The Money Mustache Community
Learning, Sharing, and Teaching => Investor Alley => Topic started by: everinprogress on January 13, 2017, 11:43:00 AM
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Hello people who know more about ETFs than I do!(Let's face it, that's pretty much everyone)
My husband and I have been discussing moving our long term investments to ETFs to reduce our MER fees, and just having a hard time actually pulling the trigger. So any advice or resources to read would be great. As a note, I *may* be prone to analysis paralysis.
Things of note, let me know if I should add more:
- Live in Canada
- Leaning towards questrade as a brokerage account, but open to suggestions.
-Would like to keep portfolio relatively simple
-Would probably do 70-80% stocks, rest bonds, but once again open to suggestions
-Having a super hard time actually picking ETF's, have looked at the list available on vanguard canada but just get stuck overanalyzing/feeling like I have no idea what I'm doing
-Would be tax advantaged accounts with a long term (30 or so year) horizon (RRSPs)
-$45k in one account, 3K in the other but will be probably 15k shortly
Thanks for your input, and I know I should have done this sooner
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Hey there Progress,
My advice to you would be to keep it simple. Some Americans even go so simple as to go with just one fund covering the whole US market (VTSAX). In Canada this doesn't really work as the Canadian economy is so heavily weighted towards energy and financials. For that reason I would highly recommend the Canadian Couch Potato investment style. They have some great articles on where to put it but the basics is VXC and VCN for equities and VAB for any bonds you want to hold. Highly recommend reading the investing articles over there.
VXC is ~50% US and 50% international except Canada so has a good diversification already. Personally I keep:
- 25% Canadian equities
- 35% US Equities
- 40% international equities
Obviously i'm 100% stocks.
I know there are other items to consider in the future such as which funds are better to hold in which accounts for tax purposes but I will have to let a smarter MMMer than me speak to that one.
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Questrade is good as I believe they don't charge commission on buying ETFs. I use my banks trading platform for easy transfers and convenience.
Have you looked at CCP's model portfolios? Specifically #3
http://canadiancouchpotato.com/wp-content/uploads/2015/01/CCP-Model-Portfolios-ETFs-2016.pdf
I believe the choices of actual ETFs on there have the current lowest MER. I personally stick to all Vanguard funds by using VAB for bonds, VCN for Canada, and VXC for global excluding Canada.
You said you were looking for 20-30% bonds so look at the "Assertive" portfolio.
Something interesting though is that after 20 years, each of those portfolios has nearly the same annualized return. So the bigger factor when choosing how aggressive/conservative to be is how you think you can handle large drops.
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I'll check him out, thanks!
and thank you to both of you for responding:)
Ill do more reading, then hopefully get past the analysis paralysis :)
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Thanks for posting - I need the exact same info. If you go with Questrade, could you provide an update?
We were leaning that way but then I was in downtown Toronto and the wall in the subway was plastered with advertising and I got spooked - all that money on promotion- how could they be the most cost effective?
Needless to say three months later and no progress....
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Thanks for posting - I need the exact same info. If you go with Questrade, could you provide an update?
We were leaning that way but then I was in downtown Toronto and the wall in the subway was plastered with advertising and I got spooked - all that money on promotion- how could they be the most cost effective?
Needless to say three months later and no progress....
I invest with Questrade and have been with them for several years now. Overall I've been really happy with them: low fees, reasonable customer service, and a good trading platform. My only complaint was dealing with them on a pension transfer to a Locked-in RRSP, but that's a long story and partly my pension plan's fault.
One thing to keep in mind re the advertising, they are heavily pushing their Portfolio IQ product. This is a managed investing service similar to Wealthsimple or Betterment (US). What most of us do here is not Portfolio IQ, it's self-directed investing using ETFs following a Lazy Portfolio strategy. Two very different services.
There is little doubt about one thing. Questrade is the cheapest online broker if you have multiple accounts (TFSA, RRSP, etc) and are using them to purchase ETF products. Even with rebalancing I spend about $50 a year on commission fees. It's peanuts.
CCP has an excellent portfolio strategy that's easy to implement. http://canadiancouchpotato.com/wp-content/uploads/2015/01/CCP-Model-Portfolios-ETFs-2016.pdf
In my new, and definitely not as polished or credentialled blog, I will be posting monthly on my Balanced Portfolio to give people an idea of how to rebalance etc when making regular contributions. http://therichmoose.com/portfolios/
Risk tolerance and all that stuff is dependent on your personal situation. This is a good read for newer investors. https://www.bogleheads.org/wiki/Risk_tolerance
In fact, this whole page is great even though it's from an American perspective. https://www.bogleheads.org/wiki/Outline_of_investing
Hope this helps. Oh and if after your research and review of the options you are considering Questrade, I would be grateful if you used my referral key. :)