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The Timeless Harmony of a Balanced Portfolio
Deciding on the right asset allocation can cause investors a lot of grief—far too much, in fact, since there is no such thing as a perfect mix of stocks and bonds. In his excellent book Your Money and...
View ArticleCouch Potato Portfolio 2011 Returns
The 2011 performance results are now in for my model Couch Potato portfolios. Many thanks to Justin Bender at PWL Capital in Toronto for providing these data. Complete performance results are available...
View ArticleMarket Forecasts Prove Worthless—Again
I’m confused by a lot of things in investing, but the enduring influence of market forecasts is the one that stumps me the most. Year after year, expert predictions, estimates, forecasts and...
View ArticleHow Claymore’s Advantaged ETFs Pay Investors
In a previous post, I looked at some strategies for tax-efficient investing with ETFs. Among the innovative products designed for non-registered accounts are Claymore’s Advantaged ETFs, which hold...
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Market Timing Goes to College
In recent years, the so-called Yale Model has been extremely popular with investors. The model is an attempt to mimic the investment strategy used by Ivy League endowment funds, which have an...
View ArticleAsk the Spud: Does Home Bias Ever Make Sense?
Q: The Global Couch Potato has one-third of the equity allocation in Canadian stocks, but Canada makes up only about 4% of the world markets. Aren’t you guilty of home country bias? – Jeremy D. I’m...
View ArticleTim Pickering on Managed Futures, Part 2
Here’s part two of my interview with Tim Pickering, president of Auspice Capital Advisors, who manages both the Horizons Auspice Managed Futures Index ETF (HMF) and the iShares Broad Commodity Index...
View ArticleAsk the Spud: Should I Unbundle My ETF?
Q: What do you think of investing directly in Canadian REITs instead of buying an ETF? It may be possible to achieve similar results without paying the ETF’s management fee. – Philippe V. ETFs promise...
View ArticleUnder the Hood: Vanguard FTSE Canadian Capped REIT (VRE)
This post is part of a series called Under the Hood, where l take a detailed look at specific Canadian ETFs or index funds. The fund: Vanguard FTSE Canadian Capped REIT (VRE) The index: The fund tracks...
View ArticleWhat’s On Your ETF Wish List?
It seems like ETFs are appearing in Canada every month, but it’s been a while since I got genuinely excited about a new product. It was great to see both Vanguard and BMO create S&P 500 funds with...
View ArticleAsk the Spud: The Role of Real Return Bonds
Why has the iShares DEX Real Return Bond (XRB) dropped so dramatically this year? I thought this asset class was protective in times of rising interest rates (which are correlated with inflation), but...
View ArticleUnderstanding Floating-Rate Notes
By now every serious investor understands the consequences rising interest rates will have on bond portfolios. For more than four years we’ve been reminded that when rates go up, bond prices fall—and...
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Why a Diversification is a Piece of Cake
After almost four years of false alarms, the bond bears are finally able to act smug. Broad-based Canadian bond index funds have fallen in price about 4% or so in since the beginning of May. Meanwhile,...
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Seeing Diversification in Action
Why should you add multiple asset classes to your portfolio? That seems like a simple question, but it’s one many investors would answer with only a vague comment about “more diversification.” It’s...
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Deep Thoughts on Diversification
Just shy of two years ago—in October 2011—I wrote a post that laid out the year-to-date returns for the Complete Couch Potato portfolio. If you can remember that far back, the third quarter of 2011 was...
View ArticleHow Not to Prepare for a Bear Market in Bonds
The risk of rising interest rates has become an obsession in the financial media. Those risks are undeniably real: it’s quite possible that broad-based bond funds will see multiple years with negative...
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Making Smarter Asset Location Decisions
Last week’s posts about tax loss selling prompted some interesting questions about asset location in the comments section. Holding your ETFs and index funds in the most tax-efficient accounts can have...
View ArticleThe Failed Promise of Market Timing
I’ve long believed the most difficult part of being a Couch Potato investor is resisting temptation. Index investors are asked to be content with market returns, but they are bombarded daily by fund...
View ArticleCalculate Your Personal Rate of Return
On January 9, I published the 2013 returns of my model portfolios. The equity markets performed spectacularly last year, but most investors are likely to be far more interested in the performance of...
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A Periodic Review of Diversification
After the financial crisis of 2008–09, financial commentators loved to take shots at “old school” investment strategies. First came the declarations that diversification no longer works, because during...
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