Talk:Portfolio design and construction

Introduction

This may be because I'm working within a "user page", but the [[ ]] formating does not work for mutual funds, ETFs... --Quebec 07:45, 30 December 2014 (MST)

Done. See diffs for how it was fixed. Note: The link target is case-sensitive except for the first character (so mutual fund links to "Mutual fund" but Mutual Fund does not). Source: Help:Wikilinks. --Peculiar Investor 08:10, 30 December 2014 (MST)

Risk

The pie charts in this section include "alternative equity" and "global fixed income". These asset classes are not for beginners. I don't think that these asset classes should appear here in the "risk" section. They can be discussed under "complex portfolios" perhaps. Also, the fact that the recommended AA is different for registered vs non-registered portfolios adds unneeded complexity at this stage. Plus, these charts and some of the accompanying discussion are not about "risk", but "asset allocation", the next section. --Quebec 08:05, 30 December 2014 (MST)

Done no objections to the idea of moving the chart, so I will move it to "complex portfolios". --Quebec 11:00, 31 December 2014 (MST)

The huge spreadsheet image at the end of this section is a very nice piece of work, but for beginners, it's not easy to understand what is going on there, without some words of explanation and simple images. Also it includes the mother of all bull markets for bonds, meaning that the annualized returns are 9.5% no matter what AA is used, which is a confusing message. All we “see” in this dataset is that bonds are good and stocks bad. But in a more normal environment, the long-term return on stocks should be larger than that on bonds (but with more volatility). Otherwise no one would invest in stocks. Something like the “One-Year Returns” table in the asset allocation section is a much better, and simple to understand, message about the role of bonds. Should we delete the spreadsheet image from this section, and perhaps move it elsewhere (not sure where --Quebec 08:22, 30 December 2014 (MST)

Ok, the nice simple charts and clear discussion of the spreadsheet are already in Risk and return. Suggest we move the spreadsheet there. -Qc

I took a stab at it, worded for beginners. --LadyGeek 11:27, 30 December 2014 (MST)

on the new graph, the expected return should increase as the stock proportion is increased. Otherwise, why buy stocks? --Quebec 11:39, 30 December 2014 (MST)

It's a different perspective. The expected return is over the full 1970 - 2011 period (held constant) while varying the allocation mix. Perhaps File:Range of Annual Cdn Returns.png would be better discussed first, then lead into the reason for diversification? You can download the source file to see the underlying details: Risk - Historical Performance of Cdn Bonds and Stocks.xlsx (listed under External links). --LadyGeek 11:56, 30 December 2014 (MST)

I understand how that chart was produced. But had we known this in 1970, then 100% bonds, 0% stocks would have been perfect. We don't want to give the impression that this will happen again in the future. There has to be a promise of higher returns to entice the investor to buy stocks. This is why the actual 1970-2011 data may not be ideal in a conceptual discussion on the role of stocks & bonds in portfolios. Maybe we could use hypothetical numbers based on century-long series of historical data? --Quebec 12:34, 30 December 2014 (MST)

1970 was the earliest that Cdn data is publicly available. Otherwise, US data is the only source. Would it really make a difference? Consider the data presented in the asset allocation chart we just removed: File:Asset Allocation, Risk & Return.jpg. --LadyGeek 12:58, 30 December 2014 (MST)

I think I just want something like the figure on page 6 of this document. Does not need to be real historical data, I can just make up a theoretical plot of what mixing two risky assets does (with variable correlations). Let me think about this some more. --Quebec 16:21, 30 December 2014 (MST)

OK. I see your intentions and will wait. Let me know if you need any administrative assistance (uploading charts, etc.). --LadyGeek 18:17, 30 December 2014 (MST)

Redesign approach - work on the Lead section as an introduction to the article and a summary of its most important aspects

What is the approach for redesigning this page? Perhaps rather than trying to rearrange/add/delete existing content someone should start with an outline of the purpose of the page and what topics/concepts are to be covered. See Lead section for guidance from Wikipedia. Without a clear articulated vision for the page, it isn't clear to me how to proceed or to offer feedback. --Peculiar Investor 08:19, 30 December 2014 (MST)

I think the current overall layout is pretty good. We just need to improve the existing sections. --Quebec 08:22, 30 December 2014 (MST)

But indeed, the lead section should be expanded too, as it provides a definition of what a portfolio is, but certainly not a summary of the contents of the page

I formatted the introduction into separate paragraphs to clearly show the individual steps. In the opening paragraph, is it necessary to mention "and closed-funds counterparts"? I don't see any finiki references to closed-funds and I am confused why they are mentioned here. --LadyGeek 15:13, 1 January 2015 (MST)

Close-end funds are not important. They are mentioned by Investopedia in their definition of "portfolio", but we can remove them since I've modified the definition anyway. --Quebec 17:10, 1 January 2015 (MST)

I revised the opening sentence. --LadyGeek 19:04, 1 January 2015 (MST)

Asset allocation

I suggest that the subsection on "Sector diversification and index concentration", now within the "Simple portfolios" section, should be moved to the end of the "asset allocation" section. Also the "The FPX Indexes" subsection does not belong in "simple portfolios", but not sure where to move it. --Quebec 09:01, 30 December 2014 (MST)

FPX indexes subsection: probably within "asset allocation" too, as an exemple of some possible asset allocations --Quebec 11:42, 30 December 2014 (MST)

Done Both changes done. --Quebec 12:00, 31 December 2014 (MST)

Simple portfolios

Over on the forum, Longinvest suggests an spendid idea which I think will solve all of our problems with "simple portfolios". Basically he says we should have a dedicated page for the 3-fund portfolio and the 4-fund and 5-fund equivalents (but not for the other simple portfolios). I would call this "Simple INDEX portfolios". In Longinvest's vision, the page would discuss "a) its philosophy, b) how to implement it, and c) what funds and ETFs are currently available to implement it". We can place a giant disclamer about due diligence and so on at the top, because specific ETFs and allocations would be discussed in this page. Doing this allows us to keep (or even simplify) the existing "simple portfolios" within the "Portfolio design and construction" page, including the GIC ladder, the balanced funds, etc. This means that there would be no more need for a separate "Simple portfolios" page replicating the contents of "Portfolio design and construction". Also it allows us to stay completely or mostly neutral on investment philosophy (active vs passive management, the importance of foreign diversification, etc.) within the "Portfolio design and construction" page. --Quebec 12:00, 30 December 2014 (MST)

I created a user page for User:LadyGeek/Three-fund portfolio, but not the others. Anything more than 3 asset classes gets complicated. I would keep 4+ asset class portfolios together. For reference, the Bogleheads wiki does: Lazy portfolios which then deep-dives into Three-fund portfolio (the only dedicated page). Feel free to disagree, this is just my perspective (configured as a new investor).

Reminder to Bogleheads wiki editors: Be sure to incorporate changes here with Canadian versions of lazy portfolios (Lazy portfolios). (If there are any other changes, post here.)

Should User:LadyGeek/Simple portfolios be renamed to User:LadyGeek/Simple index portfolios?--LadyGeek 12:47, 30 December 2014 (MST)

I've looked at the Lazy portfolios page on Bogleheads wiki. The "Lazy Portfolios" are mostly variations on index portfolios containing domestic bonds, domestic stocks, and global stocks. I want to call the equivalent page on finiki "simple index portfolios"; we are not at a point where can can "dive deeply" into the 3-fund version... --Quebec 13:00, 30 December 2014 (MST)

Done I've renamed the page to User:LadyGeek/Simple index portfolios without a redirect, meaning that the prior 3-fund portfolio link will be broken. --LadyGeek 13:04, 30 December 2014 (MST)

Simple portfolios has been simplified.

• Two fund portfolios deleted entirely (they are not a good idea, better use balanced funds or go directly to 3 funds)
• 3-4-5 fund portfolios simplified greatly, since we have a dedicated page for that
• Couch potato subsection might sill need to be split between "Simple portfolios" and "Complex porfolios"

--Quebec 12:04, 31 December 2014 (MST)

Instead of splitting the couch potato, perhaps you could simply raise it up one level (==The Couch Potato portfolios==) and explain that they cover the full range, from simple to complex? --LadyGeek 09:43, 2 January 2015 (MST)

this is the easy solution, yes, and preserves the nice graphs. But the Couch Potato portfolios range from simple to complex, and it would be best, IMO, to present possible portfolios using these two categories only (simple vs. complex)... The "Global" one is a nice example of a simple balanced 4 funds portfolio. It is mentioned in "simple index portfolios". The other two ("Complete" and "Uber-Tuber") are examples of complex portfolios, I've described the latter in detail under "complex portfolios". OR: how about giving the Couch Potatoes their own page, with the current content of the "The Couch Potato Portfolios" section?--Quebec 10:47, 2 January 2015 (MST)

I took the OR path and created a new page: [[User:LadyGeek/Couch Potato portfolios]] (page deleted --LadyGeek 15:00, 17 January 2015 (MST)). Being bold, I moved the Über-Tuber content to the new page with a brief explanation. --LadyGeek 19:08, 2 January 2015 (MST)

Excellent! --Quebec 04:27, 3 January 2015 (MST)

As the Couch Potato covers a full range from simple to complex, I located the section at the end of the page (after complex). --LadyGeek 19:08, 2 January 2015 (MST)

I've gotten rid of a separate "Couch Potato" section. Instead, [[User:LadyGeek/Couch Potato portfolios]] (page deleted --LadyGeek 15:00, 17 January 2015 (MST)) is linked in the "Simple portfolios" and "Complex Portfolios" section, using the "main article" template. The advantage of this is to reduce the number of sections in the article. What do you think? --Quebec 04:27, 3 January 2015 (MST)

I further reorganized the page by moving the prebuilt portfolio section after the Portfolio_design_and_construction#Low_cost_balanced_funds section. A prebuilt portfolio is a simple approach, so I think it belongs before Three-fund, etc. portfolios. It's not the lowest cost, but the simplest. --LadyGeek 19:08, 2 January 2015 (MST)

Complex portfolios

The material at the end of "complex portfolios", starting with "Let's say you fill out a risk tolerance questionnaire..." is left-over from another section. I moved it here because the pie chart uses exotic asset classes like alternative equity and global fixed income. However the text "Historically, having US and international equities in a portfolio had a counterbalancing effect on Canadian equity performance. It is arguable that the effect still exists because of globalization and the resulting integration of economies. Global equity markets are more likely to move in sync as a result. Notwithstanding, a case can still be made for continuing with a significant foreign equity component: it reduces the risk of having one's equity eggs in a single Canadian basket." seems a bit out of place. I propose deleting the quoted text. --Quebec 17:35, 1 January 2015 (MST)

The detailed example, the "complex portfolio for a 60-year-old retiree", mentions that "This type of portfolio requires more frequent monitoring". This only applies if security selection is involved, as mentioned already in the preceding parag. If only mutual funds, index funds and ETFs are involved, I think something like a yearly rebalancing is good enough, no need to listen to BNN, etc. --Quebec 17:40, 1 January 2015 (MST)

The wording for high-yield bonds is somewhat misleading. High-yield bonds are securities with "equity-like" risk, but are not equities."to juice-up the yield" does not send the proper message.

• High yield bonds, to juice-up the yield

Perhaps:

• High yield bonds, additional returns with additional risk

--LadyGeek 19:05, 1 January 2015 (MST)

Sure... --Quebec 04:26, 2 January 2015 (MST)

Content for deletion

I don't see any reason to keep the sections "Not sure where to put this" and "Content proposed for deletion".

Also, the section "Prebuilt portfolios" (under the couch potato) has no value. Unless you wish to explain this in more detail, perhaps as part of the Simple index portfolios page, I recommend deletion. We have US prebuilt portfolios, such as bogleheads:Vanguard target retirement funds. I don't know if there are Canadian equivalent portfolios. --LadyGeek 09:43, 2 January 2015 (MST)

I've now included retirement-date funds under "Prebuilt portfolios". High fees, no good. But worth mentioning them, if only to reject them. --Quebec 11:12, 2 January 2015 (MST)

I supplied a reason to keep them. I am one of those US investors who started with a prebuilt portfolio because it was the only investment type I could understand. A year later, I finally got the courage to change to a simple portfolio. --LadyGeek 11:49, 2 January 2015 (MST)

Yes, a valid reason. But 2% fees is horrible. Many of the "low-cost balanced mutual funds" we or Carrick recommend (in the G&M article linked in reference 10 of Portfolio_design_and_construction#Low_cost_balanced_funds are cheaper (more like 0.9-1.5%)--Quebec 12:07, 2 January 2015 (MST)

To drive this point further, I updated Management expense ratio. Please check my wording. Perhaps this section can be used as a "See also" reference. --LadyGeek 12:16, 2 January 2015 (MST)

Done MER article read and improved slightly. Added to "see also" here--Quebec 12:47, 2 January 2015 (MST)

Here is the left-over material in case we want to move it elsewhere --Quebec 11:37, 5 January 2015 (MST):

Not sure where to put this

Let's say you fill out a risk tolerance questionnaire saying that you are 50-59 years old, retired, are fairly certain that your current sources of income will continue into the future, have one dependent, have a main objective of generating retirement income now, need the income for at least 20 years, are very concerned about portfolio volatility, etc. Your answers result in the following: You are conservative with low risk tolerance. A suggested asset mix is provided.

Content proposed for deletion

This looks pretty complicated but it can be distilled down into 30-36% equities, 62-65% fixed income, and 2-5% money market funds, i.e., cash. Historically, having US and international equities in a portfolio had a counterbalancing effect on Canadian equity performance. It is arguable that the effect still exists because of globalization and the resulting integration of economies. Global equity markets are more likely to move in sync as a result. Notwithstanding, a case can still be made for continuing with a significant foreign equity component: it reduces the risk of having one's equity eggs in a single Canadian basket.

FPX indices

The 52-week highs and lows on November 1, 2013, as well as the percentage drops of the three indexes, are shown below:

FPX Indices at 2013.11.1

Index	52-week High	52-week Low	% Difference
FPX Growth	3129.195	2642.745	-15.5%
FPX Balanced	3192.224	2858.595	-10.5%
FPX Income	3224.180	3078.811	-12.5%

EXPLANATION OF WHY THIS CONTENT IS PROPOSED FOR DELETION: I don't see any important message in the "FPX Indices at 2013.11.1" table. The page is very long, so anything that can be deleted or moved to other pages should be. --Quebec 11:35, 11 January 2015 (MST)

Annual Cdn Returns - Portfolio.png

This is demonstrated in the figure below. Going from left to right, increasing the percentage of stocks (decreasing the percentage of bonds or fixed income) will increase the possibility of a loss. In 2008, investors who held 80% of their portfolio in bonds experienced a small drop in portfolio value; while those with 80% in stocks experienced a very dramatic drop.

Risk vs. Return for Various Portfolios: 1970 - 2011

EXPLANATION OF WHY THIS CONTENT IS PROPOSED FOR DELETION: The important message in this graph is that the more stocks one had in 2008, the greater the loss. This is an important message. But this message is already presented in table format in the "Asset allocation" section a few lines below. In fact there are two different tables ("One-Year Returns" and "Risk of Loss") to show this. And the constant 10% expected return on the graph (regardless one one's AA) is very misleading, as I've argued before. Yes the Canadian historical data shows this for the chosen period, but long bonds were used (not broad market bonds), and this was a special time for bonds. If I expected bonds to have the same return as stocks in the future, with less volatility, then I would not buy more than 20% stocks. --Quebec 11:35, 11 January 2015 (MST)

OK, I see your point. I was trying to reuse a graph. I also added a <references /> tag below my comments to capture the <ref> tags from the above citations. --LadyGeek 12:17, 11 January 2015 (MST)

Bernstein table

The maximum expected losses as a function of the equity percentage as estimated by Bernstein are given in the following table:

Risk of Loss

Maximum loss	Equity allocation
35%	80%
30%	70%
25%	60%
20%	50%
15%	40%
10%	30%
5%	20%
0%	10%

EXPLANATION OF WHY THIS CONTENT IS PROPOSED FOR DELETION: There is already a table showing the effect of a severe bear market on portfolios with 0, 25, 50, 75, 100% equities in the "risk/AA" section. The table from Bernstein shows more or less the same thing.

Building a portfolio

" ... for now he will use his monthly contributions to add to his Canadian index holdings": this does not make sense. Why is Ed is adding money to Canadian Equities only? Why not add to the four funds according to the target AA every month (e.g., automatic transfer from chequing account), and rebalance once a year? Or add to the asset class further away from the target AA every month? --Quebec 11:51, 5 January 2015 (MST)

No comments? The difficulty is that this issue appears within a quote, so we can't really change the sentence. But again, a pre-authorized purchase plan of the 4 funds with amounts proportional to Ed's target AA would be much better. For example, if Ed has $500 available per month, he would automatically buy $250 worth of bonds, $125 worth of Canadian equities, $50 of US equities, and $75 of international equities. At TD the minimum per fund for such plans is only $25, so this would work for total monthly or even quarterly contributions as low as $250--Quebec 08:01, 11 January 2015 (MST)

I would if I had Canadian investing experience. Remember that this is one of the most widely read pages. I recommend starting a general forum discussion (not the editor's lounge) and see if you can get a consensus on your approach, link to the development page. I doubt there will be more opinions coming directly here. For comparison, the Bogleheads wiki rarely gets a response in the talk pages. General forum threads are the appropriate venue for this type of a discussion. --LadyGeek 08:16, 11 January 2015 (MST)

I don't see this as a Canada-specific issue. Surely the same type of small monthly contributions into several funds are possible at Vanguard (once the minimum amount exists in each fund)? --Quebec 10:44, 11 January 2015 (MST)

Good point, I stopped too soon. I am in full agreement. One should invest in the proportions of the target asset allocation. The example is showing several concepts simultaneously (1) how to rebalance (2) where to set the rebalancing thresholds, and (3) how to dollar cost average (contribute) to your RRSP. This section is on the initial phase of building a portfolio, rebalancing comes much later. I suggest rewriting this example to show contributions to the RRSP only. New investors will be able to follow the example easier if they are presented with one concept at a time. --LadyGeek 11:07, 11 January 2015 (MST)

Done I've deleted the problematic sentence. This solves the problem. --Quebec 13:40, 13 January 2015 (MST)

There was some value in the deleted sentence, so I've restored it. The part that I wanted to save is "Although Ed is very nervous about investing in equities because of the volatility, he recognizes that his time horizon is very long and he decides to contribute monthly...". So that's been restored. But the part about adding to one fund only has been replaced by "adding to the four funds automatically". --Quebec 16:28, 13 January 2015 (MST)

A thought from left field, split article into two parts?

Starting to catch up and starting reviewing and contributing to this article. As I do so, I'm struck by a thought. Has anyone given consideration to splitting this article into two parts for readability? As I read through the original and this new version, I'm struck by the overall length that makes it a tough slog to read from start to end. A logical split might be: Portfolio design; Portfolio construction (or implementation). I'm not sure I know where to draw the line if we split them, but wanted to toss out the idea for consideration. --Peculiar Investor 21:01, 15 January 2015 (MST)

I've just deleted a lot of content from the "complex portfolios" section, as this topic now has its own page (under development: User:Quebec/Complex portfolios). This shortens the "LadyGeek/Portfolio design and construction" page a bit, but it's still very long. Sections that could be shortened, with material moved to other (already existing) pages include "Risk", and "Asset allocation". FPX indices could get their own page. "Three fund, four fund and five fund portfolios" can be reduced further by moving material to Simple index Portfolios). If we do all of this, then we may not need to separate "Portfolio design and construction", the most popular article on finiki, in two pages. It' good to have the entire process in one place, IMO. --Quebec 12:50, 16 January 2015 (MST)

From a "new investor" perspective, I agree with keeping everything on one page. As soon as you split the information, it becomes more difficult to follow. Reducing the level of detail is a good approach. When the reader is ready to go further, he/she will follow the links. --LadyGeek 14:27, 16 January 2015 (MST)

"FPX indices could get their own page" - Done (it's called Benchmarks, and the FPX section has been deleted from here. --Quebec 17:21, 16 January 2015 (MST)

I've moved some content from the "Risk" and "Asset allocation" sections to the page "Asset allocation", where I think they belong (explanation: the Asset Allocation page should cover it's own topic in more detail than the "Portfolio design..." page!). BUT: the "Risk" and "Asset allocation" sections are still too long, and probably should be combined into one. Not sure how to do this however. --Quebec 12:22, 17 January 2015 (MST)

All "human capital" ideas moved to the "Asset Allocation" page. Combined the "risk" and "AA" sections within this page. Can still be improved. --Quebec 15:12, 17 January 2015 (MST)

I improved the combined "risk" and "AA" sections by restoring the introductory paragraph. I also retitled the first three sections to be more direct, i.e. push the reader to take action. You should know that I encountered an edit conflict. We were making changes simultaneously and I was blocked from saving my update. When that happens, copy your text to another editor (notepad.exe) and abort the edit (leave page). Then, edit the page, review what changed, paste in the content, Save. --LadyGeek 15:25, 17 January 2015 (MST)

Additional source of information, use as reference or External link

I went Googling for asset+allocation+human+capital and found Lifetime financial advice: human capital, asset allocation, and insurance (PDF) by Ibbotson, Roger G., Milevsky, Moshe A., Peng Chen, and Kevin X. Zhu. , that seems like it would be helpful to use concepts from (i.e. as a reference) or if not, perhaps as an External link. I've just had a quick glance through it so don't have lots to say/edit at this time, but thought it might be useful for others to also look at it for ideas. --Peculiar Investor 11:51, 17 January 2015 (MST)

Getting to the finish line - what else needs to be done?

What is left to be done with this effort before it can be moved into the main article space and replaces the existing article? There are still a few Citation needed and Clarification needed tags that would be nice to resolve. Has anyone else stepped back and made sure that all the concepts from the current main article are addressed this new version? I realize that some concepts have been separated out into their own standalone articles. If that's the case are they connected appropriately into this article? It would be nice to declare this article ready for prime time soon. --Peculiar Investor 07:22, 22 January 2015 (MST)

I'm done with this page, but I've created an empty section at index funds: How to choose index mutual funds that needs to be filled. This empty section is linked in User:LadyGeek/Portfolio_design_and_construction#Building_a_portfolio to replace "Ed looks at Bylo's list". The latter is unfortunately outdated --Quebec 18:12, 22 January 2015 (MST)

The section title is "How to", but the intent is "List of...". Perhaps Ed should review Simple index portfolios and pick from the funds on that page?

As for moving the article, this will be a copy-n-paste replacement of the existing article, not a "Move." The user page content can be replaced with a redirect to the new page. --LadyGeek 18:42, 22 January 2015 (MST)

I was giving that some thought too. I think it is important to maintain page history for both articles. Need to investigate further if there are any administrative tools available to help. --Peculiar Investor 18:52, 22 January 2015 (MST)

I think it can be done. Two articles that cover the process from Wikipedia/Mediawiki, Merging and Help:Merge history. --Peculiar Investor 19:01, 22 January 2015 (MST)

I read the articles and agree. The merging process itself is a copy-n-paste. The tricky part is merging the history, which is a special page accessible by administrators. --LadyGeek 20:30, 22 January 2015 (MST)

When the time comes, I volunteer to take ownership of making it happen, both the copy-n-paste and the history merging. --Peculiar Investor 21:03, 22 January 2015 (MST)

Upon further review and testing, don't cut-and-paste. From How to fix cut-and-paste moves "When a cut-and-paste move is done, the page history of an article or talk page can be split among two or more different pages. This is highly undesirable, because we need to keep the history with the content". I still have a couple of minor nuances to figure out, but at this point the plan would be to have the new version before the main article version tomorrow, January 26th. --Peculiar Investor 14:49, 25 January 2015 (MST)

Done History has been merged, double checked and then moved into main article space to replace the previous version. Thanks all. --Peculiar Investor 05:49, 26 January 2015 (MST)

Balanced funds vs. prebuilt portfolios

I combined the prebuilt portfolios with the balanced funds. I really don't see the difference between them, as the investor is purchasing a "fund-of-funds" in each case. Is this incorrect, or can the terminology be made consistent? --LadyGeek 15:00, 25 January 2015 (MST)

Target date funds have asset allocations that change with time. Balanced funds typically are have a fixed target allocation (some engage in tactical AA). "Prebuilt portfolio" seems to me a more general concept than "balanced fund". Prebuilt portfolios include a range of sometimes surprising things, e.g. iShares Diversified Monthly Income ETF contains over 35% junk (&BBB) bonds, or iShares Balanced Growth CorePortfolio Index ETF has about 50% "fundamental" ETFs in it, inherited from the Claymore days I imagine. One last comment is that they're not all strictly "funds-of-funds", e.g. the Tangerine offerings don't have underlying funds of Canadian equity, Canadian bonds and so on; "CIBC Balanced Index Fund – Premium" holds ETFs and individual stocks, Mawer Global Balanced holds a mix of other funds and individual stocks, etc. --Quebec 17:19, 25 January 2015 (MST)

Thanks, that is a big help. The section has been revised. I used your fund examples, but don't match your numbers - please double check. I also have a discussion going in the editor's forum. --LadyGeek 19:39, 25 January 2015 (MST)

I've reworked this section a bit, calling it "One-fund portfolios". I've removed references, good or bad, to specific products (Tangerine funds are not necessarily "better" than low-MER actively managed balanced funds: why mention Tangerine only?). I've also removed the note that said that "balanced fund" and "prebuilt portfolio" are sometimes used interchangeably, as this was confusing IMO. I hope the new version is satisfactory. --Quebec 14:49, 26 January 2015 (MST)

It is satisfactory. Consider that the section was written by a US investor (me) utilizing the Couch Potato article as the only reference. That's why I asked for an expert review - I was concerned that I missed something. I could not find a credible definition (authoritative source) for "prebuilt" portfolio - the confusion was mine. Behavioural aspects are covered in Balanced fund, but are a very important benefit of one-fund solutions. I added behavioural aspects to the decision process. --LadyGeek 15:35, 26 January 2015 (MST)

While I concur with adding behaviour aspects, it would be beneficial to have citations to support the statements. --Peculiar Investor 17:20, 26 January 2015 (MST)

I added a citation. It's not a direct quote, but more of a summary. I'm also tempted to add Behavioural pitfalls as a "See also" link, but it may be out of context with the intent. Or is it? --LadyGeek 18:01, 26 January 2015 (MST)

Building a portfolio

The example of 'Ed' in his 30s and starting to invest is kind of outdated, because:

• mutual funds (including TD efunds) are not free to buy anymore at many discount brokerages
• asset allocation ETFs are cheaper and simpler than a four-fund portfolio of e-funds, and can now be purchased commission-free at many brokers

So I suggest to replace the current text with a new simplified example of someone startng to invest, filling a risk tolerance questionaire, and selecting an appropriate asset allocation ETF. This fits better with current recommendations on the FWF. --Quebec 06:49, 3 March 2022 (MST)

Since there were no objections, this is now Done.--Quebec 13:47, 5 March 2022 (MST)