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Discussion Starter #1
Newbie investor, 57, mortgage paid, 250K equity in investment real estate, 300K RRSP, 15K in a GIC TFSA and 60K in cash.

I am creating a new portfolio and would appreciate any help you could provide in the way of comments, ideas and suggestions on the following 300K ETF RRSP I created based on limited research and am considering implementing.

Canadian equity - 25% iShares S&P/TSX Capped Composite (XIC); US equity -30% Vanguard Total Market Stock (VTI); Europe/Pacific equity - 15% Vanguard Europe Pacific (VEA); Emerging markets equity -10%; Vanguard Emerging Markets (VWO); Bonds? - 20% (your suggestion).

Thank you.
 

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Do you have any short-term plans for your cash and GICs, or are you considering the whole thing as a single portfolio? If you're considering it as a whole, you've got a bit less than 40% fixed income, which I would call aggressive for somebody your age, but not overly so.

If your cash is already earmarked for short-term needs and your RRSP is intended for your retirement, then you should probably consider increasing the fixed income portion of your RRSP. To give some perspective, you're over twice my age and I have the same 20/80 bonds/stocks split.
 

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Check out the model portfolios at www.canadiancouchpotato.com

Do you really have such a high risk tolerance that you can devote 80 percent of your portfolio to equity investments?

There is sometimes a fine line between properly diversified investing and gambling. It's your money and you should take adequate steps to protect it but everyone's risk tolerance is different. However, back in 2008, many investors learned the hard way, by experience, that their risk tolerance was nowhere near what they thought it was and they consequently sold out of panic at precisely the wrong time out of fear that their heavily weighted to equities portfolio was about to collapse. They did this after many nights of sleepless tossing and turning.

Know yourself.

My core bond holding is the PH&N Bond Fund D.
 

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Discussion Starter #8

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Discussion Starter #9
Fixed income portion of portfolio

Think I will consider your suggestion to increase my fixed income to 30% to 40%.

Any suggestions on diversifying the fixed income portion of the portfolio, ie REIT's?

Sounds good. Just watch out for foreign exchange fees charged by the brokerages. At your current allocation for foreign ETF's, if the bank charge you the standard 1.5% fee, you'll be paying $2475 in exchange fees.

Try to avoid that with norbert's gambit:

http://www.canadiancapitalist.com/a-foolproof-method-to-convert-canadian-dollars-into-us-dollars/
Check out the model portfolios at www.canadiancouchpotato.com

Do you really have such a high risk tolerance that you can devote 80 percent of your portfolio to equity investments?

There is sometimes a fine line between properly diversified investing and gambling. It's your money and you should take adequate steps to protect it but everyone's risk tolerance is different. However, back in 2008, many investors learned the hard way, by experience, that their risk tolerance was nowhere near what they thought it was and they consequently sold out of panic at precisely the wrong time out of fear that their heavily weighted to equities portfolio was about to collapse. They did this after many nights of sleepless tossing and turning.

Know yourself.

My core bond holding is the PH&N Bond Fund D.
 

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Discussion Starter #10 (Edited)
Your thoughts on my first (revised) ETF portfolio

I posted that I was considering the portfolio below but a number of you thought that it was too aggressive for a 57 year old. I think it is good advice, I am considering making changes. I would appreciate your thoughts on the following options:

60/40 or 70/30?

Is the percentage of US equities too high?

I want to take 20% from equities and add it to fixed assets, where would you take it from below?

Canadian or US fixed assets?

Which Canadian fixed assets investments do you own?

Other than Bonds, any other fixed asset investments ideas?

Thank you.

This was the initial portfolio:

Canadian equity 25% iShares S&P/TSX Capped Composite (XIC)

US equity 35% Vanguard Total Market Stock (VTI)

Europe/Pacific equity 15% Vanguard Europe Pacific (VEA)

Emerging markets equity 5% Vanguard Emerging Markets (VWO)

Corporate bonds 10% Claymore 1-5 Yr Laddered Corp Bond (CBO)

Government bonds 10% Claymore 1-5 Yr Laddered Gov’t Bond (CLF)
 

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Discussion Starter #11
My first portfolio queries...

Almost completed my first self created index RRSP portfolio.

Question: I have 15K in a TFSA and 35K in cash that I would like to invest in index funds outside the RRSP.

How are you investing similar amounts outsider your RRSP?

Would you simply use the same assest allocation and investments that you have in your RRSP?

Thank you.
 

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You should think of all your accounts as a single portfolio. For example, hold your international equities in RRSP, bonds fund in a registered account and canadian equities in a non-registered account.

With this setup, you can save on trading cost and optimized your taxable income.
 

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I posted that I was considering the portfolio below but a number of you thought that it was too aggressive for a 57 year old. I think it is good advice, I am considering making changes. I would appreciate your thoughts on the following options:

60/40 or 70/30?

Nobody know your risk tolerance better than you do. When in doubt, pick the more conservative asset allocation, you can readjust down the road with new money if you feel comfortable. The last thing you want, is to start losing sleep when there a bear market at selling at the bottom because you could not take it anymore.

Is the percentage of US equities too high?

I personally have my US and Canadian equities split equally (20% XIC and 20% VTI in my case)

I want to take 20% from equities and add it to fixed assets, where would you take it from below?

15% from US and 5% from Canadian

Canadian or US fixed assets?

In most case, Canadian should own Canadian domiciled bonds

Which Canadian fixed assets investments do you own?

XSB

Other than Bonds, any other fixed asset investments ideas?

What about REIT ? I like my REIT's they fit nicely in my TFSA ! Look at XRE and ZRE
:)
 

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@doitnow!

I like where you're going with the selections. My feedback:

25% = XIC, great pick and weighting.
35% = VTI, great pick although seems kinda high to me? Maybe closer to 25% is better?
15% = VEA, again great pick but maybe only 5%?
5% = VWO, great pick, I own it as well at 5% of my RRSP.
__________

I would put about 60% in equities. Here, you have 80%.

I'm 37 and I have 30% bonds (all XBB) in my RRSP, just saying.

What about 20% XSB and split the rest:
Corporate bonds 10% Claymore 1-5 Yr Laddered Corp Bond (CBO)
Government bonds 10% Claymore 1-5 Yr Laddered Gov’t Bond (CLF)

?

That would be quite healthy and diverse im my opinion for a 57-year-old and if you know about these products and asset allocation, you not that much of a "newbie"

Good luck!

My Own Advisor
 

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You can split fixed-income allocation to several parts: short term bonds like XSB/CBO, high yield bonds like CHB , REIT ETFs like XRE or ZRE
 

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I'm looking at buying either XRE or ZRE for my & my wife's TFSA. I don't see the prices fluctuate very much - they seem to have flattened. Is now a good time to buy as any?
 

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Discussion Starter #19
RRSP and non RRSP accounts

You should think of all your accounts as a single portfolio. For example, hold your international equities in RRSP, bonds fund in a registered account and canadian equities in a non-registered account.

With this setup, you can save on trading cost and optimized your taxable income.
How is that possible when I have 300K in RRSP and 50K outside RRSP and I want to diversify the portfolio?
 

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I own one single etf XTR, in my TFSA. It is well diversified between bonds, REITS and equities. It pays good monthly income.
 
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