2010 Personal Investment Portfolio Returns For My Canadian Couch Potato Portfolio

by Mike Holman

I finally got around to calculating my investment returns for 2010 and the results are decent, if unspectacular: 7.3%

My portfolio is supposed to look something like Canadian Capitalist’s sleepy portfolio which returned 9.56% this year.  I’ve made a few changes and this is what my desired allocation is:

Asset class ETF Target (%)
Bonds XSB 20
Real return bonds XRB 5
Canadian equity XIU 15
US equity VTI 30
International equity VEA 30

The only problem is that my portfolio doesn’t look like that. Over the last two years, I haven’t rebalanced or made very many purchases.  I guess you could say that I’ve gone from passive investing to neglectful investing:)

As a result, my cash position is probably around 15%, which is why my returns trailed the sleep portfolio so much.  I also have a higher foreign content and with the Canadian dollar and market doing so well – that results in my portfolio not doing so well.

The next step

My plan (once I finish my taxes) is to rebalance all our investment accounts, so that they look something like the allocations shown in the table.  I’m going to make sure that I do more frequent purchases as well.

Past returns

Here are my returns from the last five years:

Year Return(%)
2006 14.7
2007 4.1
2008 -17.0
2009 20.24
2010 7.3

My annualized rate of return over the five years is 5.05%. At that rate, $100,000 invested five years ago would be worth $127,861 now.
The rate of inflation over the last five years has been pretty low at just under 2%, so my annual real return is just over 3%, which I’m quite happy with.

Stay the course, regardless of your investment style

I’ve done two things well with my investments:

  1. Stay the course – I haven’t sold anything in the last five years and I’ve had more or less the same plan.
  2. Make lots of contributions – I make regular contributions, and extra when I can.

I had an interesting conversation with Dan Bortolotti from Canadian Couch Potato, a while ago and one of the topics we discussed was different investment strategies.  Although we are both die-hard couch potatoes, we agreed that most (reasonable) investment methods are just fine as long as you stay the course and keep making contributions.

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