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Hi everyone, I decided to start this thread because I have a whole bunch of questions but wanted to get the ball rolling with this first.

I have some questions regarding potential asset allocations for my portfolio. I basically want to do equities together with dividend growth stocks, and was considering a breakdown like this:

10% canadian equities
10% US equities
30% emerging markets
50% dividend growth stocks

Would there be any overlap in terms of the NA equities and the dividend stocks? I figure if I invest in something like the iShares MSCI Canada Index ETF (EWC) and buy shares of popular dividend growth companies in Canada (ie. CNR, Big 5 banks, TRP, etc.) i would be getting overlap.

I also have questions about what accounts to put the funds into. I read on this forum how its best to hold dividend stocks in non registered accounts and put ETFs in RRSPs/TFSA. is this the best way to approach it?
 

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That's not really a proper allocation , the dividend growth stocks could be Canadian , US or emerging markets.

You have to decide where each stock fits in and re-figure your allocation , the first three are geographically allocated , the last 50% is return allocated.
 

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Would there be any overlap in terms of the NA equities and the dividend stocks? I figure if I invest in something like the iShares MSCI Canada Index ETF (EWC) and buy shares of popular dividend growth companies in Canada (ie. CNR, Big 5 banks, TRP, etc.) i would be getting overlap.
Why would a Canadian investor buy EWC? Why not XIU or XIC that trade on the TSX?
 

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Only reason I could think of would be to keep all holdings trading in US dollars. A good question is how dividends from Canadian companies are taxed when earned from a US-based ETF. They ought to be still 'eligible dividends', but I suspect the fund won't be disclosing how much to you.

Same goes for 'whole world' ETFs, though the Canada weighting is pretty minuscule.
 

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Now depending on the OP's situation and if they mostly intend on buying/holding then I would have to reccomend creating some sort of "Couch Potato" portfolio using ETF's from Claymore and Canadian iShares.

First I reccomend reading these two articles to better understand the world of Couch Potato Investing.
http://www.moneysense.ca/2009/12/17/the-complete-couch-potato-roadmap/
http://canadiancouchpotato.com/couch-potato-faq/

Next thing would to look at what kind of "Couch Potato" portfolio will work for you.
http://canadiancouchpotato.com/model-portfolios/

Let me know what you think!
 

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Not sure if you are looking for etf's or equities to buy individually. IMO it depends on how much you are going to invest.

But if you are looking at US equities, it is best to hold them in the RRSP to avoid witholding taxes.
 

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I always felt that the first consideration in deciding an asset allocation that would allow you to sleep well is the breakdown between cash, fixed income, and equities.

Age is often a major consideration here. The younger you are, the more you can allocate to equities. That said, many investors were glad that they didn't have a larger equity component than they did back in 2008 when the equity markets took a gut-wrenching drop which they will undoubtedly do again at some point in the future.

A cash and fixed income component will both serve to reduce the volatility of your portfolio as well as enhance your long term results.

Often, new investors end up discovering that they were not as risk tolerant as they thought they were. These are uncertain times.

Asset allocation is generally considered to be more important than the actual investments that you have in your portfolio but most investors spend far more time and attention to the latter.

Also, always rebalance periodically whenever your original asset allocation gets out of wack.

Ten to twenty good dividend paying stocks, with a history of increasing their dividends, can be a good fit for the equity portion of your portfolio.

This month's MoneySense magazine has a list of the 100 top paying dividend stocks.

And, never sell in a panic when things get rough. Buy, hold, and prosper.:cool:
 

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Only reason I could think of would be to keep all holdings trading in US dollars. A good question is how dividends from Canadian companies are taxed when earned from a US-based ETF. They ought to be still 'eligible dividends', but I suspect the fund won't be disclosing how much to you.

Same goes for 'whole world' ETFs, though the Canada weighting is pretty minuscule.
I don't think you can any dividend tax credit from dividends paid in US dollars. When in doubt, pay taxes or call CRA :)
 

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It's a good point. People at 65 should not necessarily have everything in bonds. Even the naive '100-age' equity asset allocation rule of thumb suggests 35%.

If you have a reasonable amount of pension income, you can certainly allocate more of your portfolio to risky assets. I agree that many people forget to put a value on their pensions as part of their net worth/investment portfolio.
 

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Hi everyone, I decided to start this thread because I have a whole bunch of questions but wanted to get the ball rolling with this first.

I have some questions regarding potential asset allocations for my portfolio. I basically want to do equities together with dividend growth stocks, and was considering a breakdown like this:

10% canadian equities
10% US equities
30% emerging markets
50% dividend growth stocks

Would there be any overlap in terms of the NA equities and the dividend stocks? I figure if I invest in something like the iShares MSCI Canada Index ETF (EWC) and buy shares of popular dividend growth companies in Canada (ie. CNR, Big 5 banks, TRP, etc.) i would be getting overlap.

I also have questions about what accounts to put the funds into. I read on this forum how its best to hold dividend stocks in non registered accounts and put ETFs in RRSPs/TFSA. is this the best way to approach it?
Since you have provided virtually no information about your investor profile, it is impossible to comment intelligently on your proposed asset allocation.

Your other questions are not really about asset allocation. But asking so many different questions in one post will lead to a pretty scatter-shot set of replies.
 

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There is no cookie cutter approach. Everybody's circumstances are different.

Even when you start withdrawing some of your investments to live on, another large portion remains untouched for many years continuing to grow--you hope!!
 

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I agree that many people forget to put a value on their pensions as part of their net worth/investment portfolio.
Actually the idea is to determine what portion of your portfolio you are relying on for current income. That part should be safe. The rest can be in volatile investments to compensate for long term inflation (we hope).
 
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