tag:blogger.com,1999:blog-5465015914589377788.post3862563916515125273..comments2024-03-20T09:32:16.592-04:00Comments on Michael James on Money: A Deeper Look at My PortfolioMichael Jameshttp://www.blogger.com/profile/10362529610470788243noreply@blogger.comBlogger37125tag:blogger.com,1999:blog-5465015914589377788.post-3260815386090303852019-07-31T14:21:37.924-04:002019-07-31T14:21:37.924-04:00Hmm, I'll play with the numbers and see if I c...Hmm, I'll play with the numbers and see if I can get an allocation mix that fits nicely with the location guidelines... I appreciate your help!<br /><br />We're currently about equal with size of RRSP/TFSA/NREG accounts, the TFSA accounts lagging behind in size by about 10% compared to the other two types.Sebastien Benoithttps://www.blogger.com/profile/01039283591320845645noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-52580563755578977992019-07-31T14:12:54.306-04:002019-07-31T14:12:54.306-04:00@Sebastien: I hold VCN in my TFSAs. I haven't...@Sebastien: I hold VCN in my TFSAs. I haven't tried to work out all the scenarios for different sizes of TFSA/RRSP/taxable. In my case, RRSPs are much larger than TFSAs.Michael Jameshttps://www.blogger.com/profile/10362529610470788243noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-85886743498180105392019-07-31T14:09:05.158-04:002019-07-31T14:09:05.158-04:00Thank you! Yes, I've read your article on CAD ...Thank you! Yes, I've read your article on CAD vs USD ETFs which prompted a lot of this thought. Re-reading it now makes a bit more sense to me. :)<br /><br />So, we're actually part way through the thought process for Asset Location; do you generally hold VCN in your TFSA? I noticed you like to talk more about what *not* to put in your TFSA, and that sometimes you need to put VTI to balance your accounts, but I just want to be sure. I was under the impression before that it was best for me to hold international equities in my TFSA...Sebastien Benoithttps://www.blogger.com/profile/01039283591320845645noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-85269534288889427682019-07-31T13:47:49.247-04:002019-07-31T13:47:49.247-04:00@Sebastien: I've stuck with this asset allocat...@Sebastien: I've stuck with this asset allocation with a single exception. To keep the 3 U.S. ETFs exclusively in my RRSPs, I own some VEQT in taxable accounts. I treat the VEQT like it's a mix of VCN/VTI/VXUS and own a little extra VBR in my RRSP to compensate. My spreadsheet handles all of this automatically.<br /><br />For someone not interested in the small value tilt (VBR), a reasonable possibility is to go with the asset allocation of VEQT. I discussed the makeup of VEQT at length in the following article:<br /><br />https://www.michaeljamesonmoney.com/2019/07/canadian-etfs-vs-us-etfs.htmlMichael Jameshttps://www.blogger.com/profile/10362529610470788243noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-11565144172950970102019-07-31T12:18:42.191-04:002019-07-31T12:18:42.191-04:00Hi, I hate reviving old threads but there's be...Hi, I hate reviving old threads but there's been a lot of development in the last 4-5 years with new ETFs coming out, and MERs lowering on existing ETFs, that I was curious if you'd still pick VCN/VTI/VBR/VXUS if you were building a portfolio from scratch?<br /><br />We're about rebuild our mid 6-figure portfolio with a new broker (leaving Virtual Brokers, and going to Questrade) and want to start fresh. We're starting from the basics: What ETFs should we hold, considering that we're OK with holding US-listed ETFs (using Norbert's Gambit) and want to keep our costs as low as possible? (next question: What asset location to optimize across all accounts... eek)<br /><br />Thanks so much for always sharing your insights; your blog is hands-down my favourite in Canada!Sebastien Benoithttps://www.blogger.com/profile/01039283591320845645noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-38727281745952435472016-12-12T18:22:33.225-05:002016-12-12T18:22:33.225-05:00@Anonymous: I just found this long-lost comment. ...@Anonymous: I just found this long-lost comment. My response is a couple of comments down.Michael Jameshttps://www.blogger.com/profile/10362529610470788243noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-8744481350100786782015-11-27T15:29:06.934-05:002015-11-27T15:29:06.934-05:00@R: Averaged over a long period of time, rebalanci...@R: Averaged over a long period of time, rebalancing between stocks and bonds has not delivered higher returns than owning stocks alone. There have been periods where 90/10 has beaten 100% stocks, but over recorded investing history, 100% stocks has given higher average returns. The rebalancing boost has not made up for the opportunity cost of holding bonds instead of more stocks. The reason to hold some bonds is to control volatility.Michael Jameshttps://www.blogger.com/profile/10362529610470788243noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-38084402001590918292015-11-27T15:17:11.815-05:002015-11-27T15:17:11.815-05:00Theoretically, wouldn't adding say 10% of Bond...Theoretically, wouldn't adding say 10% of Bond actually increase your return as you'll then be force to sell stocks if they're and buy bonds and vice-versa?Rhttps://www.blogger.com/profile/03606117402650452168noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-61047825523212573422014-12-21T22:06:32.500-05:002014-12-21T22:06:32.500-05:00@Anonymous: To the extent possible, I want all of ...@Anonymous: To the extent possible, I want all of VTI, VBR, and VXUS in RRSPs. But it doesn't all fit. So some VTI, say, has to go into either a TFSA or a non-registered account (with more VCN going into the other account).<br /><br />If the excess VTI goes into the non-registered account, its dividends get taxed as income (the U.S. withholding tax produces a tax credit). If the excess VTI goes into a TFSA, I pay the 15% U.S. withholding tax, and I pay the dividend tax rate on the VCN dividends. <br /><br />Based on the tax rates in Ontario and the dividend yields of VCN and VTI, I worked out that I'm slightly better off with VTI in the non-registered account. But the difference is small. (If you think the balance actually tips the other way, I'm interested in hearing about it.) The main rule is that I want as much VTI, VBR, and VXUS in RRSPs as possible.Michael Jameshttps://www.blogger.com/profile/10362529610470788243noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-53771905685422189912014-12-21T14:44:38.108-05:002014-12-21T14:44:38.108-05:00"So, my main rule for “asset location” is to ..."So, my main rule for “asset location” is to never hold VTI, VBR, or VXUS in a TFSA."<br /><br />This implies that you hold VCN in the TFSA? Do you have non-registered accts? If so, this implies then that VCN is held in TFSA, while one or more of VTI, VBR or VXUS are held in Unreg?<br /><br />Realize the three US-listed ones are subject to the FWT issue in TFSA. But isn't this a case of cutting off nose to spite face, since all distributions from those three are treated as income in Unreg?<br /><br />In other words, unless you have very low or no income and are in a very low tax bracket (guessing not?) then holding any of VBR/VTI or VXUS would result in about 1.8-2.5ish% being treated as "income" in unreg? Whereas holding VCN in Unreg would have the 2.5ish% yield treated as "dividends", and I would think that for any moderate to high income, the math would favor holding VCN in Unreg due the better tax treatment or distributions, even if it did mean holding VTI in TFSA and giving up 15% of the distributions.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-6022504223701406602014-11-15T11:36:35.709-05:002014-11-15T11:36:35.709-05:00@Anonymous: Good advice. I tend to be paranoid ab...@Anonymous: Good advice. I tend to be paranoid about these things. In addition I'll probably put in fake data once in a while just to make sure it's working. A big part of coding is anticipating all the ways that things can play out differently from what you'd expect.Michael Jameshttps://www.blogger.com/profile/10362529610470788243noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-82638472708907516622014-11-15T11:03:31.032-05:002014-11-15T11:03:31.032-05:00One other thing: after you update the script with ...One other thing: after you update the script with your spreadsheet id, email and cell references, make sure you run it once manually (Tools -> Script Manager)... the script may need permission to access your spreadsheet/email, and by running it manually, you will be prompted to approve that. This method also gives you a chance to test it with an obvious rebalancing case (i.e. fake data) to make sure it works as well.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-28822981877681333002014-11-15T10:31:05.028-05:002014-11-15T10:31:05.028-05:00@Anonymous: Thanks. That's simple enough. I...@Anonymous: Thanks. That's simple enough. I had seen "Script" under "Insert" and it wasn't immediately obvious how to proceed.Michael Jameshttps://www.blogger.com/profile/10362529610470788243noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-47232313923149647492014-11-15T10:26:15.047-05:002014-11-15T10:26:15.047-05:00Yeah, from your spreadsheet, go to Tools -> Scr...Yeah, from your spreadsheet, go to Tools -> Script Editor. Paste it in, save it, then from the code editor, go to Resources -> Current project's triggers.. create a new one, time-based, and say how often you want it to run. The spreadsheet does not need to be open anywhere.. it runs on Google's servers. It's actually quite cool what you can do with Google Docs.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-28678257675776593612014-11-15T10:20:04.222-05:002014-11-15T10:20:04.222-05:00@Anonymous: Cool. Thanks for taking the time to e...@Anonymous: Cool. Thanks for taking the time to explain it. At first I thought there was some way to jam code into a Google spreadsheet, but it seems that this is a script that resides elsewhere that happens to access a spreadsheet. Or maybe I just don't understand yet. This is a common problem for me. I find the logic of programming simple enough. But figuring our how to get started always trips me up. I remember when I first started working in Java I wrote some code and had no idea what to do to cause it to run. The first people I asked couldn't even understand what my question was. I had to resort to saying something ridiculous like "I've got some Java code sitting in a text file. Do I just scream at my computer to execute the text file?" I'm at this stage with your script. I found "Google Apps Script" from an online search. It seems to be relevant. Michael Jameshttps://www.blogger.com/profile/10362529610470788243noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-17128996100360133072014-11-15T09:59:02.304-05:002014-11-15T09:59:02.304-05:00Michael, if you're using Google Spreadsheets, ...Michael, if you're using Google Spreadsheets, it is actually quite easy to have it email you when you need to rebalance. I have something like the following (removing my personal information of course):<br /><br />function sendEmailUpdate() {<br /> var spreadsheet = SpreadsheetApp.openById("verylongspreadsheetid");<br /> var sheet = spreadsheet.getSheetByName("Rebalancing");<br /> <br /> var taxloss = sheet.getRange("W23").getValue();<br /> var rebalance = sheet.getRange("X23").getValue();<br /> <br /> var email = "myaccount@gmail.com";<br /> var subject = "Portfolio status";<br /> var message = (taxloss ? "Tax loss opportunity is available\n" : "") + (rebalance ? "Portfolio needs to be rebalanced\n" : "");<br /> <br /> if (taxloss || rebalance)<br /> MailApp.sendEmail(email, subject, message);<br /> <br />}<br /><br />I added a trigger for this function to be run once per day, and if something needs to be done, I get an email. If I don't need to rebalance (or harvest a tax loss), then I receive nothing. Naturally, all the intelligence is in the spreadsheet: I have one cell which is TRUE if anything needs to be rebalanced, likely you have something similar. When I open the spreadsheet, I can see which individual security it is, of course.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-24287995328195116152014-11-08T15:59:10.309-05:002014-11-08T15:59:10.309-05:00@Just: It's true that U.S. companies get some ...@Just: It's true that U.S. companies get some of their revenue from outside the U.S. just as it's true that international companies get some of their revenue from the U.S. For your assertion that I have more international exposure than I want to make sense, it would have to be true that VTI and VBR have higher international exposure than a world-wide ETF would have. This is obviously untrue. A portfolio with just one Canadian ETF and one worldwide ETF is certainly a reasonable approach, but I prefer to have a U.S. bias, which I have.Michael Jameshttps://www.blogger.com/profile/10362529610470788243noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-64762987047067426332014-11-08T14:32:50.840-05:002014-11-08T14:32:50.840-05:00Michael,
I will try this one more time. Diversifi...Michael,<br />I will try this one more time. Diversification by country does not work any longer. Companies are too diversified to say they are in only one country.<br />You want 25% of your investments to be in the US. A stock like McDonald's, a great US stock, only has 31% of it's sales from the US, 40% comes from Europe and 23% from China and emerging markets. How is this considered a US stock?<br />I believe you are invested at a much higher percentage of International sales and profits than you want.<br />Other than a Canadian ETF for home bias, why not just use one world wide ETF and be done with it.<br />Regards <br />Just<br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-13156732329378252802014-11-07T07:59:35.947-05:002014-11-07T07:59:35.947-05:00@Dan: I used DLR for my first few gambits but I no...@Dan: I used DLR for my first few gambits but I now use RY because it's a little cheaper and at Investorline it saves me a phone call. Good luck with your transition to a couch potato approach. It took me quite a while to make a complete transition.Michael Jameshttps://www.blogger.com/profile/10362529610470788243noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-3226287821271526052014-11-06T22:22:11.839-05:002014-11-06T22:22:11.839-05:00Looks like a simple and well diversified portfolio...Looks like a simple and well diversified portfolio. I also use DLR for my currency conversion. It helps save on those extra currency fees that Questrade charges. I hold a small basket of dividend stocks at the moment but will be looking to add more ETFs in the future so I can adopt my own version of the couch potato investing strategy Dan @ Our Big Fat Wallethttp://www.ourbigfatwallet.comnoreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-90218424748384906822014-11-06T10:31:15.217-05:002014-11-06T10:31:15.217-05:00@Anonymous: I've thought about doing this and ...@Anonymous: I've thought about doing this and even started once, but it will take some work. My spreadsheet evolved over time and is quite a mess. This is on my list of things to do, but I can't promise a date.Michael Jameshttps://www.blogger.com/profile/10362529610470788243noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-56170806283437811722014-11-06T10:18:32.630-05:002014-11-06T10:18:32.630-05:00Michael, is it possible for you to post your sprea...Michael, is it possible for you to post your spreadsheets (minus the personal information)?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-84634199015711393102014-11-05T22:53:23.464-05:002014-11-05T22:53:23.464-05:00An anonymous comment seems to have become lost:
&...An anonymous comment seems to have become lost:<br /><br />"Read your post and white paper on Re balancing. My inner nerd lives it. I was wondering if you could give some data point as to how often this formula has triggered events for you? Ie did the recent market move in October trip your threshold? How long have you been using that formula and how often has it triggered?"<br /><br />I've been using my rebalancing thresholds for about 2 and a half years now. I think it has only tripped twice now if I remember correctly (and neither was during this past October). There are two reasons for this infrequent activity. One is that I'm adding new money fairly frequently that keeps bringing my allocation percentages back in line. The other is that I don't hold any bonds. Stocks of the world have been moving together to a fair degree over the last couple of years. Rebalancing between stocks and bonds is likely to happen more often.Michael Jameshttps://www.blogger.com/profile/10362529610470788243noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-55940180117858876912014-11-05T22:45:49.920-05:002014-11-05T22:45:49.920-05:00@Anonymous: I use the spreadsheet in Google Drive....@Anonymous: I use the spreadsheet in Google Drive. There are built-in functions to get live data (actually delayed 20 minutes or so). For example, you can get the price of RY in Canada with<br /><br />=GoogleFinance("RY.TO","price")Michael Jameshttps://www.blogger.com/profile/10362529610470788243noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-33026025962333161332014-11-05T22:42:36.511-05:002014-11-05T22:42:36.511-05:00@Be'en: I describe the process I use in the fo...@Be'en: I describe the process I use in the following post:<br /><br />http://www.michaeljamesonmoney.com/2014/06/currency-exchange-using-royal-bank-stock.html<br /><br />I haven't had to take any explicit action to journal the shares; it happens automatically the day after the trades settle. I just make the trades in quick succession and my account shows simultaneous long and short positions in RY until they automatically get "flattened".Michael Jameshttps://www.blogger.com/profile/10362529610470788243noreply@blogger.com