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Discussion Starter #1
Here are some suggested 'Easy Chair' or 'Couch Potato' building blocks for your consideration. It takes into account that, over the long term, value and small cap stocks generally outperform albeit perhaps with increased volatility. As always, do your own due diligence.

Canadian Equities (20% of portfolio):

Claymore CDN Fundamental Index ETF (CRQ)
iShares CDN Value Index ETF (XCV)
iShares CDN Small Cap Index ETF (XCS)

U.S. Equities (15% of portfolio):

Vanguard Total Stock Market ETF (VTI)
Vanguard Small Cap Value Index ETF (VBR)
iShares Russell Microcap Index ETF (IWC)
iShares S&P 500 Value ETF (IVE)
or
Vanguard Value ETF (VTV)

International (15% of portfolio):

Vanguard Europe Pacific ETF (VEA)
iShares MSCI/EAFE Value ETF (EFV)
Vanguard All World Ex. U.S. Small Cap (VSS)

Emerging Markets (10% of portfolio):

Vanguard Emerging Markets ETF (VWO)

Bonds (40% of portfolio):

iShares Short Bond ETF (XSB)
iShares Broad Bond ETF (XBB)
iShares Real Return Bond ETF (XRB)

These building blocks might be suitable for an investor with a ten year time horizon or more who can handle a fairly high degree of volatility.

Asset allocation between stocks and bonds could be adjusted depending on your risk tolerance and time horizon.
 

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I recently became more interested in my investments after reading Malkiel and Ellis new intro level book Elements of Investing. They are huge proponents of investing in a whole market fund like the US Vanguard Total Market ETF that you list. While it does give greater coverage and exposure to more companies, does the historical data show that a whole market fund really outperforms S&P500 by a large margin?

I presume the difference will be even more minimal in Canada if you need to choose a mutual fund instead of an ETF. When I was rebuilding my wife’s portfolio, I ultimately decided against investing in a US total market fund because of lack of choice in Canada. She will be making monthly contributions into her RSP and that leaves ETFs out of the portfolio. Other than CIBC’s total US market fund (with a relatively high MER of 1.09), there does not seem to be any other Canadian offerings for a US total market fund. Based on what I reviewed, with its higher MER, the CIBC fund did not seem to be any more beneficial than RBC’s or Altimira’s S&P500 fund with a 0.68MER.

I know ETFs are the way to go these days (and I do have a few in a LIRA), but I really wish there were more index options in Canada for investors of traditional mutual funds. To me, monthly auto contributions to an RFP is so convinient and requires very little active management (other than the occassional rebalancing).
 

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Discussion Starter #6
I have a bank discount brokerage account and have negotiated a $4.95 trading fee. If you have a large enough account, you too should be able to obtain this fee or, otherwise, threaten to move your account to someone who will give it to you and then do it!!

Since I invest primarily in ETF's, I am only interested in obtaining the most rock bottom trading fee and not with all of the bells and whistles on their web site.
 

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TD e-series... your best index mutual funds...
TD e-series US Equity follows S&P 500. It is not a broad market fund like Vanguard Total Market.

PS: I use a combination of the two. I accumulate every pay cheque into TD e-series US Equity in my taxable account. Then every year, I sell my TD e-series US Equity, and buy Vanguard Total Market in my RRSP account. The helps reduce trading cost, while maintaining the relative low cost advantage of VTI.
 

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Discussion Starter #9 (Edited)
I have a bit of a problem getting my head around something called a small-cap dividend fund but WisdomTree Investments seem to refer to all of their funds as 'dividend funds'. They also have the WisdomTree International SmallCap Dividend Fund (DLS).

The markets are on track to have their first down August in five years!! The Dow has been down 9 out of the past 11 trading days.:(

Historic low bond yields are pointing to a weak future for the economy. Existing U.S. home sales just hit a 15 year low with a drop of 27.2% which was much worse than economists had predicted. There is currently a 12 1/2 month supply of homes on the market which is a record.

Either very high inflation or record deflation is possible going forward--or even a combination of both.

The markets are very fragile and there is much fear out there of the big picture!!!:eek:

There is a deep crisis of confidence in the economy.

--Wednesday/9 PM/CNBC/: Madoff in Jail
 

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I have a bank discount brokerage account and have negotiated a $4.95 trading fee. If you have a large enough account, you too should be able to obtain this fee or, otherwise, threaten to move your account to someone who will give it to you and then do it!!

Since I invest primarily in ETF's, I am only interested in obtaining the most rock bottom trading fee and not with all of the bells and whistles on their web site.
i tried with RBC and did not work. so i wonder what large enough means for RBC?
 

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I have a bank discount brokerage account and have negotiated a $4.95 trading fee. If you have a large enough account, you too should be able to obtain this fee or, otherwise, threaten to move your account to someone who will give it to you and then do it!!

Since I invest primarily in ETF's, I am only interested in obtaining the most rock bottom trading fee and not with all of the bells and whistles on their web site.
which big bank gave you that? TD??
 

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Yes, which bank gave you $4.99 pricing?

At BMO investoreline, if you have enough assets with them, the fee comes down to $9.99 but not lower. Unfortunately, my wife does not have enough assets to meet that level and mine are trapped at a workplace based RRSP program with some older legacy stuff with a financial planner (I need to get that moved and take control one of these days).

If you do open a BMO Investoreline account with $50,000 in it, they will give you 20 free ETF trades during the 60 day period following the opening. That offer expires in mid or end of October.
 

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Discussion Starter #13
I'd prefer not to say which of the big 5 banks charges a trading fee of $4.99 but they actually contacted me and offered it to me.

I think that they thought that I was going to move my accounts to a different bank.

I do have quite a bit over $500,000 total in my various accounts-open, RRSP, and LIF.
 

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Discussion Starter #14
Here is another suggested portfolio of ETF's courtesy of Dan Bortolotti, creatore of www.canadiancouchpotato.com and featured in the current Canadian Moneysaver magazine:

Canadian Core Equity, 12%, Claymore Canadian Fundamental (CRQ), MER 0.68%

Canadian small-cap equity, 8%, iShares S&P/TSX Small Cap (XCS), MER 0.55%

U.S. Core Equity, 8%, PowerShares FTSE RAFI U.S. 1000 (PRF), MER 0.46%

U.S. Value Equity, 4%, Vanguard Value (VTV), MER 0.14%

U.S. Small-cap Equity, 4%, Vanguard Small-Cap (VB), MER 0.15%

International Core Equity, 8%,Vanguard Europe Pacific (VEA), MER 0.15%

International Value Equity, 4%, iShares MSCI EAFE Value (EFV), MER 0.40%

International Small-cap Equity, 4%, Vanguard FTSE All-World ex-U.S. Small-cap (VSS), MER 0.40%

Emerging Markets Equity, 4%, Vanguard Emerging Markets (VWO), MER 0.27%

Global Real Estate, 4%, Claymore Global Real Estate (CGR), MER 0.70%

Short-term Bonds, 40%, iShares DEX Short Term Bond (XSB), MER 0.25%

This portfolio has a weighted MER or 0.36%, less than one-sixth the cost of the average balanced mutual fund in Canada!!!

It offers tremendous diversification, with more than 7,000 stocks in dozens of countries and several currencies.

And, it's designed to capture the higher expected returns of both value and small-cap equities.

From everything that I have read about index investing using ETF's, this seems to me to be a very solid portfolio that an investor can buy and hold for the long term with only periodic rebalancing required.

Use a discount brokerage account with the lowest trading fees if you plan to set it up.

Any thoughts or comments?
 
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