A central tenet of my writings has been the need to simplify. I abhor complexity. I have lived with complexity in the past and it does not wear well with me. Your mileage may vary.
With the advent of these AIO (All In One) ETFs, it has made my investment plans simpler.
I know about tax loss selling. I only started buying my ETFs in May 2018 and I have experienced two tax loss selling opportunities. One in October 2018 and again in December 2018.
October went fine but then I doubled the port and December happened.
I knew that it was best to trade the ETF when the bid- ask is a 1-2 cent spread. But when the time came and the market was nosediving, I ended up pulling a market buy for my XAW. I think the bid-ask spread was about 7-9 cents.
Ouch. That one hurt.
So I got caught in the whipsaw during this one trade. I can only imagine my sheer terror when I try to buy and sell with over ten times the amount in December. No thanks. I will pass on these strategies. I shall allow the taxes to fall where they may.
I tend to learn quickly. Thankfully. I am also quite aware that I better keep it brutally easy thus the AIO ETF strategy.
I am buying a Global Stocks and Bonds fund. I am not trying to knock it out of the park here.
I know how to build great excel spreadsheets which light up whenever it overrides the 5% bands for my asset allocation. But I also know that I want to spend less and less time on this stuff. But more importantly, I need to get myself out of the way.
I understand the reasons why I hold my portfolios. I do not trust myself to do it as efficiently as Vanguard can. It really is that clear to me.
That is also why I intend to set up dividend reinvestment plans on each account. Automate ruthlessly where possible.
My ultimate plan is that the entire process will whirl in the background with minimal upkeep needed by me. That would be nice.
I have been pleasantly surprised by my husband recommending even more ways that we can simplify. He wants us to buy a bond ETF in the RRSPs which would negate having to buy GICs yearly. Then I truly would have nothing to do.
The whole point of money is to have financial EASE. I do not want or need money for luxuries. That’s not even on the radar for me.
I would rather pay extra MER for these AIO ETFs. I know I can make it cheaper by continuing with a three ETF strategy. I know I can make the taxes less by strategizing where each asset would best be held. I know I can harvest tax loss selling but I do not think I will bother.
The truth is, in my hands those so-called solutions may backfire. That has certainly happened to me in the past. Focusing on minutiae while the train is hurtling towards me on the other side.
This way, no matter what happens, I will have financial ease. And no. Hiring a financial advisor would NOT be helpful. I do not need a person between me and an automated strategy.
I am a financial nerd. But I also know myself. I tend to take my eyes off things often at the worst possible times.
How is that for insight?