My Investing And Trading Activity This Year
Investors face countless distractions every year. Whether it’s fear of missing out on this year’s top performing asset, or fear of your existing portfolio losing money, these distractions are designed to make you want to take action (and likely part you from your money).
Meanwhile, a successful investment plan is all about setting up a low cost, risk appropriate portfolio that you can stick to for the long term. That means not getting caught up chasing past performance, be it meme stocks or crypto or tech stocks for that matter. It also means not abandoning ship when global stocks and bonds tumble, as they did in 2022.
Finally, we should also recognize that we’re human and our plans can change. For instance, you might not have sold your equities in a panic this year, but it’s perfectly reasonable if you paused your regular contributions to focus on building up your emergency fund or paying down your mortgage.
My Investing and Trading Activity
Flexibility is the key to any good plan, and it was a theme for me when it came to my investing and trading activity this year. Long-time readers know that I invest my money in Vanguard’s All Equity ETF (VEQT) across all of my accounts except for my kids’ RESP (invested in TD e-Series funds).
But we decided to build a new house earlier this year and wanted to use our TFSA funds as part of the down payment. The decision to build a new home also influenced what we did with our corporate investing account, as we opted to pause these contributions to build up a larger cash cushion just in case.
Here’s what my investing and trading activity looked like in 2022:
RRSP
My wife and I pay ourselves dividends from our small business and so we don’t generate new RRSP contribution room. With both of our RRSPs fully maxed out, these accounts remained invested in Vanguard’s All Equity ETF (VEQT).
That said, I did place one trade in this account when VEQT’s annual distribution was paid in January.
My RRSP is down about 10.5% on the year.
LIRA
A similar story with my locked-in retirement account. This was set up in 2020 after my decision to leave my former employer’s pension plan and take the commuted value. I invested the funds in VEQT and plan to leave it there for the next 20+ years.
That said, I did place one trade in this account when VEQT’s annual distribution was paid in January.
My LIRA is down about 10.5% on the year.
TFSA
I contributed $6,000 to my TFSA in January and bought more units of VEQT in this account. But then we went house shopping and signed a purchase agreement to build a new house.
I sold all 3,300 units of VEQT at the end of January and transferred the proceeds over to an EQ Bank TFSA. I withdrew these funds this summer to make our first deposit on the new house.
VEQT was down about 4.5% on the year when I sold, and then I earned about $500 in interest while the funds were parked at EQ Bank.
Corporate Investment Account
My goal with our corporate investing account was to contribute $4,000 per month and invest in VEQT. The year started out that way, with contributions of $4,000 in January and February. I skipped March and April, and then contributed $16,000 in May, $8,000 in June, and $4,000 in July.
I decided to pause contributions from there. We wanted to build up a bigger cash reserve just in case we had to draw from our company at some point to pay for overages on the new house (not yet!) or if we end up having to carry the mortgage on our existing house for longer than expected. It seems like a prudent move.
Total contributions of $36,000 this year. It’s down about 5% on the year – a better performance than my other accounts thanks to the timing of contributions in the first half of the year.
RESP
This is the account in which I stick to a robotic automated schedule every single year. I contribute $416.66 every month and immediately buy one of four TD e-Series funds (the one lagging its target allocation).
Total contributions of $5,000 (plus $1,000 in government grants). It’s down about 8.75% on the year.
Final Thoughts
There you have it. I placed a total of nine ETF trades this year. One in my RRSP, one in my LIRA, two in my TFSA, and five in my corporate investing account. I placed 12 mutual fund trades in my kids’ RESP – buying more TD e-Series funds.
In a year of extreme market volatility I resisted the urge to deviate from my investment plan. I continue to hold VEQT across all of my account types, aside from my kids’ RESP.
But I did withdraw from my TFSA to make a deposit on our new house purchase. And I did pause regular contributions to my corporate investing account to build up more cash.
I feel like VEQT is still an excellent choice for someone like me who does not want to spend time managing and rebalancing a multi-ETF portfolio. Writing this post even reminded me that I can simplify my RRSP and LIRA even further by turning on automatic dividend reinvestment, saving me from placing one trade a year in those accounts.
And while the globally diversified VEQT will always underperform the top sector, country, or region every year, it will also outperform the worst sector, country, or region every year. It’s that tighter dispersion of returns that helps keep investors like me in their seat and able to stick to their long-term plans.
Why are you investing in TD e-Series funds in the RESP? I searched back through your blog for a self directed post about RESP, but only see your post about Group RESP.
Like you, I’m all in on VEQT for retirement. But for RESP it has a shorter investment period, so should be a bit more risk adverse. I’m interested in your opinion on this.
Thanks
Hi Billy, I use the e-Series funds because I have my kids’ RESP at TD Direct and I contribute monthly so I don’t want to pay any commissions.
Agree that the RESP has a shorter time frame, but that’s why I use four funds (including the bond fund).
Hi Rob, what equity/fixed income split have you opted for in the RESP, and how many years are there until it’s expected to be needed?
For our grandkids, we choose VEQT for their first five years, at which point I’ll switch them to VGRO, and later I’ll transition them to VBAL. I’ve not thought about the point at which I’ll switch them to cash. Do you have a glide path worked out?
Hi Bob, that sounds similar to the path I’m on, although I’m a little late to de-risking the portfolio. I should be down to 70/30 by the end of 2023 (kids will be 14 and 11), then 60/40 by the end of 2024, and then new contributions will go to cash for the remaining four years to get ready for my oldest daughter’s first and second year expenses.
One thing to remember is you can only withdraw $5,000 in the first 13 weeks of post-secondary, so you’ll not only want that available in cash but also some contingency money outside of the RESP to help with the first semester’s expenses. After 13 weeks you can withdraw any amount you wish (within reason), so you can have the child pay you back from the RESP if you used your own funds in the first semester (for example).
An RESP is a tricky account to self-manage. I’d say I was too aggressive with equities in the first 12 years, and I’ll likely be too conservative in the final 4-8 years. But that’s when my kids need the money so there’s no need to take excess risk.
Thank you for sharing.
I trade the same three investments every year.
More Vanguard US. Canada, and International.
I sold all my real estate and I not planning to ever go back.
I have a one year worth of living expenses cash position.
Hi Alain, thanks – that sounds like a nice portfolio set-up. One year of living expenses in cash sounds like a lot but the older I get the more that appeals to me.
Hi Robb,
Great Post!
Like you, I hold VEQT across all my accounts, stock my investments are also down similarly this year. Unfortunately, I haven’t added any new contributions (at discounted prices) but I haven’t taken any withdrawals either. I fired @ 45 in (Nov 2020) with rental properties and a stock portfolio. It has been a tough year but I’ve managed to cover my living expenses from rental income and part-time work. Originally, I was of the mindset set that I’d never work again but I’ve come to enjoy a little stress-free side income. I find that just a little side income makes a big difference and allows me to keep my portfolio intact.
Hi FI@45, thanks!
Glad to hear you’ve survived a tough year. Agree 100% about the side income or part-time income. More and more of my retired clients are discovering this helps the finances and the lifestyle by remaining active socially and cognitively.
Thanks for the update. I am fully in with the VEQT plan while also continuing to build my defined pension plan through work.
Could you please elaborate what you mean by “I did place one trade in this account when VEQT’s annual distribution was paid in January.”
I contribute regular monthly amounts to TFSA and in lesser amount RRSP when I get paid.
Thanks
Hi Monique, VEQT pays out a dividend (called a distribution) once a year in January. It’s usually about 2% of the fund balance, which makes sense because about half of global stocks pay a dividend and half do not.
This distribution shows up in the “cash” portion of your account. When that happens I use the cash to buy more units of VEQT.
You can ask your online brokerage to turn on automatic dividend reinvestment so that process happens automatically rather than you having to do it manually.
That’s what I thought you meant. Thank you for clarifying. I missed the part about your RRSP and TFSA limits being maxed out so that makes sense you aren’t making more contributions.
I will look into auto reinvestment as well. Thank you.
I just started learning about all this on my own a year ago and have a fairly good grasp on things but am still learning.
I appreciate all your writing as it makes sense to me and aligns with my views and investing style. I am looking forward to your 2023 info.
Many thanks for the kind words!
I’m very new here and am enjoying your site! Thank you! Question: is VEQT recommended if I am 4 years from retirement or is this recommended for younger investors like my children?
Hi Pat, welcome!
Pat, it would be irresponsible to recommend a specific investment product or asset mix without knowing a lot more about your financial situation. Do you have pension income, do you have a mortgage, do you have a spouse with pension income or a lot of assets, do you have adult children that you want to support, do you have investments spread across an RRSP, LIRA, TFSA, and non-registered accounts? How much are you looking to spend, and what portion of that will come from your investments (and which accounts)?
I will say in general that investing your entire portfolio in 100% equities seems very aggressive when you’re within five years of retirement. But, for instance, you may not need to touch your TFSA in retirement and so in that account it would be perfectly reasonable to invest in something like VEQT.
Thank you. I’ve been wanting to enter the world of ETFs and will give it a whirl with some TFSA funds.