My Year-to-date stock market results for this 2020 are -19.23
From a few years back, I decided to be 100% invested in the stock market. I diversify my portfolio by having one-third of
- Canadian stocks,
- US stocks, and
- international stocks.
I don’t invest in bonds. I think bonds are dumb.
Stock market investment principles
I don’t invest in gold, crypto, or any other not productive assets. I think they are even dumber than bonds.
However, I do have cash, but not as an investment but rather as an emergency fund. I don’t expect any return from my cash, but cash fulfills a very important role because it provides a nice cushion in cases I lose my income, like in this period of the coronavirus. It prevents me from having to sell any of my stocks to pay my rent.
All my investments are in my Tax-Free Savings Account
All my investment is in my Tax-Free Savings Account, so I am limited by the amount of money the government allows me to deposit every year.
Although I claim to have 1/3, 1/3, 1/3 portfolio, this is only aspirational. Even if it was possible to divide the portfolio into three equal parts, after the 1st day, the portfolio would no longer be equally divided.
I don’t rebalance my portfolio by selling some from the highest performer and buying some of the lower performers, like many people do, or suggest. Instead, what is do is that in the first week of January, I make only one transaction only ($10), I buy the one with the lowest amount of money. Let’s say that my Canadian stock is the one with the smaller amount of money, then I buy the maximum allowed (this year $6,000) on the Canadian stock. Then, the following year, if the international stock is the one with the lowest amount of money, then I would make one transaction only, I would buy the international stock.
It’s not an exact science, and anyone who uses decimal point to show precision is just plain stupid because most of these portfolio calculations are pulled out of people’s ear. For example, my 1/3, 1/3, 1/3 portfolio just sounded good to me. I could be 100% Canadian, or 100% international, or 100% US and is just as good, but I decided to try a little bit of each one. Any other adviser who claims that his/her portfolio is the best, he/she is full of sh*t.
All my investments are low-cost ETFs. I own no individual stocks. I have been tempted, several times, but I have managed to stay away.
Which ETFs do I Buy?
All of them are from Vanguard, which I believe is the lowest ETF provider in the world. These are their tickers and names:
- Canada: (VCN) Vanguard FTSE Canada All Cap Index ETF
- US: (VFV)Vanguard S&P 500 Index ETF
- International: (VIU) Vanguard FTSE Developed All Cap ex North Amer Idx ETF
Here are my results until the end of April:
| ETF | YTD | |
|---|---|---|
| Canada | -23.52 | |
| U.S. | -15.68 | |
| International | -18.65 | |
| Total | -57.85 |
-57.85 ÷ 3 = -19.23
My portfolio is down 19.23 From January 1st until today March 2nd.
For 2020 my portfolio was up 20.30%. So, it’s not the end of the world.
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