I want to put 20% in a ETF Fund and the other 80% in something safer. I was thinking of putting it in a bond ETF but since the interest rates are so low on them right now, do you think it would be better to put that 80% in a GIC until the prices of bonds fall and the yields increase.
What is the ETF fund that you are putting the 20% into?
"Something safer" usually means a GIC
Bond funds fluctuate in value and it is quite possible for you to be in the red for a period of time, depending on when you bought.
Yes to waiting for bond prices to lower a bit (they are starting to go down already) and no for the GIC. I Just put the money in a high interest savings account or money money market fund. More liquid. The money is ready when you're ready. Not the other way around.
For a 7 year timeframe, don't do GIC.
I'd assumed your time frame was shorter than that.
I'd put the 80% into XSB.
Or, if you are willing to change your asset allocation, do 50% XIU and 50% XSB.
I also was wondering what's a good number of ETF's to go with?
I will be re-balancing my portfolio every 6 months so I guess I shouldn't have to more than 4 or 5 to keep transaction fees low. Would that be correct?
As few as four ETF's can be used to keep it simple and cheap!!
Getting your asset allocation right is more important than which index investments you select.
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