# Help me fine-tune my plan



## Rysto (Nov 22, 2010)

Hi, I'm Rysto. I'm a 25-year-old software programmer from Ontario. Several months ago I got into index investing, and now I'm ready to start making the transition from mutual funds to ETFs, so I figure that this is a good time to review my plan. My asset allocation is quite aggressive: 30% US Equity, 30% Intl. Equity, 20% Canadian Equity and 20% Canadian Bonds(this may sound slightly familiar to a certain Capitalist). Currently my assets look like this(I have no debt):

*Cash*
$5153 -- TD Chequing
$11119 -- ING Direct Savings

*RRSP*
$37784 -- TD Balanced Growth Fund
$1635 -- Cash

*TFSA*
$2251 -- TD Canadian Index (TDB900)
$3311 -- TD US Index (unhedged) (TDB902)
$2031 -- TD Canadian Bond Index (TDB909)
$3474 -- TD Intl. Index (unhedged) (TDB911)

*Non-Registered*
$1769 -- TD Canadian Index (TDB900)
$2626 -- TD US Index (unhedged) (TDB902)
$1632 -- TD Canadian Bond Index (TDB9009)
$2534 -- TD Intl. Index (unhedged) (TDB911)
$500 -- Cash


My plan is to get into ETFs in the new year, which is why I have spare cash kicking around in a couple of accounts -- I don't want to get hit with an early redemption fee. In January I get an extra $13K in RRSP contribution room; my plan is to sell everything in the non-registered account and withdraw enough from the TFSA(in 2009, of course) to make the full contribution right away. In the RRSP I'm going to buy VTI, VEA and ZAG to hit my allocations, with the remainder of the money going into TDB900. In the TFSA the remainder of my money will go into TDB900. 

The reasoning for this rather complicated dance is that I see no reason to hold investments in a non-registered account while I have contribution room in my registered accounts.

Throughout 2010 I'll make the contributions that used to go to the RRSP to my non-registered account along with my normal monthly contribution. While I have contribution room I'll transfer the money directly to the TFSA, and after that accumulate the money in the non-registered account. Again, the goal is to use up my TFSA contribution room as quickly as possible. I plan on making monthly buys of the TD eSeries funds for the the first nine months of the year, and then in 2011 I'll do the whole TFSA -> Non-Registered -> RRSP dance again(I buy the eSeries for only 9 months because of the 90-day minimum holding period for eSeries funds, and I plan on converting those units to ETFs again in January). I think that buying the eSeries funds during the year avoids the biggest problem with ETFs, which is that you're only buying once a year. This way my contributions should be much less vulnerable to bad market timing.

So, after the initial conversion in January I should look something like this:

*RRSP*
$17867 -- VTI
$17867 -- VEA
$4935 -- TDB900
$11911 -- ZAG

*TFSA*
$6976 -- TDB900

*Non-Registered*
(nothing)


Right now I'm still trying to decide which bond fund I want. My concern with ZAG is the fact that it holds some longer-duration bonds. Part of me is leaning towards exclusively buying short-term bonds. What are people's opinions? 


Finally, separate from all of that, my employer offers a stock purchase plan. It's a pretty sweet deal: my employer matches 50% of my contributions. What's been holding me back from opting in is the fact that I must stay with the company and hold my shares for a full 2 years before I get the 50% from the company(the shares are held in escrow for the 2 years). My employer's just a small cap company that's still struggling to make it to consistent profitability, so I've preferred to get the rest of my investments in order before making a pretty speculative investment that's going to be highly correlated with my income. However I'm up for a raise this week and I'm considering putting the raise towards the stock plan. I figure that it's money I don't have right now so if I were to lose it I know that I would survive without it. Given the huge employer match, am I a fool not to take this deal? I keep going back and forth on this.

So, uh, congratulations to anyone who made it through the whole post. I didn't expect this to be so long. Any comments on anything would be welcome. I'm still pretty new to investing, so I know that there are a lot of things that I could be missing.


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## larry81 (Nov 22, 2010)

For bunds... look up (in this order): PHN110, XSB, XBB

PHN110 is a well known fund with incredible track record (date back to 70s).


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## Four Pillars (Apr 5, 2009)

Just a suggestion:

You have about $50k in the rrsp - ETFs are a good choice, but the cost savings over TD e-funds are minimal.

One drawback to ETFs is that you have to manually do the purchases. If this is a problem, then you might consider just moving the money to TD e-funds and do your investing there. Once you have more $$ - perhaps $100k then maybe get into ETFs?

Alternatively - set up the $50k with ETFs and then start a TD efund account for the new contributions.


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