Long time lurker here! I have read pretty much all the posts on International/CDN permanent portfolio's. I would like to do something that is as easy as possible and I believe I have found an intriguing option. My cash is in a HISA TFSA (2.5%) and I was wondering about putting the other 75% of the portfolio a custom 33%/33%/33% ShareOwner ETF customer portfolio containing XIC, CGL-C and XLB. (I know that XLB is not the best option but its the best available from this brokerage). The fees seem to be very attractive since you basically just pay a flat $40 per month which includes all your purchasing and automatic rebalancing. Funds can be set to automatically withdrawn for your bank account and then funds are automatically reinvested into the lowest performing sections. You also can set automatic rebalancing bands.
Anybody have any thoughts on this? Any hidden dangers I am missing? Thanks for your help!
https://www.shareowner.com/investments.html
Canadian PP Brokerage Option? (Gosso, canPP........)
Moderator: Global Moderator
Re: Canadian PP Brokerage Option? (Gosso, canPP........)
Welcome to the forum!
I've never heard of ShareOwner before, so I don't know much about them, although I get a bit nervous when pulled away from the teat of the big banks. Do you know if the $40/month covers all your accounts, or is it charged for each account? If it is per account then that could get quite expensive if you have an RRSP, RESP, TFSA, LIRA, and/or taxable account. If you use more than one account and the $40/month covers all of the activity then it seems like a good deal.
The other benefit of automation is that you remove yourself from the investing process so you don't have to deal with the emotional trauma of buying the lagging asset(s).
I've never heard of ShareOwner before, so I don't know much about them, although I get a bit nervous when pulled away from the teat of the big banks. Do you know if the $40/month covers all your accounts, or is it charged for each account? If it is per account then that could get quite expensive if you have an RRSP, RESP, TFSA, LIRA, and/or taxable account. If you use more than one account and the $40/month covers all of the activity then it seems like a good deal.
The other benefit of automation is that you remove yourself from the investing process so you don't have to deal with the emotional trauma of buying the lagging asset(s).
Re: Canadian PP Brokerage Option? (Gosso, canPP........)
Hey CDNron, welcome as well!
I like questrade if someone is just starting out, $4.95 per trade and zero trading costs on some ETFs, coolest trading platform of the ones I've toyed with.
$40 flat fee may be steep if you're not buying every single month.... I see some disadvantages to rebalancing too often (or would you be rebalancing only by addition?)
I average $10/month and I think my average MER is just about 0.33% annual averaging everything together (buying only the fund that is lagging the most behind the other allocations, and typically only if the allocation is < 23%). I use XLB, VXC, GTU split with CGL for gold and aside from the CGL all are under 0.5% annual. For the TSX I like HXT (0.07% MER ), but I found I was getting rocked on the days where gold took a dive and the TSX went down with it, I sleep much better with an all-world index fund and even better as it leaves out our sucky stock market
I like questrade if someone is just starting out, $4.95 per trade and zero trading costs on some ETFs, coolest trading platform of the ones I've toyed with.
$40 flat fee may be steep if you're not buying every single month.... I see some disadvantages to rebalancing too often (or would you be rebalancing only by addition?)
I average $10/month and I think my average MER is just about 0.33% annual averaging everything together (buying only the fund that is lagging the most behind the other allocations, and typically only if the allocation is < 23%). I use XLB, VXC, GTU split with CGL for gold and aside from the CGL all are under 0.5% annual. For the TSX I like HXT (0.07% MER ), but I found I was getting rocked on the days where gold took a dive and the TSX went down with it, I sleep much better with an all-world index fund and even better as it leaves out our sucky stock market
"Thanks, give me the gold" - Kyle Bass
-
CDNron
Re: Canadian PP Brokerage Option? (Gosso, canPP........)
Hi Gosso! - The emotional part of making automatic is a huge benefit for me. Also its $40 for all your accounts as long as you use the etf model portfolio's. I also like the idea of the buying and selling being done for me on a monthly basis. I am a minimalist (aka lazy!). In all seriousness I really like the PP but I just don't enjoy the process of investing. My life is quite hectic and I would gladly pay $40 a month to have the automation.
Hi Mike59! - I would only rebalance by addition and if a 15/35 band was hit. Basically any cash or dividends is automatically used to fund the asset that is below its target weighting. If a rebalancing band has still been hit then it will automatically rebalance everything back to the desired weighing. How did you find the swap-based HXT worked for tax purposes? I was also wondering about your use of the global index. Since the PP is meant to cover you against all local economic conditions do you think putting an index that reacts to global economic conditions increases the overall risk of your portfolio? I saw it mentioned in the past that a CDN might put a portion of the index into the US market which to me seems safer since our markets seem closely tied together. I am just going to go plain HB vanilla for now and see how it works out!
Guys do either of you hold some of the PP inside a RRSP or TFSA? If so how do you effectively rebalance (RRSP holds cash and bonds)? I want to maximize the tax sheltering so I would prefer not to run a compete secondary PP if possible. Also the rebalancing I mentioned above is done once a month. Could this slow 'reaction time' be risky? Thanks for responding!
Hi Mike59! - I would only rebalance by addition and if a 15/35 band was hit. Basically any cash or dividends is automatically used to fund the asset that is below its target weighting. If a rebalancing band has still been hit then it will automatically rebalance everything back to the desired weighing. How did you find the swap-based HXT worked for tax purposes? I was also wondering about your use of the global index. Since the PP is meant to cover you against all local economic conditions do you think putting an index that reacts to global economic conditions increases the overall risk of your portfolio? I saw it mentioned in the past that a CDN might put a portion of the index into the US market which to me seems safer since our markets seem closely tied together. I am just going to go plain HB vanilla for now and see how it works out!
Guys do either of you hold some of the PP inside a RRSP or TFSA? If so how do you effectively rebalance (RRSP holds cash and bonds)? I want to maximize the tax sheltering so I would prefer not to run a compete secondary PP if possible. Also the rebalancing I mentioned above is done once a month. Could this slow 'reaction time' be risky? Thanks for responding!
Re: Canadian PP Brokerage Option? (Gosso, canPP........)
Sounds like a reasonable tradeoff for less stress and better sleep.CDNron wrote: Hi Gosso! - The emotional part of making automatic is a huge benefit for me. Also its $40 for all your accounts as long as you use the etf model portfolio's. I also like the idea of the buying and selling being done for me on a monthly basis. I am a minimalist (aka lazy!). In all seriousness I really like the PP but I just don't enjoy the process of investing. My life is quite hectic and I would gladly pay $40 a month to have the automation.
Re: Canadian PP Brokerage Option? (Gosso, canPP........)
I believe with HXT the capital gains are the only factor, as the dividends are swapped to come back to you as return of capital. I feel the Canadian market is too closely linked to commodities/resources and as we saw when oil plunged, the TSX and gold both went with it, making it very tough on a Canadian PP investor who isn't diversified. Up to that point I had XEC and HXT split for my equities (Thinking I was being a smart value investor), but learned the hard way that a global index (which is already 50% USA to begin with) lets me sleep at night. I wouldn't feel too comfortable going too heavy beyond that 50% USA though, especially buying in at all time highs, I like the idea of getting a slice of the entire world of equities personally.CDNron wrote: Hi Mike59! - I would only rebalance by addition and if a 15/35 band was hit. Basically any cash or dividends is automatically used to fund the asset that is below its target weighting. If a rebalancing band has still been hit then it will automatically rebalance everything back to the desired weighing. How did you find the swap-based HXT worked for tax purposes? I was also wondering about your use of the global index. Since the PP is meant to cover you against all local economic conditions do you think putting an index that reacts to global economic conditions increases the overall risk of your portfolio? I saw it mentioned in the past that a CDN might put a portion of the index into the US market which to me seems safer since our markets seem closely tied together. I am just going to go plain HB vanilla for now and see how it works out!
Guys do either of you hold some of the PP inside a RRSP or TFSA? If so how do you effectively rebalance (RRSP holds cash and bonds)? I want to maximize the tax sheltering so I would prefer not to run a compete secondary PP if possible. Also the rebalancing I mentioned above is done once a month. Could this slow 'reaction time' be risky? Thanks for responding!
I have my PP spread out between a business investment account, personal TFSA/RRSP and some cash in a nonreg account for now, thank goodness for spreadsheets to keep track of everything. I use the same funds so even if there is some in each account, I just add up the shares and values and it's easy to tally. I try to hold my bonds in the RRSP, gold in the TFSA. Cash and stocks in the nonreg/taxable accounts.
Let us know what you come up with for your funds!
"Thanks, give me the gold" - Kyle Bass