, the illiquidity of XIC options will trap him. He will find himself at the tender mercies of the one-eyed market maker. There will be no counterparties to his rollover trades & he will have to accept the market maker's brutal prices. The MM's spread between bids & asks will be so big our hapless investor could drive a truck between.
> 
> there are no other core canadian equity ETFs with liquid markets, other than XIU, so a canadian player wishing to sell calls on a bell-wether canadian ETF is stuck with XIU.
> 
> 
> .


+1

re: XIU if you _really want to trade. _ Count me out!


----------



## BoringInvestor

mordko said:


> Considering is OK but the moment one starts trading options, he is no longer a "couch potato".


Indeed.
I've toyed with the idea of writing covered calls for some times, but just felt a stronger-than-normal urge this morning.


----------



## BoringInvestor

humble_pie said:


> alas i believe that XIC is the wrong fund for this game. Won't you please look at the open interest figs on the montreal exchange. You'll see that XIU is *the* ETF of choice for all the institutional players. As a matter of fact, the institutions drive XIU options hard.
> 
> there's no liquidity in XIC options so they are far more difficult. Don't trade XIC, go with the crowd & trade XIU, is my suggestion.
> 
> i've held XIU since 2001. Not much, only 3000 shares. I've sold calls on all units of XIU non-stop since 2001. Fifteen years of short call positions, 365/7. So many calls, i've come to know the market makers' quirks like familiar cousins. They - the XIU market makers - are among the hardest noses on the montreal exchange
> 
> nevertheless, selling call options has boosted my XIU annual return by some 2-4%. It's a no-brainer. I look to XIU as a simple low-maintenance covered call strategy that yields 5-8% annualized on a current basis.
> 
> turning once again to XIC, the problem with illiquid XIC options markets will not sink in until it comes time to roll that first sold call forward. The very first call to be sold may indeed look easy, tempting & tasty. But an XIU holder who has big notional paper capital gains will not want to be exercised, since exercise means crystallizing & paying taxes on those gains.
> 
> accordingly, if XIC share price rises, such investor will want to roll his XIC call options forward & hopefully up an increment. At this point, the illiquidity of XIC options will trap him. He will find himself at the tender mercies of the one-eyed market maker. There will be no counterparties to his rollover trades & he will have to accept the market maker's brutal prices. The MM's spread between bids & asks will be so big our hapless investor could drive a truck between.
> 
> there are no other core canadian equity ETFs with liquid markets, other than XIU, so a canadian player wishing to sell calls on a bell-wether canadian ETF is stuck with XIU.
> 
> 
> .


The challenge there is I own XIC, not XIU, and I'd be hesitant to switch. I like the 'capped' part of XIC as I find the Canadian market has a tendency to go overweight on selected securities (Bre-X, Nortel, Research in Motion, Potash, Valeant) that tend to end spectacularly poorly.


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## humble_pie

BoringInvestor said:


> The challenge there is I own XIC, not XIU, and I'd be hesitant to switch. I like the 'capped' part of XIC as I find the Canadian market has a tendency to go overweight on selected securities (Bre-X, Nortel, Research in Motion, Potash, Valeant) that tend to end spectacularly poorly.




your reasons for holding XIC sound very sensible. The problem, though, is that XIC options are not good.

i gazed at em this pm. What a discouraging sight. Both XIC & XIU have never had any premium in their option prices, but nowadays things look worse than ever.

for example, even going as far out in time as possible in order to try to capture some decent premium, the march 2017 25 calls in XIC can raise only a bid of 25 pennies. 

the march 24s were 60 pennies bid but this strike is close to the price of the underlying share (23.49) so there is a far greater risk of assignment.

BInvestor, do you happen to have a large notional or paper capital gain tied up in your XIC holding? if you do, & if the short calls that you sell would be exercised against you, you will have to sell your stock at the strike price. This will crystallize your gain & force you to declare taxable gains on the sale. 

would you wish that to happen? if you don't so wish, then the problem is that one would be selling pitifully low-priced call options that might entrain the risk of high taxable capable gains. This does not make much sense to me.

here's what i'd do myself, if i had high paper capital gains in XIC to manage & protect. I would not bother selling those low-priced XIC options. If i truly thought XIC were toppish, i might sell a few actual shares.

in options, i'd find some other stock in my portf with higher volatility & more attractively priced options. I'd think about selling those instead.

.


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## james4beach

humble_pie, with covered call performance like that, have you considered starting an investment fund of your own? I think you've accomplished something that is not easy to do.

For example, look at one of these BMO covered call ETFs like their covered call banks. Contrary to your results, BMO's covered call strategy has returned 1% less per year than the underlying! Yet they still attracted over $1 billion in assets.

Any idea why BMO's options traders do so much worse than you? They are under-performing the underlying index.


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## mordko

What an awesome idea! Hey, HP, how much did you have in VRX around about the middle of 2015?


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## humble_pie

james4beach said:


> For example, look at one of these BMO covered call ETFs like their covered call banks. Contrary to your results, BMO's covered call strategy has returned 1% less per year than the underlying! Yet they still attracted over $1 billion in assets.
> 
> Any idea why BMO's options traders do so much worse than you? They are under-performing the underlying index.




historically the weakness in most of the CC ETFs is the particular strategy they are using. Most are employing a classic strategy that works OK for individual option traders but backfires when an ETF with a small fixed universe of stocks in which it is permitted by prospectus mandate to trade, carries on with the same strategy.

the strategy is to sell very short-term calls only an increment above market. Sometimes even with strikes at market, in order to capture a bigger premium.

for funds, this strategy can become a chokehold in rising markets. The same strategy is not so harmful to individual traders because they are free to move into other stocks with other options.

but the restricted-by-prospectus fund manager is often obliged to buy back the exact same stocks when - in rising markets - assignments inevitably occur. Being assigned automatically means the fund manager receives $$ proceeds which are less than the costs of buying back the same stocks. He can only buy less stock, ie the capital is depleted. Morever, he will have fewer call contracts to sell.

repeat this every 30 or 60 days across several years of rising markets & one sees t.r.o.u.b.l.e.

(the popular option income product known as DFN.A & DFN.PR.A is another that, until very recently, was strangling itself with its own chokehold of only 15 stocks. To remedy the depletion of capital & protect the preferred shares, the managers would issue new shares from time to time.

(very recently, the DFN managers have amended their trust documents so they can now trade all kinds of other options, just as individuals can. This move may relieve the chokehold.)


it might be worth noting that a sustained falling market will relieve the option chokehold on CC funds using the above strategy. However, the same falling market will unfortunately produce lower prices in the underlying holdings.


as for the BMO CC ETF, i believe this has been helped all these years by the fact that a large portion of the underlying holding is the regular BMO bank ETF.


.


----------



## BoringInvestor

humble_pie said:


> your reasons for holding XIC sound very sensible. The problem, though, is that XIC options are not good.
> 
> i gazed at em this pm. What a discouraging sight. Both XIC & XIU have never had any premium in their option prices, but nowadays things look worse than ever.
> 
> for example, even going as far out in time as possible in order to try to capture some decent premium, the march 2017 25 calls in XIC can raise only a bid of 25 pennies.
> 
> the march 24s were 60 pennies bid but this strike is close to the price of the underlying share (23.49) so there is a far greater risk of assignment.
> 
> BInvestor, do you happen to have a large notional or paper capital gain tied up in your XIC holding? if you do, & if the short calls that you sell would be exercised against you, you will have to sell your stock at the strike price. This will crystallize your gain & force you to declare taxable gains on the sale.
> 
> would you wish that to happen? if you don't so wish, then the problem is that one would be selling pitifully low-priced call options that might entrain the risk of high taxable capable gains. This does not make much sense to me.
> 
> here's what i'd do myself, if i had high paper capital gains in XIC to manage & protect. I would not bother selling those low-priced XIC options. If i truly thought XIC were toppish, i might sell a few actual shares.
> 
> in options, i'd find some other stock in my portf with higher volatility & more attractively priced options. I'd think about selling those instead.
> 
> .


Thanks for your input.
For now I've decided not to chase the covered call play.

I think part of my initial reasons for looking at doing it was to capture a bit more of a gain (and thus reach my financial goals earlier), but also, quite frankly, a bit of boredom was setting in. It felt like a little way to bring some excitement to the portfolio.. which is of course against the mentality of a couch potato portfolio.

This isn't to say I won't look at, and possibly go further with covered calls at a later date, but for now I'll stick with what I got going.


----------



## mordko

Good call. Casino works just as well against boredorm. Faster too.


----------



## mordko

Portfolio return as of 31/08/16:

1 month: 1.5%
3 months: 5.0%
6 months: 11.9%
YTD: 1.9% 

These are time-weighted returns; money-weighted returns are a tad better with YTD at 2.1%.

Since 31/12/2002: 7.86% (annualized).

In August the following holdings did particularly well: UK, Emerging markets.


----------



## humble_pie

mordko said:


> Portfolio return as of 31/08/16:
> 
> 1 month: 1.5%
> 3 months: 5.0%
> 6 months: 11.9%
> YTD: 1.9%
> 
> These are time-weighted returns; money-weighted returns are a tad better with YTD at 2.1%.
> 
> Since 31/12/2002: 7.86% (annualized).
> 
> In August the following holdings did particularly well: UK, Emerging markets.




wondering whose results you believe you are posting here?

this is boringInvestor's own personal diary thread. The focus should be on bInvestor. On his accomplishments. On whatever issues he chooses to raise.

thank you for not gate-crashing in the future.

.


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## mordko

@BI - I might have misunderstood the thread title; thought it was for reporting progress/comparing of all couch potatoes in here. The heading does not have a name in the title as the other personal threads do, which is why I thought it was generic. Will be happy to stop "gatecrashing" if it's an exclusively personal thread.


----------



## humble_pie

BoringInvestor said:


> I think part of my initial reasons for looking at doing it was to capture a bit more of a gain (and thus reach my financial goals earlier), but also, quite frankly, a bit of boredom was setting in. It felt like a little way to bring some excitement to the portfolio.



covered writes are actually an excellent & sustainable strategy to increase portfolio returns. Moreover the premium received from selling options is tax-favoured as a capital gain.

to be honest, i don't find options exciting in the least. To me, options are a game to be played for a couple of hours a few times a week, in a highly detached & emotionless manner. Think chess players contemplating their boards, planning their next moves.

turning now to covered calls, if the would-be option seller has old holdings with significant unrealized capital gains - ie paper gains only so far - he needs to be cautious about selling calls. Normally he will want to prevent assignment. This means that normally he will sell near the upper limits of the trading band that he projects for the underlying stock, in order to reduce the probability of assignment.

a problem is that many 30-day, 60-day or even 90-day calls do not offer enough premium to make this exercise worthwhile. A good example of such futility was the XIC calls discussed above. The usual solution is to go further out in time, allowing time value/theoretical value to add fat to the premiums. However, with a sleeper like XIC, even this will not work.

another way to harvest TV premium from an underlying stock is to sell puts, since the return from (long stock less short call) = short put. An option seller who wishes to avoid the possibility of call assignments could sell puts instead.

the complicating issues in put selling are whether the investor has the cash or margin to cover the assigned stock if the counterparty in the put contract(s) exercises against him. Also whether the investor does, indeed, wish to accept delivery of more of the underlying stock, in cases where he believes he already holds enough.


.


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## BoringInvestor

mordko said:


> @BI - I might have misunderstood the thread title; thought it was for reporting progress/comparing of all couch potatoes in here. The heading does not have a name in the title as the other personal threads do, which is why I thought it was generic. Will be happy to stop "gatecrashing" if it's an exclusively personal thread.


It's an open thread - I invited other couch potatoes to share their results too.

If you want to start your own thread go right ahead and I'll follow along. You (and our fellow couchies) are always welcome to share results here.


----------



## BoringInvestor

humble_pie said:


> covered writes are actually an excellent & sustainable strategy to increase portfolio returns. Moreover the premium received from selling options is tax-favoured as a capital gain.
> 
> to be honest, i don't find options exciting in the least. To me, options are a game to be played for a couple of hours a few times a week, in a highly detached & emotionless manner. Think chess players contemplating their boards, planning their next moves.
> 
> turning now to covered calls, if the would-be option seller has old holdings with significant unrealized capital gains - ie paper gains only so far - he needs to be cautious about selling calls. Normally he will want to prevent assignment. This means that normally he will sell near the upper limits of the trading band that he projects for the underlying stock, in order to reduce the probability of assignment.
> 
> a problem is that many 30-day, 60-day or even 90-day calls do not offer enough premium to make this exercise worthwhile. A good example of such futility was the XIC calls discussed above. The usual solution is to go further out in time, allowing time value/theoretical value to add fat to the premiums. However, with a sleeper like XIC, even this will not work.
> 
> another way to harvest TV premium from an underlying stock is to sell puts, since the return from (long stock less short call) = short put. An option seller who wishes to avoid the possibility of call assignments could sell puts instead.
> 
> the complicating issues in put selling are whether the investor has the cash or margin to cover the assigned stock if the counterparty in the put contract(s) exercises against him. Also whether the investor does, indeed, wish to accept delivery of more of the underlying stock, in cases where he believes he already holds enough.
> 
> 
> .


Thanks.
I think the bug in my system wanting me to write/trade options has passed. Not to say I'll never do it in the future, but for now I'm back to being a contented potato.


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## mordko

Tnx, I'll stick around. It's fun comparing performance of slightly different portfolios.


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## BoringInvestor

*August 2016 update*

*Commentary*
August carried on the trend, stretching back six months now, where every second month is relatively flat (following April and June's results). 
August just edged out the previous best rolling 3-year return to set a new high at 29.08%.

*Results*
The portfolio's return this month: down -0.12%

The portfolio's return since inception (December 2012): up 33.78%
How much do I make each year (aka the annualized money-weighted rate of return since inception): 9.93%

View attachment 11378


View attachment 11386


View attachment 11394


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## peterk

Ha. I was wondering what was going on here... For a while I though Mordko and BI might have been the same person, or perhaps a husband/wife duo... :stupid:


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## humble_pie

BoringInvestor said:


> I think the bug in system wanting me to write/trade options has passed. Not to say I'll never do it in the future, but for now I'm back to being a contented potato.




delighted to know you have refrained from setting foot on the primrose path to hell; but such discipline would not be surprising.

though you probably won't be happy to discover eventually that some of the favourite ETFs composing your couch potatoes are, themselves, using representational sampling, options, futures & other forms of derivative proxy trading to construct their approximated returns.

check out their prospectuses! For now, those abstract declarations that nobody reads or understands are all that the regulators require the funds to divulge.

however, greater transparency reform is on its way .each:

.


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## mordko

> some of the favourite ETFs composing your couch potatoes are, themselves, using representational sampling, options, futures & other forms of derivative proxy trading to construct their approximated returns


False. Vanilla index ETFs used by potatoes do not have options/futures etc. And composition of ETFs is transparent, as is required in all cases so that they can be valued. Very occasionally, under special circumstances a non-hedged index ETF may include derivatives but it would be for a tiny fraction (<<1%).


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## mordko

BoringInvestor said:


> *August 2016 update*
> 
> *Commentary*
> August carried on the trend, stretching back six months now, where every second month is relatively flat (following April and June's results).
> August just edged out the previous best rolling 3-year return to set a new high at 29.08%.
> 
> *Results*
> The portfolio's return this month: down -0.12%
> 
> The portfolio's return since inception (December 2012): up 33.78%
> How much do I make each year (aka the annualized money-weighted rate of return since inception): 9.93%


It's interesting how all these highly diversified portfolios, even if they have very different components, ultimately end up with the same rate of return. It usually takes a couple of cycles, and exchange rate can temporarily have an impact, but we all end up in a similar range.


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## brajington

Does anyone have any idea what would be the best 'couch potato orientated advice' for USD in a TFSA account? 

I'm currently working on opening an RRSP, and technically it would be best to hold VTI in there, but the problem is I can't transfer the money out of the TFSA without losing the room for the year.


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## mordko

Does it have to be USD? Assuming you are holding Canadian, international and US funds within the same TFSA account, the easiest approach would be to have CAD denominated ETFs for all of them. VUN is the CAD version of VTI. The MER is ever so slightly higher than VTI, but it does not matter given the TFSA limit and currency exchange costs. It's particularly advantageous sticking with CAD within TFSA as you seem to be considering shifting your US holdings to RRSP in the future. 

If you really have to have it in USD within a TFSA, then you can. Questrade and others provide capability to combine USD and CAD assets within the same account, so you can have VTI within your TFSA.


----------



## brajington

mordko said:


> Does it have to be USD? Assuming you are holding Canadian, international and US funds within the same TFSA account, the easiest approach would be to have CAD denominated ETFs for all of them. VUN is the CAD version of VTI. The MER is ever so slightly higher than VTI, but it does not matter given the TFSA limit and currency exchange costs. It's particularly advantageous sticking with CAD within TFSA as you seem to be considering shifting your US holdings to RRSP in the future.
> 
> If you really have to have it in USD within a TFSA, then you can. Questrade and others provide capability to combine USD and CAD assets within the same account, so you can have VTI within your TFSA.



Well you see I made a stupid speculation error basically by initiating Norbert's Gambit by buying DLR.TO and mid-process realising I could essentially hold hedge my risk of the CAD by buying VUN. (My guess is CAD will be worth less in the future). I ended up cancelling the request to journal DLR.TO to DLR.U.TO, selling it and taking the loss..lesson learned.:hopelessness:

I figure USD are only worth having in a RRSP where I can hold VTI..although it only really matters with larger amounts. Might as well start now.

My to be portfolio should be as follows, I am purposely low in bonds. Maybe my emerging markets % is too high? I plan to play around with a tiny portion of it, but probably not for a while until that amount is around $5k.

VSB (RRSP) - 10%
VCN, VTI (in RRSP) - 30% each 
XEF - 24%
XEC - 6%

There would be probably cash available to invest in a downturn although the amount would vary. I have around $25k to start with. Any critical advice you can provide? 

I realise I am hijacking this thread, although I am basically on the same journey. Only maybe just before the first step, so I hope it is relevant.


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## mordko

A few comments, hope you don't mind:

- Currency hedging comes at a cost. This is against the whole ideology of index investing which strives to keep costs low.
- VUN is not hedged. You are simply buying US companies for CAD. So, you probably don't mean "hedging", you may have meant "shares outside Canada".
- Personally I prefer XIC rather than VCN. In general, XIC is cheaper for individual "Potatoes" while VCN is cheaper for institutional investors, who trade often, but they are both good. 
- 6% EM does not sound like too much to me. China alone represents almost 20% of the global GDP, although not by market cap. Also, EM have done poorly over the last decade, which improves their relative prospects for the next decade. I have 21% target for EM.


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## brajington

mordko said:


> A few comments, hope you don't mind:
> 
> - Currency hedging comes at a cost. This is against the whole ideology of index investing which strives to keep costs low.
> - VUN is not hedged. You are simply buying US companies for CAD. So, you probably don't mean "hedging", you may have meant "shares outside Canada".
> - Personally I prefer XIC rather than VCN. In general, XIC is cheaper for individual "Potatoes" while VCN is cheaper for institutional investors, who trade often, but they are both good.
> - 6% EM does not sound like too much to me. China alone represents almost 20% of the global GDP, although not by market cap. Also, EM have done poorly over the last decade, which improves their relative prospects for the next decade. I have 21% target for EM.


I absolutely do not mind! Thank you. 

I guess what I meant by the hedging is basically how to avoid the risk of the possibility that CAD that may worth less in the future. To which I suppose the answer to is basically to not hold just CAD. I assume being invested in a couch potato portfolio can help as you are holding the equities / bonds which are simply represented in CAD? I don't know how much the assets in a typical couch potato portfolio are correlated with currencies..assuming they are unhedged. 

I will definitely look into XIC as well.

What are your thoughts on lump sum investing / DCA? It's technically the better decision to pull the trigger and throw it all in the market as that has been shown to have better returns. Do you think my initial lump sum ~$20K should be invested immediately? I am leaning towards an initial investment of ~$10k the DCA'ing the rest over the period of a year or two. At this point I suppose it doesn't matter too much since it is not a large sum.. I appreciate any input it is helping hash out some sort of plan for myself. Any reading material you can refer me to in regards to this?


----------



## BoringInvestor

brajington said:


> I absolutely do not mind! Thank you.
> 
> I guess what I meant by the hedging is basically how to avoid the risk of the possibility that CAD that may worth less in the future. To which I suppose the answer to is basically to not hold just CAD. I assume being invested in a couch potato portfolio can help as you are holding the equities / bonds which are simply represented in CAD? I don't know how much the assets in a typical couch potato portfolio are correlated with currencies..assuming they are unhedged.
> 
> I will definitely look into XIC as well.
> 
> What are your thoughts on lump sum investing / DCA? It's technically the better decision to pull the trigger and throw it all in the market as that has been shown to have better returns. Do you think my initial lump sum ~$20K should be invested immediately? I am leaning towards an initial investment of ~$10k the DCA'ing the rest over the period of a year or two. At this point I suppose it doesn't matter too much since it is not a large sum.. I appreciate any input it is helping hash out some sort of plan for myself. Any reading material you can refer me to in regards to this?


Two-thirds of the time you're more likely to do better with a lump sum investment rather than dollar-cost averaging.

https://pressroom.vanguard.com/nonindexed/7.23.2012_Dollar-cost_Averaging.pdf


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## mordko

^+1.

This is because on average shares go up. But averaging does reduce your risk of putting a large amount just before the crash.


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## mordko

> I don't know how much the assets in a typical couch potato portfolio are correlated with currencies..assuming they are unhedged.


The currency that impacts you most is your own (CAD). If it falls against a basket of currencies then your internationally diversified portfolio goes up and makes you feel good, even though you are no richer in real terms. And the other way around. 

In general, you are owning actual assets and currency is simply the measuring stick which sometimes shortens and sometimes extends. If USD goes up, it is usually counterbalanced by the fall in price of USD-denominated goods and assets. It's a bit more complex than this, but the gist does not change.


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## BoringInvestor

Request for excel help: in the image below the x axis has stopped updating the month label - you'll notice June was the last label, even though the data continues.
I've toyed around without any success, and haven't found useful tips online.

Anyone know how I can solve this; ideally I don't want to recreate the chart.

View attachment 11794


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## mordko

If you click on one of the lines on the plot, you will see a range of data that the plot displays. This range has to be expanded. 

One way of solving this problem for good is to set up a dynamic range. Here is an example: http://www.techrepublic.com/blog/microsoft-office/two-ways-to-build-dynamic-charts-in-excel/


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## mordko

Portfolio return as of 30/09/16:

1 month: 0.6%
3 months: 7.0%
6 months: 8.3%
YTD: 2.5% 

These are time-weighted returns; money-weighted returns are a tad better with YTD at 2.7%.

Since 31/12/2002: 7.86% (annualized).

In September all my categories were flat. 

On a side note, we sold the house. Return on Investment - 190% since December 2004 (not annualized and not taking into account inflation). I am also not counting annual tax bill, utilities, etc... - we would have had to spend that anyway even if we didn't own the house. That's CAGR of 9.3%. Not as good as with our previous house, where CAGR was an incredible 45% (annualized) over 6 years. That's taking into account leveraging. Perhaps I should forget about CP and just keep buying houses


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## gibor365

mordko said:


> Portfolio return as of 30/09/16:
> 
> 1 month: 0.6%
> 3 months: 7.0%
> 6 months: 8.3%
> YTD: 2.5%
> 
> These are time-weighted returns; money-weighted returns are a tad better with YTD at 2.7%.
> 
> Since 31/12/2002: 7.86% (annualized).
> 
> In September all my categories were flat.
> 
> On a side note, we sold the house.


I have "hybrid" portfolio... ETFs + individual stocks... Emerging markets: DEM, Rest of World: VEA, VGK, bunch of ETFs for fixed income,
XIC, VTI, QQQ combined 5-7% of total portfolio, rest - stocks

Returns:

1m	0.64%	
3m 3.20%	
6m 7.81%
YTD 10.32%
YTD XIRR 14%
4.5 years XIRR 10.4%
All calcs are in $CAD


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## mordko

^ What is YTD vs YTD XIRR? Are you annualizing YTD XIRR? I don't annualize unless its for periods over a year. 

Either way, it's awesome performance for 2016. Mine got totally screwed because half of these holdings are in sterling, which dropped 15% vs CAD.


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## gibor365

mordko said:


> ^ What is YTD vs YTD XIRR? Are you annualizing YTD XIRR? I don't annualize unless its for periods over a year.
> 
> Either way, it's awesome performance for 2016. Mine got totally screwed because half of these holdings are in sterling, which dropped 15% vs CAD.


YTD is just = current value/(Jan 1 value+this year contributions)

XIRR is time-weighted , this is why it's higher


----------



## gibor365

> On a side note, we sold the house.


 just curious why? Are you downsizing? Moving to another location?


----------



## mordko

Nope, XIRR is money-weighted as opposed to time weighted, but its annualized which explains the difference with your other number which is ROI.



> just curious why? Are you downsizing? Moving to another location?


It's a combination of reasons:

- As of September both kids are at university, so we don't need access to the school, which was one of the reasons for picking that location
- House price jumped to not far off $2M due to a particular set of circumstances (Chinese investing in Canadian property). If something changes in China or Ontario government follows BC lead or interest rates rise or... bubble bursts for some other reason then the price would drop. Basically too much risk of having so much of net worth in the house
- Right now I am working outside GTA (and will be for at least 6 months) so a rental is being paid for. When this is done we'll pick another place; I fancy something more rural and obviously a lot cheaper.


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## gibor365

> It's a combination of reasons


 Makes sense. Do you have mortgage? Our son at 4th year university, daughter goes to university in 3 years... I was also thinking about downsizing in 5-6 years...although our house much smaller and cheaper... bought it for 230K, now imho it costs 700-750K


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## mordko

Yep, 160k mortgage.


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## mordko

The slightly insulting thing is that the Chinese chap who is buying the place is buying it for his little sister who is a student. Where did we go wrong?


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## gibor365

mordko said:


> The slightly insulting thing is that the Chinese chap who is buying the place is buying it for his little sister who is a student. Where did we go wrong?


:tears_of_joy:


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## BoringInvestor

*September 2016 update*

*Commentary*
September saw a slightly below-average gain, on top of a quarterly deposit and rebalancing. The portfolio hit a new all-time high gain of 34.22%. 

This month also marks the first time where all my rolling returns (1 month, 3 months, 6 months, 1 year, 2 years, 3 years) have been positive, and each successively longer rolling period has a larger return than the period proceeding it, aka, my 1 month return < 3 month return < 6 month return < 1 year return < 2 year return < 3 year return.

*Results*
The portfolio's return this month: up 0.73%

The portfolio's return since inception (December 2012): up 34.22%
How much do I make each year (aka the annualized money-weighted rate of return since inception): 9.90%

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## mordko

> September saw a slightly below-average gain,


How do you define "average gain"? Based on your portfolio's monthly growth over a 6-year period or do you use a benchmark?


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## BoringInvestor

mordko said:


> How do you define "average gain"? Based on your portfolio's monthly growth over a 6-year period or do you use a benchmark?


Defined against the portfolio's median return (0.82%), and simple average return (0.87%).


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## mordko

Portfolio return as of 31/10/16:

1 month: -0.11%
3 months: 1.98%
6 months: 8.59%
YTD: 2.37% 
1 year: 3.03%

These are time-weighted returns; money-weighted returns are a tad better with 1 year at 3.4%. A bit of luck - I put in some money during the downturn. 

Since 31/12/2002: 7.86% (annualized).

October was flat. There is also some drag from me starting to move the money around. I need to move about 10% of the total portfolio out for a couple of months and then in January we will be nearly tripling the size of our stockmarket portfolio.


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## BoringInvestor

*October 2016 update*

*Commentary*
October ended with a slight pullback. During the month the portfolio swung back and forth between a large loss and a large gain.
Looking ahead, the end of November marks the four-year anniversary of the portfolio. 

*Results*
The portfolio's return this month: down -0.37%

The portfolio's return since inception (December 2012): up 33.73%
How much do I make each year (aka the annualized money-weighted rate of return since inception): 9.52%


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## BoringInvestor

#ElectionDay + 1... who knows what the next four years will bring, but let's hold tight.


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## mordko

A crazy month. 

Portfolio return as of 30/11/16:

1 month: 2.1%
3 months: 2.5%
6 months: 7.6%
YTD: 4.6% 
1 year: 5.7%

These are money-weighted returns because that's what everyone else seems to be reporting. 

In November US portion of the portfolio went up a lot. Most of my US holdings are in VBR (small value) which outpaced S&P 500 by quite some measure. 

On the other hand EM stocks went down and gave up about half of their (significant) gains for the year. 

I am also incurring some costs due to portfolio rebalancing and streamlining for tax-efficiency in preparation for adding a large lump sum in January.


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## BoringInvestor

*November 2016 update*

*Commentary*
Happy 4-year invest-a-versary! 

Though the month ended on a positive note and the portfolio's return hit an all-time high of 34.42%, the results for all rolling periods (1 month, 3 months, etc.) were below average.

The 'hero' of the portfolio continues to be VTI, an ETF that holds a large number of US equities. VTI is producing annualized returns of ~24% (including gains on the fluctuating USD exchange rate).
XIC.T and VXUS, which track Canadian equities and world equities respectively, are averaging ~7-8% annual returns, while my REIT ETF and bond funds are all around 3%.


One note re: where I put my updates updates - since the CMF board has changed settings and I can no loner edit posts older than a few days, I'll won't be maintaining the start of this thread anymore with historical data. All my reporting will be in my monthly updates.

*Results*
The portfolio's return this month: up 0.52%

The portfolio's return since inception (December 2012): up 34.42%
How much do I make each year (aka the annualized money-weighted rate of return since inception): 9.44%


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## Pluto

Compounded, you are getting an annual 7.67% rate of return. not bad.


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## BoringInvestor

Pluto said:


> Compounded, you are getting an annual 7.67% rate of return. not bad.


I think it'd be a fairer summary of the performance to look at the annualized money-weighted rate of return (9.44%) or the time-weighted rate of return (10.31%).
For example, by making my December deposit my CAGR has immediately dropped from 7.67% to 7.53%,

If I didn't know the MWRR or my TWRR, then looking at the compounded RoR would be a good start. 
As I do know both I don't see the value in tracking the compounded return.


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## mordko

^ Agreed; CAGR is only useful if you don't have any inflows or outflows.

Also, both money-weighted and time-weighted returns are "compounded". 

Having your money-weighted return 1% less than the time-weighted return is unusual. This can only happen if the value of contribution is large compared to the value of the funds and if the timing was unlucky (i.e. contributions made just before a drop). 

For the last year my TWRR is only 0.12% less than my MWRR.


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## BoringInvestor

Most years my TWRR has barely edged out the MWRR, with the exception of 2014 when I had a relatively large transfer and the TWRR was ahead by >0.5%.
YTD 2016 the difference is negligible: 7.53% MW vs 7.54% TW.


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## Pluto

BoringInvestor said:


> I think it'd be a fairer summary of the performance to look at the annualized money-weighted rate of return (9.44%) or the time-weighted rate of return (10.31%).
> For example, by making my December deposit my CAGR has immediately dropped from 7.67% to 7.53%,
> 
> If I didn't know the MWRR or my TWRR, then looking at the compounded RoR would be a good start.
> As I do know both I don't see the value in tracking the compounded return.


I see your point. I forgot about the deposits.


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## BoringInvestor

I just caught an error that ends up lowering my YTD 2016 return from ~7% to about 6.3%; the error was I wasn't including new deposits in the calculation.
Everything else looks fine: re: money weighted and time-weighted returns, along with rolling total returns.

I won't correct previous updates.


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## mordko

Portfolio return as of 01/01/17:

1 month: 1.5%
3 months: 3.3%
6 months: 11.4%
1 year: 6.0%
CAGR since 12/31/2002: 8.0%.

These are money-weighted returns because that's what everyone else seems to be reporting. Time-weighted returns for the year happen to be exactly the same.

Other notes for 2016:
- My UK investments are in the red for the year. Although FTSE went up, the pound went down vs CAD by 18% as a result of Brexit. 
- Emerging Markets and Developed Markets outside the UK and N America did OK, returning just over 6% each in 2016. 
- North American investments were the big winners, providing returns well into the double digits. Most of my US investment is in VBR (small value), which shot up after Trump got elected.


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## BoringInvestor

*December 2016 update*

*Commentary*
2016 ended strong, as the portfolio finished up 1.31% which pushed the portfolio to a new all-time high of 35.47%.

The portfolio was rebalanced with a new deposit during the month. 
Three of my ETFs paid a dividend during December (VTI, VXUS, and ZRE.T), and the remaining three (XIC.T, XBB.T, and XRB.T) will be paying their quarterly/bi-annual dividends in early January.

Over the year the portfolio finished up 8.06%.
The 2016 annualized money-weighted return, and the annualized time-weighted returns were nearly equal at 8.32%, and 8.29%, respectively.

I'm now at 3.5% of my passive income goal (my goal is to earn enough in dividend income to meet my forecasted needs when I'm 55).


*Results*
The portfolio's return this month: up 1.31%

The portfolio's return since inception (December 2012): up 35.47%
How much do I make each year (aka the annualized money-weighted rate of return since inception): 9.60%


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## snowbeavers

Hmmm, we started our couch potato portfolios at almost the exact same time and I've got very similar allocations and holdings. I based mine of Canadian Couch Potato portfolios as well. We also have a child with an RESP almost the same age. 

However, I thought I was doing a good job tracking till I saw your spreadsheet though  Any chance you could share your template that you used or a copy of your spreadsheet (minus your numbers of course)? It would be much appreciated.


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## BoringInvestor

snowbeavers said:


> Hmmm, we started our couch potato portfolios at almost the exact same time and I've got very similar allocations and holdings. I based mine of Canadian Couch Potato portfolios as well. We also have a child with an RESP almost the same age.
> 
> However, I thought I was doing a good job tracking till I saw your spreadsheet though  Any chance you could share your template that you used or a copy of your spreadsheet (minus your numbers of course)? It would be much appreciated.


My template is quite manual - it's really not at a state where it could be successfully shared and used by someone else, especially the areas that track the portfolio outside of the RESP.

I'd suggest using the boggleheads spreadsheet linked in the RESP thread - seems intuitive-enough to use, and is readily available.


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## Jerm

For the record - the calculations page of the boggleheads spreadsheet contains all the information needed to create the same graphs as BoringInvestor has in his sheet. I know because I've done it


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## BoringInvestor

*January 2017 update*

*Commentary*
January marked 50 months since the portfolio started, with a slight gain of 0.19%, pushing the overall return to a new high of 35.72%.

For the first time the portfolio's rolling 1-year return was greater than the 2-year return (10.59% vs 8.39%). 
This is due to the rolling 2-year return dropping the portfolio's best returning month (Jan 2015: up 6.23%), while the rolling 1-year return dropped the portfolio's 3rd worst month (Jan 2016: down 2.20%).

With the exception of the 1-year return, all other rolling returns were below average.

Observant readers may notice the % of passive income goal achieved jumped from ~3.5% to nearly 6%.
As my wife recently started a job with a defined benefit pension, I'm including her estimated pensionable earnings at age 55. I recognize that's a large assumption to make - that my wife will continue to work at her new job and contribute to her pension for the next ~20 years, but I've decided to reflect it now and will adjust it in the future when needed.


*Results*
The portfolio's return this month: up 0.19%
The portfolio's return since inception (December 2012): up 35.72%

How much do I make each year based on my deposits and growth (aka the annualized money-weighted rate of return since inception): 9.43%
How much do I make each year if I ignore the size of new deposits and treat them all equally (aka the annualized time-weighted rate of return since inception): 10.26%


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## BoringInvestor

For each of our six positions I've created a chart showing how the average cost, and, the average cost including dividends, have changed over time.

You'll notice two of the positions: XIC.T, and VTI, have large unrealized capital gains.

The other four positions each have an average cost almost equal to the current price. 
The profits on these four positions have come the dividends received, or in the case of VXUS (which trades in U.S. dollars), the changing CAD/USD exchange rate.


_Log in to view the three attachments below.
As the forum limits five attachments per post, I'll make a second post below for the rest._


*XIC.T (Canadian equities)*
View attachment 14050


*VTI (U.S. equities)*
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*VXUS (World equities)*
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## BoringInvestor

*ZRE.T (Canadian REITS)*
View attachment 14074


*XRB.T (Inflation-tracking bonds)*
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*XBB.T (Canadian bonds)*
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## BoringInvestor

*February 2017 update*

*Commentary*
February was the 8th best month since the portfolio began. The 2.82% monthly gain pushed the total return to within reach of 40%. 
The gain also pushed the annualized money weighted return back above 10%.

On a percentage basis, this was the 4th best rolling one year return: up 15.59%.
On a dollar basis, this was the best rolling one year return as the portfolio rose $39.62; meaning 47.5% of my total gain has been made in the past 12 months.


*Results*
The portfolio's return this month: up 2.82%
The portfolio's return since inception (December 2012): up 39.55%

How much do I make each year based on my deposits and growth (aka the annualized money-weighted rate of return since inception): 10.08%
How much do I make each year if I ignore the size of new deposits and treat them all equally (aka the annualized time-weighted rate of return since inception): 10.79%


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## BoringInvestor

I'm late posting this month's results, but they'll be coming along in the next few days.

In the meanwhile - lately I've become fascinated with the idea of adding a precious metals ETF , and/or physical gold ETF to my portfolio, primarily based on this white paper from Schwab. 


For any fellow couch potatoes out there - do any of you hold part of your portfolio in precious metals? 
Or have any of you explored the possibility of doing so, but ultimately decided against it?


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## none

Nope - adds complexity with no real benefit. Why bother?


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## BoringInvestor

I don't mind the complexity of it.
The key benefit, citing the white paper, is the low correlation of returns between gold & most other examined asset classes, whereas return trends for most other asset classes are converging.


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## My Own Advisor

You own precious metals, and gold, indirectly by being an indexer in equities. 

No?


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## BoringInvestor

My Own Advisor said:


> You own precious metals, and gold, indirectly by being an indexer in equities.
> 
> No?


I hold some firms who primarily mine precious metals/gold, but it's my understanding (from previous readings) the price of the metal and the prices of miners don't always move together in the long-run, with miners dragging behind.

I suspect companies that mine will also have a higher price correlation with other listed equities compared to physical gold itself.


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## mordko

I considered gold (and other commodities) and decided against because:

- expected real return of zero. Number one criterion for asset selection is an expectation of positive real return, however small. 

- I have a high allocation to Canadian stocks (way more than 4% market cap) and am already overweight in gold and commodities. 

Yes, miners and commodities don't move in the absolute tandem. Correlation isn't 1, but it is high. And gold miners have a higher expected return even if they have underperformed.



> whereas return trends for most other asset classes are converging.


I am skeptical about this claim. Correlations between assets keep changing. You can have two assets showing a very high correlation for a decade or two and then behaving completely differently. The problem is that we don't know future correlations and the past ones don't matter one bit.


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## BoringInvestor

mordko said:


> I considered gold (and other commodities) and decided against because:
> 
> - expected real return of zero. Number one criterion for asset selection is an expectation of positive real return, however small.
> 
> - I have a high allocation to Canadian stocks (way more than 4% market cap) and am already overweight in gold and commodities.
> 
> Yes, miners and commodities don't move in the absolute tandem. Correlation isn't 1, but it is high. And gold miners have a higher expected return even if they have underperformed.
> 
> 
> 
> I am skeptical about this claim. Correlations between assets keep changing. You can have two assets showing a very high correlation for a decade or two and then behaving completely differently. The problem is that we don't know future correlations and the past ones don't matter one bit.



I hadn't heard of the expected rate of return being 0%, but I found this link which suggests it's true over certain periods (with other periods showing strong positive returns): http://awealthofcommonsense.com/2015/07/a-history-of-gold-returns/.

Your second and third arguments are pretty convincing as I have ~22% of my portfolio in a broad-market Canadian ETF, of which the materials sector makes up 12%.


I'm thinking if I ever decide to move assets away from the Canadian market (which would be due to a diminishing home-bias, instead of based on sub-par performance expectations), I'd explore picking up a gold or precious metals ETF.


Thanks all for the replies.


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## mordko

BoringInvestor said:


> I hadn't heard of the expected rate of return being 0%, but I found this link which suggests it's true over certain periods (with other periods showing strong positive returns): http://awealthofcommonsense.com/2015/07/a-history-of-gold-returns/.
> 
> .


I don't remember the sources; might have been Bernstein, but... Gold is quite remarkable because we have millennia of historic data. Sure, prices went up and down over periods of 10 or 20 years but if you look at the real value of gold it stayed constant since Roman times. 

Theoretically this makes total sense because "gold" does not add value as businesses do. Bonds also have positive expected return, even if most of the 20s century was bad for bonds because people underestimated inflation. Gold has no large scale industrial need (like silver, platinum or palladium); the price is driven purely by sentiment which is then, eventually, offset by increased supply. 

The only purpose gold serves in the long term is preservation of value by hedging against inflation.


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## BoringInvestor

*March 2017 update*

*Commentary*
Catching up on this money diary with my delayed update - March was a slightly-above average month as the portfolio rose 1.12%, and also saw a quarterly deposit and rebalancing. 

The positive return pushed the overall return above 40% for the first time since the portfolio began.
The overall equity in the account also surpassed $300 (or 3x the initial deposit) for the first time.

*Results*
The portfolio's return this month: up 1.12%
The portfolio's return since inception (December 2012): up 40.50%

How much do I make each year based on my deposits and growth (aka the annualized money-weighted rate of return since inception): 10.18%
How much do I make each year if I ignore the size of new deposits and treat them all equally (aka the annualized time-weighted rate of return since inception): 10.86%


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## BoringInvestor

*April 2017 update*

*Commentary*
April was the 12th best month since the portfolio began, as it rose 2.69%. 
On a dollar basis (but not a percentage basis), this was the best 3 month, 6 month, 1 year, and 3 year rolling results since the portfolio began.

*Results*
The portfolio's return this month: up 2.69%
The portfolio's return since inception (December 2012): up 44.27%

How much do I make each year based on my deposits and growth (aka the annualized money-weighted rate of return since inception): 10.74%
How much do I make each year if I ignore the size of new deposits and treat them all equally (aka the annualized time-weighted rate of return since inception): 11.32%


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## BoringInvestor

*May 2017 update*

*Commentary*
May was another positive month, bringing the streak of gains to 7 months. 
This is the second-longest positive streak since the portfolio began, only trailing the 12-consecutive month gain from September '13 to August '14.

The total gain is very close to equaling the initial deposit, that is, if I started off the portfolio with $100, the total gain over the past 54 months has been $95.85.


*Results*
The portfolio's return this month: up 0.39%
The portfolio's return since inception (December 2012): up 44.84%

How much do I make each year based on my deposits and growth (aka the annualized money-weighted rate of return since inception): 10.60%
How much do I make each year if I ignore the size of new deposits and treat them all equally (aka the annualized time-weighted rate of return since inception): 11.19%


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## Moneytoo

Today is the 3 year anniversary since I started tracking our (mostly passive now) portfolio performance, and I was checking this thread to compare with yours and mordko's - hope you dont mind me sharing mine 

*Trailing investor return (money-weighted return, internal rate of return)*
Investor return as of	31/05/2017 
*Since*	31/05/2014	11.4%* 
* Annual compound return	

*Trailing portfolio return (time-weighted return, comparable return)*
Portfolio return as of	31/05/2017 
1 month	0.3% 
3 months	4.9% 
6 months	10.6% 
YTD	8.4% 
1 year	18.0% 
*3 years*	10.0%*
* Annual compound return


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## BoringInvestor

Moneytoo said:


> *Trailing investor return (money-weighted return, internal rate of return)*
> Investor return as of	31/05/2017
> *Since*	31/05/2014	11.4%*
> * Annual compound return
> 
> *Trailing portfolio return (time-weighted return, comparable return)*
> Portfolio return as of	31/05/2017
> 1 month	0.3%
> 3 months	4.9%
> 6 months	10.6%
> YTD	8.4%
> 1 year	18.0%
> *3 years*	10.0%*
> * Annual compound return



Congrats on the 3 year anniversary.
Looks like we're right around the same range: ~10-11% CAGR.


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## Moneytoo

Thanks - and yep, it's been a great run, very forgiving of a few mistakes I made with individual stocks and sector ETFs  Looking backward, I'm glad to have jumped in 3 years ago instead of waiting for the crash... which of course will happen one day, but "so far so good"


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## BoringInvestor

*June 2017 update*

*Commentary*
June saw the third largest drop since the portfolio began (-2.30%), surpassed only by August 2015 (-4.52%), and June 2013 (-2.62%).

A relatively large deposit was also made into the portfolio. The funds were made up of a quarterly deposit, and a tax rebate from claiming RRSP contributions.

The combination of the large portfolio decline, and the large deposit, caused the portfolio's overall gain to fall from 44.84% to 35.50%.


*Results*
The portfolio's return this month: down -2.30%
The portfolio's return since inception (December 2012): up 35.50%

How much do I make each year based on my deposits and growth (aka the annualized money-weighted rate of return since inception): 9.56%
How much do I make each year if I ignore the size of new deposits and treat them all equally (aka the annualized time-weighted rate of return since inception): 10.41%


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## Jerm

Wow rough timing on the deposit. Very interesting to see how much deposit and withdrawal timing affects your money weighted return.


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## BoringInvestor

Jerm said:


> Wow rough timing on the deposit. Very interesting to see how much deposit and withdrawal timing affects your money weighted return.


It would have been nice to have had a decline then make a large deposit and rebalance (instead of the reverse as it occurred), but, c'est la vie and it all washes out in the long-run.


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## gladaki

I was looking at TD e series and it lacks vangaurd with 2% approximately, because of emerging market mainly.
Which trading platform you are using now days ? Questrade ?
I guess all ETF in above portfolio has no commison buying through questrade.

Other question :

Are there any changes you did with portfolio since setup as mention in start of thread

1)You do re balancing every quarter 
2)You buy with 15% income every month with no commison


*Portfolio setup
We're following the Complete Couch Potato Portfolio that was previously detailed on CanadianCouchPotato.com (before newer portfolios were created, and this older portfolio was removed from the website), with some modifications:

We're using XIC as our Canadian ETF instead of the recommended ZCN. The six ETFs we hold are: XIC.T, VTI, VXUS, ZRE.T, XRB.T, and XBB.T.
Our bond allocation % is: [(my age) - 10]. i.e., when I'm 30 the bond allocation is 20% of the portfolio.
I've made adjustments to the weightings based on which account type (RRSP, TFSA, Margin, etc.) holds the ETF.
I make no attempts to time the market. I rebalance quarterly by buying the ETFs we're underweight in; for now I'm not selling anything to rebalance.
All distributions/dividends/return-of-capital received are set to DRIP additional ETF shares.*




Thanks 

A


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## BoringInvestor

Hi gladaki, I've continued to do my trading through Questrade, where all ETFs are commission-free to purchase.

Recently, I've decided to move to _yearly_ rebalancing. 
From readings I've done over the years, it seems there is little value from rebalancing quarterly vs yearly, so I'll start keeping it simple. 

Since the birth of our daughter, and all the extra expenses incurred, we're no longer putting aside 15% of our net income. 
Over the past few months our savings rate has been steady around 5-6%, though we'll be putting our savings on hiatus over the summer and intend to start savings again in the fall.


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## BoringInvestor

*July 2017 update*

*Commentary*
July was the 9th worst month since the portfolio began, with a -1.12% drop.

For all tracked periods, (3 months, 6 months, 1 year, 2 years, and 3 years), the rolling totals were below average.
In $, it was the worst rolling 3-month period, with a scaled drop of -$10.47, (the previous low was -$9.86).
In %, it was the worst rolling 3-year period since the portfolio began, with a gain of 17.75%, (the previous low was 18.34%).


*Results*
The portfolio's return this month: down -1.12%
The portfolio's return since inception (December 2012): up 33.93%

How much do I make each year based on my deposits and growth (aka the annualized money-weighted rate of return since inception): 8.99%
How much do I make each year if I ignore the size of new deposits and treat them all equally (aka the annualized time-weighted rate of return since inception): 9.96%


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## gladaki

BoringInvestor said:


> *July 2017 update*
> 
> *Commentary*
> July was the 9th worst month since the portfolio began, with a -1.12% drop.
> 
> For all tracked periods, (3 months, 6 months, 1 year, 2 years, and 3 years), the rolling totals were below average.
> In $, it was the worst rolling 3-month period, with a scaled drop of -$10.47, (the previous low was -$9.86).
> In %, it was the worst rolling 3-year period since the portfolio began, with a gain of 17.75%, (the previous low was 18.34%).
> 
> 
> *Results*
> The portfolio's return this month: down -1.12%
> The portfolio's return since inception (December 2012): up 33.93%
> 
> How much do I make each year based on my deposits and growth (aka the annualized money-weighted rate of return since inception): 8.99%
> How much do I make each year if I ignore the size of new deposits and treat them all equally (aka the annualized time-weighted rate of return since inception): 9.96%
> 
> 
> _Log in to view the three attachments below_
> 
> 
> View attachment 15906
> 
> 
> View attachment 15914
> 
> 
> View attachment 15922


Its interesting you are clearly beating canadian couch potato

TD eseries. 
In 2015 TD eseries
conservative	Cautious	Balanced	Assertive	Aggressive
30% equities	45% equities	60% equities	75% equities	90% equities
5.26%	6.36%	7.45%	8.55%	9.65%

Vangaurd 2015
Vanguard ETFs

Conservative	Cautious	Balanced	Assertive	Aggressive
30% equities	45% equities	60% equities	75% equities	90% equities
4.97%	5.72%	6.46%	7.21%	7.95%

2016:
TD e-Series funds

Conservative	Cautious	Balanced	Assertive	Aggressive
30% equities	45% equities	60% equities	75% equities	90% equities
3.2% 4.2% 5.5% 6.2% 7.2%
Vanguard ETFs

Conservative	Cautious	Balanced	Assertive	Aggressive
30% equities	45% equities	60% equities	75% equities	90% equities
4.0% 5.4% 6.7% 8.1% 9.4%

these results are from 30 dec 2014 - 30 dec 2015
and 30 dec 2016 - 30 dec 2016


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## BoringInvestor

gladaki said:


> Its interesting you are clearly beating canadian couch potato...



Using those number I quickly mocked up a comparison table.

Compared to my time-weighted return, in 2016 my portfolio beat all but the Vanguard aggressive portfolio.
In 2015, the balanced, assertive, and aggressive portfolios for both TD e-Series and Vanguard beat my portfolio.

View attachment 15946


It's worth noting that I'm treating my REITs (~10% of my portfolio) as a part of my overall equity %.


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## BoringInvestor

I took the comparison a step further to look at the two-year geometric average return.

Using my time-weighted rate of return - over 2015 & 2016 my portfolio returned 7.35% per year.
This beat out the conservative, cautious, and balanced portfolios of both TD and Vanguard.
The assertive and aggressive portfolios of both beat mine - with the assertive portfolios just a little higher, and the aggressive portfolios beating by >1%.


View attachment 15954


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## Ihatetaxes

My results over the past three years almost identical to yours. Keep up the (easy) good work!


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## BoringInvestor

Ihatetaxes said:


> My results over the past three years almost identical to yours. Keep up the (easy) good work!


Likewise!


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## BoringInvestor

*August 2017 update*

*Commentary*
August saw a return to a monthly gain (after two months in of losses), as the portfolio was up 0.82%.
The portfolio's 3-year rolling return hit an all-time low at 17.03%.


*Results*
The portfolio's return this month: up 0.82%
The portfolio's return since inception (December 2012): up 35.04%

The portfolio's yearly return based on my deposits and growth (aka the annualized money-weighted rate of return since inception): 9.02%
The portfolio's yearly return if I ignore the size of new deposits and treat them all equally (aka the annualized time-weighted rate of return since inception): 9.97%


_Log in to view the three attachments below_

View attachment 16218


View attachment 16226


View attachment 16234


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## BoringInvestor

*September 2017 update*

*Commentary*
September saw a late rally to push the portfolio to a monthly gain, and a new end-of-month high.
The one-month return was above average, and with the exception of beating the rolling two-year median return (15.59% vs 14.43%), all other rolling-returns were below average.


*Results*
The portfolio's return this month: up 1.09%
The portfolio's return since inception (December 2012): up 36.50%

The portfolio's yearly return based on my deposits and growth (aka the annualized money-weighted rate of return since inception): 9.12%
The portfolio's yearly return if I ignore the size of new deposits and treat them all equally (aka the annualized time-weighted rate of return since inception): 10.03%


_Log in to view the three attachments below_

View attachment 16449


View attachment 16457


View attachment 16465


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## BoringInvestor

*October 2017 update*

*Commentary*
October saw very strong growth, as it was the 4th best month measured by percentage (3.50%), and the 2nd best month measured by dollars ($11.86) since the portfolio began.

For the first time the portfolio's gain is greater than the starting balance (i.e., if the portfolio started with $100, the total gains to date are $102.41).
This month-end result also saw new records for the greatest gain in a calendar year ($27.75), and a new record high 3-year rolling total as measured by dollar gains ($65.44).

The portfolio is one month shy of it's 5-year anniversary.

*Results*
The portfolio's return this month: up 3.50%
The portfolio's return since inception (December 2012): up 41.29%

The portfolio's yearly return based on my deposits and growth (aka the annualized money-weighted rate of return since inception): 9.91%
The portfolio's yearly return if I ignore the size of new deposits and treat them all equally (aka the annualized time-weighted rate of return since inception): 10.62%


_Log in to view the three attachments below_

View attachment 16746


View attachment 16754


View attachment 16762


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## Ihatetaxes

A very good month indeed!


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## BoringInvestor

Indeed!

From a mental-checklist perspective, it was great to have my total gains surpass my initial deposit.

The next 'checklist' item to have my total gains surpass my total deposits; based on some rough forecasts on deposit and growth this may happen in ~5 years.


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## BoringInvestor

With the 5-year anniversary of the portfolio approaching, I'll be doing a deeper dive into its performance.

Chime in if you have any questions or requests, otherwise, look for the recap in early December.


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## Pluto

That's very good progress. 
Looking at your graph in 2015 your drawdown wasn't too bad either. That was a challenging year for all.


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## BoringInvestor

2015 was an odd year in how quickly things changed.

The portfolio ended up making a decent return in 2015 (6.19%), but that was primarily based on the strength of January which was the best month in since the portfolio began (6.23%).

The rest of 2015, from February to December, ended flat with a lot of turbulence along the way.

The period from March 2015 to February 2016 was the lowest rolling 12-month return at -6.23%, which included 6 of the 10 worst months since the portfolio began (-4.52%, -2.20%, -1.94%, -1.73%, -1.71%, and -0.85%).


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## BoringInvestor

*November 2017 update*

*Commentary*
Happy 5 year portfolio-a-versary!
I'll do a more thorough 5 year recap later this month, for now we'll look at the usual monthly numbers.

November's 1.86% gain was the 16th best by percentage since the portfolio began, and 11th best as measured by dollars gained.

The monthly result pushed the portfolio to new highs for: 
- end of month balance: ($357.00)
- total growth: ($108.94)
- greatest dollar gain over 3 months: ($22.02)
- greatest dollar gain in a calendar year: ($34.28)
- greatest dollar gain over 2 years: ($55.45)
- greatest dollar gain over 3 years: ($68.35)

All rolling periods tracked (i.e., 1 month, 3 months, etc.) were nearly at, or greater than, the historical average with the exception of the 6-month period.



*Results*
The portfolio's return this month: up 1.86%
The portfolio's return since inception (December 2012): up 43.91%

The portfolio's yearly return based on my deposits and growth (aka the annualized money-weighted rate of return since inception): 10.23%
The portfolio's yearly return if I ignore the size of new deposits and treat them all equally (aka the annualized time-weighted rate of return since inception): 10.86%


_Log in to view the three attachments below_

View attachment 17113


View attachment 17121


View attachment 17129


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## BoringInvestor

*5 year recap*

To look back at the growth of my portfolio over the past five years, I compared its performance to a selection of similar mutual fund portfolios to see how my investments have stacked up (see the image below).

Over the past five years my portfolio has outperformed the average global equity balance fund by an annualized rate of 0.85%.


Overall, I'm quite happy with the relative performance.
I expect that if the same comparison is repeated over longer periods of time (i.e., 10 years, >10 years), that the performance gap between my portfolios, and those lagging portfolios, will widen further due to their higher MERs.

Interesting, the Tangerine Balanced Growth Portfolio has done slightly better than my portfolio (10.99% vs 10.86%), despite it having a MER (1.07% vs 0.16%). 
I believe the key reasons my portfolio under performed relative to the Tangerine portfolio is due to two of my holdings:
1. 11% of my portfolio is in REITs, which have returned 2% less (6.43% vs 8.67%) than my Canadian ETF.​2. 4% of my portfolio is in real-return bonds, which aims to act as a hedge against inflation, but the returns lag the broader Canadian bond index (1.43% vs 2.78%).​
Roughly speaking, if I held all my REITs (ZRE.TO) as a Canadian-index tracking ETF (XIC.TO) instead, and moved all my real-return bonds (XRB.TO) to a broad bond-tracking index (XBB.TO), my yearly return would be highly by about 0.30%, and would have finished higher than the Tangerine fund.


One note about my portfolio is I'm slowly lowering the overall risk as I move 1% of its value from equity to bonds each year.
In effect, this will reduce my overall growth as generally equities grow more than bonds over the long run, and this will make ongoing comparisons to these competing portfolio less relevant as they maintain their equity/bond allocation.


View attachment 17249


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## BoringInvestor

One additional point of comparison is against Wealthsimple, as it's arguably the largest and best known Canadian roboadvisor.

Wealthsimple launched in late 2014 so I can't compare 5-year returns, though I can look at time-weighted annual and 2017 YTD returns.

2015:
- BoringInvestor: 6.4%
- Wealthsimple: 5.1%
- My delta: 1.3%

2016:
- BoringInvestor: 8.3%
- Wealthsimple: 8.8%
- My delta: -0.5%

2017, as of November 30th: 
- BoringInvestor: 12.8%
- Wealthsimple: 11.4%
- My delta: 1.4%


https://help.wealthsimple.com/hc/en-ca/articles/214187018-How-has-the-Growth-portfolio-performed-

Wealthsimple's all-in fee is 0.6% (used in the calculated returns above), or 0.5% if you have over $100,000.


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## Jerm

How'd you end up finishing the year off? My slightly modified couch potato portfolio returned 12.64% time-weighted in 2017. I'd imagine we're probably within 1% of each other


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## BoringInvestor

Looks like my time-weighted rate of return was about 11.1%.
I'll get the full update out in the next few days.

Happy New Year CMF!


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## BoringInvestor

*December 2017 update*

*Commentary*
December finished slightly down (-0.28%) to cap off the year. 
It was the 14th worst month since the portfolio began.

Overall in 2017 the account's return was 10.31%.
My annualized money-weighted rate of return was 10.86%, and my annualized time-weighted rate of return was 11.30%.
By annualized returns, this was the 2nd best year for the portfolio, trailing only 2013.

Over 2017: 9 months saw positive growth, and 3 ended with losses.
Two of the months were in the top 10 for growth percentage (October: 4th best month at 3.50%; February: 9th best most at 2.82%), and two of the months were in the bottom 10 for loss percentage (June: 3rd worst month at -2.30%; July: 9th worst month at -1.11%).

December saw the highest rolling-three year dollar gain of $69.24.


*Results*
The portfolio's return this month: down -0.28%
The portfolio's return since inception (December 2012): up 43.51%

The portfolio's yearly return based on my deposits and growth (aka the annualized money-weighted rate of return since inception): 9.92%
The portfolio's yearly return if I ignore the size of new deposits and treat them all equally (aka the annualized time-weighted rate of return since inception): 10.60%


_Log in to view the three attachments below_

View attachment 17417


View attachment 17425


View attachment 17433


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## BoringInvestor

*January 2018 update*

*Commentary*
2018 started off slightly above average with a gain of 1.28%.
The return pushed the portfolio to its highest overall return of 45.35%, and brought the money-weighted annualized return above 10%.

This month marked the best rolling return in dollars over a six month period ($28.29), and over a two year period ($64.66).

For the first time the percentage rolling return over the past two years was higher than the return over three years (21.85% vs. 19.73%).
This difference in returns is due to the volatile, negative growth months in 2015 dragging down the rolling three-year returns. 

With the exception of the rolling three year return, all other periods were at, or better than, their respective average.


*Results*
The portfolio's return this month: up 1.28%
The portfolio's return since inception (December 2012): up 45.35%

The portfolio's yearly return based on my deposits and growth (aka the annualized money-weighted rate of return since inception): 10.05%
The portfolio's yearly return if I ignore the size of new deposits and treat them all equally (aka the annualized time-weighted rate of return since inception): 10.69%


_Log in to view the three attachments below_

View attachment 17913


View attachment 17921


View attachment 17929


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## BoringInvestor

*February 2018 update*

*Commentary*
That was a wild month! 
For a time the portfolio saw huge losses (among the worst suffered by the portfolio), followed by a rally pushing it to a moderate gain, only to finish back in the red at the very end of the month.

Overall the portfolio finished down 0.83%, and remained positive for the year at 0.43%.

This was the worst rolling return in percentage over a three year period (16.17%), and over a five year period (40.67%).

For rolling returns in dollars there were two extremes hit: it was the worst rolling return in dollars over five years ($103.38), but it was the best return over two years ($65.86).


*Results*
The portfolio's return this month: down -0.83%
The portfolio's return since inception (December 2012): up 44.14%

The portfolio's yearly return based on my deposits and growth (aka the annualized money-weighted rate of return since inception): 9.62%
The portfolio's yearly return if I ignore the size of new deposits and treat them all equally (aka the annualized time-weighted rate of return since inception): 10.35%


_Log in to view the three attachments below_

View attachment 18161


View attachment 18169


View attachment 18177


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## BoringInvestor

*February 2018 update*

*Commentary*
The portfolio ended flat, though it doesn't reflect the relatively large negative swings throughout the month with a bounce back at the very end. 
Overall the portfolio finished up 0.01%, and is positive for the year at 0.45%.

The rolling 3-year return bounced off its all time low (of 16.17%), to finish modestly higher at 16.80%


*Results*
The portfolio's return this month: up 0.01%
The portfolio's return since inception (December 2012): up 44.15%

The portfolio's yearly return based on my deposits and growth (aka the annualized money-weighted rate of return since inception): 9.42%
The portfolio's yearly return if I ignore the size of new deposits and treat them all equally (aka the annualized time-weighted rate of return since inception): 10.18%


_Log in to view the three attachments below_

View attachment 18426


View attachment 18434


View attachment 18442


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## BoringInvestor

*April 2018 update*

*Commentary*
The portfolio saw a deposit from my family's income tax refund, allowing all positions to be rebalanced. 
The portfolio nudged slightly higher, leading to the lowest return in both $ and % over the past 5 years ($102.39 and 36.97%).

As an added bonus this month, I added two attachments showing my $ and % returns over 1/3/6 months and 1/2/3/5 years.
The lowest/worst returns are highlighted dark red, with the next lowest/worst returns shaded a lighter red.
The highest/best returns are highlighted a dark green, with the next highest/best returns shaded a lighter green.




*Results*
The portfolio's return this month: up 0.14%
The portfolio's return since inception (December 2012): up 40.88%

The portfolio's yearly return based on my deposits and growth (aka the annualized money-weighted rate of return since inception): 9.26%
The portfolio's yearly return if I ignore the size of new deposits and treat them all equally (aka the annualized time-weighted rate of return since inception): 10.04%


_Log in to view the attachments below_
View attachment 18626


View attachment 18634


View attachment 18642


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## BoringInvestor

I put together a table showing what the portfolio's total time-weighted return over time, starting from January 2013, with 2018 data assuming steady growth for the remainder of the year based on YTD results.

You can think of this as a hypothetical - what would my total return be if I invested in BoringInvestor's portfolio on January 1st, and held until December 31, over a duration of 1-6 years.


For example, if you 'invested' on Jan 1st 2013, and held for five years, your total return would have been 65.1%.
If instead you 'invested' on Jan 1st 2016 and held for two years, you total return would be 20.5%.


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## BoringInvestor

*May 2018 update*

*Commentary*
The portfolio had an above average return of 1.87%, hitting a new asset growth high of $117.18.
By $ gain, it was the 8th best month with an increase of $7.10.

Looking ahead, all six of my positions will pay dividends in June or early July.

For some reason the normal chart image I post each month isn't being accepted by the CMF system, so I'll skip it this month and look to add it again next month.


*Results*
The portfolio's return this month: up 1.87%
The portfolio's return since inception (December 2012): up 43.52%

The portfolio's yearly return based on my deposits and growth (aka the annualized money-weighted rate of return since inception): 9.56%
The portfolio's yearly return if I ignore the size of new deposits and treat them all equally (aka the annualized time-weighted rate of return since inception): 10.25%


_Log in to view the attachments below_


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## BoringInvestor

*June 2018 update*

*Commentary*
The portfolio saw a pretty average return in June, up 0.85%, hitting a new high of $389.73.

All six ETFs paid dividends in the month, and where applicable all securities were registered for additional shares through a dividend reinvestment program.



*Results*
The portfolio's return this month: up 0.85%
The portfolio's return since inception (December 2012): up 44.74%

The portfolio's yearly return based on my deposits and growth (aka the annualized money-weighted rate of return since inception): 9.58%
The portfolio's yearly return if I ignore the size of new deposits and treat them all equally (aka the annualized time-weighted rate of return since inception): 10.25%


_Log in to view the attachments below_


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## BoringInvestor

--


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## like_to_retire

BoringInvestor said:


> *June 2018 update*
> 
> 
> The portfolio's return since inception (December 2012): up 444.74%


Is that a typo?

ltr


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## BoringInvestor

like_to_retire said:


> Is that a typo?
> 
> ltr


Absolutely it was. 
Thanks for catching. I've updated it in the post above.


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## BoringInvestor

*July 2018 update*

*Commentary*
July matched the performance of June, rising 0.85%, to a new account balance high of $393.04, and a new high for overall return at 45.97%.

The rolling 5-year return, measured in dollars, hit a new high of $116.12.




*Results*
The portfolio's return this month: up 0.85%
The portfolio's return since inception (December 2012): up 45.97%

The portfolio's yearly return based on my deposits and growth (aka the annualized money-weighted rate of return since inception): 9.60%
The portfolio's yearly return if I ignore the size of new deposits and treat them all equally (aka the annualized time-weighted rate of return since inception): 10.26%


_Log in to view the attachments below_


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## gladaki

I am wondering hows your portfolio doing compared to Canadian couch potato aggressive ETF portfolio.
ZAG,VCN,XAW


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## BoringInvestor

gladaki said:


> I am wondering hows your portfolio doing compared to Canadian couch potato aggressive ETF portfolio.
> ZAG,VCN,XAW


About as expected.

Though these time frames aren't in synch, they give an indicative idea of comparative performance.

For the 5-year period from Jan 1, 2013 to Dec 31, 2017, the ZAG/VCN/XAW portfolio returned an annual rate in the range of 6.23% to 13% (depending on your risk profile).
https://cdn.canadiancouchpotato.com/wp-content/uploads/2018/01/CCP-Model-Portfolios-ETFs-2017.pdf

From Dec 2012 to today, my portfolio's annualized time-weighted return is 10.26%.


Examining the performance difference, the MER of my my portfolio is 0.16% is equal to the MER of the aggressive ZAG/VCN/XAW portfolio linked above.
As such, the difference in returns seems primarily because of: i) the different time frames covered, and ii) the different weightings.


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## gladaki

Are you still following same portfolio : XIC.T, VTI, VXUS, ZRE.T, XRB.T, and XBB.T.
what breakdown ? Anything you would have changed if you are starting this portfolio today >?
Thank you


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## BoringInvestor

gladaki said:


> Are you still following same portfolio : XIC.T, VTI, VXUS, ZRE.T, XRB.T, and XBB.T.
> what breakdown ? Anything you would have changed if you are starting this portfolio today >?
> Thank you


Yup, same six ETFs, by this breakdown:
- ZRE.T is steady at 10%
- Equity % is set to: [110-(my age)], with 40% in XIC.T, 30% in VTI, and 30% in VXUS
- Bond % is set to [(my age)-10], with 75% in XBB.T, and 25% in XRB.T

I rebalance my portfolio whenever I have an influx of funds, but I do so by purchasing more shares or the laggards, and never by selling the outperformers.


If I was starting fresh today, I'd probably go for the _assertive_ ZAG.T/VCN.T/XAW.T portfolio linked above.


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## BoringInvestor

*August 2018 update*

*Commentary*
August was a pretty positive month finishing up 1.24%, to hit new highs for asset gain ($128.63), portfolio size ($397.89), and total return (47.77%).

All tracked rolling returns were above their median and simple averages, with both the 3-year and 5-year rolling returns hitting new highs for dollars gained ($79.48 and $121.25 respectively).

I've included one additional image this month - I've started tracking the YTD cumulative asset gain by year.
The $20.69 made in 2018 is the biggest asset gain by the end of August since the portfolio began.


*Results*
The portfolio's return this month: up 1.24%
The portfolio's return since inception (December 2012): up 47.77%

The portfolio's yearly return based on my deposits and growth (aka the annualized money-weighted rate of return since inception): 9.71%
The portfolio's yearly return if I ignore the size of new deposits and treat them all equally (aka the annualized time-weighted rate of return since inception): 10.33%


_Log in to view the attachments below_


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## BoringInvestor

*September 2018 update*

*Commentary*
September was a rougher month for the portfolio, ending down -1.44%, for the 9th worst month by percentage.
The dollar loss of -$5.74 was the 3rd worst since the portfolio started.

All tracked rolling returns were below average, with the exception of the 3-year period which was above.

Dividends are rolling into the account from five of the six ETFs over late September and early October.
All dividends are registered to purchase additional shares via a DRIP.


*Results*
The portfolio's return this month: down -1.44%
The portfolio's return since inception (December 2012): up 45.64%

The portfolio's yearly return based on my deposits and growth (aka the annualized money-weighted rate of return since inception): 9.17%
The portfolio's yearly return if I ignore the size of new deposits and treat them all equally (aka the annualized time-weighted rate of return since inception): 9.91%


_Log in to view the attachments below_


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## Jerm

This next update should be interesting. I have a similar portfolio and I'm pretty sure this'll be my worst month to date. That's even including the quarterly dividends that were paid out this month.


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## BoringInvestor

Indeed, unless there's a drastic change this month will end up being the worst result to date.

Full update coming in early November.


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## BoringInvestor

*October 2018 update*

*Commentary*
October saw the biggest dollar decline since the portfolio began, as it was down -$16.66.
The percentage decline of -4.25% was the 2nd worst, trailing only the -4.52% decline in August 2015.

October's loss erased all YTD 2018 gains, as the portfolio now sits at a small loss on the year.

The rolling 3-month and 5-year dollar and percentage returns hit new lows, of -$17.54/-4.46% and $90.40/31.71% respectively.


*Results*
The portfolio's return this month: down -4.25%
The portfolio's return since inception (December 2012): up 39.45%

The portfolio's yearly return based on my deposits and growth (aka the annualized money-weighted rate of return since inception): 7.94%
The portfolio's yearly return if I ignore the size of new deposits and treat them all equally (aka the annualized time-weighted rate of return since inception): 8.95%


_Log in to view the attachments below_


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## BoringInvestor

Looking ahead, the six-year anniversary of the portfolio is coming up at the end of the month.

At that time I'll highlight anything I find particularly interesting with the portfolio, but if any readers have any requests do let me know.


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## BoringInvestor

*November 2018 update*

*Commentary*
Happy 6-year portfolio anniversary!

As a special treat to celebrate the occasion I've added some points of comparison between the performance of my portfolio vs WealthSimple and Questrade Portfolios.
You'll find that below my regular monthly updates


November saw a bounce-back-to-positive from October's large loss, with the portfolio finishing up 2.01%, or $7.53.
It was the 16th best month by percentage, and the 8th best by dollar gain.

The positive month brought the year-to-date gains back into the black, and brought the total return since the portfolio began back above 40%.


*Results*
The portfolio's return this month: up 2.01%
The portfolio's return since inception (December 2012): up 42.25%

The portfolio's yearly return based on my deposits and growth (aka the annualized money-weighted rate of return since inception): 8.26%
The portfolio's yearly return if I ignore the size of new deposits and treat them all equally (aka the annualized time-weighted rate of return since inception): 9.19%


_Log in to view the attachments below_



























*Portfolio comparisons*

To gain some perspective on how my portfolio is doing, I decided to compare the time-weighted performance vs. a couple of the better known robo-advisors: WealthSimple and Questrade Portfolios.

To fairly compare, I looked at results from the start of the earliest full-calendar year, up to the latest data available, and with a starting balance of $10,000.

For WealthSimple, the data compares from the start of 2015, up to October 2018, for three portfolio weightings: conservative, balanced, and growth.

For Questrade, the data compares from the start of 2013, up to September 2018 (it ends prior to the market downtown in October), for four portfolio weightings: income, balanced, growth, and aggressive.


The equity portion of my portfolio makes my portfolio most equivalent to the Growth portfolio at both Questrade and WealthSimple.


The result: 
- Compared to WealthSimple: my portfolio has had a higher total return than any WealthSimple portfolio, with a total return of 28%, vs. a range of total returns from 24% (for growth), to 10% (for conservative). My portfolio performed better than any WealthSimple portfolio in 2015, 2016, and YTD-2018, and was only slightly outperformed by the Growth portfolio in 2017 (11.6% vs 11.3%).
- Compared to Questrade Portfolios: my portfolio's total return has finished just behind the Aggressive portfolio (72% vs 79%). My portfolio performed best in 2014, 2015, and YTD-2018, and was outperformed by the Aggressive portfolio in 2017 (13.51% vs 11.3%), and both the Aggressive and Growth portfolios in both 2013 and 2016 (2013: 21.95% and 16.81% vs 15.74%; 2016: 10.76% and 8.7% vs. 8.29%).

On the whole, based on these data points, I'm satisfied with the performance of my portfolio.
Over time as I continue to shift my portfolio's weighting from equity to bonds, I expect to slowly trend towards yearly returns that are most comparable to the respective Balanced portfolios at each firm.


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## BoringInvestor

As is no surprise given the consistent, relatively-large daily declines as of late, my investment portfolio is having a pretty bad December.
As of now, this may end up being the first calendar year with a negative return.

See you in the New Year with my regular recap.

Happy Holidays all.


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## BoringInvestor

*December 2018 update*

*Commentary*
December closed out 2018 on a relatively large down note, finishing as the 3rd worst month by percentage-loss (-3.53%), and the 2nd worst by dollar-loss (-$13.52).

2018 was the first calendar year in which the portfolio saw a negative return (-2.04%).

December also capped off the worst dollar and percentage rolling returns over 3 months (-5.78% / -$22.65), 6 months (-5.19%, -$20.23), 5 years (27.85% / $80.48), and the worst percentage return over 3 years (14.52%).


I've included one additional image this month showing my money-weighted and time-weighted returns over the past 1 through 6 years, and since inception.
To pick one example, over the past four years my time-weighted return is 5.85%. You can see the full details below.



*Results*
The portfolio's return this month: down -3.53%
The portfolio's return since inception (December 2012): up 37.23%

The portfolio's yearly return based on my deposits and growth (aka the annualized money-weighted rate of return since inception): 7.27%
The portfolio's yearly return if I ignore the size of new deposits and treat them all equally (aka the annualized time-weighted rate of return since inception): 8.41%


_Log in to view the attachments below_



Note: I've having some technical trouble with the forum. I'll either attach the images later to this post, or follow up with another post.


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## BoringInvestor

As I couldn't attach these before, find below the three regular images for my December update, plus a special end-of-year image detailing my rates of return over time.


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## BoringInvestor

In the coming days, whenever Questrade and WealthSimple update their portfolio returns to the end of 2018, I'll post updated comparison charts.

It will be interesting to see how my portfolio fared against them in light of the market downturn in late 2018.


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## james4beach

Sorry if you posted this earlier, but do you use WealthSimple, or are you just benchmarking your portfolio against theirs for comparison sake?

And if you're using figures they post, do you know if their performance calculations include realistic factors such as the inefficiency of filling ETF trades (the bid/ask spread)? If you actually had a portfolio with them, their system would occasionally trade your ETFs which is going to cause some friction and inefficiency. It might be good to look into whether they are accounting for all of that.


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## BoringInvestor

I'm bench-marking my portfolio vs Wealthsimple and Questrade Portfolios.

I'm unsure how exactly they do their calculations, but on the whole I'm concerned with getting an idea it doing it myself is worth it, vs just transferring all my assets to a roboadvisor.

Based upon the comparisons, so far it seems my efforts are delivering value, and are worth continuing.


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## james4beach

I would expect that if you stick to a consistent methodology, avoid cash drag, and don't try to make strategic changes to your asset allocation, that you will do just as well as the robo advisors.

For me personally, if I decided I didn't want to manage my investments on my own, I would buy a good mutual fund such as one of these, rather than use a robo advisor. The reason is that many of these mutual funds have shown multi-decade histories through both bull and bear markets, whereas robo advisors have not demonstrated any long term success. My parents hold Mawer Balanced and I have personally recommended BMO Monthly Income Series D to friends. In my opinion 20 years of solid demonstrated performance from a diversified mutual fund at around 1% MER is not a bad deal, and sometimes managers _are_ worth their fees.


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## BoringInvestor

I expect to slightly better than robos. 
If I find I'm consistently under-performing, I'll have to re-evaluate my investments and consider dumping my account and pouring all the assets into a robo.

Re: your point about robos lacking a long history, I don't quite buy the argument.
If the idea of a passive index-tracking robo portfolio is to mirror broad-indexes as closely as possible, then we can reasonably infer what the performance would look like stretching back to when various indexes were created. As we all know, over the longrun, indexes manage to return positive results over bull and bear markets.

I understand the value of a mutual fund for some segment of retail investors, but for most who are looking for a set-and-forget mentality I believe a robo would be a far better choice over the longrun, primarily from the simplicity of selecting a portfolio and from lower fees. 

Further I believe, that those that have the time, interest, and inclination can perform even better if they're willing to create their own couch potato via lower costs and greater opportunity to compound gains.


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## james4beach

BoringInvestor said:


> Re: your point about robos lacking a long history, I don't quite buy the argument.
> If the idea of a passive index-tracking robo portfolio is to mirror broad-indexes as closely as possible, then we can reasonably infer what the performance would look like stretching back


We don't actually know that. They may turn out to be strictly passive investors, or it may turn out that their algorithms occasionally change allocations (which means tactical adjustments or market timing). There is evidence that robo advisors are more active than passive indexers: https://www.reddit.com/r/PersonalFi...nybody_elses_portfolio_allocation_changed_at/



> Weathsimple is a discretionary portfolio manager. You have authorized them to trade on your behalf. They don't have to notify you as long as the trades they make are in line with the goals of the particular portfolio.


There is no question they use passive index ETFs under the hood, but that alone doesn't make them passive (as in the couch potato). If they use a computer-driven system to adjust the portfolio over time; that's active management. It's active because every time they make a slight change (e.g. sell some government bonds and buy more corporate bonds, or, sell some US and buy Canada) they are making a strategic decision which can either help or hurt performance.

For Wealthsimple, we have no idea how their "algorithms" would have navigated through 2007-2008 turmoil, for example. Unless you are absolutely sure that they have a strict policy of fixed % allocations to specific countries and fixed income, I would not assume they are passive indexers. Just because they show a composition of country and % right now, doesn't mean they have a policy of keeping these constant over time -- my guess is that they do not pledge to keep it constant.

I seriously doubt Wealthsimple and other robo advisors are passive indexing approaches.


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## BoringInvestor

Time will tell. For now I don't see a reason to doubt they'll remain passive.


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## BoringInvestor

For my January update I'm looking to for a more comprehensive comparison of my portfolio vs a sampling of roboadvisors.
Thus far I have the data for all firms except Questrade (their website updates quarterly, and is still showing data as of Sep 30, 2018).

As such, my next update may be a little delayed depending on when they update their performance.


Quasi-spoiler for my performance: January was a very good month.


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## BoringInvestor

*January 2019 update*

*Commentary*
I changed my mind about waiting for data from select roboadvisors before giving my regular monthly update, so I'll make a subsequent post when I have the information.


January was a fantastic month for the portfolio. 
This was the best month for dollars gained ($18.15), and the second best by percentage gain (up 4.91%).
15% of the portfolio's overall gains-to-date were made in January.

The past five months have seen a whipsaw of dollar returns, as it saw: the fifth worst month, followed by the worst month, then the ninth best month, the second worst month, and finally the best month.

All tracked rolling returns are positive with the exception of the six-month return that is slightly negative at -1.37%.



*Results*
The portfolio's return this month: up 4.91%
The portfolio's return since inception (December 2012): up 43.97%

The portfolio's yearly return based on my deposits and growth (aka the annualized money-weighted rate of return since inception): 8.23%
The portfolio's yearly return if I ignore the size of new deposits and treat them all equally (aka the annualized time-weighted rate of return since inception): 9.13%


_Log in to view the attachments below_


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## BoringInvestor

As promised, I compiled data comparing my time-weighted return to returns from some of the larger robo-advisors that publicly disclose their calendar year returns (Questrade, WealthSimple, WealthBar, and BMO), plus Tangerine.


I compared my portfolio vs.:
- any portfolio that had at least a 50% equity target, and
- only looked a full-calendar year returns


Using those filters, I highlighted in green: 
- those portfolios that had a higher portion of their portfolio in equity, and 
- those portfolios that had a better yearly return that my performance.

I also shaded in red the lowest return among all tracked portfolios.


Before undergoing the comparison I expected:
- those funds that have a higher equity portion to outperform or match my portfolio, 
- over time as I reduce my equity target (by about 100 basis points per year) my portfolio will be matched and beat by other portfolios more often, and
- those portfolios that were 'balanced' would generally have the lowest yearly returns.


Results:
- Over the past three years my annualized portfolio return has performed 5th best (5.7%); bested only by the WealthBar: Aggressive portfolio (6.7%), WealthBar: Growth portfolio (6.1%), Tangerine: Equity Growth portfolio (5.9%), and BMO Smartfolio: Equity Growth portfolio (5.9%).
- Over the past five years my annualized portfolio return (6.9%), has bested all tracked portfolios that started by at least January 1, 2014 (Tangerine and Questrade portfolios).
- Since January 1, 2013, only the Tangerine: Equity Growth portfolio has had a higher annual return compared to my portfolio (9.2% vs 8.3%).
- In 2018, though all portfolios were down, my portfolio performed 2nd best (down -2.1%), vs the BMO SmartFolio: Balanced portfolio that was only down -1.2%.



Find the full results attached below.


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## BoringInvestor

Following up from a post in late 2018, I wanted to update the comparisons of my portfolio vs three of the bigger/better known robo-advisors (Questrade, WealthSimple, and WealthBar). This updated comparison would include the market decline in late 2018.


Result: looking at full calendar year stats since inception, (since 2013 for Questrade, and since 2015 for WealthSimple and WealthBar), my portfolio has performed better than all portfolios except for WealthBar's Aggressive portfolio.


To repeat a point I made in an earlier post, as I continue to shift my asset allocation from equity to bonds, I expect all robo-advisor aggressive portfolios will eventually perform better than my portfolio over the longrun.

For now, given my current equity portion and the low ongoing cost of my portfolio, my portfolio is doing quite favourably to relevant robo-advisor portfolios.


See the three attached images below for details.


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## BoringInvestor

*February 2019 update*

*Commentary*
February continued 2019's winning ways. 

The month finished up 2.33%, which was the 15th best percentage gain since the portfolio began, and made $9.02 which was the 5th highest all-time.

The portfolio is up 7.35% since the start of the year, and is only $1.22 away from its peak value hit in August 2018 (of $397.89).

February capped the best rolling-three year dollar gain, of $83.79, surpassing the previous high of $79.48 in the period ending August 2018.

Given the strength of January and February, if the next few months show average returns I expect the portfolio will hit new rolling dollar gains for three months and six months.

*Results*
The portfolio's return this month: up 2.33%
The portfolio's return since inception (December 2012): up 47.32%

The portfolio's yearly return based on my deposits and growth (aka the annualized money-weighted rate of return since inception): 8.61%
The portfolio's yearly return if I ignore the size of new deposits and treat them all equally (aka the annualized time-weighted rate of return since inception): 9.42%


_Log in to view the attachments below_


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## BoringInvestor

Hi CMF.

My regular update for March will be coming up in a couple of days.

Looking ahead, I'm thinking of moving from monthly updates, to quarterly updates, as I think this thread has gone on long enough to demonstrate the value and viability of following a couch potato portfolio, and doesn't require nearly the same level of updates.

I'd also like to do a portfolio-anniversary recap each November, and possibly one other 'special' update focusing on something interesting I'd like to share.

So going forward, it'd be something like this:

- March quarterly update
- June quarterly update
- September quarterly update
- November portfolio-anniversary update
- December quarterly update
- plus likely one other 'update/post' per year on a topic of interest.


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