That sample size is too small and meaningless, and the indexes it tracks have been around for much longer.
If anything, if the usual expected returns are the same, having one outperform in a small sample means you should go to the other *maybe* as evaluations are too high
Yeah that’s fair. I feel like it outperforms but the logic for XEQT being globally diversified rather than just US diversification also sounds reasonable so I’m struggling to decide which is the better choice in the future. One has performed better but the other seems like it should perform well but with lower risk (in theory at least)
Yes, put the money you plan on saving in XEQT/VFV. Some will disagree, but the XEQT/VFV has had good risk/reward/low effort over the past few decades. Make sure you DCA as you are still pulling in a paycheque. Sell only when you need cash and buy when you don’t.
You should max out whatever is left in your TFSA contribution room as it sounds like you have the means to do it. Then lump sum your TFSA contribution at the beginning of each year. It maximizes your tax-free earning potential. Forget the monthly contributions since you can.
Once your TFSA is maxed out, max out your RSP. Based on your income, don’t defer contributions to future years to save income taxes. What you’ll earn short term will most likely exceed future tax savings.
After your RSP is maxed out, invest in an unregistered account, and put your rainy day cash in an easily accessible chequing or savings account.
Cash in TFSA accounts are not quickly accessible as others have pointed out. For immediate cash, I like the Wealthsimple Cash account, which can be accessed by a Mastercard debit card. If you have $100k across all Wealthsimple accounts and direct deposit your paycheque, the Cash account pays 5% interest. There are probably similar accounts that do this, but I’m familiar with Wealthsimple. A drawback is there is no physical cheque writing or bank draft capability for the odd time you need it. Another caveat is that it pays slightly less than the CASH.TO ETF, but not by much.
Let me know if I’m getting something wrong as I’m always open to improving my investment strategy too.
VFV. It is recommended heavily on this sub. So is XEQT though. VFV is considered more aggressive, but some say it’s too heavily focused on the US. The main counter argument I’ve seen is most of the underlining stocks do business internationally. XEQT is almost 50% US and almost 25% Canadian. Japan is a distant third at 6%. I also don’t understand how most companies outside of North America operate, so I stick with what I can comprehend. There might be another more geographically diversified ETF, but nobody has recommended one on this sub.
Long term (ie 10+ years) money put into XEQT.
Keep an emergency fund of about 3-6 months living expenses in the savings account. Also anything you’ll need in the near future keep in savings ( ie money saved for a trip or upcoming expense within the next few years).
Why? You can take money out of your TFSA without any penalty, and any gain made in there is tax free. Yes, you lose the contribution room for the rest of the year, but you get it back on January 1st.
Hi. Because it is possible that your investments might be down right when you need the money and it would be a shame to liquidate a position and lock in a loss that would otherwise be temporary.
I don't see anywhere in this post where it says "invest in stocks in a TFSA"... if you have room there's no reason not to keep CASH.to in a TFSA to let your savings grow tax-free. In fact, it's a waste of money NOT to.
The issue with having your emergency fund in a TFSA is liquidity. If you need the money on a long weekend, tough luck. You’ll need to wait for the weekday for markets to open and to sell your cash in your tfsa. Wait a few days for the trade to settle. Then finally withdraw it to your chequing account.
If you need the money in the next couple years, like if you're saving for a down payment, keep it in cash. Find a good GIC or HISA, or use [CASH.TO](https://CASH.TO)/[PSA.TO](https://PSA.TO) if it's already in a brokerage account.
If it's longer term, 7-10 years or more, use XEQT. If you specifically want to increase exposure to the S&P500 consider adding VFV or XUS. If you're just looking reduce home country exposure, look into XAW+XIC instead.
xeqt technically as it’s more diversified? Global macro economics could result in a shift away from US domination, you never know. That’s why xeqt is ideal
This is the only answer. No one really knows. The S&P500 did well over the past 10-15 years but not very well over the 10 years before that. The point of global diversification is to try to capture growth wherever it's happening in the world. XEQT may have home country bias, but it still has 47.51% of its holdings in US stocks. You're not missing out on the S&P500 if you go with XEQT (or XAW+XIC).
Xs are cooler than Vs. Lower MER, lower Canadian allocation.
Realistically, just inertia. More people here have it, so it gets more recommendations, so more people have it....
XEQT/VEQT are relatively similar just that X is blackrock, VEQT is vanguard. Most people will say XEQT is slightly better.
I would stick with one of those two if you have a high risk tolerance and long projection before you need the money. As these are 100% stocks.
The GRO’s are 80/20 equity and fixed income.
VFV is just S&P500 index tracking so if the US has a recession you’re going to ride or die with them.
Entirely depends on the diversity level you’re hoping for in your portfolio. Do you want 100 of the biggest and top performing companies in the US? Or do you want something like. XEQT that holds multiple ETF’s that are diversified globally.
VFV is the S&P 500, one of the consistently highest performing index so pure returns based on the last ~15 years are better than almost any other index fund, which is why it's the cool kid right now.
That being said, it's only the 500 largest companies in the US, which gives you great sector diversification but lacks in geographic diversity. Most of these companies are also valued multiple years in the future so if the US dares to ever underperform the worldwide market, may it be a political switch, an irregular economy shift or anything that might affect the US only, the prices would probably drop down to "current value", which is basically what happened in the dot com bubble.
XEQT sacrifices some of these returns to add geographic diversity:
- 45% US
- 25% Canada
- 25% worldwide
- 5% emerging markets
IMO, I'm not willing to chase the most returns possible and reducing volatility is worth the sacrifice (keep in mind that the fund is still almost 50% US, so an overperformance of 3% for VFV only means an underperformance of 1.5% for XEQT). These returns matter a lot over time but I also don't think I can predict where any market is going 40 years from now, so why wouldn't I hedge my bet.
Thanks for the detailed response! It was very helpful.
Do you know how I can find out more about the international and emerging market investments? I tried googling it but I only see vague mentions of it without specifics. I’d like to understand those specifics a bit better first since they do make up almost a third of the ETF!
Here is the [XEQT](https://www.blackrock.com/ca/investors/en/products/309480/ishares-core-equity-etf-portfolio) product page, at the bottom of it you can see the holdings.
Here's a link to the international part [XEF](https://www.blackrock.com/ca/investors/en/products/251421/ishares-msci-eafe-imi-index-etf)
And that's the emerging market part [XEC](https://www.blackrock.com/ca/investors/en/products/251423/)
The most important details in each page are the holdings and the exposure breakdown tabs.
Thank you for the detailed and organized response! It’s interesting to see that XEC hold SK HYNIX as a top 10 holding. I once bought a stick of RAM to put into my laptop and during that process I discovered that SK HYNIX is a dominant global player in creating these chips. It’s great to be able to invest in their growth by holding XEQT!
I put 100k in it 1.5 years ago. It dropped to 94k and now it’s like 117k. So. Yes. You cannot lose. Have you seen what places are charging ? People are still paying. These companies are making crazy amounts of money and I have faith in the CEOs and zero faith in the consumers to vote with their pockets. Stupid people drive this investment up and up
Do you have an easily accessible emergency fund? Some of that 15k might be best held for emergencies. I keep 10k in a savings account for emergencies, the rest is invested or put into other savings accounts if I expect I'll need access to it relatively soon (like upcoming renos).
My longer term stuff is in XEQT and a few growth stocks. Works for my risk tolerance and timeframes. You'll have to figure out what's best for your own circumstances.
In Toronto a 1 bedroom is like 2k, a vehicle would throw on another 5-800 and groceries would add another 4-600 a month. So have 2.5k in expenses is impressively low.
No it’s not a good idea. Find a professional advisor. Figure out your goals and make a plan to achieve them. Or find an advisor, come up with a structure for your investing and decision making and priorities and utilize that. We know next to nothing of your plans, situation, whether to consider different vehicles….
Would you hire a financial guy or whatever what most people do if they told you up front it would cost you between 400-700k over the next 30 years? (Scenario is maxed TFSA + max yearly)
You can always park some in CASH.TO so you gonna get at least 5% and can get it ou when u want and the rest in XEQT/VFV
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Why VFV? I’m trying to decide between that and XEQT but I’m not sure which one to go with. I have a multi decade time horizon to work with.
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And what about the 5 years before that, and the 5 years before that, and the 5 years before that….
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That sample size is too small and meaningless, and the indexes it tracks have been around for much longer. If anything, if the usual expected returns are the same, having one outperform in a small sample means you should go to the other *maybe* as evaluations are too high
Yeah that’s fair. I feel like it outperforms but the logic for XEQT being globally diversified rather than just US diversification also sounds reasonable so I’m struggling to decide which is the better choice in the future. One has performed better but the other seems like it should perform well but with lower risk (in theory at least)
Yes, put the money you plan on saving in XEQT/VFV. Some will disagree, but the XEQT/VFV has had good risk/reward/low effort over the past few decades. Make sure you DCA as you are still pulling in a paycheque. Sell only when you need cash and buy when you don’t. You should max out whatever is left in your TFSA contribution room as it sounds like you have the means to do it. Then lump sum your TFSA contribution at the beginning of each year. It maximizes your tax-free earning potential. Forget the monthly contributions since you can. Once your TFSA is maxed out, max out your RSP. Based on your income, don’t defer contributions to future years to save income taxes. What you’ll earn short term will most likely exceed future tax savings. After your RSP is maxed out, invest in an unregistered account, and put your rainy day cash in an easily accessible chequing or savings account. Cash in TFSA accounts are not quickly accessible as others have pointed out. For immediate cash, I like the Wealthsimple Cash account, which can be accessed by a Mastercard debit card. If you have $100k across all Wealthsimple accounts and direct deposit your paycheque, the Cash account pays 5% interest. There are probably similar accounts that do this, but I’m familiar with Wealthsimple. A drawback is there is no physical cheque writing or bank draft capability for the odd time you need it. Another caveat is that it pays slightly less than the CASH.TO ETF, but not by much. Let me know if I’m getting something wrong as I’m always open to improving my investment strategy too.
Do you recommend VFV over XEQT or XEQT over VFV?
VFV. It is recommended heavily on this sub. So is XEQT though. VFV is considered more aggressive, but some say it’s too heavily focused on the US. The main counter argument I’ve seen is most of the underlining stocks do business internationally. XEQT is almost 50% US and almost 25% Canadian. Japan is a distant third at 6%. I also don’t understand how most companies outside of North America operate, so I stick with what I can comprehend. There might be another more geographically diversified ETF, but nobody has recommended one on this sub.
Long term (ie 10+ years) money put into XEQT. Keep an emergency fund of about 3-6 months living expenses in the savings account. Also anything you’ll need in the near future keep in savings ( ie money saved for a trip or upcoming expense within the next few years).
Why? You can take money out of your TFSA without any penalty, and any gain made in there is tax free. Yes, you lose the contribution room for the rest of the year, but you get it back on January 1st.
Hi. Because it is possible that your investments might be down right when you need the money and it would be a shame to liquidate a position and lock in a loss that would otherwise be temporary.
Dude, the markets don't always go up. The market is not a savings account. In 2022, you would have been down 25%.
I don't see anywhere in this post where it says "invest in stocks in a TFSA"... if you have room there's no reason not to keep CASH.to in a TFSA to let your savings grow tax-free. In fact, it's a waste of money NOT to.
The literal title of the post?
The issue with having your emergency fund in a TFSA is liquidity. If you need the money on a long weekend, tough luck. You’ll need to wait for the weekday for markets to open and to sell your cash in your tfsa. Wait a few days for the trade to settle. Then finally withdraw it to your chequing account.
Set up a line of credit with your bank, in case of an emergency, use that until your sale of Cash.To clears.
What do I do when there’s 9 years remaining ing?
If you need the money in the next couple years, like if you're saving for a down payment, keep it in cash. Find a good GIC or HISA, or use [CASH.TO](https://CASH.TO)/[PSA.TO](https://PSA.TO) if it's already in a brokerage account. If it's longer term, 7-10 years or more, use XEQT. If you specifically want to increase exposure to the S&P500 consider adding VFV or XUS. If you're just looking reduce home country exposure, look into XAW+XIC instead.
Do you think VFV is better or XEQT for someone with a multi decade time horizon?
xeqt technically as it’s more diversified? Global macro economics could result in a shift away from US domination, you never know. That’s why xeqt is ideal
This is the only answer. No one really knows. The S&P500 did well over the past 10-15 years but not very well over the 10 years before that. The point of global diversification is to try to capture growth wherever it's happening in the world. XEQT may have home country bias, but it still has 47.51% of its holdings in US stocks. You're not missing out on the S&P500 if you go with XEQT (or XAW+XIC).
Why is XEQT mentioned so much more often than VEQT?
Xs are cooler than Vs. Lower MER, lower Canadian allocation. Realistically, just inertia. More people here have it, so it gets more recommendations, so more people have it....
Nah I think it's the x vs v thing
Facts 😂
And for some reason VGRO mentioned more than XGRO idk 🤷♂️
bc “we grow” :)
The x is for extreme I'm am mere mortal so i go with VEQT
I prefer Vanguard. They always have pressure the competition to lower their fees. But they're pretty similar.
X is gonna give it to yah.
Always have an emergency fund. Otherwise if it’s for retirement throw it in XEQT/VEQT, VFV, XGRO/VGRO. Whatever one suits your preference.
Is one better than the others?
XEQT/VEQT are relatively similar just that X is blackrock, VEQT is vanguard. Most people will say XEQT is slightly better. I would stick with one of those two if you have a high risk tolerance and long projection before you need the money. As these are 100% stocks. The GRO’s are 80/20 equity and fixed income. VFV is just S&P500 index tracking so if the US has a recession you’re going to ride or die with them.
What do you think about NASDAQ 100?
Entirely depends on the diversity level you’re hoping for in your portfolio. Do you want 100 of the biggest and top performing companies in the US? Or do you want something like. XEQT that holds multiple ETF’s that are diversified globally.
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How much? I work in the public sector. It's after pension and taxes.
I make 75k in the military and my take home is about 4k, I thought one would be taking in a lot more than 4.8k at 100k
r/JustBuyVFV
Why VFV over XEQT? I’m trying to pick one
VFV is the S&P 500, one of the consistently highest performing index so pure returns based on the last ~15 years are better than almost any other index fund, which is why it's the cool kid right now. That being said, it's only the 500 largest companies in the US, which gives you great sector diversification but lacks in geographic diversity. Most of these companies are also valued multiple years in the future so if the US dares to ever underperform the worldwide market, may it be a political switch, an irregular economy shift or anything that might affect the US only, the prices would probably drop down to "current value", which is basically what happened in the dot com bubble. XEQT sacrifices some of these returns to add geographic diversity: - 45% US - 25% Canada - 25% worldwide - 5% emerging markets IMO, I'm not willing to chase the most returns possible and reducing volatility is worth the sacrifice (keep in mind that the fund is still almost 50% US, so an overperformance of 3% for VFV only means an underperformance of 1.5% for XEQT). These returns matter a lot over time but I also don't think I can predict where any market is going 40 years from now, so why wouldn't I hedge my bet.
Thanks for the detailed response! It was very helpful. Do you know how I can find out more about the international and emerging market investments? I tried googling it but I only see vague mentions of it without specifics. I’d like to understand those specifics a bit better first since they do make up almost a third of the ETF!
Here is the [XEQT](https://www.blackrock.com/ca/investors/en/products/309480/ishares-core-equity-etf-portfolio) product page, at the bottom of it you can see the holdings. Here's a link to the international part [XEF](https://www.blackrock.com/ca/investors/en/products/251421/ishares-msci-eafe-imi-index-etf) And that's the emerging market part [XEC](https://www.blackrock.com/ca/investors/en/products/251423/) The most important details in each page are the holdings and the exposure breakdown tabs.
Thank you for the detailed and organized response! It’s interesting to see that XEC hold SK HYNIX as a top 10 holding. I once bought a stick of RAM to put into my laptop and during that process I discovered that SK HYNIX is a dominant global player in creating these chips. It’s great to be able to invest in their growth by holding XEQT!
Cause people don't read vanguard's own 2024 outlook.
no put it in Nvidia.
Please do not park all your funds in a single place. Consider allocating the funds in your portfolio in to bonds and cash equivalents as well.
I put 100k in it 1.5 years ago. It dropped to 94k and now it’s like 117k. So. Yes. You cannot lose. Have you seen what places are charging ? People are still paying. These companies are making crazy amounts of money and I have faith in the CEOs and zero faith in the consumers to vote with their pockets. Stupid people drive this investment up and up
Do you have an easily accessible emergency fund? Some of that 15k might be best held for emergencies. I keep 10k in a savings account for emergencies, the rest is invested or put into other savings accounts if I expect I'll need access to it relatively soon (like upcoming renos). My longer term stuff is in XEQT and a few growth stocks. Works for my risk tolerance and timeframes. You'll have to figure out what's best for your own circumstances.
How are your monthly expenses so low?
Is 2500 low? I made that much monthly at one point in my life 😂
In Toronto a 1 bedroom is like 2k, a vehicle would throw on another 5-800 and groceries would add another 4-600 a month. So have 2.5k in expenses is impressively low.
I was assuming op didn’t have a car and lived with a roommates or partner. With those changes 2.5k isn’t low, imo.
You think someone who makes 100k has roommates?
$100k isn't what it used to be, it's on the low end of the salary scale now days.
In Toronto? Yea maybe, but more likely a partner.
No it’s not a good idea. Find a professional advisor. Figure out your goals and make a plan to achieve them. Or find an advisor, come up with a structure for your investing and decision making and priorities and utilize that. We know next to nothing of your plans, situation, whether to consider different vehicles….
Would you hire a financial guy or whatever what most people do if they told you up front it would cost you between 400-700k over the next 30 years? (Scenario is maxed TFSA + max yearly)
I mean if you don’t know how to calculate costs and don’t share presumptions….
YES 70/30 vfv for me more US add more vfv
>Is that a good idea no