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Long-term investment / Index funds

2K views 9 replies 7 participants last post by  AlexInvestSavvy 
#1 ·
Warning: Unseasoned Investor Alert :)

I have funds I want to "plant" in my RRSP for the next 20+ years, which won't be needed until then. Am I too adventurous to plant them in index funds such as SPY/QQQ/VT?
 
#3 ·
Am I too adventurous to plant them in index funds such as SPY/QQQ/VT?
What will you do if they go through a bad stretch of say 5 or 10 years? To invest in these things successfully you have to have amazing patience and not get upset by low returns for long periods.

VT is an excellent investment. And yet some people will complain that over 1 year, it hasn't moved at all. It's down 7% this year so far.

Whether one can tolerate 100% stocks is hard to predict, but is very much a personal thing.
 
#4 ·
The all in one asset allocation ETFs like XEQT are an excellent choice leading up towards retirement when some more conservatism (less volatility) is warranted. Set and forget (which is what I do in my TFSA) BUT one has to have the personality to tolerate wide market swings, e.g. -34% or so in March 2020. What if recovery from that debacle took 5 years? It took about 10-12 years for the S&P500 to recover from its 2000 peak.
 
#5 ·
Warning: Unseasoned Investor Alert :)

I have funds I want to "plant" in my RRSP for the next 20+ years, which won't be needed until then. Am I too adventurous to plant them in index funds such as SPY/QQQ/VT?
Take an investor profile test to see what kind of risk you're comfortable with.
Some people freak out if their stock portfolio value drops by a modest 10% or so. Some are comfortable with 20-30% drops, some aren't comfortable with a 10% drop.

You might want to consider a Canadian Couch Potato portfolio if you're thinking ETFS.
 
#7 ·
Warning: Unseasoned Investor Alert :)

I have funds I want to "plant" in my RRSP for the next 20+ years, which won't be needed until then. Am I too adventurous to plant them in index funds such as SPY/QQQ/VT?
I would rule out QQQ as that is an active decision to over weight a sector and inconsistent with your 20year constraint.

The remaining two are sensible choices to capture market return which in the long run is anchored by GDP growth, and corporations share of same.
 
#8 ·
Very relevant points here to give the pros and cons here, much appreciated, thank you all. It appears risk tolerance and personal preference are a big factor. I like XEQT/VEQT, did not know about these, or Couch Potato, which also seems interesting. Another thing to factor in is exchange rate (for SPY, etc.), which can vary over time and (although, who can really say) USD is expected to weaken vs. CAD in coming few years. Perhaps less of a factor with XEQT/VEQT/Potato, which are in CAD : -)
 
#9 ·
Perhaps less of a factor with XEQT/VEQT/Potato, which are in CAD : -)
From your perspective, being in CAD eliminates the hassle of changing currencies...... BUT VEQT/XEQT market prices in CAD will include the effects of forex for the holdings of VEQT/XEQT that are in foreign currencies. You just don't see the effects directly. IOW, if you own anything that is ex-Canada there will be currency effects if the holdings are not hedged to the loonie. That is a good thing.
 
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