# Rebalancing tools?



## marina628 (Dec 14, 2010)

I am trying to figure out my % of each asset allocation which sounds simple enough until you see the mess I have in front of me lol.I have 3-4 plans for myself and my husband and each may have 20 or so stocks or etf/mutual funds in them.I have started this task a few times and just quit out of frustration , are there any tools where you input everything and get the % shown? On flip side how important is it to know that % number.


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## Four Pillars (Apr 5, 2009)

How detailed do you want to get? If you are just looking for a generic idea of what percentage of your portfolio is equity vs fixed income, that should be easy enough to tabulate with a spreadsheet.

If you want to break things up a bit more - like geographic regions for the equity ie Canada vs US vs Euro vs whatever... A bit more work but doable.

Mutual funds can be tough - I would just guess. Ie if a fund is "North American", just assume 50/50 Canada/US split or something like that.


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## marina628 (Dec 14, 2010)

Mike I hate excel and spreadsheets and yeah doing it geographically as well.I can use excel but may be tricky to do the formula for me.


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## HaroldCrump (Jun 10, 2009)

Almost all mutual funds provide a geographic breakdown of their holdings.

For example, I picked an equity fund from TD at random and they have their holdings broken down by country as follows:
https://www.tdassetmanagement.com/C...s/p_FundCard.asp?FID=6234&TAB=HOLD&PID=5&SI=4

Mutual funds, IMHO, are easy to breakdown into equity/FI allocation and geographical allocation.
What is harder are globally diversified companies like P&G, BHP, etc.
You will have to wade through their annual reports to figure out what % of their revenues they get from each geographical location and country.


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## humble_pie (Jun 7, 2009)

HaroldCrump said:


> Almost all mutual funds provide a geographic breakdown of their holdings.
> 
> For example, I picked an equity fund from TD at random and they have their holdings broken down by country as follows:
> https://www.tdassetmanagement.com/C...s/p_FundCard.asp?FID=6234&TAB=HOLD&PID=5&SI=4



i for one think swift breakdowns like these are superficial & misleading. The majority of large companies are multinational & in particular their client bases/revenue sources are multinational. The country in which their head office happens to be located is of lesser importance.

let's look at this TD fund breakdown for example. Does it matter that germany is 2.8%, brazil 2.3%, canada 2.3% etc. To me it would be far more significant that the brazil portion might be embraer (global aerospace, ie better) or vale (global mining, ie riskier).

leading canadian firms are especially effective as multinationals. They have been strong multinationals, particularly in resource industries - mining, oil & gas, lumber - ever since WW II. That's more than half a century.

we have brand name publicly-traded firms in canada that have derived most of their earnings from overseas operations - bombardier is an example - for literally decades. Our chartered canadian banks are already morphing into global banks albeit on a smaller stage than the world's top 10.

coca cola ? quaalcom ? potash ? apple ? total petroleum ? HSBC ? it doesn't matter to me where their head office is situated. What matters is who their clients are & where their production centres are located.

here in cmf forum, there is a tiny minority of members who share my view: that's it's possible to be globally diversified by buying nearly 100% canadian multinational stocks. That way, the DIY investor receives better local coverage & news. He can more easily develop a strong sense of what "his" multinational is actually doing in faraway indonesia or china or colombia.

take SNC as an example, as the bad news keeps reeling out, one dark chapter after another. It's far easier for us, here in eastern canada, to judge whether there could be life after death for this giant global engineering firm (i'm one who cautiously thinks yes) than it could ever be for faceless bean-counting number cruncher analysts in london or hong kong.


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## HaroldCrump (Jun 10, 2009)

^ I agree humble_pie, and I pointed that out in the second part of my post above, using P&G and BHP as random examples.
Arcelor Mittal would be another extreme example - located in tiny Luxembourg, but having operations all over the world.

I personally see no compelling reason to figure out my country specific asset allocation to this level of detail.
Just a broad awareness of approx. geographical locations is enough for me (North America vs. Europe vs. Asia vs. global etc.)

I am far more interested in asset allocating between equities, fixed income, and cash.

But if someone felt the overwhelming urge to determine the geographical allocation of their portfolio, the mutual fund page was the quickest way to arrive at that.
It is not practical for an individual investor to try and figure out what % of a company's revenue is derived from which geography and assess geo-political and currency risks that way.


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## humble_pie (Jun 7, 2009)

but HC all that the mutual fund tables will tell the investor is the geographical location of head offices of companies the fund contains. Time spent on this useless research is time wasted imho. Your Mittal is a perfect example. Who'd ever think of this as a luxembourgeoise enterprise (& as U very well know, head office is in luxembourg for tax reasons only.)

may i go further. I think the "geographical allocations" that folks are supposed to practice in their couch potatoes are a giant hoax, a fairy tale that gets sold to beginner couch potatoes in order to keep em busy & make em feel that they are truly massaging their portfs. Like 20% senior canadian equity, 20% same type sr US equity, 20% sr international equity, 40% bonds.

the fact is a canadian transport/aerospace is going to be much like a US aerospace or a french or russian aerospace etc. Even more pronounced will be the similarity between canadian, US, european, chinese & indian big energy (Nexen news, anyone ? are we having a little cnooc for a snaack this am ??)

many of the top executives from those companies attended the same leading graduate business schools in london, the US, france or switzerland.

so i think an investor has to diversifiy by type of business. Also i dare to think that canada has more multinationally diversified companies (BNS for example) than our country is ever given credit for. The advantage to investors of investing locally is not just reasonable access to really good news. It's also eligible dividend tax credits, adherence to familiar & reliable canadian & US accounting standards, plus fewer or no irritating T3s arriving with mind-numbing figures in april, only 25 days before tax deadline time.


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## marina628 (Dec 14, 2010)

Started this in excel last night and decided to do it based on Canada ,USA,Japan ,Latin America ,Europe and of course by Sector .What I am afraid of is being overweight in one area because the accounts are spread out , mostly my husband's as he has Investments in few places as his employer switched things around many times with their group RSP.Also forced me to learn a few excel formulas lol.Was hoping for plug and play option


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## humble_pie (Jun 7, 2009)

it's so unlike you marina to be wasting your time like this


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## marina628 (Dec 14, 2010)

Yes I should be playing poker lol .BTW I am down to one insulin injection a day from 4 so things are looking better with my health .Lost 22 pounds and my husband said if i can fit into the wedding dress by next October he will marrry me again for our 25th, I married a fool lol.


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## humble_pie (Jun 7, 2009)

atta girl, poker & the glam 25th wedding anniversary celebration are the marina we know !

never mind tiddlywinks like which funds/etfs fit into japan spreadsheet patati patata


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## CanadianCapitalist (Mar 31, 2009)

humble_pie said:


> may i go further. I think the "geographical allocations" that folks are supposed to practice in their couch potatoes are a giant hoax, a fairy tale that gets sold to beginner couch potatoes in order to keep em busy & make em feel that they are truly massaging their portfs. Like 20% senior canadian equity, 20% same type sr US equity, 20% sr international equity, 40% bonds.


Just because you "think" foreign diversification is a hoax doesn't make it so. Currency diversification alone provides enough justification for holding some portion of your equities portfolio in foreign securities -- lower volatility, lower correlation etc. This is true for all investors, couch potato or otherwise.


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## humble_pie (Jun 7, 2009)

& did i say it was a hoax ? no i did not! i said the standard kind of fund geographical diversification that HC was kind enough to point out up top offers a fairy tale to investors by pretending that identical boiled-to-death global alphabet soup is better than fresh minestrone or french onion soup or lobster bisque or borscht.

plus CC you've distorted my view by extracting only 5%, tch. You've left out the significant part, which is that investors will tend to do better by focusing on market sectors. Cyclical rotations, for example, are important. It's more important to get a sense of where resource stocks are headed - ie get a little bit out or stay a little bit in - than to own a neutered spectrum of similar or even identical global resource stocks all of the time while deriving false comfort from the fact that 20% of them are canadian, 20% are US, 20% are international, etc.

that world markets work in sync in our times is a cliché. There's no diversification to be had from geographical allocation. I for one say it's yesterspeak to claim that cloned financial/transport/pharma/manufacture/retail/base metal stocks from 25 different countries are lending any special strength to a portf.

as for currency people can buy the ADRs of foreign banks or telcos in order to incorporate a snifter of foreign currency exposure if the same helps to calm anxiety, no need to pay any management fee for this.

CCUR so much fun to tease i can't resist each: how have your US equity allocations & your international equity allocations been doing this whole past decade ... er, sorry


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## brad (May 22, 2009)

I thought the main rationale for international diversification was to increase exposure to market sectors that aren't very well represented in the Canadian index (e.g., IT, healthcare, etc.)?


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## Toronto.gal (Jan 8, 2010)

humble_pie said:


> 1. (Nexen news, anyone ? are we having a little cnooc for a snaack this am ??)
> 2. Also i dare to think that canada has more multinationally diversified companies (BNS for example) than our country is ever given credit for.
> 3. It's also eligible dividend tax credits, adherence to familiar & reliable canadian & US accounting standards....


1. I already had a full meal several weeks ago. :tongue-new:
2. Indeed! Last year I began reducing [not eliminating] certain foreign positions and increasing Canadian ones, like BNS. Maybe people don't read/travel enough to know we're everywhere. :encouragement:
3. +1.


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## brad (May 22, 2009)

Also, to quote the Canadian Couch Potato's "Perfect Portfolio" book:

"Looking back over a century of data, Credit Suisse found that the volatility of the average country's stock market was 23.4% per year. However, the volatility of the world index as a whole was much lower, at just 17.7%. They concluded that 'the risk reduction achieved through global diversification remains one of the last "free lunches" available to investors.'"

The book then goes on to discuss the argument that "global diversification doesn't work, because everything [after the 2008-09 bear market] went down together," saying that "Statements like this betray a fundamental misunderstanding of what equity diversification is designed to do. Spreading your stock investments across several countries and currencies lowers long-term volatility and may even boost returns if you occasionally rebalance. But will not, and cannot, protect investors from losses in a global financial crisis....For most people the only way to reduce those losses is to allocate a portion of your portfolio to government bonds and cash."


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## humble_pie (Jun 7, 2009)

brad said:


> I thought the main rationale for international diversification was to increase exposure to market sectors that aren't very well represented in the Canadian index (e.g., IT, healthcare, etc.)?



brad there are lightyears of difference between buying a few choice, fresh, green US techs & pharmas (way better selection, U are right) & sweating day & night, 365/24, in the kitchen over the boiled-to-death universal alphabet soup

you're a good cook so you know how this works


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## humble_pie (Jun 7, 2009)

what, all this uproar night & day in the kitchen to keep the alphabet soup pot stirred in the faint hope that it will "lower volatility" plus it "may even boost returns" if the cook sweats enough ?

btw how're them US equity & int'l equity funds doin ? no point keeping em in separate pots, they're made from the same stock ... same rice ... same barley ... same vegs ... it's only the branding & the packaging that are different ...


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## CanadianCapitalist (Mar 31, 2009)

humble_pie said:


> plus CC you've distorted my view by extracting only 5%, tch. You've left out the significant part, which is that investors will tend to do better by focusing on market sectors. Cyclical rotations, for example, are important. It's more important to get a sense of where resource stocks are headed - ie get a little bit out or stay a little bit in - than to own a neutered spectrum of similar or even identical global resource stocks all of the time while deriving false comfort from the fact that 20% of them are canadian, 20% are US, 20% are international, etc.


Do you have any studies we can look at? Or should we just take your word on this?



> that world markets work in sync in our times is a cliché. There's no diversification to be had from geographical allocation. I for one say it's yesterspeak to claim that cloned financial/transport/pharma/manufacture/retail/base metal stocks from 25 different countries are lending any special strength to a portf.
> 
> as for currency people can buy the ADRs of foreign banks or telcos in order to incorporate a snifter of foreign currency exposure if the same helps to calm anxiety, no need to pay any management fee for this.


It may be cliche but it is demonstrably false. 10 year returns of:

US Financials: 1.44% (in USD)
CAD Financials: 9.68% (in CAD)
Delta: -8.24%

US Energy: 14.9% (in USD)
CAD Energy: 10.5% (in CAD)
Delta: 4.4%

US Materials: 10.53%
CAD Materials: 12.85%
Delta: -2.32%

CAD appreciated by 4.5% per year. So, in CAD terms, here are the relative returns:

US Financials: -3.16%
Delta: -12.84%

US Energy: 9.68%
Delta: -0.82%

US Materials: 5.5%
Delta: -7.35%



> CCUR so much fun to tease i can't resist each: how have your US equity allocations & your international equity allocations been doing this whole past decade ... er, sorry


I'd be glad to answer this. US equity and international equity certainly performed as well as the average invested dollar. After expenses, it did much better.


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## dave2012 (Feb 17, 2012)

I used to use excel to track everything but it was a nightmare to keep up with and trying to figure out returns etc, especially in the days when we used a financial sales person had an endless array of mutual funds. Never did get around to organizing it to show asset and sector weighting though which I am quite interested in and would end up calculating manually from time to time. I also used excel to track acb and capital gains for our accountant to save some $$'s at years end but it was pretty time consuming especially this year.

I finally got fed up and decided to write an online portfolio manager myself recently using php and a mysql database to manage our multiple portfolios.

I have a database of all our holdings (stocks, mutual funds, etfs, bonds, cash) for which I detail everything about each stock/fund/etf/bonding including security type, google/yahoo lookup symbols, %dividends, payout, asset category, sector, country, current price, MER etc.

Secondly I have a database of all transactions for each portfolio which I copy over from my Investors Edge account every time I buy/sell or record dividends, including commissions. This is now very quick to keep up to date with a few mouse clicks.

My online portfolio manager features:

- stock profile manager
- portfolio transaction manager (carry fwd, buy, sell, dividend, interest, transfer in/out), inline editting
- handles multiple portfolios and currencies (currently just US and Canadian dollar)
- portfolio details report and totals for each portfolio plus overall portfolio including acb, commissions, capital gain/loss, irs tax withheld (for US holdings), total returns (dividends, capital gains, unrealized gains)
- asset allocation report - goals vs actual for our overall portfolio
- sector allocation report - goals vs actual for our overall portfolio
- capital gains reporting
- automatic price updating via a background google finance api for near real time reporting

It's working out pretty good and as long as Investors Edge is showing the same prices I automatically scrap from Google Finance, my online portfolio balances to our Edge account reports to the penny. I can also if our portfolio match goals and how each portfolio is performing.

I'll also be automatically recording S&P 500 and S&P/TSX Composite index data so that I can see how well each portfolio is doing relative to the two main indexes I care about. The idea being that I can see how well I am doing and decide if I am better off to concentrate on etfs vs stock picking for one.

Lots of other features to add including alerts. Adding embedded charts or other technical data should be easy enough to add as I see fit. I am far from begin a financial gru, but I have been writing software for years so its easy enough to create whatever I need.

Although its still a work in progress, if anyone is interested in checking it out, let me know and I'll setup a demo portfolio you can access when I have time or post some sample screen shots.


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## marina628 (Dec 14, 2010)

PHP and MYSQL -Finally somebody speaks my language lol


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## Barwelle (Feb 23, 2011)

I've never heard of MYSQL... dave (or marina)... is this something that someone with a good (but not quite "expert" level) understanding of Excel could use and figure out how to manipulate? Or would this require some proper training?


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## dave2012 (Feb 17, 2012)

PHP and MySql are very popular tools that run millions of internet sites, including co-incidentally CMF.

Both PHP and MySql are available (for free) on all popular operating systems.

Microsoft users and MAC users (like me) can run PHP MySql on their local computers or via an online website.

php and mysql are tools that require some programming background unfortunately. For non-programmers, excel is an easier solution.


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## HaroldCrump (Jun 10, 2009)

dave2012 said:


> php and mysql are tools that require some programming background unfortunately. For non-programmers, excel is an easier solution.


Yep, I use Excel to track my asset allocation.
It automatically totals up all the bonds, equities, and cash balances (using conditional formulas) and yields the asset allocation.
To clarify, I am tracking allocation among asset classes, not the geographical allocation being discussed here.


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## P_I (Dec 2, 2011)

marina628 said:


> PHP and MYSQL -Finally somebody speaks my language lol


Since you opened that door, check out BeanCounter portfolio performance toolkit. Might be useful to you as is, or with further hacking to accomplish your needs/goals.


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## humble_pie (Jun 7, 2009)

CanadianCapitalist said:


> ... It may be cliche but it is demonstrably false. 10 year returns of:
> 
> US Financials: 1.44% (in USD)
> CAD Financials: 9.68% (in CAD)
> ...



CC this list comparing US & canadian returns from 3 important investment sectors over 10 years proves up exactly what i was saying.

the US returns were not as good as the canadian. There was no advantage whatsoever to be gained from US/canadian geographical allocation in these 3 sectors over this time period.

it would appear that the cliche - that global markets work in sync - does seem to apply, as far as this limited sample is concerned.


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## Sampson (Apr 3, 2009)

but pie, you can't simply pick out the winners post-hoc. What if instead, we were all American and did not hold any Canadian equities? Wouldn't your argument that international diversification is unecessary and is a drag on returns be flipped on its head and debunked?

There are some limitations to CC's numbers, obviously there is no demonstration of the portfolio's total return (with and without US diversification) over a longer period, nor the risk-adjusted returns.


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## humble_pie (Jun 7, 2009)

sampson i didn't pick out any numbers, i was merely replying to CC's list - which he provided as "proof" that diversification via geographical allocation is successful - & i was pointing out that, in reality, the list shows the exact opposite. That list - which as i stated is very limited - shows that canadian returns for the same sectors, over the same time frame, were noticeably better. 

no one was ever discussing here the point of view of americans or of any other nationals. The discussion only had to do with canadian investors. We are lucky in this country because for well over half a century our business leaders have honed their multinational skills. I for one don't happen to believe that their accomplishments have been showcased enough.


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## CanadianCapitalist (Mar 31, 2009)

humble_pie said:


> sampson i didn't pick out any numbers, i was merely replying to CC's list - which he provided as "proof" that diversification via geographical allocation is successful - & i was pointing out that, in reality, the list shows the exact opposite. That list - which as i stated is very limited - shows that canadian returns for the same sectors, over the same time frame, were noticeably better.


I haven't looked at other numbers that are important such as standard deviation and correlation. The only thing that the numbers are intended to show is that the same sector returns in different countries are different over time -- not "in sync" as you said earlier in this thread. i.e. geographies still matter (even when you take currency out of the equation). Canadian returns have been much better in the past ten years but it tells you nothing about what the next ten will look like.


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## Sampson (Apr 3, 2009)

I suppose the metric for 'success' must be defined here.

For those observing diversification, risk-adjusted returns are key. A geographically diversified portfolio may not have the highest returns, but that's not the purpose.

I guess pie, that CC's numbers do in fact show little correlation amongst Canadian equities to at least one region (US) which does not support your thesis that Canadian companies have enough exposure to the World economy. If the exposure of Canadian companies to foreign markets was high, then you would expect the CAD markets to move lockstep with US markets, or at least show much lower delta.


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## HaroldCrump (Jun 10, 2009)

Sampson said:


> I suppose the metric for 'success' must be defined here.


What we should also define is what is a Canadian equity, what is a US equity, what is an international equity.
Is Exxon a US equity?
Are P&G or J&J US equities?
Is Nestle a European equity?
Are Sony or Toyota Japanese equities?

Going simply by the location of a company's registered office and classifying its geography based on that is misleading.


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## humble_pie (Jun 7, 2009)

CC won't you please stop misquoting me. I never said markets are in sync. All i said just upthread - in an obviously slightly mocking tone - is that the cliche recites that world markets are in sync.


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## humble_pie (Jun 7, 2009)

HaroldCrump said:


> What we should also define is what is a Canadian equity, what is a US equity, what is an international equity.
> Is Exxon a US equity?
> Are P&G or J&J US equities?
> Is Nestle a European equity?
> ...



Exactly. Well said.

there is a minority of successful portfolio managers who don't invest by geographical head office location. They invest by sector.

when speaking of senior large-cap companies - nearly all of whom are multinationals - to insist that 20% of one's equity investments of this type must have head offices situated in the US of A or in any other locale is archaic. It's a point of view that doesn't correspond to contemporary business. It's a relic.


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## Sampson (Apr 3, 2009)

I suppose it is testable, if anyone wants to create a portfolio of companies all situated in Canada or the US, which is diversified by where earnings are derived and compare this to a portfolio in the 'conventional' format with CAD, US, INTL equities.

I wonder if anyone knows if this has been done and back tested.

I don't fully doubt pie and HC's claims, but I haven't seen support of this and wouldn't want to change my strategy on an assumption.


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## humble_pie (Jun 7, 2009)

no need to wonder or backtest, sampson, these all-canada & all-US portfolios exist already. By the bushel. They were country funds for decades long before etfs were invented each:

this is what happens when the overly-theoretical like some of the couch potato advocates here start to over-planificate. Reductio ad absurdum.

all i had hoped to discuss in this thread - before my words got twisted backwards by some - was how a standard couch potato formula of X% senior canadian equity, X% senior US equity & X% senior international equity is likely to include far more repetition & similarity among large companies operating in the same sectors, but with head offices in different countries, than most investors realize. In other words "geographical allocation" does not assure the diversification or the protection from harm that investors are hoping for.

i also tried to suggest that several leading canadian companies are strong multinationals in their own right. Their ability to manage sovereign risk is generally superior IMHO to any fund company team of marketers or analysts, as it is their own company's treasury operations they are managing, not other people's money they are betting with.

CN rail, for example, is primarily a US railway company today. Most of its track is in the US. Most of its freight is stateside. CN rail is said to be the 2nd largest railco operating in America by both track & freight statistics.

lastly, may i mention canadian dividend tax credits. Investors won't receive these credits for foreign dividends or for any part of a foreign etf distribution. All other criteria being absolutely equal, for example, a canadian bank will be more valuable to an investor because of its dividend tax credits.


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## CanadianCapitalist (Mar 31, 2009)

humble_pie said:


> all i had hoped to discuss in this thread - before my words got twisted backwards by some - was how a standard couch potato formula of X% senior canadian equity, X% senior US equity & X% senior international equity is likely to include far more repetition & similarity among large companies operating in the same sectors, but with head offices in different countries, than most investors realize. In other words "geographical allocation" does not assure the diversification or the protection from harm that investors are hoping for.


If you are holding a concentrated portfolio of stocks, your risk, return characteristics is not comparable to one that is exposed to just the market risks. 

And all I'm saying is that your claim that companies operating in the same sector but headquartered in different countries for those holding widely-diversified portfolios have "similarity" is demonstrably false. And the claim that geographic diversification does not assure protection from harm is also false. A globally diversified portfolio is clearly less volatile than a portfolio concentrated in one country.



> lastly, may i mention canadian dividend tax credits. Investors won't receive these credits for foreign dividends or for any part of a foreign etf distribution. All other criteria being absolutely equal, for example, a canadian bank will be more valuable to an investor because of its dividend tax credits.


It is certainly not my argument that Canadian DTCs are not valuable. It is one reason to allocate a significant portion of one's portfolio to Canadian stocks. The argument is one should have an allocation to foreign stocks. Whether that percent is 30 or 70 depends on the investor. And of course, when one holds foreign stocks, one holds them in registered accounts as much as possible.


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## Toronto.gal (Jan 8, 2010)

humble_pie said:


> 1. this is what happens when the overly-theoretical like some of the couch potato advocates here start to over-planificate. Reductio ad absurdum.
> 2. CN rail, for example, is primarily a US railway company today.


1. LOL! But we have to have the conformists & non-orthodox types [and others in between]. No getting rid of either group. 
2. And what famous investor just upped his stake in the stock?


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## humble_pie (Jun 7, 2009)

how "demonstrably?" wherefore "demonstrably?"

the only thing i see demonstrated are the unspeakably abysmal returns of those world etfs, those world-ex-US etfs, those world-ex-japan etfs ...

returns so pitiful that my brain forbids my even knowing their ticker symbols, anyhow they start with the letter V ...

besides, what i'm asserting is that a significant number of canadian companies *are* multinationals in their own right. I've given some examples. Could give more. The bulk of their operations have little or nothing to do with canada. I know i know you are not willing to read this, therefore i am hoping you will forgive that i've said it 3 times ...


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## HaroldCrump (Jun 10, 2009)

Toronto.gal said:


> 2. And what famous investor just upped his stake in the stock?


Bill Gates, both directly and via the Foundation.
He now owns more than 12% of the company.

And no, I did *not* Google the answer.
Now, where is my prize?


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## humble_pie (Jun 7, 2009)

prize ? would you accept the boundless admiration & affection expressed by tarts, gals & women investors everywhere for men who are bold enough to hew their own portfolio paths ...


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## CanadianCapitalist (Mar 31, 2009)

humble_pie said:


> the only thing i see demonstrated are the unspeakably abysmal returns of those world etfs, those world-ex-US etfs, those world-ex-japan etfs ...
> 
> returns so pitiful that my brain forbids my even knowing their ticker symbols, anyhow they start with the letter V ...


According to this logic, one shouldn't invest a penny after a steep market fall because recent returns were abysmal. And one should load up at market tops because recent returns have been great. Yeah, that makes total sense.

Pitiful is a relative term. I recently calculated returns from a global portfolio since August 2007. The returns are an annualized 7.2%. That would be the ballpark return expectations of a portfolio such as this for the market valuations that existed during the investment period.


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## Toronto.gal (Jan 8, 2010)

HaroldCrump said:


> Bill Gates, both directly and via the Foundation. He now owns more than 12% of the company. Now, where is my prize?


Well, just a few days ago you were awarded *CMF's 'All Rounder' prize.* Want another one before the week is over? Okay, here it is: 










And yes, you had the right answer, how about the stock, do you own it? I do!


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## HaroldCrump (Jun 10, 2009)

humble_pie said:


> prize ? would you accept the boundless admiration & affection expressed by tarts, gals & women investors everywhere for men who are bold enough to hew their own portfolio paths ...





Toronto.gal said:


> Want another one before the week is over? Okay, here it is:


Thank you ladies for the kind words.
I am, as always, indebted to this forum and its members.


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## humble_pie (Jun 7, 2009)

CanadianCapitalist said:


> According to this logic, one shouldn't invest a penny after a steep market fall because recent returns were abysmal. And one should load up at market tops because recent returns have been great. Yeah, that makes total sense.
> 
> Pitiful is a relative term. I recently calculated returns from a global portfolio since August 2007. The returns are an annualized 7.2%. That would be the ballpark return expectations of a portfolio such as this for the market valuations that existed during the investment period.




oooh là, here you go again, twisting my words & suggeting that i'd recommended buy-hi-sell-lo.

this thread is light years away from any discussion of buy-lo-sell-hi or its ridiculously-named inverse. These concepts involve market timing & were never even alluded to. I'm left wondering why there was an attempt to introduce the topic.

i'm also surprised by any claim that a plain vanilla couch potato international equity portfolio could have returned 7.20% since 2007. Given the performance of international equity index funds during that same time period, it looks as if some mistake may have occurred somewhere.

as benchmarks, for comparison, i've checked returns of 2 leading global equity index funds since 2007. One is blackrock's Global 100 Index etf, which has posted an average annualized loss of (2.60) over the past 5 years.

the other is td's International index e-fund, which has posted an average annualized loss of (5.08) since 2007.

in addition, globe investor funds says the 5-year average annualized loss for international equity funds was (6.07.)

please notice CC that these are loss figures for the years that you've designated as profitable to the tune of 7.2%. A reported gain of this magnitude is far outside the typical or median index profile, which showed losses as set forth above. One would expect an index or couch potato result to be a figure close to the median, certainly not in an extreme or deviant position.


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## marina628 (Dec 14, 2010)

*cough* Guys I got my spreadsheet all done now


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## CanadianCapitalist (Mar 31, 2009)

humble_pie said:


> oooh là, here you go again, twisting my words & suggeting that i'd recommended buy-hi-sell-lo.


Whatever. This discussion is going nowhere.


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## Barwelle (Feb 23, 2011)

marina628 said:


> *cough* Guys I got my spreadsheet all done now


Great! Would you want to share with us? Using screen capture maybe? I've got my own sheet, I'm interested to see how you did it. (I meant to offer to email it to you when you started this thread but i forgot!)

I'm not taking sides here, but CC, I'm curious about what the global portfolio that returned 7.2% since Aug 2007 is composed of.


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## CanadianCapitalist (Mar 31, 2009)

Barwelle said:


> I'm not taking sides here, but CC, I'm curious about what the global portfolio that returned 7.2% since Aug 2007 is composed of.


Actually, I made a typo in my spreadsheet and an error in the rate of return calculation. The IRR is 5.3%. The IRR was 3.6% in the last quarter. The IRR will be all over the map because markets are volatile and you can make any point if you pick the start and end dates carefully. Updates are here:

http://www.canadiancapitalist.com/sleepy-mini-portfolio-q4-2012-update/


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## Barwelle (Feb 23, 2011)

Oh right, your Sleepy Mini Portfolio. I like seeing those updates.

You know what would be interesting, CC... a comparison between the SMP, and a portfolio in which you made the same $1000 contribution per quarter but did not rebalance. Just a suggestion if you are looking for ideas for your blog.

Or even a comparison between the SMP and a portfolio in which you had invested the total amount (20,000) in Aug 2007. That is the difference between you and humble... even with an IRR of 5.3%, that's still sounded unreasonably high to me until I realized that you had been investing over time (and rebalancing) SINCE Aug 2007, and not one lump sum in Aug 2007 (which, I am guessing, is what pie assumed as well, as it wasn't clear in your post. Pie, please confirm as I know you hate it when people try to guess what you meant/thought).


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## Sampson (Apr 3, 2009)

humble_pie said:


> no need to wonder or backtest, sampson, these all-canada & all-US portfolios exist already. By the bushel. They were country funds for decades long before etfs were invented each:.


But it certainly does. While I don't dismiss your thesis, there are two major assumptions that must be resolved.

1. Is a companies stock price more highly correlated with the home country's market/tracking index? or with the markets of the country's where it's earnings are made?

2. Do poor or negative correlations still exist amongst companies in different parts of the World?

I'm sure one could handpick a portfolio of stocks comprising the exact same distribution of Worldwide earnings, but head offices in different countries.

It does require testing, otherwise either side's argument is merely hearsay.


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## CanadianCapitalist (Mar 31, 2009)

Barwelle said:


> Or even a comparison between the SMP and a portfolio in which you had invested the total amount (20,000) in Aug 2007. That is the difference between you and humble... even with an IRR of 5.3%, that's still sounded unreasonably high to me until I realized that you had been investing over time (and rebalancing) SINCE Aug 2007, and not one lump sum in Aug 2007 (which, I am guessing, is what pie assumed as well, as it wasn't clear in your post. Pie, please confirm as I know you hate it when people try to guess what you meant/thought).


I track a static portfolio with a similar overall asset allocation too. Value on Oct. 2, 2007 was $132,000. Value today is $141,500. So, rate of return would be 1.33%. The portfolio was started up on Jan. 1, 2005. Since then rate of return is 4.46%. Both these portfolios have 80 percent allocation to stocks. They are aggressive portfolios for young investors. As such, I think the portfolio with regular additions better captures the experience of on young investor investing their savings regularly.


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