Comments for Canadian Couch Potato

Comment on Put Your Assets in Their Place by Canadian Couch Potato

Canadian Couch Potato — Thu, 09 Sep 2010 02:54:13 +0000

@Dong: There’s no magic solution to your problem. “Optimized” means keeping taxes as low as possible, but that doesn’t mean eliminating them altogether. Many wealthy retirees do hold bonds outside registered accounts. If you’re in this situation personally, I’d suggest talking to an accountant or tax advisor.

Comment on Put Your Assets in Their Place by Dong

Dong — Thu, 09 Sep 2010 02:32:19 +0000

what about someone with a non-registered account worth much more (say 10x) than his rrsp/tfsa, how can you be tax efficient and properly diversified at the same time ??? suppose a classic 60/40 allocation, i fail to see how things could be divided, fixed income would be all in rrsp/tfsa and taxable account would be almost 100% Canadian based ETF and/or high dividends paying stocks.

i often read that all account should be treated as one single portfolio and optimized regarding tax-returns. Any guidance regarding a situation like this ?

Comment on Choosing a Canadian Bond Index Fund by Financial Cents

Financial Cents — Thu, 09 Sep 2010 01:15:37 +0000

Great post.

I own XBB in both my TFSA and RRSP, enough in the latter to DRIP more than one full unit each month. It’s great to have that secure compounding machine running for me. I also avoid high-yield bonds. Why not just have equities then – use XIU?

BTW – I need to read John Bogle’s book, I’m adding it to my list.

Cheers,
Mark

Comment on Review: Why Smart People Make Big Money Mistakes by Dd

Dd — Wed, 08 Sep 2010 22:18:07 +0000

Great post and I have to admit that I am guilty of at least 2 of these mistakes–The sunk cost fallacy, and the The ego trap

Now if I can just do better than index funds

Comment on Choosing a Canadian Bond Index Fund by Brian

Brian — Wed, 08 Sep 2010 20:43:28 +0000

Good analysis Dan. I’ll be switching over to XBB from td e-series once I have a large enough portfolio. Always good to see index funds out performing their respective active funds. Makes me happy =)

Comment on Choosing a Canadian Bond Index Fund by Canadian Couch Potato

Canadian Couch Potato — Wed, 08 Sep 2010 19:01:52 +0000

@Sean: Thanks, glad you liked the post. If you’ve held XBB since 2000, I would think you have quite well at 6% compounded during a difficult decade!

I have an allocation to emerging market equities, but not bonds. Emerging market bonds would clearly be added to a portfolio for potentially high yield and not for safety, and as I said in my response to DM above, I prefer to take risk on the equity side. However, it would be interesting to see how emerging market bonds are correlated with other asset classes. They may offer some diversification benefit, but I have not looked into this.

Have you looked at the BMO emerging markets bond ETF?

Comment on Choosing a Canadian Bond Index Fund by Sean

Sean — Wed, 08 Sep 2010 18:46:52 +0000

Excellent and informative post!

I started buying XBB soon after it was created in 2000. I like the all-in-one solution. As you say, it has a significant short bond position also.

What are your thoughts on Emerging market bonds?

Comment on Choosing a Canadian Bond Index Fund by Canadian Couch Potato

Canadian Couch Potato — Wed, 08 Sep 2010 14:37:57 +0000

@Brad: Sorry, I didn’t mean that you had to have a bank account with TD, only that you need to open an investment account with TD. You cannot purchase the e-Series funds through any discount brokerage other than TD Waterhouse. I’ve clarified the language in the post.

Comment on Choosing a Canadian Bond Index Fund by Canadian Couch Potato

Canadian Couch Potato — Wed, 08 Sep 2010 14:35:45 +0000

@DM: I use only short bonds, too, though I use Claymore’s laddered ETFs: my allocation is split evenly between government and corporate bonds. Like you, I’m concerned about rising interests rates, but really I just like the lower volatility of short bonds. In my opinion, the role of bonds in a log-term portfolio is to smooth out volatility. That’s why I don’t use high-yield bonds: if I want to take on more risk in hopes of higher returns, then I do that on the equity side.

Comment on Choosing a Canadian Bond Index Fund by brad

brad — Wed, 08 Sep 2010 14:30:55 +0000

You wrote “The e-Series funds, however, are only available to TD account holders.” Is that really true? I don’t have any TD accounts, yet I’ve been investing in the eSeries funds since about 2003. I just filled out the application and mailed it in to set up my eSeries account. I didn’t see anything about this requirement in the earlier blog post you linked to, but maybe it was in the comments?