Gyroscopic Investing

good thread! some other suggestions:

Cash - Altamira high-interest savings - 1.25% without any interest rate risk. I use CLF also but it can and does lose money with rate fluctuations.

Gold - Horizons Comex Gold (HUG) - tracks price of gold in US dollars, lower MER than IGT. As far as I know IGT has a 0.8% MER.  Also HUG is commission-free at my broker (Qtrade).

Long-term bonds - Powershares Ultra DLUX Long Term Government Bond (PGL). This is not quite as super-premium as ZFL, it does own some provincial debt (mostly federal though). However I like it for several reasons:

1) ZFL has been messing around with the allocation lately. They own Canada housing corporation debt and a lot of infrastructure projects like Muskrat Falls in Newfoundland. They also have quite a bit of Canada Post debt which I don't like.
2) It tracks a different index which I like better. PGL tracks DEX Ultra DLUX government bond, which has very large requirements (e.g. minimum bond issue $1bn). ZFL tracks FTSE TMX Canada Long Term Federal Bond Index which has a much smaller scale (minimum $50m) although to be fair ZFL has a stricter credit rating requirement.
3) It has much higher trading volume (9x as large as ZFL).

In terms of weighted average duration, yield and MER it's pretty much the same as ZFL.

International stocks

iShares Europe Australasia Far East (EAFE) (XEF) - for people like me who aren't comfortable with emerging market volatility and want vanilla international stocks. Holds international blue-chips like Toyota, Diageo, Daimler, SAP, Mitsubishi, etc.
iShares emerging market (XEC) - exposure to emerging market (mostly Korea, Taiwan, Russia).

I used to use iShares International Fundamental Index (CIE) and iShares Emerging Markets (XEM) but the MERs were too high, there are better alternatives.

Canadian stocks

Horizons TSX 60 index (HXT) - absolute cheapest way to own TSX index I've found (0.07% MER).

BMO low volatility (ZLB). I am agnostic on low-volatility investing but this is much more diversified than a TSX 60 index fund. Much less financials and resources, more consumer defensive and utilities. Top components of TSX are 1) Royal Bank 2) TD bank 3) Scotiabank and although I own the index I get uncomfortable with too much bank exposure. Top holding of ZLB are Couche-Tarde, Metro Grocery, Dollarama. Also has a higher dividend than the TSX (2.2%).

My modified PP is very similar to Gosso's:

20% gold
20% cash/short term debt
25% long-term debt
10% US stocks
10% International Stocks
15% Canadian stocks

TorontoSkeptic,

Be careful with HUG.  You want to hold gold without a currency hedge.  The reason being is if the CAD tanks while the USD remains strong then the hedged gold will not compensate for the fall in the CAD.  Imagine an Icelandic PP that held gold hedged to the USD, it would have been a disaster during 2008, since unhedged gold went up 180% during the 2008 crisis in terms of the Icelandic krona, while the hedged gold would have only increased 5% in terms of the Icelandic krona (according to Marc De Mesel's site, HERE).  The PP needs this potency from gold when the world/country is falling apart.

Maybe use HUG for your monthly contributions, and then once you have ~$5,000 you can switch into an unhedged version.

This is another reason why I encourage people living outside the US to include some unhedged US/International stocks, since they will also help offset the weakening domestic currency.

PGL seems interesting, but ZFL still looks a bit better (less provincial bonds).  It is annoying ZFL has allocated a small percentage to Canada Post (7%) and Muskrat (3%).  But I wouldn't worry too much about it -- it seems we won't ever get pure bond ETFs in Canada.