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Discussion Starter · #1 ·
Greetings all,

I'm planning to soon have $20K to invest for (at least) a 10 year period. I want to be more hands off than I normally am so I'm looking for around 5 ETFs. What would you suggest?

Thank you all for your time and suggestions and let me know if you have any questions.
 

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Discussion Starter · #3 ·
Thanks.
I'm also thinking XUU: Top holdings are Apple, Microsoft, Amazon, Facebook, Tesla, Google A, Google C, Berkshire, Johnson&Johnson, JP Morgan

2 good ones. Any others suggestions? See this is the tricky thing, ETFs are already diverse but I would still feel better having around 5 or so for diversity... which you're already getting in ETFs. Funny how the mind works.
 

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I'm also thinking XUU
What's your risk tolerance? Do you want to go all equities? Will you have to withdraw that money in 10 years to use it? What's your target minimum growth on that money?
 

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I would suggest VOO. Rock bottom MER of 0.03% for the S&P 500.

I would suggest XEF for developed markets. XIC for Canadian markets.

Also, would suggest ZAG, XBB or XSB for passive bond fund.

Edit: since cryptocurrency is all the rage I would suggest QBTC and QETH. The MER for them is higher. I don't know the future of crypto but I know blockchain (the underlying technology) is quite important and a lot of companies are investing into it including big banks. This is my way of staying in the game although I do not have much exposure to it.
 

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Discussion Starter · #7 ·
What's your risk tolerance? Do you want to go all equities? Will you have to withdraw that money in 10 years to use it? What's your target minimum growth on that money?
  • Risk tolerance... What does that really mean? Do I want to risk investing in penny stocks and hope they go up? No. Or does risk just mean how volatile am I willing to have my portfolio, and I'm OK with lots of volatility.
  • I'm leaning more towards equities.
  • 10 years or close after - it's not a strict timeline though.
  • No target - it will grow what it grows.... man, I sound like a hippy.
I've never been asked these questions before so I'm sorry if my answers are weird.
 

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  • Risk tolerance... What does that really mean? Do I want to risk investing in penny stocks and hope they go up? No. Or does risk just mean how volatile am I willing to have my portfolio, and I'm OK with lots of volatility.
  • I'm leaning more towards equities.
  • 10 years or close after - it's not a strict timeline though.
  • No target - it will grow what it grows.... man, I sound like a hippy.
I've never been asked these questions before so I'm sorry if my answers are weird.
Those are the most important questions in investing.
Risk tolerance, are you okay with your portfolio dropping 30% in a few days and taking years to recover?

10 years is pretty short for an all stock portfolio.
 

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  • Risk tolerance... What does that really mean? Do I want to risk investing in penny stocks and hope they go up? No. Or does risk just mean how volatile am I willing to have my portfolio, and I'm OK with lots of volatility.
  • I'm leaning more towards equities.
  • 10 years or close after - it's not a strict timeline though.
  • No target - it will grow what it grows.... man, I sound like a hippy.
I've never been asked these questions before so I'm sorry if my answers are weird.
Two questions to help with risk tolerance....
23085528-00B8-4E74-8A33-074EF22D3CC0.jpeg
BFF70BF6-02CB-4467-BCD2-82094CCF60E7.jpeg
 

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  • Risk tolerance... What does that really mean? Do I want to risk investing in penny stocks and hope they go up? No. Or does risk just mean how volatile am I willing to have my portfolio, and I'm OK with lots of volatility.
  • I'm leaning more towards equities.
  • 10 years or close after - it's not a strict timeline though.
  • No target - it will grow what it grows.... man, I sound like a hippy.
I've never been asked these questions before so I'm sorry if my answers are weird.
About risk tolerance, I'm asking this because some people panic-sell their losses if they invested a lump sum which then crashes -40%. With an horizon of 10 years, this could happen (that's S&P 500) :
21339


And if you think it's not too bad because you break even on the 12th year, well you should keep in mind that your initial $20k will be worth maybe $16k in today's dollars when accounting inflation after 12 years. There's also the risk that things turn unexpected during those 10 years and that you now need that money in 5 years, for instance.

My suggestions :
  1. ZGQ.TO (all world, 100% equities, quality factor)
  2. XWD.TO (developed world, 100% equities)
  3. HGRO.TO or XEQT.TO (all world, bundle of 100% equities ETFs)
  4. ZGRO.TO or XGRO.TO (all world, bundle of 80% equities, 20% bonds ETFs)
  5. HBAL.TO (all world, bundle of 70% equities, 30% bonds ETFs)
  6. ZBAL.TO or XBAL.TO (all world, bundle of 60% equities, 40% bonds ETFs)
 
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Discussion Starter · #11 ·
Risk tolerance, are you okay with your portfolio dropping 30% in a few days and taking years to recover?
By that definition, my risk tolerance is high because yes, i'm ok with the portfolio dropping and taking years to recover. But recover is the key here.
But how about risk tolerance, are you ok risking your money on potentially amazing returns but potentially losing some money even after 10 years?..... I'd say No.

So in one case I say yes and another I say no - hence why I didn't know how to answer that question.

About risk tolerance, I'm asking this because some people panic-sell their losses if they invested a lump sum which then crashes -40%.
I had stocks during March 2020 and I didn't panic sell. In fact, I borrowed money to invest more so by that definition, my risk tolerance is high but as always #1, don't lose money.

If someone said, hey want to invest in this weed company that just started... I would say "No, too risky at this point", so would my risk tolerance be low?
 

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10 years is such a short period, that I'd probably go with something like 80% XSH + 20% XAW

Maybe 30% stocks at most. I wouldn't want too much equity exposure for just a 10 year time horizon.
 

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10 years is such a short period, that I'd probably go with something like 80% XSH + 20% XAW

Maybe 30% stocks at most. I wouldn't want too much equity exposure for just a 10 year time horizon.
To the defence of the stock market... well, the US stock market... exception made of the Great Depression, the US stock market very rarely had a negative total return over 10 years and never had a negative total return over 15 years.

And a 60% equity 40% bond portfolio never had a negative total return over 10 years for at least the past 50 years.

At the end, it also depends if you want to be 99.99% sure that you won't lose a dime, or if you want to be 95% sure that you won't lose more than 5%. Your tolerance to those possibilities will drive your potential returns.
 
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I would make one pick the ARK Disruptive Innovation ETF EARK which will give your portfolio some growth. Down now after the pull back.
 

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You are trying to invest 20k for 10 years and seem like a thoughtful person. Two things to think about.

First over the very long term a reasonable expectation is the total stock market will return the rate of growth of the economy. The rational for this should be obvious. Over shorter timeframes stocks can increase because of multiple expansion, share buy backs etc but overall the long term the only sustainable thing is underlying economic growth and prosperity. A passive investment in a broad market ETF taps this expectation. See Mr Blackhill's list above.

If you are deviating from a broad market thesis to one that relies on a select group of stocks outperforming the market it is essential that you understand why these companies, or the person picking them, will do so. And since you are in for 10 years how they will do so under changing circumstances. Many will stop here and say that's not possible. I am open to the idea that there are potentially sound strategies to seek excess return. If you follow this path just make sure you understand it, believe in it, and have a way to monitor and change course if it doesn't make sense any longer.
 

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Discussion Starter · #18 ·
I've settle on $5K in each:
  • XUU - ISHARES CORE S&P U.S. TOTAL MKT IDX ETF
  • VBAL - VANGUARD BALANCED ETF PORTFOLIO
  • TGED - TD ACTIVE GLOBAL ENHANCED DIVIDEND ETF
  • ZEB - BMO EQUAL WEIGHT BANKS INDEX ETF CAD
I think that's a good mix for a starting point.
 

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I've settle on $5K in each:
  • XUU - ISHARES CORE S&P U.S. TOTAL MKT IDX ETF
  • VBAL - VANGUARD BALANCED ETF PORTFOLIO
  • TGED - TD ACTIVE GLOBAL ENHANCED DIVIDEND ETF
  • ZEB - BMO EQUAL WEIGHT BANKS INDEX ETF CAD
I think that's a good mix for a starting point.
Is there a target asset allocation you are trying to achieve with these selections? I'm not familiar with all those, but a quick glance seems to show it to be some strange slice and dice without a specific objective.

I'd start with Balanced ETF Portfolio (VBAL) (vanguardcanada.ca) and understand how it is allocated. It already has 18.5% in the Financials sector and then you've layered ZEB on top so significantly increased the weight in Financials.

Use the fund facts and model what you've picked and understand the geographic and sector allocations. Again, I don't understand what they four ETFs are trying to accomplish.
 
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