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Discussion Starter #1
In the process of building a new portfolio of reasonable size. Have been reading multiple forums. Targeting 10-12 years to retirement. Thought about my risk tolerence etc. Have been largely on sidelines with cash.

Cdn Equity 23% (XIC + XIU + XCS + select stocks)
US Equity 22% (VTI + VB + Select dividend stocks)
EMG Equity 5% (VWO + ExcelIndia + ExcelChina)
INT Equity 13% (VEA + CIE + ??)
REITs 8% (XRE + DRW)
Bonds 21% (XSB + XRB + ML Bond Mutual fund)
Speculative 4% ("Hot stocks" playing)
Cash 4%

Q1: What do you think of this portfolio? Suggestions in any category?
Q2: Just jump in and start building or wait on certain asset classes to be de-valued before buying? if so, which ones?

TIA
 

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With 10 years left before retirement, I would be quite hesitant for a 95% equity portfolio.

Unless you can retire off your money now, you run the risk of 're-experiencing' another "lost decade". Figure out how much you'll need to accumulate to reach your goal, then only expose your money to the minimum amount of risk required to achieve that goal.

Regarding specific holdings that cover the different asset classes, I think you are making it too complicated. For example, exposure to emerging markets: if you want greater exposure to India and China, think about a BRIC tracking ETF like BFK instead.

Also, I don't see much purpose in purchasing multiple ETF's within an asset class or geographical location. XIC + XIU + XCS? Unless you think the ETF holding company will go under, there probably isn't much advantage.
 

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I cringe when I read about "building a portfolio" in an asset allocated, lump sum, one-shot deal as if different types of investments are good buys all at the same time, so I'm going to avoid commenting any more than that.
 

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I cringe when I read about "building a portfolio" in an asset allocated, lump sum, one-shot deal as if different types of investments are good buys all at the same time, so I'm going to avoid commenting any more than that.
which why i asked question 2
 

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I cringe when I hear that someone was all in cash and all of a sudden wants to be in the market. I am not saying one or the other is right or wrong, I would just want to know why this is the case.
 

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Q2: Just jump in and start building or wait on certain asset classes to be de-valued before buying? if so, which ones?
The ideal situation is for an individual to wait for a specific asset class to de-value and then to add it to the portfolio.

Unfortunately, to ask 'which asset class' implies that the individual is unable to identify opportunity in any asset class.

If an individual is unable to identify an opportunity the only appropriate options available to them are investments in risk-free assets.
 

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Targeting 10-12 years to retirement. Thought about my risk tolerence etc. Have been largely on sidelines with cash.

Cdn Equity 23% (XIC + XIU + XCS + select stocks)
US Equity 22% (VTI + VB + Select dividend stocks)
EMG Equity 5% (VWO + ExcelIndia + ExcelChina)
INT Equity 13% (VEA + CIE + ??)
REITs 8% (XRE + DRW)
Bonds 21% (XSB + XRB + ML Bond Mutual fund)
Speculative 4% ("Hot stocks" playing)
Cash 4%
When you say you are targeting 10 - 12 years, does that mean you will be in you 50's or so then, or are you hoping for an early retirement? I'm assuming in the following that by targeting == early retirement hope. If you really need to retire in 10 - 12 years, bump up your bonds to 50% or so so extra safety.

If I was going to build a mainly ETF portfolio with some stocks like you are looking at, I would tweak it a bit:

Cdn Equity 25%
US Equity 15%
EMG Equity 5%
INT Equity 15%
REITs 5%
Bonds 25%
Speculative 5%
Cash 5%

For the Cdn Equity, true dividend yield, not overall yield, should be important to you because unless you are going to retire making top tax bracket income, Canadian dividends are taxed much less than other income sources like interest. Canadian dividends are your friend when you are in middle to lower income brackets.

If you do decide that you want to jump in on equities, then I would suggest you stagger your purchases over the next 6, maybe 12 months, so if the markets do drop then you have a chance of not been completely screwed by what many think is an overall over evaluation of equities in general. I would agree, especially most banks and many REITs right now. If they keep going up, well......

Many of the banks are at or near their highs before crash.

Utilities (telco's, etc), oil and gas, seem to have not jumped as much. Telco's like Bell (as much as I hate them) have not risen nearly as much and some offer great dividend yields right now.

>> Previously posted:
>> Unfortunately, to ask 'which asset class' implies that the individual is >> unable to identify opportunity in any asset class.
>> If an individual is unable to identify an opportunity
>> the only appropriate options available to them are investments
>> in risk-free assets.

I disagree with this overall statement, and would suggest that if the poster feels so strongly that this is true, then help teach us here on the forum how they think it should be done instead of just saying the negative without giving any insight into how you think it should be done. IMO, this site should be about helping people learn, not just telling them that if they don't know X then don't do X. That does not really get anyone any futher along in their learning journey. ;)

The whole point of having a balanced portfolio using low MER ETFs based on broad indexes, including bonds, is based on the idea that you do not need to cherry pick sectors or stocks; and that in the long term (I think 10 + years is longish term) you will do OK, maybe not as good as the few in the world that truly can cherry pick stocks and or sectors correctly year after year, but still come out better than keeping everything just in cash making 1-2%.

'Low value' for a stock or sector is always relative and not always rational in the short term; the crash and rapid recovery (so far) has shown us that I think. I started reading a book last night (Neatest Little Guide To Stock Market Investing by Jason Kelly) and it made the comment that 'by low, sell high', is always stated and is true, but 'buy high, sell higher' is also true. ;)

I do also think that you should read some books etc to help you gain a better understanding of investing. Spidey list 4 -5 books recently that are all great IMO.

I do agree that jumping all in right now to any equities is risky given the rise we have seen since the march lows and the relative performance of the real economies. Gov's are pumping in billions into the economy and we are just staying afloat IMO, with inflation and interest rates staying low. This suggests to me that when the stim. $ runs out, we could end up in a bigger real mess than before we started. But who knows for sure; no one.

With all this said, if you are going to 'stay in cash', which maybe not a bad idea especially if you have been so risk adverse so far, and wait it out for the day crash 2 happens, as some think / hope will occur, then shop around for the best rates for your cash, and consider at least for some of your cash short term GICs if you can find any that are 2%+, maybe consider bonds, instead of just staying in literal cash so you can make a bit more $ than just letting it sit in a bank account.

I don't think anyone would bet you big real $ how the markets in general are going to go moving forward, we really are in uncharted territory here I think.

Good luck. ;)
 

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I cringe when I hear that someone was all in cash and all of a sudden wants to be in the market. I am not saying one or the other is right or wrong, I would just want to know why this is the case.
I think this is a really good point and question.

I've mentioned before that a few years ago I used to be big on just holding cash in an ING savings account; it was a large amount of cash. I got convinced by an adviser, and my media fed greed, that I was wasting my money just having it in cash and that I should put it in some stocks that he suggested. This was in the spring / early summer of 2007 I believe.

Here is what happenned:

1) I took his advise because the markets were just going up and up and seemed they could do no wrong. I at least had him put about 50% of it in bonds because I was still nervous but also got the greedy bug. - BAD, except the bond part.

2) I gave him all my ING cash to invest. He said may as well put it all in at once instead of staggering because I would just be missing out on more oppertunities. So I did. - BAD.

3) It turned out that when I put my $ in, the markets were basically at their all time high, only touched that high again for a week or so in June 2008 I believe. So there was 1 week that i could have sold and at least would have broken even. I didn't sell. Again, greed. - BAD

4) The crash happened and I lost about 20 - 25% of that portfolio; would have been way worse if I had not had 50% in bonds. - BAD, bit could have been REALLY BAD.

5) I fired the adviser in January of 2009, cashed out all the stocks and bonds I had with him (so I have a nice huge capital loss now at least), and started buying an ETF based balanced portfolio and some Canadian stocks that had long track records of dividend payments. Even the ETFs I purchased I looked at dividend yield as an important point, since this $ is all we will have when I retire; no company pension here. I did not buy all at once given 2), so I did not make as much as if I had given what happened in that case, but bought February - early April with that cash weekly in a staggered fashion. - GOOD

6) I'm much happier now. I have learned so much and have so, so, much more to learn. I thank sites like MDJ and others for giving me the starting tools I needed. I also now have a portfolio that is up nicely and am getting about 45K/year in yield from it, which I reinvest. - GOOD

7) Through 2009 I continued to add $ as I got it to my self run portfolio. - GOOD / BAD - time will tell. ;)

2009 was the year for 'do it yourself investors' with cash, we need to be much much more careful moving forward.
 

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2009 was the year for 'do it yourself investors' with cash, we need to be much much more careful moving forward.
Thank you for sharing your experience ssimps!
and good luck with your portfolio.

I was quite lucky that I only started investing money after the crash and even then I was cautious before putting my money in and rely a lot on learning from forums like this one and MDJ, CanadianCapitalist blogs and other online resources. Now I feel like I should have risked more knowing how the market have rallied throughout 2009 - but then again, what if it hadnt? - I think through the helps of this forum and other resources I was able to made decisions that give me good balance between risk/potential gain and one that I am comfortable with.
 

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It's to bad you sold in Jan. 09 just a couple more months things would have looked better.

The crash was the greats opportunity in my life time. I was well positioned in great stock and cash from my buy out.

So Buy Buy Buy! Lost decade I can't stop smiling.

It's about my 5th crash and I'm looking for 6.
 

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It's to bad you sold in Jan. 09 just a couple more months things would have looked better.

The crash was the greats opportunity in my life time. I was well positioned in great stock and cash from my buy out.

So Buy Buy Buy! Lost decade I can't stop smiling.

It's about my 5th crash and I'm looking for 6.
I don't view it as bad at all; I sold to dump my broker mainly, to get a large cap. loss that I can use in the future, and to started buying on my own, learning as I went. I think the crash is the best thing that ever happened to us (my wife and I) not just from a making money point of view but from a mentality point of view. ;)

I only thing I regret in 20/20 hindsight is not immediately buying fully back in March when things were at the lowest if lows (12 years I think hearing), but that's called market timing which can also screw you as I have also learned.;)

So overall I don't even regret the staggered approach I took, because things could have ended up differently.

I've still done very well this year and even though I staggered my purchases from the sold assets over ~3 months (weekly), got some great ETFs and stocks that have dividend yields that are sweet.

I won't be selling again next time there is a crash or correction, I'll be buying buying buying too. ;)
 

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Thank you for sharing your experience ssimps!
and good luck with your portfolio.
.....
I think through the helps of this forum and other resources I was able to made decisions that give me good balance between risk/potential gain and one that I am comfortable with.
Your welcome and thank you.

Being comfortable with your investment strategy and risks is totally critical I think.
 
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