Archive for September, 2007

Sleepy Mini Portfolio

September 3, 2007

42 comments

The Sleepy Portfolio is fine for a benchmark but not many people invest a lump sum and then hardly ever add to the portfolio. If you are like me, you save a bit of money regularly and invest it gradually over the years. I get a lot of e-mail of how to invest small sums of money or the best way to set up a regular investing program.

In order to better reflect how average people normally invest, I am introducing a “Mini” version of the Sleepy Portfolio. The Mini portfolio would differ from the Sleepy Portfolio (and in fact, other lazy portfolios) in the following ways:

  1. The Sleepy Mini Portfolio will start with an initial investment of $1,000. Every ninety days, another $1,000 would be added to the portfolio. Thus, a total of $4,000 would be invested annually in the Sleepy Mini Portfolio.
  2. Since we are starting out with a small portfolio, the portfolio will initially not be exposed to all asset classes. The initial asset allocation will be quite simple: 20% bonds, 20% Canadian equities, 30% US equities, 30% International equities.
  3. The portfolio will be rebalanced to the target allocation every time new funds are invested.
  4. The portfolio is assumed to be in a tax-deferred account such as a RRSP. However, the portfolio should be fairly tax efficient (except for the bond portion) as rebalancing is done by adding new money and not selling current holdings.
  5. The Mini portfolio would be constructed using TD e-Series Mutual funds. The minimum initial investment and the minimum subsequent investment for these funds is a low $100.

Transactions:

TDB909 – TD Canadian Bond Index (e-Series) – Buy 19.0839 units at $10.48 for a total of $200
TDB900 – TD Canadian Index (e-Series) – Buy 8.9726 units at $22.29 for a total of $200
TDB902 – TD US Index (e-Series) – Buy 10.89720 units at $27.53 for a total of $300
TDB911 – TD International Index (e-Series) – Buy 22.71 units at $13.21 for a total of $300

That’s it! Investing couldn’t be simpler.