Rethinking my assets allocation...
In a previous post, I asked you Mustachian about using HELOC for investing in equity ETF (see my "Borrow to invest ?" post)
My actual portfolio is 26%VSB (short Gov. Bonds), 21% ZCN (Canadian market), 9% ZRE (Canadian REITs), 22%VTI and 22% VXUS. The "bonds" represents 125K$ and my mortgage is 95K$ at 3.5% with 5 years to be repaid.
Some of you make me realize my bonds will probably just match the HELOC I was about to use (2.0% after taxes refund). My total portfolio would be bigger but so would be the debt...
Then, I reconsidered my A.A. and the result looks like this: 30%ZCN, 30% VTI, 10% VBR (small-value exposure) and 30% VXUS.
Volatility will probably increase, average MER drops from 0.15% to 0.06% (higher MER in Canada) and returns could be around 1% more on the long haul, 25 years +.
I know I can handle a lot of volatility, I remember myself thinking I was "buying low" during 2002 and 2008 meltdowns.
What do you think?