Our regular columnist, Mom2KG, is back for her usual monthly check-up. As usual, she appreciates any comments you may have. Her columns are now collected in her own category; if you are a new subscriber, I encourage you to read all her posts.
A number of your comments have asked for numbers as to my budget. I’m way too embarrassed for that, but here’s something almost as much: my investments, in percentages. TMW has already spat on them [TMW note: I didn't spit on them, more like kicked dirt on them- see below], but here’s your chance to put your own knowledge to the test.
Of my investments (not including home equity), the percentages are:
Cold hard cash (sitting in a bank account waiting for your suggestions) - 35%
The rest is held inside an RRSP account at an investment house, classified as follows:
Short Term Fixed Income
- “Stable Income” fund – 10%
Cash
- Actual cash - >1%
- “Money” fund – 7%
Canadian and Foreign Fixed Income
Foreign Equity
- “American Growth” fund – 2%
- “Growth” fund – 10%
Canadian Equity
- Corporate stock – 1%
- Bank stock – 8%
- “Select” fund – 4%
- “Equity” fund – 13%
Well, have at it and enjoy. What are your preferred weightings? What’s missing (e.g., there are no REIT’s)?
Also, I’m going to begin a monthly direct deposit lump sum into my investment portfolio each month. I’ve decided to put 66% of that into safe, low-risk investments, and the rest (33%) into ETFs and stocks, just for the fun and risk of it, and for learning purposes. Comments on that plan are also appreciated.
Looking at the above, I realize to some chagrin that I understand all of the above, with the stand-out exception of the mutual funds – 46% of my total investments! That’s a pretty big gap in knowing where my money is and what it’s doing. I have no idea what’s held in those funds (except some are foreign/American and some are Canadian) or what their purposes are. And those funds are where most of my money is – and, of course, what the investment advisor recommended. The MERs, however, are low: mostly about 0.5%.
When I mentioned to the advisor my plan to put money into ETF’s, he gravely warned me of the (flat) trade fee – made a big deal about it. Turns out such a fee would be 0.029% of my overall portfolio (including the cash outside his domain in my bank account). Hm. Doesn’t seem like that big a deal – was he trying to scare me off investments that wouldn’t make him any money?
Thanks in advance!
P.S. I went to the Crate & Barrel opening in Toronto with TMW himself. I want you to know he was fomenting marital discord by insisting I buy things that would wreck the family budget. Bastard convinced me, too [in my defense, the opening was for charity and I merely remarked that the bed-sheets were nice so if you need to have bed-sheets, you may as well aid charity as well. That's my story and I am sticking to it!]
TMW says- as for the “spitting” on the portfolio remark, I mentioned there may be some overlap in the mutual funds and there is a large under-exposure to foreign equity. I also thought that her advisor was unnecessarily pushing her into mutual funds without sorting out potential redundancy issues.
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