Dubai: Free Investment Talk Sunday, March 5, 2017

I’ll be speaking from 7:00 to 8:30pm at the Al Muntazah Club, Jebal Ali Village, Dubai

Please register at the link below. 

There’s an 80-person maximum, so please book early here.

Thanks, Andrew


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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18 Responses

  1. Vito says:

    Hello Andrew,

    I have to say, I’m excited and want to start index investing, but I have 3 questions that I really haven’t been able to find an answer to and its the only thing that has kept me from starting, I hope you don’t mind answering.

    Here they are:

    1) I am debating about starting index investing in a non-registered account or registered account? Here are the pros and cons I’ve learned in a nutshell

    a) Non-registered taxable account: All dividends from US securities that withhold taxes can be recoverable.
    b) in an RRSP: dividends earned from US stocks won’t matter because of the US and Canada treaty. Also, I have a company matching RRSP through my employer (which are index investments).
    c) in a TFSA: Rule of thumb, if you’re making a smaller income start here vs RRSP. Cannot claim foreign tax credit in a TFSA.

    I am leaning towards a TFSA since I know all capital gains will be tax-free and since I am already contributing to my work RRSP.

    2) The best way I can ask this question is painting a scenario, so just bare with me.

    Let’s say, for 5 years I have been buying an ETF index ABC and it has amassed an amount totalling $20K. Then on year 6 I read an article you post or elsewhere (Canadian Couch Potato) and you update your portfolio recommendations saying that a newer and cheaper ETF called XYZ is available and essentially tracks the same index as ABC does.

    What should I do? Should I:

    a) Ignore the new ETF and just continue as usual buying the same ABC ETF.
    b) keep the ABC ETF in my portfolio until I retire and only start buying the new XYZ ETF moving forward? This would mean an extra MER and one more position to rebalance yearly.
    b) do I sell the ABC shares and use the $20K to purchase a lump sum of XYZ and just continue as usual buying XYZ moving forward?

    3) In your latest book, for Canadians building an ETF portfolio (which is what I will do using Questrade) you list the following tickers.

    VSB – Vanguard Canadian Short-Term Bond
    VCN – Vanguard FTSE Canada All Cap
    VXC – Vanguard FTSE All World ex Canada

    Now, when I compare this with Dan Bortolotti’s Portfolio, he made a recent change and lists the following tickers:

    ZAG – BMO Aggregate Bond Index (I am aware you prefer short-term government bonds, but apparently this is cheaper? But the MER is more at 0.23 vs VSB’s 0.11)
    VCN – same as you list in your book
    XAW – iShares Core MSCI All Country World ex Canada Index (it is cheaper and slightly less MER compared to VXC).

    Please understand, I don’t want this question to be who is right and who is wrong, but I’m just wondering since your book came out in January of this year (but don’t know when your research was completed) and Dan wrote the article on his website about this recent change around the same time, I’m curious to know your thoughts of his selection of ETFs.

    Thank you Andrew, and if you ever do come back to Toronto, Canada and you’re doing a seminar please post it on your social media, because I would love to attend them, and if I gain the courage I’ll come by and introduce myself.


    ps. My favourite quote in the 2nd edition book is on page 115 where you say, “The debate over what percentage you should own in stocks and what percentage you should own in bonds is livelier than an Italian family reunion.” I’m Italian, so that gave me a good chuckle!

    • Hi Vito,

      Dan also said that if you already own the ETFs I listed (and that he previously listed) don’t bother making a switch. New ETFs (with lower costs) will pop up all the time. Your costs are low. Therefore, don’t be tempted to play musical chairs. Max out that TFSA, then max out that RRSP, then (if you’re amazing saver) keep adding additional money to a taxable investment account. You might have to be a freaky saver to do all three. But I think it’s a good goal to shoot for!

      Also, Vito, if you have a few seconds, would you mind reviewing my book? Here’s the link. Thanks!


      • Vito says:

        Hi Andrew,

        thanks so much for your reply. I’d be more than happy to leave a glowing review for you!

        So far, I haven’t started so I don’t own any ETFs yet, but I think I’ve decided on the following allocations, please let me know what you think.


        The only thing I’d love clarification on is the Bond component. In your book on Pg113, you explain why you think a short-term government bond is better because you’re not stuck inside a long term bond of 10 years or more if markets go bad, etc, but can you explain more about the expiring of them. I’m not sure I understand how they work exactly.

        If you have a short term 1-3 year or 1-5 year bond, what happens after that time? The word “expire” that you have in your book throws me off a little, and you mention not to worry about it, but you also say you can then buy another short-term bond at a higher interest rate? Does that mean a different ETF entirely or simply that the cost or interest rate could be higher?

        Thanks Andrew.

        • Vito,

          Each bond ETF is made up of individual bonds. Each bond has a different maturation date. When a 1 year bond within an index matures, the proceeds buy another 1 year bond. This is the same thing that happens with the 2 and 3 year bonds within the ETF as well. Such a bond ETF (a short term bond ETF) has far better odds of beating inflation if interest rates rise because the newly required bonds within the ETF will reflect the new, higher interest rates.


  2. Soukeina says:

    Hi Andrew,

    After having listened to your talk, read your books and a number of your articles, I was inspired to pull my money out of my Septic Seven account where I had been saving for the last decade. I have now opened an account with TD Direct Investing in Luxembourg and have bought into the following ETFs:


    I’m not sure if I am missing something from this portfolio. I am a French citizen living in Switzerland, but will most likely retire in the UK, would love your advice on whether this portfolio seems balanced and diversified enough.


    • Hi Soukeina,

      I am not very familiar with all of these funds. But at a glance, you have plenty of overlap. Why do you have two world indexes, for example? To me, that doesn’t make sense and only clutters the portfolio. Likewise, you have a global index listed (the first one) which I’m assuming includes emerging markets. If it does, why add an emerging market index? Maintaining a diversified portfolio is much easier when there are fewer moving parts. Is this my friend, Soukeina, from Switzerland? If it is, why not just follow the portfolio models in my expat book? There isn’t overlap in any of those.


      • Soukeina says:

        Indeed, this is she! Argh, isn’t it true that teachers are the worst at following their teacher’s instructions? I guess taking the road less travelled is a tad foolish when you know nothing about your destination or the road ahead. I will re-read the appropriate chapter from your book and make some changes to the portfolio. Thanks so much for your advice, Andrew!

        • Hi Soukeina,

          If you might end up in the UK, you could build a portfolio like this. It wouldn’t represent the same kind of UK exposure the typical expat Brit would have. The bond allocation would be a bit more diversified, giving you a bit more exposure to Euros. This lets you straddle both.

          I think this would work well:

          50% VEUR (Global stock index)
          30% IBGS (Euro short term Government bond ETF)
          20% VUKE (Vanguard UK FTSE 100 Stock Index ETF)

          As you get older (if you want to reduce short term risk) you could increase the bond allocation slightly.


          • Woosung says:


            You may have responded on this topic previously but reading your book and also on the reply above, I am not sure if I understand the reason for ‘if you ending up in UK, you should have exposure to UK stocks/index’ concept. The only aspect that might make sense is the F/X element of investments in pound sterling as to remove the uncertainty in F/X fluctuations, but sure you go for the markets and stocks that make sense you your portfolio allocation based on returns and risk profile?

            Can you kindly add your two cents please?

  3. toony says:

    Your suggested portfolio is definitely slightly unusual. Two things jumps out at me straight away – 1. The mixing of USD/GBP, and 2. Using Emerging Market bonds.
    1. Mixing USD/GBP is hell to rebalance & greatly increases costs.
    2. Emerging Market bonds should NEVER be in a ‘couch potato/lazy/buy&hold’ portfolio. It’s tempting to choose them for the extra yield over Gov bonds. However, they have similar risk/volatility profile to equity but the gains are fixed/capped -> therefore ALWAYS better off to buy equity instead of EM bonds! If you need bonds to provide stability to portfolio, ALWAYS go for very high/Gov quality bonds – IBGS is a great choice.
    I’m familiar with the funds you listed but trust me, what Andrew listed in his book (and his responds) is far superior – portfolio will be cheaper to run, less parts to rebalance, lower volatility AND higher expected returns! There’s always the temptation to complicated things or trying a new toy (eg. smart beta/factors) when building your first portfolio (I was guilty of this too!) Avoid this for superior returns 😉
    Andrew may have made a typo in his respond – VEUR is ‘developed Europe’ only while VWRL is actually the ‘developed All-World’ index (in GBP) 🙂
    Well done on escaping from the Septic 7

  4. Vito says:

    Hey Andrew,

    I have a bit of a dilemma and was hoping you can give me your thoughts on what might sound as a better solution.

    I have a mutual fund RRSP with RBC that I started when I was very young that my dad insisted I start (like most people). I have ~$10K in it and haven’t contributed to it for over 10 years now from when I started grad school and needed as much money as possible, so I simply suspended the contributions, but never withdrew funds.

    Of course after learning about MERs, I discovered recently that the two funds in the portfolio are 2.21% and 2.06%, respectively.
    Just incase you’re interested, here are their tickers:

    Here is my dilemma.

    Now that I’ve learned about MERs (after reading your book, thank you!) I am debating about doing one of two things. I can either:

    1) open an RRSP through my discount brokerage (Questrade) and fill out a T2033 form and send the funds over and use that $10K to start index investing there (along with a TFSA that we discussed that I will open and do the samething).


    2) I have a matching RRSP set up through my employer with Manulife. I checked and confirmed that they do accept lump sum contributions, so I can send my $10K there. What’s great is that my employer set up the RRSP as index investing. The allocation I have set up there are with the following 2 funds, both with 0.295% MER (I tried looking them up in Morningstar but I can’t find them).

    70% allocated with:

    30% allocated with:

    I am leaning more towards option 2 since the RRSP account is already set up and Manulife rebalances every quarter.

    Could really use your input?

    Thanks Andrew

  5. Jim says:

    Hi Andrew, when making an investment using the guidelines of your book when do the first dividend return show up in the offshore account? My understanding is that dividends are quarterly right? Is it some date fixed or does it depend on something?

  6. Scott Charlesworth says:

    HI Andrew,
    First of all, thank you for visiting my school (Gems World Academy Dubai) recently and opening my eyes. As I listened, I felt a mixture of foolishness and relief. Foolish because I have unfortunately committed to investing with not just one but TWO of the companies you mentioned, yet relieved to discover the truth behind the lies now and not years down the track.
    I am about halfway through a five-year plan with Generali, pumping in 2000 USD per month, and 5 months ago was talked into signing up for a longer term (20 year) retirement fund with Friends Provident, investing 650 USD per month.
    After hearing your talk and reading your most recent book, I now see that it would make much more sense to manage my own investments and put this money into index funds. But before I make any decisions, I was hoping you might find the time to answer a couple of questions:

    1. With regards to the shorter term Generali plan, should I ‘take the kick to the groin’ now and surrender it for what I can or should I reduce to minimum payments for the remainder of the plan (2.7 years) and ride it out?

    2. With Generali, can I switch my contributions to index funds (are they even available to me? – I couldn’t find them on the list) and will it make much of a difference at the end of the day considering the other fees I am paying?

    3. With the long term Friends Provident plan, if I surrender now, I will lose what I have invested so far ($3250). Is this also preferable to possibly switching to index funds/bonds and holding on to the plan?

    Thanks again for your time and advice.


    • toony says:

      Unfortunately your “IFA” (who is just an insurance salesperson in disguise) has put you in a financial straight jacket and shoved your hands in a burning fire, in order to obtain a massive commission (paid by you of course)!
      The great news is that you found out early and not 10+ years from now when the damage would be much greater. You currently have 2 choices:
      1) Leave your hands there and wait till the fire burns out, or
      2) Remove your hands immediately and wrap it up in ice
      To answer your questions:
      1. ‘Minimum payment and ride it out’ is same as taking option 1. If you prefer option 2, you must do a FULL surrender (not partial, not holiday, etc) and take charge of your finances as described by Andrew. This post of mine will explain:
      .If you want a deeper understanding of the scam:
      2. Piece of work that ‘IFA’ to hook you for 20 years – huge upfront commission (~$11,700) which means EVERY single $ you put into the first 18 months is just paying the commission/fees for the insurance company! Hence your account is currently worthless…and continues to be worthless for the first 18 months (actually, they have to return 4% of your money (ie. $468) if you give them $8450 more – the balance for 18 months). Does this sound sensible or reasonable action?
      Dubai is a hot bed for financial scammers targeting expats! You may be interested in the following FB group:
      They hold regular meetings/talks to help people understand these scams, getting out of the trap and investing properly as described by Andrew in his talk and books.
      Good luck

  7. John Iliffe says:

    Hi Andrew,
    If you are back in Vietnam we would love to have you at the Canadian International School in HCMC!

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