This first part is keeping it simple and simply deals with POTENTIAL returns year to date. The following chart will give the approximate returns an investor could expect with certain allocations to equity (equity has higher average returns but greater volatility).
*Benchmark comprised of:
TD Bond (1.05% YTD)
i-shares XIU (-1.86% YTD)
i-shares XAW (4.92% YTD)
Someone with an allocation of 70% EQUITY should have a return year to date of about 2.27% (maximum) while a client with an allocation of 70% FIXED INCOME will have a return in the 1.57% range.
The 6.53% gain in the CDN$ versus the US$ has had a negative effect for those owing U.S. securities BUT the return is still higher than the NEGATIVE return of the broad Canadian stock market.
While the last 2 months have been negative for most individuals, returns are positive year to date and not far off TARGET returns for a 12 month period and 12 month periods are the SHORTEST time frame I look at. HOWEVER 5 year time frames are a true indicator of TARGET RETURNS being achieved.
For those looking to reduce cost of ownership I continue to suggest BLENDING exchange traded funds (ETF’s) and individual income oriented securities into portfolios.
The CORE ETF continues to be I-shares XAW which covers the entire world except for Canada. For those not looking to add individual securities this ETF combined with the I-shares XIU will give excellent exposure to the entire world including Canada for ½ the cost of a traditional mutual fund. I believe it is very important in this low interest rate world to reduce costs when appropriate without hurting target returns.
Those looking for the CURRENT TOP 10 INDIVIDUAL SECURITY SELECTION REPORT e-mail me a request. This report will soon be part of the argosy-Burlington web page.
The views expressed do not necessarily reflect the opinion of Argosy Securities Inc. This does not constitute an offer or solicitation to buy or sell any of the securities mentioned. The information contained herein may not apply to all types of investors. Please consult a professional before making an investment decision