Intro

Asset allocation, risk, diversification and rebalancing. Pros/cons of hiring a financial advisor. Seeking advice on your portfolio?
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NIju
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Intro

Post by NIju » 23 Jun 2017 21:35

Hello all. I am new to FWF and would like to introduce myself. I am a totally novice investor, having just dumped my financial planner. I've been browsing both the FWF sand Canadian Couch Potatoes. I also just finished reading The Bogleheads Guide To Investing.

I have also opened up RRSP, TFSA and a cash account with TD Direct Investing. I'm in my early 50's, will be getting a Fed. Pension, but believe that with some help, will be able to manage my own finances.

I have approx. 50 K in TFSAs, 72 K in RRSPs and 20 K in cash. I'm looking into the Vanguard index ETFs with a 60/40 split between stock and bonds. I live in the Vancouver area. I'm hoping to get some comments from you all for how I'm progressing and any ideas or suggestions.

Cheers

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Re: Intro

Post by 2 yen » 24 Jun 2017 08:02

NIju wrote:
23 Jun 2017 21:35
Hello all. I am new to FWF and would like to introduce myself. I am a totally novice investor, having just dumped my financial planner. I've been browsing both the FWF sand Canadian Couch Potatoes. I also just finished reading The Bogleheads Guide To Investing.

I have also opened up RRSP, TFSA and a cash account with TD Direct Investing. I'm in my early 50's, will be getting a Fed. Pension, but believe that with some help, will be able to manage my own finances.

I have approx. 50 K in TFSAs, 72 K in RRSPs and 20 K in cash. I'm looking into the Vanguard index ETFs with a 60/40 split between stock and bonds. I live in the Vancouver area. I'm hoping to get some comments from you all for how I'm progressing and any ideas or suggestions.

Cheers
Welcome! Sounds like you've made some strong moves already. TDDI works well. I will let others with more knowledge of Vanguard and ETFs in general to chime in on that. Can we assume from your index comment that individual stocks are not your area of interest? Take your time reading through the finiki on this site and best of luck.

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cannew
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Re: Intro

Post by cannew » 24 Jun 2017 09:07

If you are married you can get another 50k into her tfsa. I'm also not one to give any advice about Vanguard or etf's in general.
If you are interested in diy than check out http://www.dividendgrowth.ca/dividendgrowth/ it will provide a different perspective on investing from etf's. I've followed his strategy and been retired happy for over 10 years. We don't have any work pension so needed to generate our own income stream.

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Quebec
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Re: Intro

Post by Quebec » 25 Jun 2017 08:25

Welcome to the forum!

I can recommend the following finiki articles for your situation:

Portfolio design and construction

Simple index portfolios

Cheers,

-Qc
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NIju
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Re: Intro

Post by NIju » 28 Jun 2017 20:29

Thanks for the great information. I will definitely peruse the sites you have mentioned

Cheers

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AltaRed
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Re: Intro

Post by AltaRed » 28 Jun 2017 23:17

Welcome to the forum. You are off to a good start having opened accounts with TDDI and reading both Canadian Couch Potato and FWF. Quebec's links into FIniki is worth a good read and is sound advice. Don't get swayed by stock investing if you want to keep your life simple. The KISS principle with index ETFs works just fine.

Any of the Vanguard, Blackeock iShares, or BMO line of ETFs work fine.
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Quebec
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Re: Intro

Post by Quebec » 01 Jul 2017 00:30

AltaRed wrote:
28 Jun 2017 23:17
Any of the Vanguard, Blackeock iShares, or BMO line of ETFs work fine.
To the OP (original poster): just to clarify a bit what Altared is saying here, he means the broad 'plain-vanilla' ETFs from these providers. Covering the asset classes Canadian bonds, Canadian equities, US equities and International equities (or combinations thereof). With management expense ratios (MERs) kept to the minimum (sometimes Blackrock will have two nearly identical ETFs, one of which is much cheaper). Specific suitable ETFs are listed in finiki's Simple index portfolios article, and liked articles.

With a TD Direct Investing account, a very good alternative option to ETFs to consider is the TD e-funds, with MERs in the 0.5% range. They cost more than ETFs, for sure, but are simpler to deal with, especially for novices. One advantage is the ease of establishing regular (e.g., monthly or even weekly) contributions. In registered accounts, you can always 'progress' (switch) to ETFs later if you want, with no tax consequences.

What's your plan for the cash? Is it an emergency fund, or intended for long term investment? Is your registered space fully utilized?
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AltaRed
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Re: Intro

Post by AltaRed » 01 Jul 2017 10:39

With the OP having $50k in TFSA and $72k in RRSP, whether the OP goes TD e-series funds or a few broad based ETFs depends (in my mind) how much and how often contributions will be made to these accounts. I suspect the OP, with a Federal DB pension plan has minimal RRSP contribution room and thus is pretty close to having the accounts fully funded, and the only 'major' room each year is the $5500 TFSA contribution. Then of course there is the $20k in cash, which if an emergency fund for 6 months of living expenses, is probably best kept in a HISA. $20k is not a lot of 'reserve'. It would be helpful if the OP could articulate how much $$ can be added to investment accounts each year.

IOW, where I am heading with this, is that if future contributions are few and far between, e.g. 1-2 times a year, then ETFs may be the better answer than TD e-series funds. From an iShares perspective, XIC, XAW and XBB is all the OP needs..... or the OP may want to consider a Dividend ETF for the Canadian equity portion, such as the new XDIV ETF. I have mixed feelings on the Dividend ETFs which have not performed that well overall but the new XDIV ETF on back testing appears to have the edge.

The OP will need to judge whether a few $10 commissions are worth the lower MERs of ETFs (I'd think so) from strictly a cost perspective. That said, you are right in that TD e-series won't cost him a cent to make adjustements (buy and sell to get asset allocations right) in registered accounts.
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