# Lower risk investments?



## ShannonC (Nov 16, 2012)

So I'm starting to think about investing more for my future/retirement. I've been a bit back and forth between stocks/mutuals and real estate, but I think for now perhaps I'll put real estate on the back burner. 

I'd ideally like to find something that is fairly low risk (not no-risk though) and paying around 5-6% interest. Is something like this possible to find? I'd be looking to invest for 15-20 years without withdrawing it... at least that's the plan for now. 

I recently read the Millionaire Teacher and it seemed really good. He talks about index fund investing almost entirely. Is that a good approach to use? 

I really don't know a lot about the stock market and don't really want to spend a lot of time managing it. I can save well and regularly, so adding to it won't be a problem...it's just finding the right method to invest for me.


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## HaroldCrump (Jun 10, 2009)

5 - 6% interest (let's use the term yield for that) is very hard to get these days in low risk investments.
Outside of individual stock picking, which you have said doesn't suit you, the only place you can find that kind of yield is 10 yr.+ corporate bonds.
And you will have to go just below investment grade as well (BB+ or lower).
You will have to build a portfolio of individual bonds in order to diversify single company risk.

It is not going to be easy.

As for Hallam style passive index ETF investing - first of all, it is not low risk by any means.
Secondly, it will not yield 5 - 6%.
None of the major equity or bond indices are yielding 6% these days.

But for a moment, let's look at it from a different angle - how did you arrive at the number 5 - 6%?
On what kind of projection and assumptions is that based upon?

Given the constrains you have listed (i.e. low risk, passive investing style, not too much stock market experience), it is quite hard to get 6% consistently.


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## Snuff_the_Rooster (Oct 26, 2012)

if you find such vehicle please let me know I want some too.

Other than that in stock I see sin stocks in US Markets RAI, MO paying very good dividiends and no one can accuse you of buying tops. Yes as is obvious you have equity risk that I would not ignore myself but again less than yesterday.

Then you have canadian banks with similar arguments pro and con.

If I was forced to buy stock and fall asleep for a couple of years i guess I would default to lesser evil of above ideas.


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## james4beach (Nov 15, 2012)

ShannonC said:


> I'd ideally like to find something that is fairly low risk (not no-risk though) and paying around 5-6% interest. Is something like this possible to find?


To put it bluntly: no.

But it depends on what you mean by low risk, that's a personal thing. If you mean "low probability of coming out with a net loss", then no, I would say it's not possible. Remember that pension funds and insurance companies around the world are looking to find exactly this (6% returns with low risk of loss), and they haven't found it yet. If thousands of analysts worldwide can't find it, and crooked investment banks can't even find it, then I'm tempted to believe that it doesn't exist. If someone _does_ approach you and claim they have the no-risk, high-return answer, the first thing you should wonder is why they aren't making $ billions by selling the solution to banks and pension funds everywhere.

Fundamentally speaking: this is really a function of the low interest rate environment we're in, so you can thank your buddies at the Federal Reserve, ECB, Bank of Canada, etc. By inflating bond prices (and thus keeping bond yields low), they are redefining what the market looks at as the "risk-free rate". The 10 year government bond is commonly used as a risk-free rate. Back when that rate was 4% or 6%, you knew you could immediately earn 4% with zero effort at all -- and thus, slightly higher risk investments earned a premium, and earned you 6% or higher.

Those were normal conditions. Today, the Canada 10 year bond yields 1.7%. That's your risk free rate, thanks to the central banks. So even if you get a couple percent risk premium on top of it, the most you can realistically earn in a low risk investment is 4% tops


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## MoneyGal (Apr 24, 2009)

james4beach said:


> To put it bluntly: no.


Income annuities pay out at over 5-6%, guaranteed, depending on the age of the purchaser.


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## HaroldCrump (Jun 10, 2009)

MoneyGal said:


> Income annuities pay out at over 5-6%, guaranteed, depending on the age of the purchaser.


That did occur to me, but I assumed the poster is probably in his/her 40s (given the statement about 15 - 20 years until retirement).
Maybe it was a wrong assumption.
These days we have 70 yr. old folks not retired, and 25 yr. olds looking to retire in 5 years or less :rolleyes2:


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## MoneyGal (Apr 24, 2009)

I realize my comment did not apply to the original poster's situation. However, I figured, if we are speaking in absolutes, I'd add an exception. :02.47-tranquillity:


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## ShannonC (Nov 16, 2012)

Thanks for all the replies. 

No, actually not in my 40's....28, so fairly young. I was doing calculations though on just how long it would take me to accumulate $1 million and if I could get 5-6%, that seems like it would do it if I saved accordingly to plan. I was using this calculator though: http://www.bankrate.com/calculators/savings/simple-savings-calculator.aspx, which perhaps may be neglecting elements? 

I recall speaking with a friend a few months ago who's studying to become an investment adviser (he has been investing on his own for a while as well) and he said that 5% or so was fairly easy to obtain with lower risk...not no risk though. I didn't really dig too much into questioning him as at that point I was much more thinking I was going to look at real estate investing instead. 

But lately I started to think otherwise. I'll have to talk to him again and see what specifically he was referring to for that return... he could be very incorrect as well. I kind of think he is a bit of the overconfident type. 

The Millionaire Teacher kept mentioning TD's e-series. I was reading the couch potato site last night and came across this http://canadiancouchpotato.com/recommended-index-funds/ and if I go to their recommend funds and look at 10 year averages, it seems quite a few are above 5%. Perhaps I'm doing something wrong though... like I said, I'm quite new to this.  I need to learn before I invest so I don't make a disastrous mistake!


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## Soils4Peace (Mar 14, 2010)

You can decrease risk by distibuting your assets among several asset classes. Each asset class has different exposure to various types of risk. E-series is a good start if you have only a few $k, and you can allocate to Canadian bonds (TDB900) and equities in various regions (Canada, US, EAFE)(TDB900, TDB902, TDB911). When you get to $50k, you can switch over to ETFs, and add some other asset classes like inflation protected bonds, commodities, emerging markets, REITs. Some classes do well in inflation, others in deflation, some high interest rates, some low.


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## Young&Ambitious (Aug 11, 2010)

It's not "hard" to get an average 5% return over time, but you need to take on risk. You are young, it's good for you. It will allow you to have larger returns (generally speaking). Why don't you pick up a few books, there's an Eight with Weight suggested reading list that would be good for you.


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## Sherlock (Apr 18, 2010)

Maybe it depends on what you mean by "low" when you say low risk, but I consider stocks such as the big banks and telecoms to be low risk, and these stocks usually pay dividends in the range of 3-5% plus capital appreciation, so I would suggest that you can get 6% with low risk in the long term. The chance of you having less money than you started with after 20 years if you invest in RBC or Bell is exceedingly small.


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## GoldStone (Mar 6, 2011)

ShannonC said:


> I recall speaking with a friend a few months ago who's studying to become an investment adviser (he has been investing on his own for a while as well) and he said that 5% or so was fairly easy to obtain with lower risk...not no risk though. I didn't really dig too much into questioning him as at that point I was much more thinking I was going to look at real estate investing instead.
> 
> But lately I started to think otherwise. I'll have to talk to him again and see what specifically he was referring to for that return...


My guess is, your friend was referring to the total portfolio return. Not portfolio yield.

Yield = interest + dividends

Total return = interest + dividends + capital gains


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## ShannonC (Nov 16, 2012)

Great, I put a few of those books on hold at the library, so hopefully that will help me understand everything better. It's good to hear it's not extremely difficult to get that type of return. I can handle some risk; it's more the day to day tracking that I think worries me more. I think I would end up feeling quite overwhelmed and stressed out with the whole process, so if things started to decrease, I'd stress further. 

I really liked the idea of index funds he discussed in the book as it seemed like it required very little day to day upkeep tracking. 



Soils4Peace said:


> You can decrease risk by distibuting your assets among several asset classes. Each asset class has different exposure to various types of risk. E-series is a good start if you have only a few $k, and you can allocate to Canadian bonds (TDB900) and equities in various regions (Canada, US, EAFE)(TDB900, TDB902, TDB911). When you get to $50k, you can switch over to ETFs, and add some other asset classes like inflation protected bonds, commodities, emerging markets, REITs. Some classes do well in inflation, others in deflation, some high interest rates, some low.


Thanks for this as well. I'll definitely have to read more about these; I hadn't heard of inflation protected bonds before...that sounds really good.  Would it be a bad idea to invest larger amounts in just index funds?

I would have over 50k to invest... basically the situation is I had paid off my condo, but will be selling it shortly and moving in with my fiance. Then in a little while we'll buy a house together and each put around 50k down (that's the plan anyway). That'll leave me with around 200k though that I could potentially invest. I'm not sure if I'd invest it all, but I keep reading the earlier you get your money into investments, the faster and larger it'll grow. Plus, if I don't then it will likely just sit in a bank savings account not doing much at all.


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## Snuff_the_Rooster (Oct 26, 2012)

Why don't you skip roulette wheel with risk and lay down cash on house until 0 and get lowest cost living as possible? People ask me about investing and I know walking in they likely have usual debt + mortgage and i tell them risk adjusted their best return is most likely going to be paying down their home with after tax dollars and receiving many benefits on top of that because of it. Discussion lasts 5 min. tops and not at all what they thought I would say walking in.

I ask people to show me tax returns and I want to see the line with the tax-loss carry forwards as proof of their excellent 5% + easy returns haha. I have to be honest with you i have not even once with my own eyes, and I've seen a lot of accounts, seen someone that makes really good returns over any length of time. I've seen of course millions in accounts but they did not get that way with investing, it got deposited over time and just flounder around this year and that year over decades. I'm not at all negative on investing and I agree with above folks that you want to stick with ideas like my previous IE canadian banks, etc if you're going to use blindfold approach.

The DIY couch-tater people I see do best all own that type of stock and yet even they have ugly return on any adjusted basis I use. After home = 0 you have to decide but for now you would skip roulette wheel with pot of gold sticker where green is.
I admit I am far too practical minded for most people as i have fewer shades of gray. I got that way through viewing all the evidence I see vs theories, even if it was in opposition to what I too wanted to believe at the time haha. As you don't have enough to pay off house I see that as best risk free money you'll ever make. If you want to heloc later on better repayment terms etc etc then that is only slightly different story but I'm still negative on that for most due to tax-return proof as most don't lie to tax man.

I will say you come to market at relatively good time. When I see people coming to chat stock and put money in it is almost always at tops haha. We talk to same people months before and no way do they want to touch same stock they want to buy now but is now 20% higher. That's what you're up against when you herd invest with blindfolds.

I have one question, If money so easily made for so many then why is it i cannot find these people when report is printed? haha. Just an observation I have made.


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## the-royal-mail (Dec 11, 2009)

*don't rush into this*



ShannonC said:


> ...but I keep reading the earlier you get your money into investments, the faster and larger it'll grow. Plus, if I don't then it will likely just sit in a bank savings account not doing much at all.


ShannonC, please don't take this as a personal attack, but there were a number of red flags in your last post and I am highlighting the most obvious ones.

Please be wary of the advice you receive in Internet forums. There are a lot of people out there with vested interests who thrive on newbies such as yourself.

Please be very careful about what you read. The investment industry is huge and makes a lot of money off newbies who don't really know what they're doing, which I would suggest is most people these days. Passive means to "invest" exist and for most people this means a phone call from their bank in the FEB RRSP season, where they will be sold on "portfolios" of mutual funds. You can operate these by the passive means you seem to want but my experience doing this for the past 13 years has been abysmal. Most of the "returns" have been gobbled up in fees and bad fund/stock market performance. Like you, I "invest" by passive means and my TFSA for instance is still down about $900 in the past 2 yrs. Yes, with the index funds you are interested in.

By contrast, I have a high interest savings account (HISA) and it GUARANTEES me about 1.2% per year. That fund is so far doing very well and the interest payments represent solid, predictable, no-risk growth of about 1.3% on average. No fees, no worrying, no monitoring. So please put the thing out of your mind that money "sitting in a savings account is doing nothing". That is pure BS. Those who say that mean your money in a savings account is doing nothing...for *them*!

Don't be in a hurry to invest. Since you don't know anything about it yet, you're not missing anything at this point. There is also no free lunch. If you want the better growth numbers you read about you will need to be active and monitoring your investments. If you really don't want to do this then I would suggest that a HISA/TFSA is an excellent choice for you.


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## underemployedactor (Oct 22, 2011)

^Just a small quibble with the above: HISA rates are by no means guaranteed and are subject to change by the banks at any time.
To the OP - If investing in the big boards freaks you out you can do worse than just laddering GICs.


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## londoncalling (Sep 17, 2011)

Snuff_the_Rooster said:


> Why don't you skip roulette wheel with risk and lay down cash on house until 0 and get lowest cost living as possible? People ask me about investing and I know walking in they likely have usual debt + mortgage and i tell them risk adjusted their best return is most likely going to be paying down their home with after tax dollars and receiving many benefits on top of that because of it. Discussion lasts 5 min. tops and not at all what they thought I would say walking in...


+ 1

The rate of return on a mortgage repayment is the saved interest costs. Buying a house is similarto purchasing any other equity - the purchase price, commissions and frequency of trades (number of moves) can all eat away at total return. I am not necessarily endorsing buy and hold of either investment vehicle but to trade either of these takes time, knowledge, skill discipline and effort. 

Sorry to sidetrack the original post.

I would agree with Snuff paying off (or down) a mortgage is the lowest risk return you can get over 20 years. Even increasing the mortgage payments by $50 will save thousands of dollars and reduce amortization length. While you are reading up on investing, play around with some mortgage calculators. Try and find out how much that extra $200k on the mortgage will save you in interest over the next 15 -20 years. 

Welcome to the forum. 



Cheers!


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## MoneyGal (Apr 24, 2009)

londoncalling said:


> + 1
> 
> The rate of return on a mortgage repayment is the saved interest costs. Buying a house is similar purchasing an equity, the purchase price, commissions and frequency of trades (number of moves) can all eat away at total return. I am not necessarily endorsing buy and hold of either investment vehicle but to trade either of these takes time, knowledge, skill discipline and effort.


The rate of return on a mortgage repayment is the saved AFTER TAX interest costs on a RISK FREE basis. Depending on the OP's marginal tax rate and mortgage interest rate, this can be in excess of 5% even in today's low-rate environment. And it's a risk-free return - i.e. no investment risk is assumed in order to achieve this rate of return. 

Insert generic proviso about the folly of buying real estate with a person to whom you are not legally married, need for a pre-nup, etc. here.


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## Belguy (May 24, 2010)

I wish that I had a dollar for every time that I read that buying real estate to live in was the best investment decision that they ever made.

If, on the other hand, I had a dollar for everyone who replied that investing in the stock market was their best decision, I might have enough to buy a Timmies.

Also, anytime that someone tells you that you will be virtually guaranteed a certain return for a given investment portfolio, remember to ask for that in writing!!


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## Square Root (Jan 30, 2010)

Sherlock said:


> Maybe it depends on what you mean by "low" when you say low risk, but I consider stocks such as the big banks and telecoms to be low risk, and these stocks usually pay dividends in the range of 3-5% plus capital appreciation, so I would suggest that you can get 6% with low risk in the long term. The chance of you having less money than you started with after 20 years if you invest in RBC or Bell is exceedingly small.


Agree. Over a 20-30 year time frame, I would bet on the banks amd telcos for sure. Drip as you go and other than tax if held in non reg account, this would be very low risk and probably very successful Basically what I did.


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## GoldStone (Mar 6, 2011)

Snuff_the_Rooster said:


> Why don't you skip roulette wheel with risk and lay down cash on house until 0 and get lowest cost living as possible? People ask me about investing and I know walking in they likely have usual debt + mortgage and i tell them risk adjusted their best return is most likely going to be paying down their home with after tax dollars and receiving many benefits on top of that because of it.


+2. I voted with both hands :encouragement:

Paying down the mortgage as soon as you can is your best bet. Play around with the mortgage calculators to see how much interest you save by following an accelerated schedule of payments.


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## Snuff_the_Rooster (Oct 26, 2012)

thank you London + Goldstone. Good to see simple logic being used with no fanfare and weighing pros+cons on decision to eat hand grenades. I leave that for guys versed in TI-84 use. :smilet-digitalpoint



On R/Estate as investment I don't see argument either way as you either plow rent or mortgage as a necessity of life, unless you live under bridge rent free. I happen to own and long ago mort=0 for whatever reason but I do suggest to some I see argument for renting so I have no glaring bias either way. i chose not to discuss rent vs own to get on with topic at hand. the only guy I know who thinks he's making money on his house is my neighbour but he pout when I show spreadsheet of him vs rent + risk free rate on difference. It so close we need high-speed camera @ finish line. Not to mention house is not liquid today if required, hard to hedge market, costly to buy/sell and on and on. Considerations for some.

Truth be told and also way off topic, I consider my home as almost liability = money tied up doing nothing so i heloc with rates low basically being forced into risk assets to earn return. When rates get to reasonable level again if in my lifetime, I will shutter operation and go get a tan while I sit in Gov Bonds 2 end of life = risking capital for more chips no longer required.


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## Jungle (Feb 17, 2010)

In your field, what would be the average rate of return on investments (if they are even measured) and what are these people doing?


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## Jungle (Feb 17, 2010)

The recent Dalbar study shows that investors earned an annualized 3.49% over the last 20 years, while s&p500 earned 7.81%. 
On Canadian Couch Potato website, they data on the "Global Couch Potato" portfolio, and it retuned an unflattering 5.20% annualized over 15 years.


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## Snuff_the_Rooster (Oct 26, 2012)

Ah shoot and here I thought I read 6.5% for long term couch so I really help padding their numbers.


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## HaroldCrump (Jun 10, 2009)

ShannonC said:


> I recall speaking with a friend a few months ago who's studying to become an investment adviser and he said that 5% or so was fairly easy to obtain with lower risk


Of course he would say that, now, wouldn't he? ;o)
Ever tried asking a barber if you need a haircut?
Or a mechanic if you need an oil change?

5% annual is indeed possible, but I wouldn't call any of those strategies lower risk, esp. for an investing newcomer such as yourself (by low_er_ I am assuming less risk than broad equity markets, such as the S&P 500).
Also, each additional % point that you need in return (say, going from 5% to 6%, and going from 6% to 7%) makes it progressively more riskier - it is not a straight line risk/reward ratio).

Hallam's strategy of low fee index funds is fine - nothing wrong with it.
But it is a different risk profile than what you are seeking.

Keep in mind that with broad based global indices (equity and bond) there is no question of being low_er_ risk because _that_ is the risk.
That represents the total market benchmark for risk.


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## Jungle (Feb 17, 2010)

Snuff_the_Rooster said:


> Ah shoot and here I thought I read 6.5% for long term couch so I really help padding their numbers.


Here is the results, they went back 15 years and complied data:


http://canadiancouchpotato.com/wp-content/uploads/2012/08/CCP_Model_Portfolio_Performance.pdf

What disappoints me is that over 15 years, a "passive strategy" that is suppsed to beat day traders, expert mutual fund managers and stock pickers only returned 5.2% percent per year. 

I'm not sure if I'll even get that annulized over the last two years, come Dec 31. 
We were up over 8% this year, but it dropped down over the last couple weeks. Investing is not easy.


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## GoldStone (Mar 6, 2011)

Jungle said:


> What disappoints me is that over 15 years, a "passive strategy" that is suppsed to beat day traders, expert mutual fund managers and stock pickers only returned 5.2% percent per year.


The last 15 years included two big market crashes, resulting in a "lost decade for equities".

Looking at the Globefund database, Canadian balanced fund category:

- only 39 funds have a 15 year record
- only 10 funds did better than 5.2%
- only 6 funds did better than 6%

Would you be able to identify the winners in advance?

What happened to a few hundred balanced funds that existed 15 years ago?

(the last question is rethorical... we all know what happens to the dog funds... they get killed)


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## Snuff_the_Rooster (Oct 26, 2012)

hahha another excellent post by Gold. 

He shows exactly what survivorship bias does to all fund studies and all back-tested nonsense by Rob Carricks of world as I point out last week, so you looking at best of best and look at how bad it is. There is no way anyone can tell which dog wins race I just know before bunny released that all dogs are dogs and that is enough to tell the tale.

I think it's awful funny how entire financial industry can toss up hands so easy on half generation of retiring/retired folks that got burned by so called lost decade (kind of an Ooops sorry or worse yet - excuses for failure?) since for 30-40 years before hand they tout B&H and show you pot of gold at retirement hot off Xerox that their plan is good. Good for who was question of day that was not asked. With my own eyes I see no evidence that any of this is true and you would think given enough looking I would find a small handful at least of retired joe-blue-collars who did not plow $2M of their own money but has anything close to what's in prepared folder from guy in suit.


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## GoldStone (Mar 6, 2011)

My point was, 5.2% over 15 years sounds low, but when you look at what professional fund managers were able to do, 5.2% wasn't a bad result.


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## Snuff_the_Rooster (Oct 26, 2012)

I agree. They need their cut for adding nothing of value. And Ethan ask why I make no distinction from professional fund manager to farmer when asked about who is 'qualified' haha. Answer is right there in stats.


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## Jungle (Feb 17, 2010)

As of today, "global couch potato" has returned 3.81%. This factors in distributions. 

40% bonds
CDN, US and INT split evenly three ways. (20% each)

Investors must be patient, I guess 15 years is not long enough to see returns over 5% with a strategy that is best suited to beat all the rest.


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## Belguy (May 24, 2010)

I can't believe how many times, when asked the question of which was the smartest investment decision that you ever made in your life, do I hear the respondents answer with "setting up my Couch Potato portfolio"!!! :stupid::stupid::stupid:

There must be something to it!!:encouragement:


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## jcgd (Oct 30, 2011)

Belguy said:


> I can't believe how many times, when asked the question of which was the smartest investment decision that you ever made in your life, do I hear the respondents answer with "setting up my Couch Potato portfolio"!!! :stupid::stupid::stupid:
> 
> There must be something to it!!:encouragement:


So either they have been following this strategy for the last 40 years and have proof it's the best strategy, or their answers carry as much weight as me saying that green is the best ever colour.

The only thing we can reasonably assume is that a couch potato strategy will be as close to average as we can possibly get. I see nothing wrong with that. It is what it is. If you fast forward ahead 20 years and see that you only made 2.3% per year then the global market, when weighted the same way you weight it in your portfolio, should have gained a smidge over 2.3% a year. 

The issue isn't getting the same return as the market. The issue is the return you assume the market will give you and your projected savings based on it. Saying it's the best investment decision you've ever made is BS. You won't know until it is over. All you can reasonably say is that you are perfectly content making the average return of the indexes you've tried to mirror in whatever allocations you've chosen. Anything else is meaningless.

You being content with your couch potato strategy is the same as my being content with my window coverings. You expect your couch potato to copy the market, I expect my coverings to block sunlight. If you expect your portfolio to outperform, I should expect my window coverings to act as hurricane shutters...


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## ShannonC (Nov 16, 2012)

Thanks again for all the replies. 



the-royal-mail said:


> ShannonC, please don't take this as a personal attack, but there were a number of red flags in your last post and I am highlighting the most obvious ones.


No, no offence taken. I appreciate all the advice. I do have a lot to learn... and won't jump into anything without gaining a better understanding. The thing with your savings account though for example, at just 1.3%, isn't that not even overcoming inflation? 

Paying down the mortgage is definitely a good idea and that was my strategy for this condo I lived in... I saved, saved, saved and everything went into paying it off. But with him... I guess I've always though in marriage, all housing costs should be 50/50 and then we'd each have our own separate spending costs. I watched my parents fight so often because of money growing up, I really feel this is the set-up I'd want for my marriage. We both kind of said we'd put down 50k each for the down payment, so if I put down all 250... it's quite a bit higher. 

Plus, I work for myself (my own business), so I have pretty much no type of structured company retirement plan...so right now all my money is in savings/condo. I sort of feel like I should be getting started on that. 

Plus, as MoneyGal said, if something should happen and we split...that wouldn't be good. I wouldn't get into a mortgage though unless we were married; I've already told him that. 



HaroldCrump said:


> Of course he would say that, now, wouldn't he? ;o)
> Ever tried asking a barber if you need a haircut?
> Or a mechanic if you need an oil change?


Good point...  He's definitely a bit over confident and I'm not quite sure I'd take everything he said as truth. Kind of why I wanted to ask on here and get other's opinions. 

It's just a bit frustrating I guess realizing how hard it is to get a decent return right now. It's hard to see how people manage to get ahead.


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## donald (Apr 18, 2011)

Why don't you re-invest in your ultimate wealth builder(your business,that you run)You control every aspect of it
-maybe hire more employees
-re-invest in equipment
-allocate more funds to marketing ect
-buy bulk/merchadise in advance for purchasing power ect
-give bonuses and incentives to your employees(they will pay you 10x the amt any canadian bank stock will,ie: that 4% yield)
I'm a business owner also and i am in the market(but i am going to pare back alittle)
If you have a viable,successful/well running business that is profitable re-invest in it instead-just a thought.....Have some money in the market but why not bet on you instead?Thats what will give you a return


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## ShannonC (Nov 16, 2012)

Thanks for the reply and suggestion. That is a great idea... the only thing is my business is a bit non-traditional (I'm a freelance writer and work for myself), so I can't really hire more people or merchandise. I could allocate a little more to marketing, but the best marketing for my type of work wouldn't come from increased monetary expenditure.


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## the-royal-mail (Dec 11, 2009)

OP, in the examples I gave about my own investments, I am either ahead by 1.3% (cash account) or behind by about 4% (invested account). Some people like to sidetrack the discussion by talking about inflation, which steers the conversation back to their own investing agenda. Inflation, death and taxes are certainties. Returns are not and when I look at my numbers I hope you will agree the 1.3% is a far better deal for us. It is not a far better deal for those who think "investing" is some miracle pill, because they aren't getting fees out of us when we keep our savings in high interest cash accounts.

Yes yes, here come the quote monsters. I'm quaking in my boots.


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## Four Pillars (Apr 5, 2009)

Shannon, I would suggest you read some more books and learn more about investing. Forums like this one are good to find out ideas and different directions, but the problem is that there is a huge divergence of investing styles and opinions in here.

In the end you will get a lot of conflicting advice - not because some people are necessarily wrong, but because they are talking about their style of investing and their situation.

Some particular basic topics I would look at are - asset allocation, investment time horizon, investment risk, understand what real returns are (after inflation).

In my opinion, getting some understanding of those topics is more important than the style of investing you end up choosing.


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## Sampson (Apr 3, 2009)

the-royal-mail said:


> OP, in the examples I gave about my own investments, I am either ahead by 1.3% (cash account) or behind by about 4% (invested account).


You always push your own agenda so others should do the same. One anecdote of your investing experience doesn't mean squat.

Shall we compare? My wife's invested moneys have average nearly 16% over about 4 years - this means about doubling the money. Her 'cash' investments have risen less than 10% total over the same period. What next?

I don't prescribe our method to anyone, but surely you understand that your scenario is not the default nor the only option. Keep spouting your rhetoric about your optimal strategy as if it is the only one. Perhaps you can focus on providing advice on your strengths including your savings tiers and other good advice and try to limit your commenting on areas where you have little experience?


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## MoneyGal (Apr 24, 2009)

the-royal-mail said:


> OP, in the examples I gave about my own investments, I am either ahead by 1.3% (cash account) or behind by about 4% (invested account). Some people like to sidetrack the discussion by talking about inflation, which steers the conversation back to their own investing agenda. Inflation, death and taxes are certainties. Returns are not and when I look at my numbers I hope you will agree the 1.3% is a far better deal for us. It is not a far better deal for those who think "investing" is some miracle pill, because they aren't getting fees out of us when we keep our savings in high interest cash accounts.
> 
> Yes yes, here come the quote monsters. I'm quaking in my boots.


TRM, this very narrow view is a little disconcerting to me. There are multiple "right" paths to financial self-sufficiency and what the "right" path for one investor might be can vary dramatically from the "right" path for a different investor. 

For example, you have been talking lately about "taxes" as a monolithic, unchanging entity for all investors and suggesting that (for example) someone take a lump sum from a pension plan instead of rolling it into an RRSP because "there's going to be taxes payable and you might as well get them over with as soon as possible." The rational investor will seek to (legally) minimize taxes payable, as opposed to saying (in essence) "what's the highest rate payable immediately; I'll just go for that option" - which is what you have been suggesting. In this particular response, you are saying that "inflation and taxes" are certainties (no disagreement from me on the "death" part) so the OP shouldn't bother to consider how these factors might affect their financial present or future, and how they can rationally maximize their future income while protecting themselves from risk. 

Investing is interesting. People have different views, different goals, different agendas, different circumstances and varying levels of tolerance and aversion to the varying risks to which they may be exposed over time. Your positional outbursts, on the other hand, are getting more frequent. Are you OK?


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## Square Root (Jan 30, 2010)

@jcdg post 34 was excellent. Very perceptive and articulate.


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## ShannonC (Nov 16, 2012)

Four Pillars said:


> Shannon, I would suggest you read some more books and learn more about investing. Forums like this one are good to find out ideas and different directions, but the problem is that there is a huge divergence of investing styles and opinions in here.


Thanks. Yah, I think I definitely do need to. I guess I just wanted to see if 5-6% was even realistic to think about before getting too excited over here at what's possible. I need to consider all avenues for sure. And you're absolutely right - I notice even with different people I talk to in real life, lots are very subdivided between stocks/bonds and real estate. It seems many are almost 100% pro one way, and completely against the other, so their views entirely reflect their preference. 

I would prefer to do real estate as I'm far more interested in it than stocks/bonds, but to me it seems like it could be a lot of potential headaches and hassle.


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