Even though I switched to a simple, passive, two-ETF investment portfolio, I still like to check-in on my returns from time-to-time and compare them to other benchmarks and strategies. Call it my competitive nature, or maybe a nervous tick. Let’s take a look at the Blackrock (iShares) website, as it has the most current year-to-date returns for its funds:
- iShares S&P/TSX 60 Index ETF – 16.75%
- iShares S&P/TSX Canadian Dividend Aristocrats Index ETF – 12.93%
- iShares Core S&P 500 Index ETF – 2.14%
- iShares Core MSCI EAFE IMI Index ETF – (3.54%)
- iShares Core MSCI All Country World ex Canada Index ETF – 1.69%
So we can see that the Canadian market is soaring, the U.S. market is stalling, and International markets are slumping. Great news for Canadian investors with a strong home country bias, but those with more diversified baskets will find their returns somewhere in the middle.
Indeed, my portfolio consisting of 75% VXC (All World ex-Canada) and 25% VCN (Canada All Cap Index) has returned 5.26% year-to-date. Similarly, my TD e-Series RESP portfolio has seen growth of 5.15% so far in 2016.
Now before you go chasing returns and shifting all of your resources back to the Canadian market remember that’s precisely the type of herding behaviour that leads to poor returns. If you recall the TSX fell nearly 8% in 2015 while U.S. and International equities returned 20+%.
Chasing returns is a surefire way to lose your money (and your mind). A smarter approach is to diversify so you can take advantage of some of the great returns without getting stuck with all of the bad returns.
This Week’s Recap:
On Monday I argued that new federal rules on mortgages won’t nuke the housing industry, so cool it with the doom-and-gloom.
On Wednesday Marie wrote that some debts can’t be avoided, and offered some advice to keep those debts to a minimum.
And on Friday we opened the Boomer & Echo mailbag and looked at designating a RRIF beneficiary.
Many thanks to the ModernAdvisor team for highlighting us as one of the top Canadian personal finance blogs. In fact, everyone on that list is worth adding to your weekly reading.
Side note: I’m have read or am currently reading about a dozen new personal finance books and I’m curious if readers are interested in full book reviews, short summaries of a few at a time, or just skip them altogether? Let me know in the comments.
One trend to watch over the coming years is the clash between the employee’s desire to work longer and the employer’s desire to save costs. In an all-too typical scenario, this 63-year-old man may be forced into retirement next spring and isn’t sure if he’s ready.
The Wall Street Journal has a terrific article on the biggest money mistakes we make – decade by decade – and how to avoid them.
It’s time to get a grip on mutual fund fees:
Downtown Josh Brown goes full rant mode and knocks down a straw man argument about how active management is better equipped to handle market downturns.
The Vanguard blog offers a simple, straightforward, and nearly foolproof approach to investing.
My Own Advisor Mark Seed shares his thoughts on generating retirement income.
Managing your money is like riding a bike, says Half Banked blogger Des Odjick, whose mother taught her great money management skills. Hey Des, sounds like a great idea for a blogging duo!
How do you manage your household finances when you make more than your partner? Jessica Moorhouse shares her personal experience.
Rob Carrick and Justin Bender team up to present the ABCs of building an RESP using ETFs. How’s that for alphabet soup?
A double-shot from Sketch Guy Carl Richards. First up, do your investments actually help you reach your goals? Then, an older post but well worth the read: Learning to let go of financial peer pressure.
Is your mortgage leaving you house poor? Time to check in with The Globe and Mail’s Real Life Ratio.
The Blunt Bean Counter Mark Goodfield is back and says the new principal residence reporting requirements has large implications for the average Canadian.
Frugal Trader explains how to transfer a workplace pension to a LIRA.
Finally, Jason Heath says the big lesson from Nortel Networks is that pension plans aren’t a guarantee.
Have a great weekend, everyone!