Investors face countless distractions every year. Whether it’s fear of missing out on this year’s top performing asset, or fear of your existing portfolio losing money, these distractions are designed to make you want to take action (and likely part you from your money).
Meanwhile, a successful investment plan is all about setting up a low cost, risk appropriate portfolio that you can stick to for the long term. That means not getting caught up chasing past performance, be it meme stocks or crypto or tech stocks for that matter. It also means not abandoning ship when global stocks and bonds tumble, as they did in 2022.
Finally, we should also recognize that we’re human and our plans can change. For instance, you might not have sold your equities in a panic this year, but it’s perfectly reasonable if you paused your regular contributions to focus on building up your emergency fund or paying down your mortgage.
My Investing and Trading Activity
Flexibility is the key to any good plan, and it was a theme for me when it came to my investing and trading activity this year. Long-time readers know that I invest my money in Vanguard’s All Equity ETF (VEQT) across all of my accounts except for my kids’ RESP (invested in TD e-Series funds).
But we decided to build a new house earlier this year and wanted to use our TFSA funds as part of the down payment. The decision to build a new home also influenced what we did with our corporate investing account, as we opted to pause these contributions to build up a larger cash cushion just in case.
Here’s what my investing and trading activity looked like in 2022:
RRSP
My wife and I pay ourselves dividends from our small business and so we don’t generate new RRSP contribution room. With both of our RRSPs fully maxed out, these accounts remained invested in Vanguard’s All Equity ETF (VEQT).
That said, I did place one trade in this account when VEQT’s annual distribution was paid in January.
My RRSP is down about 10.5% on the year.
LIRA
A similar story with my locked-in retirement account. This was set up in 2020 after my decision to leave my former employer’s pension plan and take the commuted value. I invested the funds in VEQT and plan to leave it there for the next 20+ years.
That said, I did place one trade in this account when VEQT’s annual distribution was paid in January.
My LIRA is down about 10.5% on the year.
TFSA
I contributed $6,000 to my TFSA in January and bought more units of VEQT in this account. But then we went house shopping and signed a purchase agreement to build a new house.
I sold all 3,300 units of VEQT at the end of January and transferred the proceeds over to an EQ Bank TFSA. I withdrew these funds this summer to make our first deposit on the new house.
VEQT was down about 4.5% on the year when I sold, and then I earned about $500 in interest while the funds were parked at EQ Bank.
Corporate Investment Account
My goal with our corporate investing account was to contribute $4,000 per month and invest in VEQT. The year started out that way, with contributions of $4,000 in January and February. I skipped March and April, and then contributed $16,000 in May, $8,000 in June, and $4,000 in July.
I decided to pause contributions from there. We wanted to build up a bigger cash reserve just in case we had to draw from our company at some point to pay for overages on the new house (not yet!) or if we end up having to carry the mortgage on our existing house for longer than expected. It seems like a prudent move.
Total contributions of $36,000 this year. It’s down about 5% on the year – a better performance than my other accounts thanks to the timing of contributions in the first half of the year.
RESP
This is the account in which I stick to a robotic automated schedule every single year. I contribute $416.66 every month and immediately buy one of four TD e-Series funds (the one lagging its target allocation).
Total contributions of $5,000 (plus $1,000 in government grants). It’s down about 8.75% on the year.
Final Thoughts
There you have it. I placed a total of nine ETF trades this year. One in my RRSP, one in my LIRA, two in my TFSA, and five in my corporate investing account. I placed 12 mutual fund trades in my kids’ RESP – buying more TD e-Series funds.
In a year of extreme market volatility I resisted the urge to deviate from my investment plan. I continue to hold VEQT across all of my account types, aside from my kids’ RESP.
But I did withdraw from my TFSA to make a deposit on our new house purchase. And I did pause regular contributions to my corporate investing account to build up more cash.
I feel like VEQT is still an excellent choice for someone like me who does not want to spend time managing and rebalancing a multi-ETF portfolio. Writing this post even reminded me that I can simplify my RRSP and LIRA even further by turning on automatic dividend reinvestment, saving me from placing one trade a year in those accounts.
And while the globally diversified VEQT will always underperform the top sector, country, or region every year, it will also outperform the worst sector, country, or region every year. It’s that tighter dispersion of returns that helps keep investors like me in their seat and able to stick to their long-term plans.
