Couch Potato Portfolio
The latest issue of MoneySense magazine has an article on a “Couch Potato Portfolio”. The main features of the portfolio are: Low cost (implemented using ETFs/index funds), diversified (Canada, US and International equities) and simple to implement and maintain.
The original “classic” version of the portfolio is split into 1/3 S&P 500 index, 1/3 TSX-60 and 1/3 bond index fund. Though this portfolio has better performance than the TSE 300 with lower volatility, I think it is too simple for portfolios that have more than $10,000.
The latest issue has an updated “Global” version which is slightly better diversified: 20% i500R, 20% i60C, 20% iIntR, 20% iG5, 20% iBond (The iG10 ETF is now called the iBond and it tracks the Scotia Capital bond index), which are all index funds from iUnits. Again, I think this portfolio is too simple for anything more than $15,000. The portfolio is missing exposure to mid-caps, small-caps, emerging markets, REITs, gold etc. In retirement portfolios a significant exposure to high dividend yield securities may also make sense.