I’ve never owned bonds before. Our actual portfolio is 100% in stocks and cash. Returns for various asset classes in 2004, shows the error of my ways: bonds returned a healthy 7.15%.

For the bond portion of the Sleepy portfolio, I would like to keep things as simple as possible. Barclay’s Canada recently introduced the iBond fund (TSX: XBB) that tracks the Scotia Capital Universe Bond Index and has a reasonable MER of 0.3%. Since bond yields are in generational lows and forecasts call for bond yields to rise sooner or later, I want to keep the bond allocation at the lower end of the target.

Jan 4, 2005: Buy XBB 700@$28.93 + $29.95 commission = $20,280.95.
Current Value = $20,237.00

Tomorrow, we will consider the equity portion of the portfolio.