keeping it in one for continuity purposes. The following is the result of our 2017 returns.
Benchmark: same as 2016, 10% cdn bond, 30% tsx comp, 30% msci eafe, 30% s&p. The index ytd return (with divi) is roughly 12.90%.
Some of you may know i have been quite bullish in 2017. As a result, I did not make any market timing moves. One would think that in absence of these actions, my return would equate to that of benchmark returns (minus fees). Alas it is not so.
Canadian dollars rose quite a bit against the mighty Dollar (with capital D), a comparison of vun and vus reveals that the exchange rate would cost us almost 5% after fees. On the flip side, cad dropped against eafe currencies on average, and a comparison of xef and zdm reveals the exchange rate would give us a boost of 2.9% after fees.
For a market timer, in a low volatility year where the home currency appreciated against foreign currencies on average, the best one could hope for is to tie the index. This year makes a good case for using currency hedged etfs as Canadians, as opposed to always using non-hedged etfs that most people favor. I ended up going back and forth, sparingly, to avoid excessive tax penalties.
My ytd return is 12.58%, below the 2017 benchmark. A completely non-hedged portfolio would return about 12.45%.
Note that none of the five "tricks" I used last year were that applicable this year, save for #4. We bought some cdn value stocks that totally smoked tsx this year (~16% return), but that alone wasn't enough due to the stock positions accounting for only 1.5% of the entire portfolio and was more or less offset by disney's underperformance.... Even the colossal berkshire barely outperformed s&p this year.
I am disappointed that I didn't get to beat the index (using index funds, no less) this year, even though the odds were against me (low vol, strong cad, taxes). This year's result shows my "models" appear to be working, we will see what happens going forward.