# Looking for input for a "Set-it & Forget-It" portfoliol.



## jargey3000 (Jan 25, 2011)

OK, I've finally come to the conclusion that what I need is a simple, low-cost, conservative, bare-bones, no-brainer, low-maintenance, diversified portfolio of no more than a few holdings. What are thoughts, comments on the following possible options:
1. One & only ETF - perhaps XGR, or XCR
2. Maybe two funds - perhaps VT (US) and VAB
3. Ok, 3 ETFs - and that's it!: 50% CAB, 25% each in XIC and VT (or 25% each in CDZ and DGRO dividend funds)
4. Is there another "better" model?
Help me do this. What'll I do?


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## bumblebee (Jan 15, 2015)

http://canadiancouchpotato.com/model-portfolios-2/


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## james4beach (Nov 15, 2012)

jargey3000 said:


> OK, I've finally come to the conclusion that what I need is a simple, low-cost, conservative, bare-bones, no-brainer, low-maintenance, diversified portfolio of no more than a few holdings. What are thoughts, comments on the following possible options:


You may also want to strongly consider the following mutual funds which have excellent performance, even after considering their MERs. I frequently ask myself why I don't simply invest in one of these. In all honesty, many of us around here can't do better than these.

RBC Monthly Income with 6.76% annual return in 15 years
Mawer Balanced Fund with 7.77% annual return in 15 years
TD Monthly Income with 8.05% annual return in 15 years

RBC Monthly Income is a balanced fund, less international exposure. It fell 11% in 2008, very good.
Mawer Balanced has more US/international exposure. It fell 16% in 2008, also very good.
TD Monthly Income has less international exposure. It fell 23% in 2008, steeper drop.

These are all great funds. ("Monthly Income" doesn't really mean anything -- just DRIP it). From those performances above, and the 2008 losses, you can see some tradeoff between risk and reward. Mawer Balanced has enjoyed outperformance due to its US exposure in recent years, by the way. TD is the riskiest and is highly concentrated in financials.


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## james4beach (Nov 15, 2012)

In fact, jargey, you asked about one of these some time ago
http://canadianmoneyforum.com/showthread.php/59137-RBC-Monthly-Income-Fund

I originally assumed one of these mutual funds could not have possibly done as well as a ETF mix, until I looked at the numbers. I've changed my mind since then. These mutual funds are very good options.


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## Nerd Investor (Nov 3, 2015)

I know I've personally considered (for part of my portfolio anyway) a one fund solution. 
In my case, I wanted something I could make regular small contributions to on payday, and also be a bit of a diversify-er from the more active strategies I employ. 

BlackRock has some D-series funds that I've been looking at and might fit the bill for you. They haven't been around that long to look at a track record, but they are fully transparent: they simply hold various ishares ETFs.


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## jargey3000 (Jan 25, 2011)

thanks for good input folks.
(note to james4: good research... yes, i have asked in past....Procrastination is my middle name!)


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## james4beach (Nov 15, 2012)

When push comes to shove I'd always prefer a fund that has existed for a while and has a track record.

Even for ETFs that track an index, I don't like the idea of investing in something with less than a few hundred million in assets. Above $500 million in assets usually makes me feel comfortable.


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## My Own Advisor (Sep 24, 2012)

3 funds:
XIC or XIU
VTI
VXUS

Add a few thousand to each fund every year. In addition, add new money to the laggard every year (re-balancing) and be done. Wake up 30 years wealthy.


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## none (Jan 15, 2013)

My Own Advisor said:


> 3 funds:
> XIC or XIU
> VTI
> VXUS
> ...


I wish my portfolio was like this. Instead I have about 10 hodgepodge of US ETFS, CAN ETFS and e-series. Works fine and is quite optimized it's just messy. A 3 fund solution is pretty sweet.


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## My Own Advisor (Sep 24, 2012)

Well, I have a few dozen stocks so I've complicated my life but in terms of set-and-forget those are my favourites


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## Beaver101 (Nov 14, 2011)

My Own Advisor said:


> 3 funds:
> XIC or XIU
> VTI
> VXUS
> ...


 ... for sure? I don't think jargey3000 can wait 30 years to see the rich result.


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## jargey3000 (Jan 25, 2011)

I'll be the wealthiest 93-year old in the home!!! 
No, i get the point.... I'm asking for input on a general basis...so MOA's comments are well-taken...


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## My Own Advisor (Sep 24, 2012)

Just increase your savings rate Jargey. Then you only have to wait 20 years.


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## jargey3000 (Jan 25, 2011)

:cool2:


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## OhGreatGuru (May 24, 2009)

For a complete no-brainer, one of the Tangerine Investment Funds. Formerly called "Streetwise" funds, these are portfolios of index funds. Pick the one that suits your asset allocation, and you don't have anything else to do. They rebalance periodically to maintain the target asset allocation. MER's are a trifle high (1.07%) to pay for the convenience.These are pre-packaged variations of the Couch Potato Portfolio.

If you are content to do your own re-balancing annually, TD e-funds at MER 0.33% are about the lowest MER Index mutual funds. https://www.td.com/ca/products-serv...es/mutual-funds/index-investing.jsp#undefined You will need 3-4 funds depending on your investor profile.

I agree with James4Beach's suggestions of RBC & TD Monthly Income Funds if you want a simple, reliable, income-balanced mutual fund.


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## james4beach (Nov 15, 2012)

And remember that the name "income fund" doesn't mean anything. Just DRIP the distributions and you get the total return; they're plain stock & bond funds. Everyone gets caught up on that income label.


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## leeder (Jan 28, 2012)

I agree with what others have stated about the mentioned mutual funds. I'd like to also propose XWD if you plan to make large lumpsum contributions, especially if you get charged for trading commissions for purchasing ETFs.


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## jargey3000 (Jan 25, 2011)

thanks all.some interesting comments here....


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## james4beach (Nov 15, 2012)

I definitely think that either a couch potato portfolio, or one of those mutual funds is a great way to go. I don't mean to diminish the ETFs either, the couch potato portfolios work well.


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## Pluto (Sep 12, 2013)

Jargey it isn't clear to me why you are unhappy with what you already have. If I recall right you have a bunch of dividend stocks that you have held since the late 1990's and have served you well. If it isn't broke, why fix it?


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## My Own Advisor (Sep 24, 2012)

Pluto said:


> Jargey it isn't clear to me why you are unhappy with what you already have. If I recall right you have a bunch of dividend stocks that you have held since the late 1990's and have served you well. If it isn't broke, why fix it?


+1


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## smihaila (Apr 6, 2009)

My Own Advisor said:


> Wake up 30 years wealthy.


Looks like everything is 100% guaranteed, this stock market is so simple and deterministic... ha 
What if exactly at the time when the OP want to cash out an "financial crisis" (induced artificially by the greedy market "participants" who just wish to enter the market for cheap/bargain) and the OP would be happy that s/he can get only the principal back (if not worse).

Can someone suggest "exit strategies" that make sense / down-to-earth (I'm sick of theories)?


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## james4beach (Nov 15, 2012)

Personally I'd be more concerned about a long lasting bear or sideways market. This kind of thing has happened repeatedly through history, sometimes 10-20 year stretches with no stock gains (yes even in the USA).

That hasn't happened for a very long time, so everyone has forgotten about that possibility.

What do you do? Diversify asset exposures and don't just invest 100% in stocks. For example, while US stocks were flat* for 1969-1979 (10 years), a bond portfolio still returned 7.5% to 8.0% annually.

_* flat in nominal terms but the stock market had a 3.5% dividend yield. Combine with bonds at 8% yield, maybe as 50/50 portfolio, and you still ended up with 6% annual returns during this rough period_


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## OnlyMyOpinion (Sep 1, 2013)

smihaila said:


> Can someone suggest "exit strategies" that make sense / down-to-earth (I'm sick of theories)?


Do some reading on two common methods:
1. A cash wedge - sufficient cash (or maturing GIC ladder, etc) to tide you over for 3 or 5 years when you first begin to draw down your savings as 'retirement' income. So a down market doesn't decimate you
2. Safe withdrawl rate (swr) - lots of permutations here but the gist of it is that you are not 'exiting' all a once. You continue to hold and draw down your savings. How much you can safely draw down and not run out of money is your swr. Commonly talked about as ~4% or a bit less, of your total savings (to last ~30 years)


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## OnlyMyOpinion (Sep 1, 2013)

James, just wanted to add that we know historical bond returns and your 50/50 example may not be representative of what we can expect in the future. Predictions closer to a 3% real return for a 50/50 portfolio are not uncommon these days (e.g. http://news.morningstar.com/articlenet/article.aspx?id=736175 ).
All we know for certain is that our predictions will be wrong  Which makes your points about diversification and dividends important.


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## Spudd (Oct 11, 2011)

smihaila said:


> Can someone suggest "exit strategies" that make sense / down-to-earth (I'm sick of theories)?


Normally you would hold a balanced portfolio of stocks and bonds. Then when you need to withdraw, you look at which asset class (stocks or bonds) is higher, e.g. if you want to have 60/40 stocks/bonds, and you're actually at 54/66 because the stock market crashed, then you would withdraw from bonds. This prevents having to sell things that are down (to some extent, at least).


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## james4beach (Nov 15, 2012)

OnlyMyOpinion said:


> James, just wanted to add that we know historical bond returns and your 50/50 example may not be representative of what we can expect in the future. Predictions closer to a 3% real return for a 50/50 portfolio are not uncommon these days (e.g. http://news.morningstar.com/articlenet/article.aspx?id=736175 ).
> All we know for certain is that our predictions will be wrong  Which makes your points about diversification and dividends important.


I agree with those predictions of much lower returns going forward. The 50/50 portfolio has done spectacularly well since the 1980s, but we've been in a simultaneous bull market for both stocks and bonds.

I don't expect that to continue indefinitely. This has been a "secular bull market" lasting about 34 years, but these things don't last forever. In your diversification, consider not only stocks and bonds, but also cash, real estate, and gold.


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## sridharcw (Jun 12, 2016)

Considering simplicity and tax efficiency I would like a combination like this
1) TSX Index companies (entire Canada) - XEI or ZDV
2) REIT - XRE or XRE - ofcourse it overlaps with above but still makes sense as its a proxy for real estate or fixed income with a combo of dividends and some capital appreciation
3) MICs - Mortgage Investment Corporations - this is slightly higher yielding than debt funds/bonds so works well in registered accounts.
4) Royalty Trusts
5) International ETFs (once you maxed out TFSA, RRSP, etc and have explored above 4 options)

This would be a mix of couch potato and some income investing to generate dividend flows to ride the volatility and have funds for reinvestment when opportunity strikes. 



jargey3000 said:


> OK, I've finally come to the conclusion that what I need is a simple, low-cost, conservative, bare-bones, no-brainer, low-maintenance, diversified portfolio of no more than a few holdings. What are thoughts, comments on the following possible options:
> 1. One & only ETF - perhaps XGR, or XCR
> 2. Maybe two funds - perhaps VT (US) and VAB
> 3. Ok, 3 ETFs - and that's it!: 50% CAB, 25% each in XIC and VT (or 25% each in CDZ and DGRO dividend funds)
> ...


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## TomB19 (Sep 24, 2015)

I'm not sure I get the idea of a person wanting to manage their own portfolio but not wanting to manage it. It's not that difficult and it's a key to an individual's future so why not take an interest in it and do the best job possible?

Doing a good job of retirement saving and investing will knock years off a person's required career. Think about that. If you could work for 28 years, instead of 30, you could have 2 more years of retired lifestyle, before you die. Let's say you start work at 25 years of age, you work 30 years, and you retire at 55. You might live to be 75 but you aren't going to have a great quality of life until 75. You will have arthritis, and various other health imparements. Let's say you're reasonably healthy until 65, such that you can travel, do things, etc. You're unlikely to be climbing the Machu Picchu at 65 but the odd person is still OK for such adventure at that age. Most, however, are not. ... so you have roughly 10 years of life in which to travel, walk around, explore, etc.

What if you could manage your money such that you could retire at age 53? No big deal? It might seem like that now but you'll end up with 20% more time in which to travel, walk around, explore, and what not. That's just with a minor improvement to a retirement investment program. With significant improvement, you can go far more quickly. I'm 49 and my career will end at the end of this month.

Investing is an important aspect to life planning. What's more, it can be enjoyable. It's not for everyone but with a little energy you can significantly improve your later years.


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