Investing

TD Bank’s 2005 Investment Outlook

December 17, 2004

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TD Bank has released a detailed outlook for the next year. Their outlook for returns for various asset classes are:
Cash: 2.5-3.25%
Bonds (SCM Bond Index): 2.0-4.5%
TSX: 3-6%
S&P500: 3-6%
EAFE: 4-7%
Given that bonds and REITs have done extremely well over the last 5 years, perhaps it is time for them to underperform equities over the next few years. Since I don’t know for sure which assets will perform well in the future, I am planning to stick to my asset allocation and rebalance every year.

New Canadian Bond Index Fund

December 16, 2004

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We now have a new option for our bond investments. It is called the iUnits Canadian Bond Broad Market Index fund (TSX: XBB) and will track the performace of the Scotia Capital Universe Bond Index. The MER is only 0.30%, interest income will be distributed quarterly and the index currently yields about 4.04%.
I am going to seriously consider the new iBond index fund for the bond portion of our portfolio. Currently, the bond portion of our portfolio is in cash because I am expecting bond yields to rise (and prices to fall). I’ve been wrong so far this year as the SC Universe Index has increased 7.38%. It is a good illustration that market timing rarely works.

Ameritrade Canada

November 29, 2004

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If you invest in US markets even occasionally, it might be worth considering opening an account with Ameritrade. Each US equity trade will cost $10.99 compared to trades starting at $26.99 at E-Trade and the discount arms of the major Canadian banks. I’ve been using Ameritrade for over a year now and my experience with them has been very good.