seeking help in rebuilding my portfolio

Asset allocation, risk, diversification and rebalancing. Pros/cons of hiring a financial advisor. Seeking advice on your portfolio?
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Ash.001
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seeking help in rebuilding my portfolio

Post by Ash.001 »

I am seeking help in rebuilding my portfolio.
Thanking you in advance.


• Emergency funds: Yes. I have about six months of expenses
• Debt: No debts
• Marital Status: Single
• Tax Rate (Fed + Prov) = 9%
• Provincial Residence: Quebec
• Age: 68
• Desired Asset Allocation:
• RRSP: 10% Bond, 30% Can.Equity, 60% All World (except Canada) Equity
• TFSA: 25% Bond, 25% Can.Equity, 50% All World (except Canada) Equity
• Non-Registered: 55% Bond, 15% Can.Equity, 30% All World (except Canada) Equity


Current total portfolio: 185 000
17% RRSP, 33% TFSA, 50% Non-Registered

Current Assets:

RRSP / TFSA / Non-Registered
100% Cash & Money Market

Pensions
Pension Income of 18K = CPP + OAS + Employer Pension.

Self-employed income which covers my living expenses, taxes & investment needs

Contributions

New annual Contributions
$12000 taxable
$5500 Tax-Free Savings Account
$0 RRSP


Question

My Desired Asset Allocation is based on the Couch Potato Portfolio. Is this the best portfolio composition? (I aim for Growth in Registered & Tax Efficient Growth in Non-Registered)
Last edited by Ash.001 on 29 Jun 2017 14:01, edited 2 times in total.
BRIAN5000
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Re: seeking help in rebuilding my portfolio

Post by BRIAN5000 »

If you're retired what funds do you use to live on?

Looks like about 63/37 equity/fixed income.
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AltaRed
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Re: seeking help in rebuilding my portfolio

Post by AltaRed »

Same question. It would appear your only income is $18k per year in CPP and OAS. How can you make almost that much in new annual contributions?

Lastly, it would be hard to make suggestions without knowing what your annual cash flow needs are... In order to determine how to set up your portfolio for income. I am almost thinking you could be in partial GIS territory.
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Ash.001
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Re: seeking help in rebuilding my portfolio

Post by Ash.001 »

Revised my Original Post regarding Total Income & Tax Rates.
BRIAN5000
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Re: seeking help in rebuilding my portfolio

Post by BRIAN5000 »

Here's an idea and I'm not saying it's a good one or to use these ETF's.

XWD could be used as a single ETF in all accounts it has a higher Mer than others but depending on what other ETF's are used maybe only be a few hundred dollars a year, a combination of ETF's would be cheaper. (shown in the open account). This hides all your fixed income in registered accounts (not a lot of income to hide so?) but stunts growth in them. This keeps all your same AA 63/37 and same split between Canadian and foreign 33/66 that you suggested but splits the AA over the whole portfolio not each individual asset location.

Code: Select all

RRSP	VAB	17%
TFSA	VAB	20%
TFSA	XWD	13%
		
OPEN	XIC	21%
	XAW	29%
This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed
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cannew
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Re: seeking help in rebuilding my portfolio

Post by cannew »

Ash.001 wrote: 28 Jun 2017 20:36 I am seeking help in rebuilding my portfolio.
Thanking you in advance.


• Emergency funds: Yes. I have about six months of expenses
• Debt: No debts
• Marital Status: Single
• Tax Rate (Fed + Prov) = 9%
• Provincial Residence: Quebec
• Age: 68
• Desired Asset Allocation:
• RRSP: 10% Bond, 30% Can.Equity, 60% All World (except Canada) Equity
• TFSA: 25% Bond, 25% Can.Equity, 50% All World (except Canada) Equity
• Non-Registered: 55% Bond, 15% Can.Equity, 30% All World (except Canada) Equity


Current total portfolio: 185 000
17% RRSP, 33% TFSA, 50% Non-Registered

Current Assets:

RRSP / TFSA / Non-Registered
100% Cash & Money Market

Pensions
Pension Income of 18K = CPP + OAS + Employer Pension.

Self-employed income which covers my living expenses, taxes & investment needs

Contributions

New annual Contributions
$12000 taxable
$5500 Tax-Free Savings Account
$0 RRSP


Question

My Desired Asset Allocation is based on the Couch Potato Portfolio. Is this the best portfolio composition? (I aim for Growth in Registered & Tax Efficient Growth in Non-Registered)
1. How much income does your self-employed provide? Assume the $17,500 is after living expenses of what $25k, $30k or more.
2. How much Income do your current investment generate?
3. When do you plan to retire and will you lose the business income? Can you sell the business?
4. Dividend income is taxed less especially if your total taxable income is less than $50k
Ash.001
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Re: seeking help in rebuilding my portfolio

Post by Ash.001 »

[quote=BRIAN5000 post_id=598534 time=1498763634 user_id=1915]
Here's an idea and I'm not saying it's a good one or to use these ETF's.

Looks Good, Brian.
I will take a few days to look deeper & will give feed back.
Thx again.
BRIAN5000
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Re: seeking help in rebuilding my portfolio

Post by BRIAN5000 »

If it was me and I was 68 and I had a 100% fixed income portfolio I don't think I would be going 63/37. I don't think I'd be going for growth either more capital preservation and which way is the beach or what's the minimum I can work so I can do whatever. Or the maximum I need to work short term to do whatever sooner. Also you will need to decide on how to enter the market lump sum or gradually.

Some what similar situation but at a younger age
Time to get on the couch
Diane and her husband are starting their portfolio over from scratch, but they are nervous about investing it all at once
http://www.moneysense.ca/save/investing ... -makeover/
This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed
Ash.001
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Re: seeking help in rebuilding my portfolio

Post by Ash.001 »

Here’s my plan:
70 Fixed Income ETF / 30 Equity ETF
The whole plan will be in place by next 6 months with gradual entry to Equity Portion.
Thank you Brian for your feedback.
gaspr
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Re: seeking help in rebuilding my portfolio

Post by gaspr »

If you have no desire to leave a legacy, and if you are in good health, you might want to consider a life annuity as an option. Payout rates for someone your age range from 7-8%... Eliminates market risk, longevity risk, and dementia risk but leaves you exposed to inflation risk.
OhGreatGuru
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Re: seeking help in rebuilding my portfolio

Post by OhGreatGuru »

Ash.001 wrote: 03 Jul 2017 07:27 Here’s my plan:
70 Fixed Income ETF / 30 Equity ETF
The whole plan will be in place by next 6 months with gradual entry to Equity Portion....
That's probably a better asset allocation as you approach retirement.

Off the top of my head, I would comment that foreign equity is greatly overrated compared to Canadian equity, particularly if you are retiring in Canada and are at the point of making withdrawals.

Secondly, you have a fair amount of fixed income in your non-registered account, where it is not tax-sheltered, compared to your registered accounts. From a tax-planning point of view it would be better the other way around.
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AltaRed
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Re: seeking help in rebuilding my portfolio

Post by AltaRed »

OhGreatGuru wrote: 03 Jul 2017 17:28 Off the top of my head, I would comment that foreign equity is greatly overrated compared to Canadian equity, particularly if you are retiring in Canada and are at the point of making withdrawals.

Secondly, you have a fair amount of fixed income in your non-registered account, where it is not tax-sheltered, compared to your registered accounts. From a tax-planning point of view it would be better the other way around.
I disagree with your comment on foreign equity. Much of our Canadian expenses are tied directly or indirectly to the USD, including our imports and even Canadian produced gasoline. If the loonie went to 50 cents, gasoline prices would shoot up as would autos, electronics, fresh fruit and veggies, etc, etc. Never mind the value of one's Canadian domiciled assets. It is important, in my opinion, to have at least some US equity.

The conentional school of thought was to keep your highly taxed Other Income/interest tax sheltered. That was when it was worth something relative to equities. That is no longer the case. Why shelter 3% yield in an RRSP/TFSA for example when most of the growth will likely come from equities, and they grow tax free at maybe 6% total return within a TFSA? I'd suggest it could be pretty much a flip of the coin for someone in their late 60s.

What I would do is look at all three accounts as a total portfolio and then decide what goes where.
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