I had $2150 cash built up in my E*Trade account from monthly contributions. It was not hard to decide what to invest it in. I simply entered all the market values of my investments into a spreadsheet and looked at how far off the current asset allocations were from the original “desired” allocations. Looks like the US equity component (furnished by VTI) was way down (thanks to the strong CAD dollar). Other components like International equities (provided by XIN) and Canadian equities (provided by XIC) were way up. Bonds were almost flat. So it was pretty obvious, rebalancing necessitated a purchase of VTI. This also made sense since everything else was up and VTI (in CAD dollars) was down (relatively speaking). So I bought $2150 of Vanguard Total Stock Market Index ETF (VTI) a few days ago.
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Not just another (Canadian) financial blog… and maybe the oldest Canadian financial blog???
Any reason why you have currency-hedged exposure to international markets (XIN), but are investing directly in American markets (VTI)?
alvanson,
I blindly read this article Exchange Trade Fund Recommendations. After recommending some funds, he said
“Something is missing in the above: There’s no EAFE listed. That’s because the EAFE funds available on the US exchanges such as EFA, IEF, and EZU, or the country-specific funds, all have the same or higher cost than a fund that is available to you right here in Canada, so there is no point to buy them.”
Since I liked a lot of his other advice, I decided to listen to this advice. Should I have listened to him? I am not sure. I did not have time to agonize over it any longer so I just made a decision. Part of me also wanted to limit my exposure to non-Canadian currencies, while at the same time not having only Canadian securities. Having my bond, Canadian, and international components in CAD and my US and emerging market components in non-US gives sort of a balance. I might adapt this over time.
I manage my wife and my portolio as if it were one portfolio. If it turns out I need more international equities and her portfolio has cash to burn, I may purchase some EFA in her portfolio (I have XIN in mine).