From The Money Writers this week:

The Digerati Life gives us the true math in choosing a fuel efficient car in her article “Fuel Efficient Cars In Your Future? Watch For The MPG Illusion”

Lazy Man and Money contemplates a new investing strategy in his article “Beauty Holding: Investing in Models?”

Generation X Finance explains investor emotion in From the Front Lines: Changing Your Risk Tolerance Based on a Bear Market.

Money Smart Life has a creative article from a guest poster about what the kung fu panda can teach you about personal finance.

Brip Blap gives us 5 ways to learn from others.

The Sun’s Financial Diary shows us how to Add Wind to Your Portfolio with PowerShares Global Wind Energy ETF.

My Dollar Plan has a few professional tips for us in her article “Career Skills: Tips and Strategies for After Your Job Interview.”

1 Comment

Last year, Scotia Bank purchased TradeFreedom. Seems that their quest to increase their online discount brokerage market share isn’t over yet. This week, they announced the purchase of E-Trade Canada!

WestJet is offering 50% off fall flights from Sept 3 to Oct 31, 2008. Tickets must be booked by July 23, 2008. More details here. Even with the discount, it would cost me and my wife over $1,000 to fly to Toronto return. Those airline fuel surcharges are brutal!

The Financial Blogger answers my question and explains The Basics of Estate Planning.

Thicken My Wallet has some great advice about How to find the best service providers.

Four Pillars teaches how to increase the odds of getting anything you want.

Canadian Capitalist shows us how to find a financial advisor.

WhereDoesAllMyMoneyGo tells us that More Research Casts Doubts on Actively Managed Funds.

MIchael James on Money writes about The Trap of Trying to be Normal.

The MoneyGardener explains that in stock analysis, consistency is crucial.

More Weekend reading tomorrow!

10 Comments

Diversified indexing seems to be all the rage these days. To be honest, I’ve only recently started seeing the real benefits of indexing. As you may know, I am an aggressive investor and a performance chaser. However, even as an aggressive performance chaser, there is always room in the portfolio for some passive investing that goes with the flow that comes with the benefit of reduced risk.

After doing some research, if I were to put together a diversified couch potato’ish passive index ETF portfolio, I would choose ETF’s with broad index coverage along with the lowest MER’s possible.

Here is what I came up with which happens to be very similar to the Canadian Capitalist sleepy portfolio:

The Diversified Low Cost ETF Portfolio

There are lots of ways to tweak the portfolio. I chose XIU over XIC because of the lower MER which is the same reason why I chose a combination of VEA and VWO instead of using VEU or XIN.

VTI, the total U.S market, is a steal in my opinion as it covers the whole U.S market without having to purchase separate funds for the Russell 2000, S&P 500, DJIA, and Nasdaq. If you’re looking for a higher potential return and willing to take on a bit more risk, you may want to purchase a U.S small cap ETF separately.

XSB, the Canadian short term bond index, was chosen because short term bonds are known to have lower correlation with the equity markets than long term bonds. Having a bond portion in the portfolio will reduce volatility while only slightly reducing potential returns. The bond portion will start out small (maybe non existent) in the early years, but increase in percentage as the portfolio gets closer to funding retirement.

How does the portfolio look to you? What would be your picks for a diversified low cost ETF portfolio?

30 Comments