Canadian investing made lazy

It's Easy

One of the most common complaints that I hear about investing is that it's too complicated and that people don't have time to learn about how to do it. The good thing is, it pays to be lazy in investing!

Canadian Capitalist - Lazy Man's Portfolio

Almost every stock or mutual fund will lose to it's respective index. The concept of the "lazy" portfolio is just to buy something as similar to the index as possible. This way you will go up and down with the market and over long periods of time you should go up. Choosing individual stocks, researching companies, etc., usually ends up in your playing "the loser's game". Never trade or sell your stocks, only add to the portfolio to keep your percentages as close to the desired percentage as possible.

Don't Play The Loser's Game

Mutual Funds vs ETFs

ETFs have become very popular lately and for good reason, they will always perform better than their respective mutual fund because they have less management fees. Because we're going with index funds the only differentiator left is the amount of management fees (denoted MER, management expense ratio) that they charge. ETFs are usually much lower, usually in the 0.1-0.3% range rather than 0.5-3% range. They're usually an order of magnitude better. This will mean several tens or hundreds of thousands of dollars difference by the time you retire.

Choosing Your Portfolio

There are a bunch of good model portfolios floating around the web. Here are two of my favourites:

Canadian Capitalist

Efficient Market

I took their recommendations and customized it a bit and here's what I've decided to go with for mine:

  • XIC - 25% - Canadian Equity - 0.05% MER
  • VTI - 20% - US Equity - 0.07% MER
  • VEA - 20% - Europe/Asia Equity - 0.12% MER
  • VWO - 5% - Emerging Equity - 0.22% MER
  • XBB - 25% - Canadian Bonds - 0.30% MER
  • RBF2010 - 5% - Canadian Cash

That's a blended MER of 0.14%! Compare that to your average mutual fund based index portfolio which would have a blended MER closer to 1%.

RBF2010 is a mutual fund which is basically a high interest savings account under the covers. Great for holding in an RRSP/TFSA. It currently pays out at 1.25%. I also hold XBB instead of XSB/XRB for simplicity.

Getting Started

To do this yourself you'll want to get a self-directed investment account from your bank of choice:

Royal Bank Direct Investing

TD Waterhouse Discount Brokerage

CIBC Investor's Edge


There is also Credential Direct which is an independent Canadian brokerage.

Setup an RRSP and TFSA with whichever one you want and get lazy!