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Yeesh, has it been a year already? And Holy Shit, WHAT a year it’s been. A completely topsy-turvy presidential election, repeated attempts (and failures) to kill Obamacare, 3 devastating hurricanes, and that’s just in US news. When we started this Workshop we were sitting on a beach in Cambodia, and now we’re sitting in a coffee shop in the Frozen North.
Through it all, we’ve been posting these Investment Workshop articles, and slowly but steadily built up an investment portfolio week after week. All in, we’ve invested $12,000 Canadian and $12,000 American for the purposes of this workshop (depleting our own cash cushion in the process), and now 52 weeks later we are ready to draw this little experiment of ours to a close. So how did the portfolio do? We’ll get to that in a minute.
But first, let’s do a brief recap of what we’ve learned about investing over the year.
Investing Is Easy
This is really the big lesson we’ve been trying to teach with the Workshop. Investing really isn’t that complicated.
With mind-numbing regularity, we put more money into the portfolio every two weeks and if that seemed a bit boring to you, that’s exactly the point. Walk into any bank or turn on your local business channel and you’ll hear all sorts of smart-looking guys in $1200 suits gabbing on about alphas and futures and put/call options and risk spreads. We didn’t mention ANY of that because you don’t need to know any of it.
Buy the Index, put money in every 2 weeks. That’s all investing is.
Predicting is Really Really Hard
That being said, predicting what direction the stock market will gyrate is really really REALLY hard. When we first started this Workshop, I was convinced. CONVINCED we were entering an economic recession. Trump had just gotten elected, the Dow had tumbled 1000 points in overnight trading, and I was like “Welp, guess a 2008’s happening again.”
And I was wrong.
Utterly and completely wrong. Instead, the Dow had recovered by opening bell the next day, and has been on an upward tear ever since. As of the time of this writing, the Dow is sitting above 24,500, having smashed record after record on it’s way up. And now that Trump and the Republicans are on the verge of passing their tax plan dropping corporate tax rates from 35% down to 20%, it looks like this rally isn’t over yet.
If I had listened to my emotions and the screaming news headlines a year ago, I wouldn’t have invested money into the stock market for this Workshop. Hell, I may even have SOLD some of the equities in my “real” portfolio. And if I had done that, I would have missed out on one of the biggest stock market rallies since I started working in 2006.
But I didn’t, and that’s precisely the right thing to do. Investing decisions should never be based on trying to predict the stock market. Investing decisions should be made analytically, using cold hard math, and that’s why we’re sitting on such a big gain one year later.
Set Your Asset Allocation Unemotionally
The biggest and most important decision you’ll make in designing your retirement portfolio is setting your asset allocation, and you do that based on your age, time to retirement, and personal risk tolerance.
If you’re 15+ years away from retirement, you might want to have a higher equity allocation like 80/20. If you’re closer to retirement like us, make your portfolio take on a more balanced allocation like 60/40. Every other decision (how much to put in US vs International, whether to currency-hedge, etc.) will make a small difference in your portfolio’s performance, but by far the largest impact is your equity/fixed income allocation.
Make that decision unemotionally, then stick with it.
Rebalance, Rebalance, Rebalance
The only skill you need to learn when it comes to the day-to-day management of your portfolio is how to rebalance it, because every transaction essentially boils down to it.
Stocks go up? Rebalance.
Stocks go down? Rebalance.
Adding in money? Rebalance.
Taking money out? Rebalance.
Every 2 weeks when we deposited more money into the account, we did the same rebalancing calculations over and over.
Step 1: Figure out what your current asset allocation is.
Step 2: Figure out what your target allocation would look like.
Step 3: Calculate what transactions you need to do to get there.
Hopefully through mind-numbing repetition we’ve taught you how to do this yourself, but if you’re still having trouble (or are just lazy), we built a tool to help you do it. Feel free to use it whenever you want.
Don’t Pay Fees
Keep your portfolio MER’s low and don’t pay fees.
In my entire investment career I don’t think I’ve ever paid a single dime in transaction fees, account maintenance fees, or transfer fees and I’m happy to report that with this workshop we’ve kept that record.
Fees suck, and will eat away at your portfolio little by little like a thousand tiny termites if you let it. The nice thing about ETFs is that because they’re traded on the stock market, you’re not tied to any brokerage company like you would be with a mutual fund.
Which is great because when/if your brokerage company starts acting like a jerk, you can take your ETFs and skedaddle to someone else.
That is MY money, and nobody gets to put their greedy little mitts on it.
Don’t pay fees.
Watch Your Money Grow
If you followed the workshop, opened up the accounts I wrote about, and actually built this portfolio, you’ve pretty much learned all the investment skills you need to retire. This is the same portfolio we used to survive the stock market crash of 2008/2009, it’s the same portfolio that allowed us to become millionaires, and it’s the same portfolio (with some tweaks) that we now use to live off of.
For this portfolio to go up in value, all you need to do is wait. Because it’s built off of Index funds, it can NEVER go to zero and will ALWAYS go up over time. The fact that it went up this year is a nice surprise, but if it had gone down (as I fully expected it to when I started it), all you have to do is keep putting money into it, buy into the storm, and wait for it to recover. In fact, that was my initial intention with this Workshop. Thinking we were going into a stock market crash following Trump getting elected, my plan was to demonstrate how to invest despite everything falling, and then just keep running the workshop for however many years it would take for the portfolio to recover. The fact that it made money in one year was a bit of a shock for me.
So how much money did we make?
Well, here’s the Canadian portfolio:
And here’s the American one:
So that’s 12699.75 / 12000 = +5.8% up for the Canadian one and 12848.29 / 12000 = +7.1% up for the American one. The difference between them was caused by the relative underperformance of the Canadian Index compared to the US one (though to be fair, EVERY index underperformed compared to the US one this year).
And remember, because we built the portfolio from scratch over a year, we would generally expect about half the upside/downside of the underlying assets. So if the combination of ETFs we picked went up 10%, we would expect to see our portfolio be up 5%. Conversely, if it went down 10%, our portfolio would only be down 5%. This is the natural effect of dollar-cost-averaging since only half the portfolio was invested throughout the year (on average).
On our actual fully-invested investment portfolio which most closely mirrors the Canadian portfolio, we’re up 11% YTD, and that matches up the performance we’d be expecting in our workshop portfolio, so that’s great. 11% ain’t nothing to sneeze at, since for us this is a gain of over $100k. Other FIRE bloggers we’re talking to are seeing even more impressive numbers depending on their equity allocation and portfolio size.
Thank You and Good Night
So that it. That’s how you build a low-cost Index-hugging ETF-based portfolio that will help you get to early retirement, and then fund your retirement once you’ve pulled the trigger.
This has been a great year and running this Investment Workshop, though a lot of work, has been a blast. Many many people over the year have emailed me saying they finally “get” how to invest now and they’re no longer scared of the stock market, which is great. I hope we’ve all learned something from this experience, and with that we are signing off.
I know I said this was the end of our workshop, but actually, we decided to extend it by adding an investigation into Robo-Advisors! Click here to check it out!
Aaaand we discovered a new tool that makes investing with Questrade much, much easier. Check it out here!
How much does it cost to participate in the Investment Workshop? NOTHING. Because that's how we roll. All we ask is that you sign-up using the following affiliate links to keep it free forever:
Or, prefer to use a Robo Advisor? Check out Wealthsimple, and get your first $10,000 managed for free!
Disclaimer: The views expressed is provided as a general source of information only and should not be considered to be personal investment advice or solicitation to buy or sell securities. Investors considering any investment should consult with their investment advisor to ensure that it is suitable for the investor’s circumstances and risk tolerance before making any investment decisions. The information contained in this blog was obtained from sources believe to be reliable, however, we cannot represent that it is accurate or complete.
57 thoughts on “Investment Workshop 53: Wrapping It Up”
I just want to say again how much I’ve appreciated this series. For most of my adult life I’ve thought off and on about investing money, but it was such an intimidating concept. I read books on the concept of investing, but they all started with instructions like “Open a brokerage account”, which was essentially greek to me. Yours was the first place where I found step by step instructions for the entire process. As a result, for the first time this year my money actually earned more money than I can spend in a single Tim Hortons visit. Even if it’s not a regular series, I hope to see more articles on the subject in the future. Thanks again!
Aww, thanks! That really does mean a lot to me.
Great way of teaching us how to invest for real.
Now that everyone is thinking the market will keep going up due the tax cut bill, it might tank.
Nobody knows so…keep investing a little regularly..this is the only thing to do really.
Haha totally. I was just talking to Jim Collins about this, and he pointed out that if I was 100% wrong on Trump’s election, I’m probably 100% wrong on the tax cut think.
That Jim. So encouraging.
Thanks for all the awesome work that you and FireCracker put into this. I’m 22 and picked up investing back in February and originally went to the bank to get started. They introduced me to their mutual funds and if I hadn’t learn about index funds at the time, I would’ve blindy let the banks charge me ridiculous MERs for managing my money. The only reason I didn’t was because I heard about the both of you from a CBC article a few months before that. I’m now on my path to one day achieving FIRE.
I hope you will start a new series and continue to update your community with current events and investment advice.
I also wanted to wish you and everyone in the Millennial Revolution community a merry Christmas and an awesome New Year!
Thank you! That’s great you’re on the path to FIRE. And I WILL do a new series next year, I just haven’t figured out what it is yet.
Merry Christmas to you too!
FOMO on crypto has given me many sleepless nights, reading this has brought me back to earth. I’m only a year away from the nomadic lifestyle, not sure why greed and envy is creeping in
Great article, staying the course
Jesus Christ, there are SO MANY EMAILS asking about crypto.
STAY AWAY. Indexing is how you get rich over time. Bitcoins are how you get temporarily rich, then lose it all within the course of a few hours.
funny how everyone is keen on Crypto just when its at a peak
bah human nature
if anyone wants to speculate and buy the new Bitcoin , look for something that’s at a low NOW
a little off topic, but i assume up north means back in canada? do y’all keep an apartment for when you’re not on some crazy jaunt around the globe where you can go and chill awhile?
Like a secret love nest? Or love igloo?
No, sorry to disappoint, we’re continuing to use AirBnb’s and short-term lets in Canada just like when we were travelling. The only reason we came back for the holidays is because we’re applying for a visa which requires us to apply in our home country. A future post will document that rather “fun” process.
Hi Guys! Just wanted to stop by and thank you for doing this workshop. Its been a great experience watch you guys do it and I’m sure you’ve helped a lot of people greatly! Also props for quitting. There is a famous movie with the following quote “Quitting while you are ahead is not the same as quitting.” 🙂
Many people would have stuck with this series because: A. it brings readers, and B. having a content line to write on is easier. But you guys wrapped it up in a year and this will keep it interesting and concise for people who want to read it in the future. Great Job!!!
Lastly, I think it may help some of your lazier readers 😉 (ahem, this one, for example) to mention some even lazier re-balancing methods (you may have mentioned this in past, if you did I apologize for the duplication):
1. Choose your portfolio allocation.
2. Invest in proportion to your original allocation every 2 weeks.
3. Once a year, see if you need to re-balance – ex. your overall categories are +/-2-5% off from the targets.
You will pay a little bit in taxes because unlike the method in this workshop, you have to actually sell or exchange investment. If you are in the US, make it so that you can do all of this within your Roth or IRA and then you’re all set – very lazy.
Thanks for that!
But I don’t understand your method. Invest blindly towards a set allocation and then rebalance later? If I had done this during the 2008/2009 crash I wouldn’t have recovered my money as fast as I did.
It’s less work, yes. But that’s why I made that calculator…
Yes, if you are recalculating every two weeks, your contributions will for the most part keep the portfolio in balance.
Wandered has it right, especially for older investors such as myself. I don’t have a 20 year horizon to average out a major crash, plus at this point my egg is much bigger. What is more a 20% drop in a Million, or a 20% drop in 50 K ?
I have a 5-10 year horizon, so really need to protect my egg with an allocation rebalance strategy.
My allocation is closer to 50/50 at this point because of short term cash needs ( RESP payments for 2 kids in University = @ $60K over the next 4 years) Some accounts that will probably be collapsed within 5, and retirement in 5-6.
great work Wanderer, can’t wait for your new thread next year.
Great job guys..if its not this blog, I would have not even started and keep paying my banker suites :-).
I joined late in the party (June 9th) and invested in Canadian portfolio (60E/40B) every two weeks with 5k
My numbers are $62,561.96/$60,000.00 which is 4.26% UP.
Not bad for newbie like me.
I also drifted my allocations to 65E/35E seeing the bull run and lazy to rebalance 🙂
Now that I got confidence, I might stop paying MIBs (Men in Black/Bank) and route my MF’s to this portfolio.
Now I have to figure out how much the tax man will collect from my gains.
Quick question though, Does QT will send the T5’s for all the accounts or only tax subjected accounts such Un Registered ?
Any tips on saving on taxes ?
Route my MF’s to this portfolio? No idea what you’re trying to say.
And as for your tax questions, Questrade will issue you a T3 or T4 for interest/dividends paid throughout the year, but if most of your gain is capital gains (i.e. the value of your ETFs going up), you don’t have to report anything until you sell. Once you sell, you report your capital gains as (Price Sold – Price Bought) x 50% and then you add that onto your income.
Thanks Wanderer for the tax clarification.
Sorry, i meant Mutual Funds (MF) from bank to be transferred to my portfolio.
My Mututal funds are in TFSA accounts (CIBC) and have to figure out the best way possible to transfer them without any tax implications.
For TFSA you can either spend the $50 or so that the bank charges to transfer a TFSA and send it to your new brokerage, or you can just sell everything, take it out, and put it wherever you want. Nothing’s taxed in a TFSA, and whatever you remove will be added to the following year’s TFSA limit.
I did the former, and Questrade refunded me the transfer fee (which my bank – not Questrade – had charged me) after I had the money with them for three months. It was the same deal with RRSP, except that you definitely don’t want to sell off and take your money out of that account, since you’d have to pay taxes on it.
Will do the the first option as advised of transferring my TFSA accounts from CIBC to Questrade.
another question, while doing so..does the Mutual Funds in those TFSA accounts gets sold/cashed out
transferred as is to Quest Trade so that I can sell them and buy the ETFs mentioned in this blog ?
Depending on the funds, you might be able to transfer them “in-kind” and keep the funds that you have. What you’ll more likely want to do is cash them out and transfer the cash, which you can absolutely do.
Thank you so much for all the hard work you both did in creating this blog to share your knowledge. Because of your blog, I know a lot more about finance than I have ever had before and it only took 1 year.
I was really worried when my portfolio took a dip a few times this year ( the whole NK nuclear thing and various tax plans) If it wasn’t for you and the FI community I would not stay steady.
Keep up the good work. Love your writing and perspective on life. I always go to your blog for inspiration and knowledge about finance and life.
Looking forward to what you have in store for us in the upcoming year. Thanks for taking us along your journey and adventures around the world.
Zoe T., when you see your investments take a dip just remind yourself – there is no money in that account. Its only pieces of companies, and the number you see is just a poor proxy for what you really own.
Great job guys, have a happy holiday Season. Ya I thought we might be at the end of a cycle by now, but I am almost never right.
Zoe, just think, if it happens, you have a balanced portfolio, and can move all that Bond money into Equities.. Bring it on.. think long term.
Awww, thanks Zoe! Those dips will happen, but they always recover.
Absolutely brilliant summary of the year to date. Your investment workshop has been a very helpful reminder to stick to the plan whatever may be occurring in the world. Best wishes to you both for the holiday season and the new year.
Thanks! And Happy Holidays to you too!
great series . thanks
the 60/40 portfolio is a no brainer with Questrade
and i have been adding and buying all year too and my account is up 10 % in 12 months
BUT .. I am having a hard time getting back to rebalancing and buying bonds
its actually not that much allocation ; 20 % only , because Prefereds are the other 20 %
BUT … i know rates are going up in Canada in the next year and bonds just haven’t dropped with stocks rising as they should do ?
so i am finding it hard to go completely 60/40
any suggestions much appreciated ??
Err…not sure what you’re asking here.
oops . sorry
is it advisable to buy bonds knowing that rates will rise soon or wait for the rates to rise and buy when bond prices have dropped ??
Please correct me if I am wrong, but there are 2 schools of thought
1. Keeping Balanced
Keeping balanced is how most Mutual funds work, and I think that was the method of the exercise. the balance is kept with each contribution, it never needs to be, rebalanced.
Rebalanceing means, keep putting money into each class (equity/cash) at the exact same amount, lets just say $500 to bonds, $500 to Equity. After a set amount of time, or at completly random intervals… you do some math and look at the percentage of each to the total at that time. If, the percentages are not at your target (60/40 etc) You sell one and buy the other.
“BUT .. I am having a hard time getting back to rebalancing and buying bonds”
Because you are trying to time the market… dont.
Investing should be reactionary, not speculative, and you are trying to speculate. “But what if it keeps going up, (Bitcoin) I might be missing out ?” yep, or you may be avoiding the mistake of a lifetime.
1. Set your allocation based on your Investment Horizon (60%/40% etc)
2. Keep balanced to your percentage levels using one of two methods
a) Rebalance with every contribution
b) Rebalance once a year, every year to your asset allocation
thanks for the reply Spaceman
very wise words . that is the way to do it , rebalance
i should have said that i have an amount in cash in my account which i need to put into
bonds , but its very easy to see cash and bonds as the same
its hard to buy bonds with my cash with interest rate increases coming up …. (that is more of a sure thing than the overall stock market which can go anyway )
Bonds are a funny thing, but overall, they have held their value because of distributions.
So i am not concerned that they fall in value, even with interest rate hikes.
I split 50/50 short and long term Canadian Bonds, to hedge against interest rate hikes. Long are affected more. Why have money in Bonds at all? Again, its where you want to be in case of a market correction, and we don’t know when that will happen. (yes i do… 2019…) no you don’t moron… who’s talking in my head? Get the hell out…
ha ha … thanks for the encouragement .. good advice
Just Do it, dont’ look even look at the market, that is the whole concept of balance. Once you start speculating, you are timing the market. Put away the crystal ball, and follow a set strategy.
Bonds are funny, yes they drop with interest hikes, but they pay our distributions. Plus the drops are minimal compared to Stocks. I use a 3 phase Bond ladder T-bill/Short term/Long Term.
T-bill – .5 % interest only, no price fluctuation
Short – 1.0 % distribution, with small price fluctuations
Long – 1.2% distribution, larger price fluctuations
I keep an even amount in each, and this composes my 40% Bond component. So interest rates hikes, if they happen, don’t phase me a bit. But when a correction happens, I have cash to rebalance back to equities and take advantage of the next market cycle.
FireCracker & Wanderer, The blogs, articles, series have all been amazing and extremely well written. This GenX wishes he had learned all this 20 years earlier but it’s never to late to start and what a crazy start it was! I’ve reallocated my 401k like a boss which is now up 12% since I started reading this site, my first ever Roth IRA (which I now know how to spell 😉 ) and an investment account which is up 7%. I even started my son on his adventure to FIRE. WOW!!! And thru millennial-revolution i’ve found MMM, DimesandDollars, JLCollins, Mr. Tako, BoggleHeads, and soooo much more. Every Monday, Wednesday (my favorite- sorry FC), and Friday’s I look forward to your postings, feedback, jokes, and everyone‘s comments.
Thank you, thank you, thank you! Can’t wait to continue the investment series through 2018 (and beyond right? This should be a 5 year thing 😀 ) where we see how our investment grows year after year.
Happy Holidays, Merry Christmas, Happy Chanukah, Happy Kwanza, and Happy Boxing Day to everyone! And may 2018 be a very prosperous new year to all!
That is a lot of positive energy, and quite frankly that grosses me out, so quit it!
You are awesome, and so glad we helped here. I’m not sure what series we’re going to do in 2018, but whatever it is, it’s going to be epic.
Merry Christmas and all that back to you!
I also want to add in my thanks, as this series is what finally pushed me over the edge to get off my ass and do something productive with my money. I previously had it “invested” with whatever the nice lady at the bank had recommended, making 1% or less per annum for years. As of now, my $64,000 invested is up $2,500 since May – about 3.9%, but as you said in the article, much of the money hasn’t been in there the full term.
In case anyone cares, I decided to go with the current Canadian Couch Potato model, started at 60-40 but am slowly moving closer to 75-25 due to having a defined benefit pension which already provides stability.
Interesting, so what is your Investment Horizon? Remember that FC and Wanderer are already retired, and the goal of the exercise was to preserve capital, and see a relatively decent growth. (aka how we survived the crash of 08)
Asset allocation usually works the opposite, when you have a small amount of cash at the beginning of your investment journey, a higher Equity component is fine, as you literally have nothing to lose, Also you have a much longer time to wait out market corrections. typical corrections run on average about 4-5 years, so over 30 years who cares. Some even advocate 100% equitys… don’t get me started…
But as you get closer to FI, or in my case retirement , you gots a much bigger NE… (nest egg) and therefore want to protect the little hatchling… so your allocation switchs. You also don’t have the advantage of waiting out the cycle, or 2 or 3, depending on your age.
64K is a substantial amount, so invest it wisely.
Thanks for the reply and the encouragement. My earnings and savings efforts are very modest compared to many on here, but I’m doing what I can to keep myself feeling free while still enjoying life.
I’m 34, have a current savings rate in the 40% range, but do have plans of home ownership and a family in the next couple of years, which will undoubtedly reduce my ability to save, unless my newly-minted management degree turns out to be more useful than I’m expecting it to be.
As a consequence I don’t foresee realistically retiring until at least my mid-50s, which conveniently coincides with the earliest date I can take an unreduced pension.
I’m ok with this, because even though I make an ok salary and am 10 years into working for my employer, I only work about 15 days a month and now that I’ve finished my degree – had my last exam yesterday – I intend to “really start my career” with some kind of side gig or new project.
As such, my plan of gradually shifting to 75% equities is because I figure that I can weather a bit of volatility because 1) I don’t plan on withdrawing the full amount anytime soon (aside from a house down payment with my girlfriend in the next year or two), and 2) I’ll have DB pension income to fall back on in retirement if anything goes wrong, although in planning my finances I’m generally pretending that my pension doesn’t exist. I have a third layer of protection in the fact that there’s a good chance that my parents will leave me some money in the future (and they’ve already offered to help with a house down payment – a generous offer which I don’t plan on accepting). For a couple of reasons, I’d really prefer not to think about that last one, and it’s once again not actively considered in my financial planning, but it’s a layer of protection nonetheless.
In addition to the $64k already invested, I have another $20k or so in cash, a good half of which I’m gradually feeding into my investments, in addition to the $20k/year I plan on continuing to set aside, at least until home ownership reduces my discretionary income. The idea is to DCA in order to smooth out any near-term shocks in the market.
All of these plans are made together with my girlfriend of three years, who’s 7 years younger than me but already has a healthy little nest egg of her own and a similar ~40% savings rate, despite being only a year out of studying full-time and sharing all of our living expenses. Her investment strategy so far is far more conservative than mine – I suppose you could almost count that as another layer of protection, even though it’s actually just because volatility scares her.
Perfect, you have a long way to go, and several other streams of capital, so for sure I would have no problem at your age, with a 75% equity position, but remember at this moment in time, we are 9 years into a market cycle, and several of the markets are at record levels. Nasdaq up 300%, Dow up 200% from 2009.
If you are going to allocate 75%, then look at some of the less volatile equities. Preferred stock, dividend paying ETF’s, value plays, that sort of thing.
And definitely not Bitcoin….
Thank you so much for the workshop. First time I started investing (hence the alias) was when I wanted to follow this workshop and I am so happy I did.
I followed the workshop to the letter with an 80/20 allocation (I have a long time horizon) and the return were pretty much similar to yours.
This workshop gave me so much more than just the financial gain. I can criticize what I see or hear from our financial adviser (where the bulk of our investments are) with better knowledge and make much better decisions. I am still kind of scared to manage all our portfolio on my own, but I should get over it and take the plunge.
Out of curiosity, do you two completely manage your own portfolio now or do you still use an adviser?
It is a bit sad to see this wrap up, like a good book ending or a long-going TV series coming to an end.
Thank you, and I can’t wait and see what’s next!
Whoa. Big surprise to see my name up in lights. I’ve been a JLCollins convert for a long time but my copy of the book will be going to a great cause in helping someone who is just starting out on their FI journey.
Keep up the great work guys, your words reach further across the globe than you realise.
Big thanks from Australia.
Hi both and thanks again for all the information you have shared over a year!
I have also started investing recently – thanks to the articles you were publishing! 🙂
I just have one question about the annual results analysis: are all the transaction fees included in, for example, your figures above? I just opened an account recently with the UK Vanguard, and I am still not sure how to see the charges, and when and where they are published..
Would all those bi-weekly balancing actions eat of lot of the profit?
Thanks for your clarification on this question and sorry if you wrote about it already – I have probably not understood or missed it.
Found your blog a few weeks ago and spent the past couple of days reading the Investment Workshop from start to finish. As a UK reader, I’ll need to figure out how the details work for me, but the overall philosophy was really interesting (although, I confess, I started skimming the 401k etc sections…)
A couple of points. Firstly, you’ve mentioned a few times, “avoid all fees” (I agree). I’m looking at Vanguard in the UK. Each fund has an OFC (ongoing fund charge, aka MER, I think) of between 0.06% and ~0.7%, which unavoidable no matter who you’re with, but what you want to keep as low as possible. However, Vanguard UK also have a 0.15% yearly charge on all your holdings (a platform charge). Is this latter fee one that you class as avoidable/unacceptable? Or did I miss this in the discussion. (I’ve been doing a little research and I don’t think I’ve found anywhere in the UK that doesn’t have some sort of platform charge, so I’m not sure this will change who I end up going with, just wanted to fully understand your position/what was happening.)
Second point. At the end of each of the workshop posts you have a “Workshop Tools” section. I know that you’ve just gone through and removed all the TDA links. But you’ve now got Vanguard with a strike through listed in the for “American Readers” list. Which I’m not sure was intended…?
Thanks again for a great series. You’ve given me some food for thought regarding my bond/equity allocation, which funds of EFTs I buy and I loved the couple of posts you did discussing the guaranteed income from bonds and how your SWR, bond/equity allocation etc tied into that (workshop 18 specifically – it was my favourite and most useful post of the series!)
Great summary of the workshop results. I’m halfway through the series and jumping out of order. I like the predictions vs. what actually happened recap. Will you both be doing a post on 2018 predictions and strategies for the new year? Again markets are high and everyone is guessing when the bull market will end. I’m sitting on some cash and not sure if it’s better to deploy it or wait for a correction. What are some indicators to look for in a lump sum deployment vs. DCA? Happy Holidays!
Thanks for your blog. I have been reading for the past week. And since I am new to investing, I wanted to get a clarification on something.
You started the investment workshop on Nov 2016 and did it till Dec 2017, if the dates on the blog posts are correct.
The Dow Jones index on Nov 18, 2016 was 18,867
And on Dec 2017, it was about 24,700.
So, the percentage increase was (24,700 – 18,867) / 18,867 which comes out to around 30%.
You concluded that in that time period, your increase was 7.1%
That’s a pretty significant different.
If the math and dates are correct, do you now think a different allocation percentage would have been better?
Hi there, I know it’s been a year, but I’m just discovering this now! Thanks for a great resource.
In order to determine your performance, you have to compare to the original $12000 you put in. So do you have to always keep track of how much you actually put in, or how much your “original” amount was? Do you guys do this? Or is there another way to measure? Every month I put aside a certain amount, but it might be more if I have a little extra, so now I’m not sure how much the “original” amount is. Is it essential for me to go back and calculate?
Calculate your return using the amount that actually goes in rather than the amount that you intend to invest. This is usually tracked for you as your portfolio’s “book value,” depending on the brokerage.
Hi guys, I am a big fan of your work and teachings, thanks for sharing all this information with us, it’s been so valuable!
I have a question that probably has been talked about before, but can’t find a specific answer or article talking about it now. I first started Index ETF investing around January 2017 following this guide and others. I have stuck to my ETF choices ever since which are 90% Equities, 10% Bonds:
30% VUN (the US)
30% XIC (Canada)
24% XEF (International Developed)
6% XEC (International Developing)
10% ZAG (Canadian Bonds)
My question is, with all these new “hot” ETFs coming out which are better packaged than my original choices, even the “all in one” recent ones, is it worth thinking about this? selling some of my old choices and replacing them? How important do you guys think this is? I did a lot of research with my original choices back then, and they were efficient low cost ETF back then, but I am not sure if I should keep using these ones, if the slightly lower fees or so in the new alternatives are worth selling off the old and buying new.
Thanks and cheers from Vancouver!
Thank you for this! What are your thoughts on VGRO ? I invested in it through questrade and they claim to keep the portfolio balances Bonds 20-80% Equity. That’s seemed to be the easy hands off option for me with a MER of .22%. Maybe I should do it myself to try and reduce towards the .16% MER?
Helloooo! I was wondering if you were going to do more of the investing on your blog? It would be interesting to hear your take on the current market. Thank you and I really enjoy your work and am really jealous of your successes!
Hello, your MathShitUp-inator Calculator link no longer works. It goes to a 404 error page.
Just wondering if the URL got changed and put somewhere else on the site? Or the calculator resource is no longer available?
Anyhow, loved this series and read your book <3
You guys are the reason I started investing on my own!
What happened to the MathShitUp-inator? I need it and it’s gone. I know you had some spreadsheet thing but I don’t get it. Please tell me you didn’t get rid of it!
Hi FIRECracker and Wanderer, thank you so much for this workshop, it has been super helpful, even two years after you finished it! And it has been a great follow up to applying what I learned in your book 🙂
One question I have is whether you ever SELL to rebalance? You mention the goal of “Buying Low and Selling High”, but unless I missed it, it looks like you’ve only ever had to buy in order to rebalance during this workshop. But I’m wondering if, as the value of your portfolio increases compared to your monthly contributions, you sometimes need to sell in order to rebalance?
Questrade charges a $4.95-$9.95 fee for selling ETFs, so I don’t think its something I’d want to do very often. But if you never sell, aren’t you missing out on the “Sell High” opportunities, and only ever “Buying Low”? And what if you don’t have regular income going in for a time period, the only way to balance would be to sell in one asset and buy in another, but then those fees would just eat up your returns if you were rebalancing too often.