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moneysense.ca, 21/03/05
Introducing the Sleepy Portfolio
I wrote about the target asset allocation for my portfolio, a little while ago. To recap, it looks like this:
Cash: 5-10%
Bonds: 20-25%
Equities:
Canada: 20-26%
US: 20-26%
EAFE: 13-18%
Emerging Markets: 10-15%
Other: 5-10%
Inspired by several “lazy” portfolios, I want to call mine the sleepy portfolio. You can also check out earlier posts about the original couch potato portfolio and the Canadian version. My main aim for this portfolio is to benchmark performance and compare it to my actual results. Over the next few days, I will post the actual mutual funds, bonds and ETFs that make up the portfolio.
I am making the following assumptions about the portfolio:
- The portfolio currency is the Canadian dollar. All foreign-currency denominated assets will be converted to C$ at the prevailing exchange rate for performance tracking.
- The initial investment will be $100,000, invested in different asset classes on Jan 3, 2005.
- Every year, in the first week of July, $10,000 will be added to the portfolio. The portfolio will be rebalanced to the original asset allocation at the same time.
- The investments will be in actual mutual funds, index funds, ETFs etc. When purchasing ETFs, a commission of $29.95 will be assumed for each buy and sell.
- The portfolio is assumed to be in a tax-deferred, self-directed account.
Annual Sleepy Portfolio report cards:
In 2005, the Portfolio was up 12.9%.
In 2006, the Portfolio had another stellar year and was up 14.7%.
In 2007, the Portfolio returned a minuscule 0.2%.
In 2008, the Portfolio had a bad year, losing -19.9%.
Updates:
The other posts in the series: Portfolio Building Blocks — cash, bonds, stocks and REITs and summary.
The blended cost of the Sleepy Portfolio is just 0.22%!
A note of caution: the Sleepy Portfolio has a large allocation to equities and is a benchmark for a young, aggressive investor. Older investors may want to boost the allocation to fixed income.
This nifty spreadsheet simplifies the rebalancing process.
moneysense.ca, 21/03/05
How did you arrive at this allocation? I’m thinking about making a passive portfolio of index funds, but I don’t know what asset allocation I should have, and Vanguard’s Investor Questionaire only differentiates between stocks and bonds.
Micheal: Very good question. I will make a post on this topic.
[...] The Sleepy Portfolio had a stellar year returning 12.9% in total returns. The biggest winners were Canadian large-cap equities (up 25.3%), Canadian mid-cap equities (up 20%), EAFE (up 11.2%), Canadian REITs (up 16%), Emerging Markets (up 33%) and US mid-cap equities (up 12%). Surprisingly, none of the major asset classes in the portfolio had a negative year. [...]
CC,
Not sure if you were aware but a July 20, 2006 article about Lazy Portfolios on Canadian Business online linked to you.
I’m always watching out for media about investments and finance… but I just picked it up today. Congrats!
Here’s the link for anyone interested: (the link is on page 2)
http://www.canadianbusiness.com/markets/stocks/article.jsp?content=20060720_150409_4148
[...] Larry MacDonald, columnist for Canadian Business magazine, has kindly included the Sleepy Portfolio in an article on Canadian “lazy” portfolios. While the Sleepy Portfolio is very simple to assemble, there are some pitfalls to be aware of: [...]
[...] The Sleepy Portfolio, which I use to benchmark the returns of my own portfolios, had an excellent quarter gaining 3.2% over the previous quarter. The gains were across the board in all asset classes. Bonds, EAFE equities and REITs performed especially well. [...]
[...] The Canadian Capitalist once again posted the results of his sleepy portfolio, the portfolio he constructed using only passive index funds, which he uses as his own personal benchmark to which he can compare his own performance. Based on the sleepy portfolio’s stellar performance, I wonder if he’ll stop investing in individual stocks so much in the future and invest in more passive index ETFs instead. [...]
[...] time flies! It is already time to check how the Sleepy Portfolio is doing now that a quarter of the year has passed. The portfolio had a decent quarter increasing [...]
[...] my masterly inaction, the Sleepy Portfolio, which I use to benchmark our personal portfolios is up 34% since its inception in 2005. As you [...]
My New Passive Index ETF Portfolio…
Unfortunately this is the second time my portfolio has changed in the past two years. The first change was when I moved from a TD Mutual Funds account to Clearsight last year. My advisor had great plans for my portfolio. He wanted to eventually have me…
[...] The Sleepy Portfolio posted gains of 2.2% and 4.4% during the past quarter and year-to-date respectively. It is surprising to see positive gains with the recent volatility in the markets but only bonds and REITs ended up in the negative column. [...]
[...] 1st, 2005 · No Comments The Sleepy Portfolio had a really sleepy quarter, advancing just 0.7%. Income of $440.28 or 0.4% from dividends and [...]
You have 20% in Canada? That is more than what you have tracking the MSCI EAFE even though the MSCI EAFE has a much larger market cap. I don’t get why so many indexers have a home bias. If you want marker cap weighting within an index, why not demand it between indexes?
[...] Sleepy Portfolio is an aggressive portfolio with 25% in bonds and cash. The portfolio is down 24% over the past [...]
[...] The Sleepy Portfolio [...]
[...] 18th, 2009 · While I have repeatedly written about my preference for passive, low-cost investing using ETFs or index mutual funds and that, in my opinion, the vast majority of mutual funds are hazardous to [...]
[...] 1st, 2009 · I’ve been tardy in keeping the Sleepy Portfolio in line with the target allocation (cash — 5%, bonds — 20%, stocks — 70% and [...]
[...] Canadian Capitalist took his inspiration from other lazy portfolios and created the sleepy portfolio (a “fire and forget” portfolio for large sums of money, if you get a surprise [...]
[...] I took early October off to attend to personal matters, I forgot to provide an update on how the Sleepy Portfolio performed in 3Q of 2009. Not that it matters. The entire point of a Sleepy Portfolio is that it [...]
[...] Canadian Capitalist took his inspiration from other lazy portfolios and created the sleepy portfolio (a “fire and forget” portfolio for large sums of money, if you get a surprise inheritance this [...]
[...] exposure to US and EAFE stocks, you earned real returns that, albeit modest, are positive. Even the Sleepy Portfolio, which has a 45% combined allocation to US and EAFE markets, managed to return 2.4% over the past [...]
[...] also: canadiancapitalist’s sleepy portfolio and its performance for several [...]