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Discussion Starter #21
Well since I'm not likely to touch any of this money for a good 30 years, I don't really mind 80% equity.

But if funds with 60% equity can perform just as well (or better) with less risk, I don't see any down side to them.

What would you think of MAW104 in RRSP, XGRO in TFSA and MAW105 in non-reg.?

Oh and is there a reason why you say MAW105 should be used in my non-reg account (instead of MAW104)?
 

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To choose active over passive, you need to be convinced not only that active will outperform, but it will beat by the more than the extra costs (MER, TER, taxes, etc).
 

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Discussion Starter #24
I don't have much faith in active management but historically it seems to have been the case with Mawer however... though call but so far I think I'll go with

MAW104 in RRSP
XGRO in TFSA
MAW105 in non-reg.
 

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Well since I'm not likely to touch any of this money for a good 30 years, I don't really mind 80% equity.

But if funds with 60% equity can perform just as well (or better) with less risk, I don't see any down side to them.
This is actually an important point, that something like 60% equity tends to do about as well, so I really don't see the need for 80% equity myself.

But regarding "I'm not likely to touch any of this money for a good 30 years", everyone says that. Reality can be quite different. For example: what if you get sick? What if you're unable to work?

Might you buy a house, or upgrade to a larger house? *

What if a family member has a big health problem and you need extra money?

What if you decide to retire earlier than your original estimates?

What if you want to use some of your capital to start a business? *

What if tax situations (or laws) change and require liquidation? *

It's true that many people can truly set money aside and not touch it for 30 years, but I know very few people like this. Among my friends, everyone has -- at some point -- needed to tap into the money much earlier than 30 years.

The points above with an asterisk * are ones which applied to me personally. My experience has been that time horizons are really not as long as I first thought.
 

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You could go all-in in XGRO. But I wouldn't.
Unless you see a different 1-3 years forecast.
Why not put 50% in now, and 50% the day after the US election? I have a feeling November 2020 will be ......uh ....interesting. (ie: another possible buying opportunity)
 

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Discussion Starter #27
You could go all-in in XGRO. But I wouldn't.
Unless you see a different 1-3 years forecast.
Why not put 50% in now, and 50% the day after the US election? I have a feeling November 2020 will be ......uh ....interesting. (ie: another possible buying opportunity)
It would makes sens. I do feel like we're possibly looking at another significant drop in the near future.

What could I do with the other half?

Would you invest it in bonds in the meantime?

Or should I put as much as possible in my mortgage?
 

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Would you invest it in bonds in the meantime?
Or should I put as much as possible in my mortgage?
You get 30% bonds in MAW104 or 105. I don't buy individual bonds, for the same reason I don't buy preferreds - I don't understand them. I try to stick with what I understand.
Regarding your mortgage, I don't know anything about your tax position, or other finances. Maybe you can use write-off stuff in Quebec - I don't know. I would get some advice on this. Quebec houses prices are pretty reasonable, I'm in Vancouver - things are weird here.
Regardless, I would throw as much as possible against debt, then grow your assets. Just my 2 cents
 

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Also, their MER is A LOT higher than VGRO or XGRO...
You get what you, or don't, pay for when it comes to MER's.
Have a look at the following comparison of MAW105 (or 104) and VBAL and XBAL. All 3 are 60/40 equity/FI.
Mawer has an MER around 1%. The others don't. Look at the "Year-to-date" returns. Mawer is 1%, the others -1%. but the real story are returns since inception (SI) - 8%. If you can find another that beats that, let me know. i'm interested.
 

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Discussion Starter #30
Am I wrong thinking the 30% bond/cash part of MAW104 would be better put in my mortgage instead?

Then I would invest with the remaining into something close to 100% equity?


It's just that I don't see the point investing in 30% (45,000$) in bonds when I could put that part of the investment in my mortgage.

Current mortagege rate is at 1.95% and my marginal tax rate is ~50%.

Am I right or do you think even the bond part of MAW104 can be expected to pay more than repaying a chunk of my mortage would?
 

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It would makes sens. I do feel like we're possibly looking at another significant drop in the near future.

What could I do with the other half?

Would you invest it in bonds in the meantime?

Feelings like this are a very poor basis for investment decisions.

You're trying to time the market. Even the professionals who do this for a living have poor track records in anticipating stock drops, so it's very unlikely you can time the markets correctly.

I suggest committing yourself to some asset allocation you're comfortable with, and then sticking with it. The key is to commit to a plan that won't stress you out, and which you won't keep revising every few months.
 

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Discussion Starter #33
One more question - If I was to go with MAW104 for now and in a few months decided to tranfer everything in VGRO, would I lose anything in the transaction?
i.e. Would there be some fees or penalties associated with selling MAW104 after only a few months?
 

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Look at the "Year-to-date" returns. Mawer is 1%, the others -1%. but the real story are returns since inception (SI) - 8%. If you can find another that beats that, let me know. i'm interested.
The two funds have different start dates; comparing "since inception" returns is like comparing apples and oranges. Not a valid comparison.
 

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Mawer Funds require a 90 day posession before you sell or you 'can' get dinged a fee for short term trades on a MF.
 

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Hi!

So I have about 150k$ sitting in my savings account right now.

Based on my situation, what would be the best way to invest this money?

Some details on my financial situation:

I have ~40k free space for my RRSP.

My salary in 2020 will be around 230k, but on average it's around 140k.

I’m in Quebec, so my marginal combined tax rate is about 55%.

I’m 32 years old. I don't plan on using any of this money for another 30 years. So I'm really focused on the long-term.

I have 2 mortgages.
122k left on a 215k condo I’m renting (I’m the landlord). Interest rate of 1.95% variable.
306k left on a 500k house. Interest rate of 1.95% variable.

My current investments are:
~69k in a TSFA maximum growth account
~150k is RRSP maximum growth account
... and 150k sitting in my savings account waiting to be invested.

My TFSA is currently full but I still have about 40k of space in my RRSP. And I will invest the remaining 110k in a non-reg. account.

I would like a simple investment strategy where I can pretty much dump all my money and barely have to do anything.
I am disciplined enough to re-invest the distributions / dividends but otherwise I would prefer not to have to do anything.

Here are the details of my current mutual fund investments that I will be closing :

TFSA
TFSA

RRSP
RRSP

The MERs on these funds are about 2.5% so I will be taking my money out of them shortly and invest them myself using an online brokerage platform (Disnat).


If really new to all this and need your opinions / advices in the investment strategy I plan to use:

For my RRSP and TSFA I'm planning to go 80% XEQT and 20% XBB. But maybe I should just stick with XGRO (or VGRO?).
Both would give me 80% equity 20% bonds but the 2 ETFs strategy allow me to more easily adjust the repartition if I need to...
Do you think 80% equity is a bit much? Should I tone it down to 30% maybe?

For my non-reg., do you think it could be a good idea to go 100% XIC for tax implications?
I think XIC gets more Canadian dividends so it could be advantageous to hold in a non-reg.? I'm really not too familiar with dividends taxation etc...


I'm open to all suggestions and ideas on what would be the best way to invest / use this money!
Thanks!
Buy and lease out more property.
 
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