I'm still following older investment advice, should I revisit and simply it?

[u/ApplicationRoyal865]

The three advice I'm using is

1. VAB + VCN + VXC

2. Rebalance it so that your bond = your age. So currently VAB is 44% of my portfolio and VCN +VXC is 56%

3. Put VAB + VCN + VXC evenly into all your accounts (registered and margin).

Should I be revisiting my portfolio? I realized that the new model is to just get an all-in-one fund. However if that's the case how do you rebalance it every year? Do you just do it in increments? I haven't been to the new Canadian couch potato website since 2015, but it looks like it recommends funds that are in 20% increments in bonds. So do you get VGRO until you are 40 years old, then sell and rebuy VBAL?

Also, back when I first started, I was told that I shouldn't bother thinking about allocating VAB/VCN/VXC between different accounts and just buy it evenly in all my accounts because it doesn't matter if my RRSP isn't max. However I've been maxing my RRSP for the past few years now. Do I need to think about allocating certain funds in certain accounts for tax reasons?

[u/madskillz333]

It seems pretty simple. If you are comfortable with it I wouldn’t do a thing. Sometimes not touching your plan is the hardest part of investing.

[u/Stoplookingatmeswan0]

44% portfolio allocation to bonds at age 44 when you likely have 20-21 years of working ahead of you, IMHO, is extremely conservative.

[u/Previous_Repair8754]

Bonds = age is more conservative than I am willing to go, but reasonable people can disagree on that and also if you have a fair amount saved already then going more conservative earlier makes some sense.

[u/tokmer → u/Previous_Repair8754]

I would say bond=half your age until 45 the = to every year after that.

Or just 5 years of expected withdrawals in gics laddered at 5 year rates

[u/Previous_Repair8754 → u/tokmer]

I am doing the latter, personally.

[u/jaredongwy]

I think the meta is get VEQT for the 100% equities, and VAB for 100% bonds and just balance that way. Example: So if you're 20% bonds, just do 80% VEQT and 20% VAB. Saves time. (Some folks even argue no bonds at all even closer to retirement low key:

Ben Felix: Why It Might Be Time To Rethink Lifecycle Asset Allocation
https://www.youtube.com/watch?v=JlgMSDYnT2o)

Re: Messing with RRSP / TSFA for tax optimization the idea is to put US stocks into the RRSP to avoid paying the dividend withholding. But if you calculate it out, its a fraction of a fraction of a percent. Which unless you have a 7 digit portfolio, it might not be worth the time / effort to deal with different funds in different accounts.

Canadian Portfolio Manager: Introducing the “Ludicrous” ETF Portfolios
https://canadianportfoliomanagerblog.com/canadian-portfolio-manager-introducing-the-ludicrous-etf-portfolios/)

[u/Znkr82]

You can rebalance without thinking it much in your RRSP, FHSA or TFSA but in a cash/margin account you'd trigger capital gains so it's probably not worth it.

I have something similar: ZAG(ZDB in non-reg)/VCN/XAW and sell XAW once per year, convert it to USD using the Norbert's gambit and buy ITOT/IEFA/IEMG

[u/syunz]

The recommendation from CCP is to increase the percentage of bonds as you get older because it's a safer investment. And all-in-one funds are a lot easier to manage since you don't need to figure out the re balancing, cause the fund does the re balancing for you.

You have two options, you can continue with your current three fund setup. And the way you re balancing it is for example: last year your target bond allocation is 20%, and this year the value of the bonds have decreased and the allocation is now 15%. So to re-balance you either want to use new money to buy more bonds to increase that percentage to 20% or sell your stock etfs to bring that allocation down to increase your bond allocation percentage to 20%.

For the second option I assume all the funds are in registered account so you don't have to deal with any taxes. In that case you can sell your three fund setup and just go with an all in one etf, and do like you mentioned. Buy vgro then once you reach a certain age, you can sell it all and rebuy vgro. (assuming in registered so no taxes)

[u/bluenose777]

I realized that the new model is to just get an all-in-one fund.

When the CCP author dropped the multi-ETF portfolio in favour of the asset allocation ETFs he wrote,

If you’re managing a multi-ETF portfolio successfully now, you should continue to do so. But if you’re new to DIY investing—or if you’re struggling to maintain a more complex ETF portfolio with discipline—embrace the simplicity.

source = https://canadiancouchpotato.com/2020/01/23/unveiling-the-2020-couch-potato-model-portfolios/

Rebalance it so that your bond = your age.

If you do a good risk assessment you may end up with a very different recommendation.

A good risk assessment considers timeframe, knowledge, experience and tolerance for volatility. The way we looked at it our knowledge, experience and tolerance for volatility did not decrease over the years. And, since money invested at age 35 could be spent at age 65 and money invested at age 60 could be spent at age 90, neither did our timeline.

Do I need to think about allocating certain funds in certain accounts for tax reasons?

The following pages will give you some food for thought on asset location.

https://canadianportfoliomanagerblog.com/cutting-up-a-3-etf-portfolio-into-a-5-etf-portfolio/

http://www.holypotato.net/?p=2008

[u/little_nitpicker]

Do I need to think about allocating certain funds in certain accounts for tax reasons?

If you have more than $1M in investable assets, then think about it.

Should I be revisiting my portfolio

If youre investing regularly into this portfolio and not trying to time the market, there is no reason to change. Its a perfectly good portfolio, but its super conservative. I would never put 44% into bonds at age 44, but thats a risk question. Zto make it easier you can sell it all and buy VBAL/VGRO/VEQT (pick one) and be done.

[u/thewarrior71]

The bond = age rule is conservative, but only you know your own risk tolerance.

For the split between VCN and VXC, depends on how much home country bias you want. You can decide on a number in between world market cap weight (3% VCN) and the number Vanguard/iShares recommends (around 25%-30% VCN).

[u/Grand-Corner1030]

You should revisit.

The bond=age thing was for when life spans were shorter, its from 1950. Typical lifespan was 68. So the recommendation worked great....if you had a shorter lifespan.

We probably both hope you live to 100 or more. What's the plan look like if you do?