typical annual earnings on a Canadian Mustachian Portfolio?

[Joan-eh?]

I'm just calculating (okay - that's a total lie, BMO Investorline just calculated) my annual earnings on my investments.

I am wondering what would have been a typical percentage of earnings this year, if you held a typical Mustiachian portfolio.

I need a benchmark to know if I am doing anything right.

so two questions:
1) what do you think a typical Canadian pre-ER accumulation-focused Mustachian portfolio would be...and \
2) what would it have earned this year?

or okay - three questions...what % were you able to squeak out of the markets and what did you do it with?

[lostamonkey]

I am also Canadian but I have an extremely aggressive portfolio (100% Equity Index Funds which are mainly American), so I expect a 8% annualized (nominal) return with fairly large swings. I am in the accumulation phase.

I started investing in the summer of 2014, previously I held a very large balance in a high interest savings account. I know that this was stupid but atleast I wasn't spending it/getting into debt. If I had began earlier, my portfolio would have returned around 24% in 2014. It's a risky portfolio and I am sure I will lose a ton during bad years but I am fairly confident about the 8% annualized return over the long run. I actually somewhat enjoy seeing the big swings in my investment portfolio.

I am pretty sure that if you want a 4% SWR, you need a 6% return assuming 2% inflation. Please correct me if I am wrong, I am still a little fuzzy on retirement math.

[Mr. Captain Cash]

Joan-eh,

I invest similairly to MMM using index funds as they are low cost, and I believe are the most efficient investment choice for delivering the greatest long term returns. Instead of only Vanguard index funds I also hold IShares and BMO index funds.

Have you heard of the Canadian Couch Potato Strategy before? Mine is very similar and you can check out my portfolio here; http://www.mrcaptaincash.com/cash-accumulators/

If you have any questions shoot me an email and I will be happy to answer them for you more in depth.

Mr. Captain Cash




 

[MMMdude]

I'm Canadian and have about 60/40 equity/bond split in my portfolio.  Unfortunately I am almost in all Canadian equities which I'm working to rectify over the next couple of years.

As for equity stuff, I mainly index it but also added high div yielding stuff like the banks, insurance companies, pipeline, rails, etc.  The usual suspects really.

Bond stuff is simply in a couple of bond funds that have done fairly well.

At the moment, my portfolio kicks off approx $26,000 per year in dividends and interest.  Once I hit $36K in passive income, I will be FIRE.  Then obviously I would have annual capital appreciation or depreciation.  Last year my equities were up about 8% and I believe my bond funds were up abit too in addition to the income of course.   So overall about 5% increase + approx 3% in interest and dividends.  I expect 5.5% total return going forward - very conservative, but I feel realistic given the huge runup in equities the last few years

[Kaspian]

I have the Canadian Couch Potato TD e-Series 60/40 equity/bond split.  It's been doing brilliantly over the years--even when US equities tanked.  I'm only hoping for 6-7%, but it's been returning 8-16%!

[Mr. Captain Cash]

MMMdude,

What type of allocation are you planning to target during the next couple years. Your investment portfolio must be of sufficient size to spin of $26,000 in dividend income per year! Great job getting it to that point.

Kaspian,

Nice to hear your also following the Canadian Couch Potato strategy! Always jealous when I hear someone has the TD e-Series funds as my online brokerage does not provide them.

Thanks for sharing,

Mr. Captain Cash

[Kaspian]

Nice to hear your also following the Canadian Couch Potato strategy! Always jealous when I hear someone has the TD e-Series funds as my online brokerage does not provide them.

So simple, huh Crunch?  Just let it do its thing and I rebalance semi-annually or so.  I remember only 4 years ago when bonds were the rockstars of the portfolio--at the time, ended up shifting a ton of cash from them into equities when those were at their bottom.  20% Canadian, 20% International, 20% US, and 40% bonds.  It's just great that one feeds the other and forces contrarian investing.  :)  Making money all the way around.

FYI, OP, I use Global Couch Potato Option #2:

http://canadiancouchpotato.com/model-portfolios/

Dan has results for the portfolios over several years--just search "report card".

[Shooter_D]

The 2014 returns for the Canadian Couch Potato model portfolios were just posted a few days ago on the site:

http://canadiancouchpotato.com/2015/01/09/couch-potato-portfolio-returns-for-2014/

Looks like returns of the model portfolios were in the range of 9.8 for the uber tuber to 10.8 for the complete couch potato.

[scrubbyfish]

Following!

[Ottawa]

Just entered the 2014 information in my ROR calculator for our child's RESP. 
The Return was 11.24% when I include inputting the $500 government grant.
The Return was 12.4% when I do not include the government grant (Which I don't because...it's not my money!).

The RESP is invested in the TD Series as follows:
TD Canadian Index - e (TDB900)   20%
TD US Index - e (TDB902)   30%
TD Canadian Bond Index - e (TDB909)   20%
TD International Index - e (TDB911)   30%

[KMMK]

The 2014 returns for the Canadian Couch Potato model portfolios were just posted a few days ago on the site:

http://canadiancouchpotato.com/2015/01/09/couch-potato-portfolio-returns-for-2014/

Looks like returns of the model portfolios were in the range of 9.8 for the uber tuber to 10.8 for the complete couch potato.

This is about how I did with my e-series funds last year.

[Goldielocks]

MMMdude - I just reviewed it all this weekend,

My company (defined contribution) plan with 2.3% MER's returned 11% (not including matching). No Bonds in there.
My personal return on my discount brokerage, half broken (not in full compliance) Canadian Couch potato, adjusted for less than 20% bonds returned 12%.

[scrubbyfish]

The RESP is invested in the TD Series...

If I put my son's RESP into eSeries, we can't receive the (government gift of) bond. For those of you putting the RESP in eSeries, is your income too high to receive the government bond contribution, or do you find the net result in the eSeries is worth forgoing it?

[Goldielocks]

The RESP is invested in the TD Series...

If I put my son's RESP into eSeries, we can't receive the (government gift of) bond. For those of you putting the RESP in eSeries, is your income too high to receive the government bond contribution, or do you find the net result in the eSeries is worth forgoing it?

I have no trouble with government add for our RESP invested in TD909 (I think that is right number?) and TD 900...

Are you talking about the lower income "bonus" if your income is less than $85k?

RESP Grants & Bonds

The Canada Education Savings Grant (CESG) program was initiated by the federal government to assist families saving for their children’s post-secondary education.

The federal government tops up your annual contribution by 20%, up to a maximum of $500 ($2,500 contributions x 20%) per beneficiary per calendar year, to a lifetime maximum of $7,200.

Lower to middle income families may receive additional CESG payments on their RESP contributions if their net family income is:

Below $42,707*: Child receives grant in the amount of 40 cents for every dollar on the first $500 saved in your child’s RESP each year
If your net family income is between $42,707* and $85,414*: Child receives grant in the mount of 30 cents for every dollar on the first $500 saved in your child’s RESP each year

[scrubbyfish]

I have no trouble with government add for our RESP invested in TD909 (I think that is right number?) and TD 900...

Yes, the government grants can be received into an eSeries account no problem.

Are you talking about the lower income "bonus" if your income is less than $85k?

There's an extra grant/match for families with lower income, yeah, but there's a third piece, too.
http://www.canlearn.ca/eng/savings/clb.shtml This "learning bond" is $100/yr for families with income less than $43,953.

TD says the bond cannot be received into an account in eSeries. First they said I could have my own contributions and the govt grants in eSeries, with a separate account for the bond, but later they said the whole account has to be outside of eSeries in order for the bond to be received.

[MMMdude]

MMMdude,

What type of allocation are you planning to target during the next couple years. Your investment portfolio must be of sufficient size to spin of $26,000 in dividend income per year! Great job getting it to that point.

Kaspian,

Nice to hear your also following the Canadian Couch Potato strategy! Always jealous when I hear someone has the TD e-Series funds as my online brokerage does not provide them.

Thanks for sharing,

Mr. Captain Cash

I have a wee bit under 800K saved up at this point.  In the next few years will be focusing on getting US equity % up to where it should be, however i'm apprehensive about that given low CDN $ and record levels in the US for stocks.   Also, I keep asking myself how can I go wrong investing in Canadian banks as an example which yield something like 4% compared to something on the Dow which would have less than a 2% yield.  Sometimes I admit to getting blinded by dividend yields.  It has burned me in the past on things like Yellow Pages and Temple Hotels.  Absolute garbage stocks...I stick to the blue chips now 99% of the time

[Gerard]

I keep asking myself how can I go wrong investing in Canadian banks as an example which yield something like 4% compared to something on the Dow which would have less than a 2% yield. 

The typical answer is that our banks will be in trouble when rising interest rates and/or oil prices pull the rug out from under the housing market, in which they're heavily invested. But people have been saying that for years now, and it still hasn't happened.

[Heckler]

Well, the Canadian banks won't be in trouble for the short term, with interest rates cut to allow even more borrowing!

[Stasher]

Very interested to see how the New ETF Couch Potato works out as I re balanced yesterday to follow their new breakdown using Vanguard index funds.
I went  with the aggressive option and do all my trading Scotia I-Trade  account
60% VXC
30% VCN
10% VAB
I sold all of my ZRE and VUN to restructure to this and made terrific gains on those sales, both funds were doing awesome.
Hope the new structure works out for 2015.

[Mr. Captain Cash]

Stasher,

Why did you re-balance to follow their new breakdown using Vanguard Index funds? This sale would have caused you to possible incur capital gains taxes if investments were not in a tax sheltered account. And trading fee costs.

I plan to keep my portfolio intact for 2015. I was happy with the 10.6% return my investment portfolio generated. My portfolio is

Canadian Equities (XIC) 22%
U.S. Equities (VUN) 22%
International Equities (VDU) 22%
Emerging Markets (VEE) 22%
REITS (ZRE) 12%

[Ottawa]

I'm tracking portfolio performance monthly now using the 2015 rate of return spreadsheet downloaded from http://www.canadianportfoliomanagerblog.com/calculators/

It also shows your ytd return and allows for dated cashflow inputs (up to 5) although it would be easy to increase that if required.  I have also added a couple of columns for myself to show investment gain etc.

I'll try to remember to update in this thread...

January 2015 return was 4.55%

[Stasher]

Stasher,

Why did you re-balance to follow their new breakdown using Vanguard Index funds? This sale would have caused you to possible incur capital gains taxes if investments were not in a tax sheltered account. And trading fee costs.

I hold my investment within my RRSP iTrade account, I had just deposited additional funds to top up my year end RRSP for tax season. I was going to rebalance already as well so my trading fee wasnt a concern. I felt confident moving out of VUN into VXC as it realized the crazy gains over 2013-2015 and thus far in VXC I'm up over $1000 in the month. I like the simple three fund approach and will see how it goes....may be silly or may be brilliant but at least its something.

[sleepyguy]

I'm WAY more conservative this year... that being said my works through Sunlife has a total of like 12 funds to choose from, lol.  I'm glad they have some index funds with relatively low MER.  Here are my 2015 allocations.

25% US equities
25% CAN equities
15% Intl equities
35% Bonds

I probably should increase my Intl allocations, still breaking down some numbers.

My returns last year was about 14%


1) what do you think a typical Canadian pre-ER accumulation-focused Mustachian portfolio would be...and
- not sure... although he wouldn't be holding that much US due to the tax implications.  Since Vanguard is available he would still be with them, probably something like 30/30/30/10 portfolio i would say.

2) what would it have earned this year?
- 15%... ok i just took a wild guess :)

[powersuitrecall]

anyone jumping on the Big Bank sale right now? pros? cons? caveats? insights?

Nope - But I'm going to jump on it passively by buying more VCN :)

My 2014 returns look to be 12%, but my portfolio changed drastically this year.  Up until April, I was invested through a financial advisor who had me overweight in Canadian energy and commodity equities through a bunch of high MER mutuals and a handful of stocks.  I fired his ass and went Global Couch Potato with a 65% Equity / 35% Bond mix.  I was pretty nervous selling all those high performers but ask me how happy I am about it now :)  I'm sticking to my weighted portfolio from now on and I'll never look back.

The real surprise have been the bonds.  It solidifies the lesson of sticking a diversified portfolio no matter what the experts think the market is going to do.

[Ottawa]

I'm tracking portfolio performance monthly now using the 2015 rate of return spreadsheet downloaded from http://www.canadianportfoliomanagerblog.com/calculators/

It also shows your ytd return and allows for dated cashflow inputs (up to 5) although it would be easy to increase that if required.  I have also added a couple of columns for myself to show investment gain etc.

I'll try to remember to update in this thread...

January 2015 return was 4.55%

I remembered.  A good sign.

February 2015 return was 2.65%.

YTD return 7.32%.

[Ottawa]

I'm tracking portfolio performance monthly now using the 2015 rate of return spreadsheet downloaded from http://www.canadianportfoliomanagerblog.com/calculators/

It also shows your ytd return and allows for dated cashflow inputs (up to 5) although it would be easy to increase that if required.  I have also added a couple of columns for myself to show investment gain etc.

I'll try to remember to update in this thread...

January 2015 return was 4.55%

I remembered.  A good sign.

February 2015 return was 2.65%.

YTD return 7.32%.

March 2015 was -0.71%

YTD return 6.56%