The Sleepy Portfolio is fine for a benchmark but not many people invest a lump sum and then hardly ever add to the portfolio. If you are like me, you save a bit of money regularly and invest it gradually over the years. I get a lot of e-mail of how to invest small sums of money or the best way to set up a regular investing program.
In order to better reflect how average people normally invest, I am introducing a “Mini” version of the Sleepy Portfolio. The Mini portfolio would differ from the Sleepy Portfolio (and in fact, other lazy portfolios) in the following ways:
- The Sleepy Mini Portfolio will start with an initial investment of $1,000. Every ninety days, another $1,000 would be added to the portfolio. Thus, a total of $4,000 would be invested annually in the Sleepy Mini Portfolio.
- Since we are starting out with a small portfolio, the portfolio will initially not be exposed to all asset classes. The initial asset allocation will be quite simple: 20% bonds, 20% Canadian equities, 30% US equities, 30% International equities.
- The portfolio will be rebalanced to the target allocation every time new funds are invested.
- The portfolio is assumed to be in a tax-deferred account such as a RRSP. However, the portfolio should be fairly tax efficient (except for the bond portion) as rebalancing is done by adding new money and not selling current holdings.
- The Mini portfolio would be constructed using TD e-Series Mutual funds. The minimum initial investment and the minimum subsequent investment for these funds is a low $100.
Transactions:
TDB909 – TD Canadian Bond Index (e-Series) – Buy 19.0839 units at $10.48 for a total of $200
TDB900 – TD Canadian Index (e-Series) – Buy 8.9726 units at $22.29 for a total of $200
TDB902 – TD US Index (e-Series) – Buy 10.89720 units at $27.53 for a total of $300
TDB911 – TD International Index (e-Series) – Buy 22.71 units at $13.21 for a total of $300
That’s it! Investing couldn’t be simpler.
