In the past 90 days, stock markets have advanced a little and the Sleepy Mini Portfolio now shows a modest gain over book value. The Sleepy Mini Portfolio was started with an initial investment of $1,000 in August 2007 and I add $1,000 to the portfolio every 90 days. Here’s how the portfolio components were valued as of August 31, 2010:

TDB909 – Canadian Bonds – $2,484 (20.3%)
TDB900 – Canadian Equities – $2,432 (19.9%)
TDB902 – US Equities – $3,524 (28.8%)
TDB911 – International Equities – $3,810 (31.1%)
Total – $12,249
Total Invested – $12,000

It is once again time to add another $1,000 to the portfolio and rebalance it to the target asset allocation — 20% bonds, 20% Canadian stocks, 30% US stocks and 30% International stocks. I use this spreadsheet to divide new money between the portfolio components. As you can notice, US equities are currently below the target and International equities are above the target. So, more of the new money will be channelled into US stocks relative to International stocks to bring the portfolio into balance.

Transactions

TDB909 – TD Canadian Bond Index (e-Series) – Buy units for $165.79.
TDB900 – TD Canadian Index (e-Series) – Buy units for $218.16.
TDB902 – TD US Index (e-Series) – Buy units for $451.15.
TDB911 – TD International Index (e-Series) – Buy units for $164.90.

[YTD Sleepy Mini Portfolio Returns as of August 31, 2010]

That’s all there is to it. Investing so simple that it would make a blindfolded, dart-throwing monkey insanely jealous.

This article has 19 comments

  1. Although I don’t share this investment philosophy, it is helpful for any investor who wants to remain “diversified/balanced” in their portfolio. Thanks for the update!

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  3. I’m curious to know how you get that graphic at the bottom of your post. Very useful way to visualize progress (or regression).

  4. @Doctor Stock: The investment philosophy here is something anyone can easily adopt as their own. It is what Graham would call “defensive investing”. The alternative is active investing. Some are good at it. The vast majority will not even be able to match the results of a defensive investor.

    @Michael: I use the free portfolio tracker available on GlobeInvestor.com.

    http://investdb.theglobeandmail.com/invest/investSQL/gx.stock_rep?pi_mode=SECLIST

  5. CC, please remind me if the automated tracking includes the distributions from the holdings and (i) if those are reinvested and (ii) if that is included in the chart you post every quarter?

  6. What is your Year-to-Date return and your rates over the years? Those stats will better allow us to judge whether to be jealous.

    • @Dale: I don’t publish YTD and yearly returns for the Sleepy Mini Portfolio because it is not static. Money is being added to it four times a year and unless you compare it to another strategy that does the same thing at exactly those dates, there is little point in comparing.

      I do publish yearly returns for the Sleepy Portfolio. I’ll publish the YTD returns in my next update (end of Sept).

  7. A cool 2% after all the ups and downs eh? This is nowhere close to the level the market has gone up, but then again you are in the money where quite a few people have lost a bunch of cash. Thanks for the update on this interesting experiment.

  8. @CC: There is a XIRR() function in excel that calculates internal rate of return.

  9. Does this portfolio factor taxes?

  10. CC, Can you comment on why you use $1000 every 90 days versus $333 per month.

    Is there any benefit/drawback to doing it monthly versus quarterly?

  11. DoubleK, the TD E-Funds have a minimum purchase of $100, so rebalancing 4 funds each month with $333 just isn’t possible.

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  14. I think it’s great you post these so others can learn. Keep it up!

    I have a question. Do you rebalance every time you put money into your portfolio, or do you only do it annually? Is there an advantage to either way? Thanks!

  15. @Slacker: Yes, I could track the YTD returns but IMO, it isn’t comparable to another strategy unless the other makes investments on the exact precise dates. Also, I’m lazy 🙂

    @Brain: No, the portfolio does not factor taxes. I’m assuming that it is held within a tax-deferred account.

    @DoubleK: I could do it monthly by signing up for a pre-authorized contribution. TD e-Series minimum with PAC is only $25. So, theoretically you could construct a similar portfolio with contributions of just $25 per month. The reason I picked 3 months is convenience — I can track the portfolio and write about it here. As an investor, I prefer to invest regularly instead of a 3-month cycle.

    @Traciatim: One option is to sign up for a PAC. The minimum then is just $25. Of course, the portfolio has to be rebalanced yearly.

    @Wesley: I rebalance every time money is added to the account. I haven’t seen studies that show which method is better. I’ll try and research this topic.

  16. Hey CC, I just started a sleepy mini-portfolio modeled exactly after yours, and after looking at the history of each fund I’m curious about something. Looking at the stats, the Canadian Equities (TDB900) seem to have almost consistently performed considerably better than the US Equities (TDB902), yet you’ve chosen to keep your portfolio balanced with 10% more of the latter than the former. Was there a specific reason for this decision? And would it be okay to switch the weighting on those two (30% CND and 20% US instead.)?

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