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An Even Better Reason to Fix Your Portfolio

So your portfolio is a disaster. Your RRSP is full of high-cost mutual funds, sprinkled with some random stocks and a bunch of exotic ETFs that seemed like a good idea at the time. You know it’s time to clean house, but you’re not sure where to begin. Well, here’s your chance to fix your portfolio and support a great cause at the same time.

Until last spring, Alex was a healthy, thriving four-year-old who loved playing soccer, swimming, riding his bike and playing with his two brothers. But in late April he was air-lifted from their home on Vancouver Island to the intensive care unit at BC Children’s Hospital, where he spent two weeks fighting for his life. Alex was diagnosed acute myeloid leukemia and has been receiving treatment for this disease throughout the summer.

Alex’s parents—who are clients of PWL Capital—are grateful for the excellent care their son is receiving, and they’re raising funds for the BC Children’s Hospital Foundation with the goal of helping other families dealing with childhood cancer.  My colleagues Justin Bender, Shannon Bender, Amanda Dalziel and I want to support Alex and other brave kids like him by raising $10,000 for their cause.

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Couch Potato Portfolio Returns for 2015

With 2015 now in the books, it’s time to look back on the year that was.

It was another year of surprises: after the gurus continued to predict higher interest rates, the Bank of Canada shocked almost everyone by lowering the overnight rate twice in 2015: first in January, and then again in July. That spelled another year for higher-than-expected bond returns. And while it was a disappointing year for equities in almost all regions, the plummeting Canadian dollar caused the value of foreign equities to soar.

All in all, a diversified portfolio did quite well in the “year when nothing worked.” Yet another reminder of why it is so important to hold all of the major asset classes all the time and ignore the noise. Let’s look at the details.

The building blocks

Here are the returns of the individual TD e-Series funds and Vanguard ETFs that are the building blocks for Options 2 and 3 of my model portfolios:

TD Canadian Bond Index – e (TDB909)
3.07%

TD Canadian Index – e (TDB900)
-8.51%

TD US Index – e (TDB902)
20.74%

TD International Index – e (TDB911)
Source: TD Canada Trust

18.90%

Vanguard Canadian Aggregate Bond (VAB)
3.48%

Vanguard FTSE Canada All Cap (VCN)
-8.74%

Vanguard FTSE Global All Cap ex Canada (VXC)
Source: Vanguard Canada

17.04%

 

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Canadian Couch Potato Threatened By Legal Action

[Note: This post was an April Fool’s joke!]

I regret to announce that this blog is in jeopardy of being shut down due to pending legal action.

On the afternoon of Friday, March 29, I received a letter from the law firm of Zuckercorn & Loblaw, LLP. The attorneys informed me that the name “Canadian Couch Potato” is owned by an Ontario corporation that is threatening to sue for trademark infringement. According to the letter: “You can avoid legal action by immediately ceasing and desisting from any and all infringing activity including use of the canadiancouchpotato.com domain.”

The letter gives me seven (7) days to decide on a course of action, and I am currently seeking counsel from my own attorney before determining how to proceed. Rest assured I will not give in unless I have no other choice.

You can read the full text of the cease-and-desist letter by clicking the image below.

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Couch Potato Portfolio Returns for 2012

I think we can safely say we are now almost four years into the most disrespected bull market in history, to borrow a phrase from Alexander Green. In a recent roundtable in The Wall Street Journal, the moderator opened the discussion by saying, “It’s been another very difficult year for investors.” Um, really? US stocks were up over 16% in 2012, and international equities did even better. If that’s a difficult year, I can’t wait for an easy one.

Indeed, last year was much kinder to investors than 2011, when the Complete Couch Potato returned just 2.36% and most of my other model portfolios did worse. In 2012, all of the model portfolios delivered remarkably similar performance, with returns between 8% and 9%.

The data below were gathered from fund websites whenever available: otherwise I used Morningstar. Returns for US-listed funds are expressed in Canadian dollars. Consider these unofficial results: when I have all the necessary data I will update the long-term Couch Potato performance report card. [Note: The updated report card is now available.]

Global Couch Potato (Option 1)

iShares S&P/TSX Capped Composite (XIC)
6.9%

iShares MSCI World (XWD)
13.5%

iShares DEX Universe Bond (XBB)
3.3%

8.1%

Global Couch Potato (Option 2)

TD Canadian Index – e (TDB900)
6.9%

TD US Index – e (TDB902)
12.6%

TD International Index – e (TDB911)
15.5%

TD Canadian Bond Index – e (TDB909)
3.1%

8.2%

Global Couch Potato (Option 3)

RBC Canadian Index (RBF556)
6.4%

RBC US Index (RBF557)
11.8%

RBC International Index (RBF559)
16.4%

TD Canadian Bond Index – I (TDB966)
2.8%

8.0%

Complete Couch Potato

iShares S&P/TSX Capped Composite (XIC)
6.9%

Vanguard Total Stock Market (VTI)
13.4%

Vanguard Total International Stock (VXUS)
15.2%

BMO Equal Weight REITs (ZRE)
18.1%

iShares DEX Real Return Bond (XRB)
2.4%

iShares DEX Universe Bond (XBB)
3.3%

8.7%

Yield-Hungry Couch Potato

iShares S&P/TSX Cdn Div Aristocrats (CDZ)
9.0%

iShares DJ Canada Select Dividend (XDV)
8.8%

iShares Global Monthly Adv Dividend (CYH)
9.5%

BMO Equal Weight REITs (ZRE)
18.1%

iShares S&P/TSX Preferred Stock (XPF)
11.1%

iShares DEX HYBrid Bond (XHB)
8.7%

iShares Advantaged US High-Yield Bond (CHB)
13.0%

iShares Advantaged Canadian Bond (CAB)
3.0%

8.5%

Über-Tuber

iShares Canadian Fundamental (CRQ)
9.8%

iShares S&P/TSX SmallCap (XCS)
-2.6%

Vanguard Total Stock Market (VTI)
13.4%

Vanguard Small Cap Value (VBR)
15.7%

iShares MSCI EAFE Value (EFV)
14.5%

iShares MSCI EAFE Small Cap (SCZ)
16.8%

Vanguard Emerging Markets (VWO)
15.8%

SPDR Dow Jones Global Real Estate (RWO)
21.9%

BMO Mid Federal Bond (ZFM)
2.8%

BMO Short Corporate Bond (ZCS)
3.6%

9.0%

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Introducing Passive Aggressive Solutions™

[Note: This post was an April Fool’s joke!]

If you’re a disciple of the Couch Potato strategy, chances are that you handle your own investments without an advisor. And that’s the right decision for many people. However, over the past few months, I’ve received many emails from readers who need the advice of a professional to help them achieve their financial goals.

That’s why I’m pleased to announce my new investment advisory service, Passive Aggressive Solutions™. I want to help you take Couch Potato investing to the next level: after all, in difficult markets like these, settling for average just isn’t good enough.

Here’s how the service works: I’ll start by helping you build an individually tailored portfolio of low-cost ETFs or index funds, using a proprietary algorithm I designed using Excel. That’s the passive part. Then I’ll implement aggressive strategies designed to earn above-market returns—something you can’t do with index funds. It’s like having your cake and eating it, too.

Of course, I want a slice of the cake. But the business model for Passive Aggressive Solutions™ is unique. My original goal was to charge a flat fee,

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