# Looking For Advice Starting



## warrdogg (Feb 8, 2013)

I just cancelled my MF account and am currently moving all my money over to RBC DI. The good news is there were no DSC from my MF company and RBC is going to cover the fees to move my Questrade account. RBC also gave me 125 free trades for the duration of 60 days after the transfer is complete. I will qualify for $9.99 trades, so I am very happy so far with the transfer process and should be fully ready in 2 - 4 weeks.

I have been reading the forums, books, blogs, and Moneysense as much as I can so I can be a more successful investor. I feel great that I have left all those high MER and trailer fees, but still have slight reservations about being a DYI only because I have been investing for 20+ years and have always had someone helping me. 

I have 12 years to retirement at age 58 with a municipal government DB pension that will pay 50% of my best 5 years that I contribute $14,000 per year. I have 3 accounts RSP with $***,000, TFS $**,000, and a non-registered $**,000. I usually max out my RSP and TFSA first then contribute to my non-registered accounts. I will be investing my money in the market with 25% ($50,000) of my portfolio every quarter starting in June and ending in March. 


I have decided to invest in ETFs. I really would like to have an account with dividend paying stocks, but don't feel confident yet with that. Here are my questions:

1. Since I have a DB pension that will be guaranteed do I have to invest in bonds?

2. I was thinking of a portfolio distributions 50% Canadian ETF (XUI), 30% US ETF (VTI), 10% International ETF (???), and 10% Bond ETF (XBB)/GIC. Does that look ok?

Thank you in advance.


----------



## My Own Advisor (Sep 24, 2012)

Congrats on going alone warrdogg!

Good of your to max out the RRSP and TFSA, then go non-registered. Seems smart to me...

Another smart call, ETFs.

I have a DB pension and I consider it a "big bond" for me. Others may or may not agree with me.
http://www.myownadvisor.ca/2012/12/...r-yourself-lucky-then-consider-it-a-big-bond/

That said, I still keep a bit of bonds (XBB) in my RRSP and probably always will.

As for the ETF allocations, XIU and VTI are solid, just make sure to keep VTI in your RRSP to avoid withholding taxes. VXUS, VEA, VWO are popular low-cost ETFs for the international flavour. 

Good luck with your investing journey!


----------



## warrdogg (Feb 8, 2013)

Thank you for the reply and info. FYI not to be a suck up but your blog is one of the reasons I made the switch to DIY. Thanks again. I hope to be more confident and knowledgeble to built a portfolio with dividend stocks in the future. I am reading about it on your blog now.


----------



## Potato (Apr 3, 2009)

I also consider DB pension to be a part of my fixed income allocation. Depending on your plan, risk tolerance, etc., you may still want to have some bonds beyond just your DB pension, so only you can answer the question of whether you have to invest in bonds -- but you likely don't have to invest as much as you would if you didn't have the pension.


----------



## My Own Advisor (Sep 24, 2012)

I hear ya Potato, re: holding some bonds.


----------



## warrdogg (Feb 8, 2013)

I think I will do a 80% / 20% with 20% in fixed income.


----------



## GoldStone (Mar 6, 2011)

warrdogg said:


> 2. I was thinking of a portfolio distributions 50% Canadian ETF (XUI), 30% US ETF (VTI), 10% International ETF (???), and 10% Bond ETF (XBB)/GIC. Does that look ok?


As I wrote in another thread: Canadian market is poorly diversified. Top 3 sectors (financials, energy and materials) represent 74% of XIU. Other Canadian ETFs (VCE, ZCN, XIC) are no better.

Think long and hard before you bet 50% of your portfolio on just 3 sectors.


----------



## doctrine (Sep 30, 2011)

You could split a portion of your Canadian allocation into real estate in the form of ZRE. That way, you are now more diversified into 4 sectors instead of 3. For example, 40% XIC, 10% ZRE


----------



## GoldStone (Mar 6, 2011)

doctrine said:


> You could split a portion of your Canadian allocation into real estate in the form of ZRE. That way, you are now more diversified into 4 sectors instead of 3. For example, 40% XIC, 10% ZRE


In the same vein, you could add ZLB ETF to your Canadian allocation. ZLB owns very few financial and resource stocks. It overweights defensive sectors that are missing in the broad Canadian ETFs.

A simpler option is to stick to XIU but reduce your Canadian allocation.

It all comes down to what you are comfortable with.


----------



## My Own Advisor (Sep 24, 2012)

Hey GoldStone,

What Canadian ETFs do you own? XIU, XIC or any others?


----------



## GoldStone (Mar 6, 2011)

My Own Advisor said:


> Hey GoldStone,
> 
> What Canadian ETFs do you own? XIU, XIC or any others?


None. 

I used to index my Canadian allocation for many years. First with XIU, later with VCE. I unbundled them last year. Unbundling is a viable option once you cross 100K mark:

http://www.ndir.com/SI/articles/0604.shtml

http://www.ndir.com/cgi-bin/ETFsVsStocks.cgi


----------



## warrdogg (Feb 8, 2013)

Thanks all for your advice and suggestions. I have learnt a ton since my first post here by reading forums and books. I am so glad that I dumped the high cost MF for ETFs. I am using Norbert's Gambit to save $$$$ on exchange fees on my USD. I did make a slight error my first attempt when I sold my RY to my Canadian RRSP account instead of my US RRSP account. Now it's like old hat for me.

I finally decided on a portfolio that I was comfortable with. I am not ready, time and knowledge, to start investing in dividend stocks, so my positions are all ETFs. 

XIU / ZLB - 25%
VTI - 25%
VXUS - 20%
ZRE - 10%
XBB - 20%

The one question I have is where do you think I should invest extra money in my Non-Registered Investment account? I deposit $500 a month in the account on top of maxing my RRSP / TFSA contributions. I don't want to increase my Canadian allocation % by more than 35%. 

Because I have a large pension deduction my RRSP amount is not as high as others.


----------



## KrissyFair (Jul 8, 2013)

Hi warddogg, just another thought: since you're fairly comfortable considering your pension to be part of your fixed income, and you still have 12 years... AND you're still contributing monthly, why not begin without that XBB and use yield from your other positions to buy that going forward? You'll still end up with a decent bond allocation, but you'll take advantage of your horizon now while you can.

And congrats on taking the leap to solo investing


----------



## warrdogg (Feb 8, 2013)

Thanks for the advice KF regarding bonds. For now it think it will leave my initial amount invested. I admit the fixed income portion of my portfolio is the one part I am unsure where to invest ie ETF, real bons, GIC etc so I am reading as much as I can. 

Can anyone offer me a suggestion on my question about my investment account? I want to put my extra savings in there per month but don't want to increase my Canadian content % too greatly in my portfolio. I want to stay as tax efficient as I can. Any ideas? Thanks.


----------

