Investing Is Simple, But Not Easy

Warren Buffett has said that “investing is simple, but not easy.”

In my bestselling book Millionaire Teacher, I explain the effectiveness of simple investing.  And I want to continue that theme by discussing my own money. 


I own just three low cost index funds:

  1. A total U.S. stock market index (ETF)
  2. An international stock market index (VEA)
  3. A Canadian bond market index (XSB)


You see.  My account is simple.  And it’s well into seven figures.  But large accounts don’t have to be complicated.

The hard part about investing is trying to ignore the investment media and your own instincts.  Our gut reactions, unfortunately, usually hamper our money’s potential.

On October 20th, 2011, I wrote a post about my personal money, Millionaire Teacher Sells $50,000 of Bonds.

I didn’t view bonds as overpriced.  In fact, I had no idea whether they would rise or fall.  And I didn’t care.

My investing method is simple enough for a fifth grader to follow.  I have 40% of my portfolio in bonds, and 60% in stocks. 


I only ask one question when I’m about to invest money: Have my bonds risen beyond 40% of my total?

  • If the answer is yes, then I buy stocks.
  • If the answer is no, then I buy bonds.


Most people do the opposite.  They prefer buying what has recently risen.  This is why Buffett says that investing is simple, but not easy.  Our instincts lead us astray.  We feel good about buying things that have recently become more expensive. 


On October 20th, 2011, my bonds represented far more than 40% of my total portfolio. 


The green line below represents the world stock index. 

 It started falling in late July, forcing my stock allocation below 60% of my account’s total value; consequently, I ended up with a percentage in bonds that exceeded 40% of the total.  So when I had fresh money to invest, I bought the U.S. stock market index.  At the time, I had more money in the international index than the U.S. index, so I wanted to even things up.

You can see that the world’s markets (the green line) had dropped 15% in less than one month. 

I wrote about my U.S. stock index purchase in the article, The Power of Rebalancing During a Volatile Market.


Have a look at the blue line. 

It represents my bond index.  When stocks fall, people usually put money into bonds.  You can see that the bond price rose as people redirected their money into “safety.”  They bought what was rising (bonds) and shunned what was falling (stocks).

I do the opposite. 


Investing is simple, but not easy, because many people find it frightening to rebalance their assets.  Buying a falling asset class frightens them.  But it shouldn’t.

Have a look at what happened to the U.S. stock index since October 22, 2011:



Including dividends, it rose 23%.

Meanwhile, my Canadian bond index dropped 1.7% after I sold $50,000 worth.

This might be the sort of thing that whets the appetite of short term thinkers:

  1. I sold bonds, and then they fell in price
  2. I bought stocks with the proceeds, and they rose in price

This $50,000 rebalance juiced my account more than $12,000.

But it’s the long term that you should be more interested in…especially if you’re young.

I really wanted the stock markets to continue falling.  After all, I’m a collector of stock market assets, and I won’t be selling them for at least another 20 years, because I’m still a relatively young man.  Collectors shouldn’t celebrate if the prices of the items they’re collecting actually rise in value.  That would be crazy.

Who wants to pay more for the things they’re collecting?

If the markets had fallen further, I would have sold more bonds, just to ensure that I had my desired allocation:  60% stocks, 40% bonds.

Predicting where the markets are going to go (or predicting the world’s economic direction) doesn’t interest me.

Successful investing is far simpler than that.  But for most people, it isn’t easy.  Fear and greed can, after all, be tough to control. 

In a couple of days, I’m going to invest more money.  Can you guess what I’ll be buying?



essential reading for visitors to andrew hallam website

Andrew Hallam

I’m a financial columnist for Canada’s national paper, The Globe and Mail, as well as for AssetBuilder, a financial service firm based in Texas. I’m also the author of Millionaire Teacher: The Nine Rules of Wealth You Should Have Learned in School (2nd Ed. Wiley 2017) and The Global Expatriate’s Guide To Investing: From Millionaire Teacher to Millionaire Expat (Wiley 2015). My mission is to educate, motivate and inspire people on basic retirement planning and best practices for investing, using evidence-based strategies. I'm happy to comment on your questions. However, please read the Terms of Use, Privacy Policy and the Comments Policy.

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63 Responses

  1. wealthbar special deal for andrew hallam readers

  2. Dave says:


    I was wondering why you chose XSB overr XBB. Is it because of the current risk of rising rates or is that something you will stick with no matter what happens with rates?

    • Hey Dave,

      To be honest, I wouldn't know a "current risk" if it hit me in the head. My ignorance is bliss–and profitable, I think. I bought XSB because it's a short term government bond index. Owning this one will ensure that I never get outpaced by inflation. There are probably cheaper (in terms of expense ratio) ETFs that would suffice instead, but chasing the next best thing would be time consuming, considering how often new ETFs come on the market. The ETF, XBB would also be a fine option. But the terms are a bit longer. I really don't follow the economy or projected interest rates. And I never have. Being blind to the calls of prognosticating has been (and I believe, will be) a very profitable venture for me. Whether you choose XSB or XBB, you'll do well, as long as you dispassionately rebalance and keep diversified. Controlling your emotions, I believe, and being somewhat greedy when others are fearful is a far better indicator of future investment success than the nuances between products ever will be. I think people get pretty carried away, when it comes to what low cost index combination they choose. In the end, if they're dealing with low costs, and they have the right emotional fortitude, they're going to do really well. I believe that it's better to invest in this fashion than to predict the economy, future risks and future interest rates. I've met people who can talk economic circles around me, but as investors….. Those with their pulse on the economy, in my view, often make the worst investors.

  3. Beardie says:

    Thanks for this, Andrew. I never understood asset allocation before. When you wrote, "A total U.S. stock market index (ETF)," did you mean, "A total U.S. stock market index (VTI)"?

  4. kunwak says:

    Well, I don't know about your current allocation vs the target Andrew but I don't like the recent run up in stocks much and will have to go for bonds. Thanks for all the great advice.

    Re chasing the next best thing: Fair enough, I do think however, that in Canada the scene has changed a bit with Vanguard being here now. I really hope they will start accepting individual investor accounts, since it would make things a lot easier IMO. It would also be simpler for many people if they would allow DRIP of partial shares in their etfs.

    • Hi Kunwak,

      Yeah, it would be amazing if Vanguard offered regular, low cost indexes, like they do in the U.S. But until then,,,Canadian have to make do, I guess. Like you, I am buying bonds this month. What do you know? With rising stocks came falling bond prices. Long term, the investing game is easy if you can keep your head and not read the media.

  5. Synapseshots says:

    Hi Andrew. Yes also wondering if you meant VTI rather than ETF?

  6. Great post Andrew, will include in my Weekend Reading roundup.

    As you know, I have a two-pronged approach to investing: dividend-paying stocks and passive indexing via low-cost ETFs.

    I'm a big fan of XBB. It's a core holding in our RRSPs. The duration of the bonds is longer (than XSB or other short-bonds) but I'm OK with that. I have DB pension from work and I consider that a VERY BIG bond, so, to take some liberties in my own portfolio via longer-bonds (which isn't that risky: XBB) and dividend-paying stocks, I think it's great for my situation.

    Controlling my investing emotions, once I have the holdings, is the biggest risk in to portfolio – probably always will be. I just need to continue sticking to my plan 🙂

    Thanks very much for your comments on my site. Glad to see you lurking around My Own Advisor!! 🙂

  7. William says:

    Great article. I just bought your book and have a portfolio of the following etfs:



    VTI -20%


    I hope this is a good portfolio. There are so many choices.

  8. Barry says:

    Interesting piece about Goldman Sachs in the news


    "WASHINGTON (AFP) – Investment banking titan Goldman Sachs has become a "toxic and destructive" firm focused on milking clients for everything it can, a resigning executive director said Wednesday in the New York Times.

    Greg Smith said the Wall Street giant, which paid huge penalties for double-dealing with investors in mortgage securities during the financial crisis, had dumped its old culture of honestly helping its customers make money.

    Today, instead, customers are called "muppets" by top executives and staff talk about "ripping their clients off," Smith wrote in an opinion piece."

    Another nail in the coffin for some of these large funds managers as far as I'm concerned

  9. Mark says:

    Hi Andrew,

    I believe your recommendation for Canadians is a combination of a Canadian bond ETF, Canadian stock market ETF, US stock market ETF, and an international stock maket ETF.

    Would you recommend going "all in" to someone about to invest in this manner even though the stock market has risen quite a bit lately and seems due for a correction? Or would you invest only some money (distributed proportionately) now?



    • Hi Mark,

      I think that if we start guessing about future market directions, we can get into trouble. If I were starting a new account today, I would ensure that it was fully diversified across the stock and bond asset classes.

  10. Hi Mark,

    I have no doubt that your investing approach is great. I would trust you with my own money!

  11. Andy says:

    Hi Andrew,

    I have a chunk of cash in U.S. dollars, so I was thinking of throwing it into VTI and VEA in an RRSP with Questrade, while keeping everything else in my TD e-series. But here's the question:

    When you rebalance your porfolio, how do you deal with having to exchange the dollar value of, say, equities in VTI (US$) to purchase bonds in XSB (CAD$) and vice versa? Do you accept factor the "loss" in converting in either direction and just factor it it into the total value of the transaction?

    • Hi Andy,

      I believe that some brokerages allow you to keep portions in U.S. dollars. I think QTrade is one. And it would be more efficient, perhaps. If you find anything out, please let me know. It doesn't affect me, but some of my readers might find it useful. Having said that, Dan, over at the Canadian Couch Potato has written some posts on this. You might want to check out his site.

  12. Andrew Hallam says:

    Yeah Barry, it's an icky culture. I felt saddened a short while ago when one of my coolest and brightest former students told me that she just accepted a job with Goldman Sachs. I had hoped that she would do something more useful, helpful and constructive. But if she burns out there, perhaps one day, she will do something cool. She's one of those "gems" –a truly amazing kid–so I was amazed at the professional turn she accepted after graduating so highly at Columbia.

    • Barry says:

      Just read this on another site

      "The Secret Reason the S&P is Hitting New Highs"… It had me thinking more about the index than the individual funds mentioned though

      PS: just reading your new post Andrew "The Goldman Sachs Magnet"

      • Agreed Barry! It's not much of a secret that there are two ways the stock market makes money: through capital appreciation and through dividends. And if I'm reading between your lines, it's easier to invest in an index rather than get seduced by individual companies. As you might know, I used to have half of my account in individual stocks, while the other half of my equity portion was indexed. But it sure is a heck of a lot easier to rebalance, now that I'm fully indexed. When stocks soar, I no longer have to worry about which ones to sell. When stocks plummet, and I sell bonds to rebalance, I no longer have to figure out which stocks to buy. It's a sweet position to be in–without the headaches or possibility of regret.

  13. Tracey says:

    Hi Andrew,

    How often do you rebalance your portfolio and what are your triggers?

    • Hi Tracey,

      I don't rebalance every year (manually) but in many respects, I rebalance once a month when adding new money. If one of my indexes no longer represents the percentage I have allocated for it, then I buy that index. I have manually rebalanced (as shown above) but I don't have a hard and fast rule. I'm actually pretty lazy. If I notice that an asset class is out by about 15% and my purchases aren't having an effect, then I'll rebalance. Again, the 15% rule isn't really a rule that I measure really accurately, before making a decision. But I'll rebalance if I'm out by roughly that amount.

  14. William says:

    Can someone help me out, is this portfolio okay? I am just starting out and still learning. Thanks.

  15. Hi Synapseshots,

    The ETF(exchange traded fund) representing the total U.S. stock market index has the ticker symbol VTI. Sorry for the confusion.



  16. e says:

    i am 32- below is my allocation…is this decent or should i look at ETF's instead of these funds?

    Vanguard Total International Stock Index Fund Admiral Shares 34%

    Vanguard Total Bond Market Index Fund Admiral Shares 32%

    Vanguard Total Stock Market Index Fund Admiral Shares 34%

  17. Andrey says:

    Hello Andrew,

    I enjoyed reading your articles and I ordered your book too.

    I'm 27 and just starting investing.

    At the end of this article you asked:

    "In a couple of days, I’m going to invest more money. Can you guess what I’ll be buying?"

    Will you be buying bonds when they become cheaper and stocks going up in price?

    Thank you,


    • You're exactly right Andrey, I put fresh money into my Canadian bond index very recently. I'm really excited that you're getting a grip on this stuff at such a young age. Fantastic! Make sure you share what you learn with your friends!



      • Andrey says:

        I can not describe how important your blog and your book are for young investors like me.

        I will definitely let all my friends know about your book.

        Thank you so much for doing it all for us.

        I'm sure more people would benefit from your book if it was available in different languages.

        One question:

        I live in Vancouver, Canada.

        What broker would you recommend to buy stocks and bonds from?

        Thank you in advance,


        • Hi Andrey,

          Personally, I really like qtrade

          There are cheaper brokerages, but I love the way you can track your investment results with QTrade. CIBC and TD don't have a performance tracker with their brokerages. RBC just added one, but it's not as good as the one at Qtrade. For TD and RBC, trades are $9.99 if you have more than $100K, and about $22 ish if you have less than that. With QTrade, it's about $22 ish, regardless of the account size.

  18. Kevin says:

    Hi Andrew.

    Great site and investing philosophy.

    Question: What are your thoughts on the Canadian iShares ETF TSE:XTR

    It's a monthly income fund which has very little fluctuation in value but regularly pays a divided of 0.06 per month (approx 5.83% yield). Could this fund take the place of separate stock and bond ETFs? I do like receiving the monthly dividend as opposed to some stock ETFs which pay a quarterly dividend.

    I have noticed the stock and bond portions of the ETF fluctuating between 40-60%. Sometimes the stocks are 40% in the ETF and sometimes 60%, and same with the bonds. (Is this like an auto rebalance?)

    Thanks for making investing simple!


  19. dave says:

    hi Andrew,

    enjoy your blog a lot !

    I am wondering why are you using xsb instead of xbb in your bond portion. looking at the performance returns:

    xbb xsb

    1m -1.12 -0.55

    6m -0.93 -1.53

    1y 4.13 -0.14

    5y 5.59 1.76

    10y 10.35 6.63

    xsb barely return more than6% over a 10 year period

    • Hi Dave,

      I use XSB because it's a shorter term index. If inflation rears, I'll always stay ahead of it. With a longer term index, you could run the risk of not always doing that. As for past returns, looking at past performance to make any investment decision is what most people do. But you don't want to be most people. The statistical odds, in this case, will revert to some kind of reversion at some point. The person who suffers from that reversion is the one (the many) who make a future investment decision based on past performance. It's a tough habit to crack, but it's a necessary habit to break.

  20. hh says:

    Hi Andrew,

    I am a 26 year old singaporean who is just starting out investing. I bought and read your book and am just starting to put what i have learnt into practice.

    I have 40% in Vanguard Total World Stock Index Fund(VT), 40% in the Singapore Stock Exchange Index Fund (STI.ETF), and 20% in the ABF SG Bond ETF (A35).

    I would like your comments on such an allocation. I am concerned that the ABF Bond Fund really doesn't move much, so there isn't much room for balancing? Further, in Singapore, there are minimum lot size limitations, which makes balancing difficult. What would you suggest? Should I invest abroad instead?

    Any response would be greatly appreciated!

  21. Caroline says:

    Hi Andrew,

    I'm a 32 year old Canadian and I'm happy! I recently bought your book and I'm so glad I did!

    Following your advice, I was going to invest in the four TD e-Series Funds recommended in your book. However, after doing a bit of web searching, it appears as though Vanguard is now in Canada. Do you still stand behind the TD Bank e-Series Index Funds or do you now recommend we buy with Vanguard? If so, which funds would you recommend to an investor?

    Thank you,


    • Hi Caroline,

      Unfortunately, Vanguard's presence in Canada isn't really what most people initially hoped it would be. They only sell exchange traded funds, and haven't made their regular indexes available to Canadians. One day, they might, but for now, we'll just have to wait. The e-Series funds allow you to buy without commissions (because they're regular index funds, not ETFs) and they allow for free dividend reinvestments, and small, automatic purchases. If your account is over $100,000, you would be better off with the ETFs, but otherwise, if you're contributing money every month, with a smaller account, the e-Series will be the better deal. Thanks so much, Caroline, for the kind words about my book. If you have time, would you mind writing a short Amazon review? I'd be thrilled if you could…even a short one. Here's the link:

      Thanks Caroline!


  22. alfred says:

    Hi Andrew,

    I thoroughly enjoyed reading your book.

    You have done a good job in drilling through the importance of having a bond component in a portfolio. Thanks!

    I have a few questions for you:

    1) Do the ABF SPORE BOND INDEX pay out coupon? I see that there are they pay 'dividends' but they don't seem like coupon payments to me. They are so nominal

    2) When you started investing at 19, did you go straight into this strategy of re-balancing your portfolio between equities and bonds? Didn't you dabble in other strategies to find which was the one that worked best for you?

    3) Given that a bond ETF is listed on a stock exchange. Would it have 'equity-like' characteristics and show some evidence of correlation with equities?

    THanks for your time

    • Hi Alfred,

      Thanks for the kind words about my book. To answer your questions, the bond index mentioned pays interest, rather than a dividend. It's a very small amount, but even a 1% return can look pretty amazing when the markets fall 10%. That portion is essentially for stability. However, your CPF is essentially like a bond, so perhaps you don't need a bond component in your brokerage account. You could just rebalance between your equity indexes.

      I didn't go straight into such a highly statistical investment strategy when I was 19. the trick is not to dabble at all. It's to seek a strategy to give you the highest statistical probabilities of success. Bad strategies could end up making short term profits over 10 years or so (10 years, I consider, a short term). But it could still be a bad, long term strategy. Stick with rebalancing indexes, and you will likely do very very well over the long term

      The bond ETF will represent the movement of the bonds and it will be isolated from the movement of stocks, even though it trades on a stock exchange. When the stock market gets hammered, you will notice that your bond index price rises.

  23. Jen says:


    What a fantastic book! I just read your book last week, and I've been telling all my friends and family about it…it was the perfect book for me because I've been trying to increase my investment knowledge for the last few years and was starting to think that I needed to start purchasing stocks but felt completely overwhelmed by how complicated that seemed…anyways I'm so happy to have learned about ETFs and your simple investment strategy.

    I'm a Canadian with less than $100K, so I've been thinking of opening an account with Qtrade and purchasing their commission free ETFs. I'm 31 years old and thinking of purchasing:

    CLF (iShares 1-5 yr government bond index) 30%

    CIE (iShares international index fund) 35%

    HXT (Horizons S&P/TSX 60 Index fund) 35%

    Do you think that opening a Qtrade account and purchasing commission free ETFs is better than a TD eSeries accoun, even though I have less than $100Kt? The MER's seem much lower with the Qtrade account…HXT has an MER of 0.08%.

    For Qtrade RSP accounts if you have greater than $15K, they do not charge any account fees (<$15K they charge $50 per quarter) and their TFSA are free as well.

    Thanks for reading this!


    • Hi Jen,

      Thank you so much for the very kind words about the book. I love hearing comments like that!

      And it looks like your portfolio is going to be a super one! Plus, it won't be $100K forever. Before long, as you add fresh money, and as it grows, it's going to be much much larger. Keep up the great savings rate. Incidentally, I love QTrade.



  24. Barry says:

    Buy Low Sell High sound like an investors dream Andrew, the rebalancing strategy and to see it play out in your posts is very interesting

    As close to Set & Forget as you can get

  25. Joei says:

    I messaged you about my situation and you told me to invest in VT. However I'm 41 years old with a 3 year old and a 2 month old. I just started investing in the Philippine stock market and have no bonds. So I was wondering if it's better for me to invest my $5,000 savings in bonds instead of VT since I'm 41? If bonds, which bonds – local or another country's? Thank you very much.

  26. RK says:

    Mr. Hallam, with what software/websites do you analyse and graph your ETFs?


  27. Mel says:

    Anyone have a good thought process on when / how to flip from XSB to XBB and vice versa?

    Here's my dilema:

    I've been a long term holder of XBB and now that interest rates are at the bottom I have been slowly adding to XSB with new cash injections and partial rebalances. I've been waiting for an indication that interest rates are rising again to flip the remaining XBB to XSB. I've been waiting for almost 2 years now and with the US keeping interest rates low for another 2 years or so I hate to see my new cash getting about 1.5% points less in return in XSB than with XBB. So I've essesntially been trying to partially anticipate the move without going all in but with no real mathematical logic to back up the size of the XSB portion.

    Anyone have any suggestions on how one might better allocate the funds between XSB and XBB or really is all of this so hard to time that it really does not make much of a difference?

    Should I contemplate moving all back into XBB until I see some better indication of inflation / rising interest rates.?

  28. AC says:

    Hi Andrew,

    Thank you for this awesome article. I just bought your book and is halfway thru it. Great read.

    I just have a question on VTI and hope to get your advice on it. Since you are now living in SG, what would you suggest to a guy with monthly investment budget of 800$ *eg 50% for VTI, 50% for STI? Since it is impossible to buy into VTI monthly with 400SGD and I really want to take advantage of DCA. Any tips?

    Thank you!

    • Hi AC,

      How about opening a Standard Chartered brokerage account and investing $400 per month in VT (the world stock market index) the remaining $400 in the STI index (commissions are very low) and allowing your CPF to be your bond component? Over time, you could then add to the lagging index, whether it's the Singapore stock market or the world stock market, so you can rebalance with your purchases.

  29. Hi Joei,

    As a 41 year old, put roughly 40% of your portfolio in your home currency government bonds. With the remainder, you could buy VT. My apologies for missing your question!


  30. RJB says:

    Hi Andrew,

    I wonder if you have ever used an "X-ray" tool such as this ( to analyse your portfolio holdings.

    I ask because (as a Brit) I'm thinking of the following allocation:

    iShares FTSE UK All Stocks Gilt (IGLT) = 52% (as per my age)

    (possible split 50/50 with an index-linked bond fund like INXG)

    Vanguard Total Stock Market ETF (VTI) = 24%

    Vanguard MSCI EAFE ETF (VEA) = 24%

    When I plugged those figures into the simulator it showed a heavy bias toward large-cap value companies. Changing the equity ratio to VTI 30% and VEA 18% gives a more even spread although there is still a warning that my allocation shows very little exposure to what Morningstar classifies as "Classic Growth" stocks.

    I'm just wondering if this is relevant or am I overthinking it.

    I loved your book and this blog is extremely helpful to a novice like me. Count me among the many whom you saved from investing in an insurance company product.

  31. Graeme says:

    Hi Andrew,

    I am immersed in Millionaire Teacher, and it has opened up a whole new world I previously had no interest in, so thank you. I even bought copies for family members for Xmas. I also follow your articles on the Globe & Mail Strategy Lab.

    I'm a 36-year-old Canadian living in the B.C. Interior and have never really invested, but I am gearing up to make the big leap into an index/bond strategy that reflects my age. I like the hockey player analogy you used in one of your Strategy Lab articles, and I'll probably adopt a strategy similar to that. I'll be starting with a fund of about $5K and hope to make regular monthly contributions around $250 (plus any extra cash I find laying around).

    I have a couple questions for you…

    1. I noticed Vanguard recently added some new ETFs to their Canadian lineup. Given my starting point, is this something I should be looking at?

    2. I currently bank with RBC, including a Direct Investing account… am I better off working from that platform, opening a TD account, or going with someone like Qtrade?

    Your advice is greatly appreciated.


    • Hi Graeme,

      I'm really glad you found the book helpful. Thanks so much for letting me know.

      Considering that your account is small and your contributions are low, you may be interested in opening an account with TD Waterhouse and buying e-Series index funds. There won't be a commission to make purchases.

      Alternatively, there's a new brokerage in Canada that offers ETF purchases without commissions. From what I understand, it applies to any ETF. Here's a link to an article about it:

      Please keep me posted Graeme, I'm curious to hear about what you eventually decide. It's always exciting to share a piece of a new investment journey.

      Take care,


      • Graeme says:

        Hi Andrew,

        Had a look at Virtual Brokers site and it is indeed free to buy ETFs. There is a min 99 cent commission when you sell, with a cap of $9.99. Sounds promising.

        One issue came up when I went to open an account… they have a choice of 9 different account types. I can tell from a glance most of them won't apply to me, but what is your take on the RRSP vs TFSA debate? Or even the non-registered route (which I can't really understand why you'd go that way with the tax implications)?

        Given that I likely won't break the annual $5K contribution max, at least for a while, I'm leaning towards the TFSA. Although, being a journalist at a non-unionized community newspaper, I doubt I'll be in a high tax bracket when I retire, so maybe an RRSP is worth considering?

        Also, my work sponsors a matched contribution registered pension plan through Manulife (which I am currently overhauling as my portfolio was treading water in a lame GIA… it has yielded a whopping 2.9% since June 2009, and dropping). I could just bump up my contributions to my portfolio once it gets rearranged, but the IMF percentages seem high (most are hovering around 1.4%). The IMF on their index products is 1.025%.

        Gotta say, this 'taking control of your finances' thingy is equal parts liberating/stressful/confusing.



        • Hi Graeme,

          I don't know where the Manulife money is invested, but it sounds like it's just fixed income (bonds) with no stock exposure. In June, 2009, the markets were at a low point. Your money should have nearly doubled since 2009, so you might want to take charge in how it's invested. Put it into some equities if you can.

          Certainly maximize your TFSA room after that, then your RRSP room. If you max those out in years to come (assuming an increase in salary) then you can invest in the taxable account.

          • Fred says:

            Hi Andrew,

            I have to disagree a bit with the recommendation of TFSA over RRSP. If his potential income in retirement will be less than his current income then it is shown to be better to go the RRSP route first.

            Secondly, if he goes the RRSP route first, then he can also invest the tax refund on the RRSP investment into the TFSA.

            Also, for most people the TFSA money is looked at as just a better savings account that one can draw from and contribute to from time to time. When tight financial times come up it would be better for the retirement funds to be in a vehicle (ie. RRSP) that makes it much harder to take funds out.

            It may be the intention of the individual to pay back the funds but it just doesn't happen a lot of the time.

            So I would say max out RRSP first (using tax refund for TFSA contribution), TFSA next and then go the non-registered route. And, if you don't have funds to contribute to the TFSA in a given year and have non-registerd funds then transfer them over to the TFSA.

            I do agree Andrew that you have to have some stock exposure at any age unless you have a very solid amount built up that you can drop into GIC's and still have enough to cover your retirement requirements after the affects of inflation are considered. A good financial plan is wonderful and eye-opening in this regard.

          • Ahh, very good points Fred. Thank you!!

          • Graeme says:

            I rearranged my Manulife portfolio to reflect 30% Can bond index, 30% Can equity index, %25 US equity index and %15 Intl. equity index. It's a start.

            Wish me luck.


          • That's great Graeme,

            Manulife offers indexed options? Fantastic!

            I wish, upon you, the greatest gift any investor could ask for. If you're close to my age, or younger, may the markets fall for the next five to ten years. We would be lucky to have that happen. Unfortunately, they probably won't.



          • Gsep says:

            Hey Andrew,

            I’ve just moved home to Canada after teaching in Vietnam and Egypt for 6 years. I’ve read your book (millionaire teacher) and I am ready to move to TD e-series. But now I have those cold feet – not to switch, but what account to choose. After reading what both you and Fred wrote in response to Graeme’s question, I was hoping to share with you my current situation and wether I should follow suite with Graeme. Should I start with TFSA or RRSP’s? Or is there something else? To be honest, this all still confuses me a bit.

            So I am currently at IG in a TFSA with just over 30K invested. I am 31 years old. I will be teaching in Ontario so I will have the Ontario Teachers Pension Plan to retire to (assuming and hoping all goes well). My future employer will also be investing 8.9% of my monthly salary to Manulife and matching that contribution.

            I am planning on opening an account with TD next week and eventually moving my investments over from IG, so I just wanted to see what you think.

            Thanks from myself and everyone else you have helped so far.

  32. Hi RJB,

    To be honest, I tend to be a pretty simple guy when it comes to cap weighted allocations. I know that the DOW (which is purely large cap) has roughly equaled the return of the total U.S. market. Although short term fluctuations and differences can occur between small, mid and large cap, I don't get too carried away when it comes to balancing them all perfectly. The far greater challenge (and a more worthy one to conquer) is to remain dispassionate and rebalance your money when necessary. I like to keep my investing pretty simple. For 23 years, it has worked well for me.



  33. Graeme says:

    Hi Andrew,

    Well, three months later and I am up and running with Virtual Brokers. Getting all the forms filled out was trickier than I thought it would be (their customer service dept. isn’t overly warm and fuzzy), and I had to get on them to process the account application.

    Alas, I have officially bought my first index funds… all Vanguard Canada… 30% Cdn Short Term bond (VSB), 30% MSCI Cnd index (VCE), 10% MSCI US Broad Market (VUS), 10% S&P 500 index (VFV), 10% MSCI EAFE (VEF, hedged), and 10% FTSE Emerging Markets (VEE).

    I might bump up my EAFE or US Broad Market % and lower Emerging Markets to 5% (the former two have cheaper MERs), but other than that I’m relatively happy with things are at. I just wish I had started this, oh say, four years ago when the markets were in the toilet.

    One question: in one of your Globe & Mail articles you mention the Vanguard Total Stock (VTI), but I don’t see it mentioned in on the company’s Canadian website. From what I have read, VUS largely follows what VTI is doing, but am I more or less on the right track?



  34. Giuseppe says:

    Hey Andrew,
    Quick question that hopefully ends up with a Yes or No answer. I’ve searched everywhere and can’t seem to find a definitive answer.

    I am 31 years old and two years ago I opened up a TFSA at Investment Group that I have just moved over to TD Waterhouse to invest in the e-series accounts. I currently have 31K in my account, I have never withdrawn any funds from it, nor have I made any contributions this year (2018).

    The TFSA annual limit this year is $5,500, but the cumulative total is $57,500. Does that mean that this year I could add $26,500 into my account without any penalty because that is my contribution room?

  35. Marie says:

    Hi Andrew!
    I’m a 32 years old Canadian expat teacher and I bought your book Millionaire Teacher last year. I have to say that it changed my financial life! I don’t feel the need to buy any other book about finance, since your book is so well explained and complete.
    My portfolio is over 100K CAD and it looks like this (considered aggressive according to the allocation method in your book):

    VTI 40%
    VXUS 40%
    VSB 20%

    Here are my questions:
    1) Why did you choose VEA over VXUS in your personal account?

    2) My VTI and VXUS are in a US account, where I converted a chunk of money from CAD to US to invest in those indexes. If I want to add money to those 2 indexes, I will need to convert more CAD to US and I feel like I would be disadvantaged if the exchange rate wasn’t in my favor. Should I be worried about that? Now that Vanguard is available in Canada, should I add money to VUN instead of VTI? And if so, what would be the alternative to VXUS in Vanguard Canada?

    Thank you for your contribution!

    • Hi Marie,

      You might have read a very old post. I don’t own VEA. Instead, I own Vanguard Canada’s international stock index ETF. As for exchange rates, they are irrelevant. If you buy VEA or a Canadian domiciled equivalent, the exchange rate doesn’t affect your rate of return. It would take me 20 minutes and a chalkboard to explain that to most people. But for now, you’ll just have to trust me, unless you want to dig deeper yourself.


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