It’s been all over the news: markets crashing, stocks falling, and overall doom and gloom about the global economy. What this really means for long-term index investors though, is that index funds are on sale, and it’s time to load up! Let’s take a look at my investment portfolio growth, and how it’s been hit in the last few months, and how I’m dealing with the fallout.
Unfortunately for the table above, it doesn’t quite accurately reflect how my index funds performed. While I made some purchases that put my net portfolio in the positive, my index funds made a big loss. Those losses offset much of my purchases. Let’s look a little deeper below.
TFSA TD e-Series Index Funds
It was painful to watch my index funds over the past 2 months, specifically drops that October delivered. You can see below that I lost half of my profits in the last few weeks. Returns for every asset in my portfolio declined, with major losses for all of the equity funds. Overall, there was a 5% loss in my TFSA TD e-Series portfolio over the last 2 months.
If you are invested with TD e-Series index funds, or any other index funds, it’s a good time to remind yourself that loses over the short-term are part of the process, and that these are long-term investments. With enough time, these index funds will rise again, and exceed previous prices.
Crashing prices also means cheap new buys! If you think of the price of an index fund dropping to mean that it’s on sale, that means it’s time to BUY! You can see that I made a few big purchases of funds as the prices were dropping. Over the long run, these will be smart purchases.
RRSP TD e-Series Index Funds
There is not much more to add about my RRSP funds. Losses across the board, and hit especially hard since I don’t hold any bond funds in my RRSP. I’ve written before that my RRSP takes an aggressive approach to index investing. You can see the downsides of an aggressive portfolio in action here, with a 6% loss in my RRSP TD e-Series portfolio over the past 2 months.
Usually I don’t put much focus on contributing to my RRSP, as I plan to max out my TFSA first. But with prices falling, a need to continue to repay a RRSP home buyers plan, and having a little extra cash left over in October, I decided to make a $500 contribution this month to my TD e-Series RRSP. I continued to balance my aggressive portfolio, keeping a 33% target goal for each asset.
High Interest Savings Account
My current plan has been to hold steady at roughly $10,000 in my short-term high interest savings account. This money works as emergency funds, and extra money that I would have immediate access to, should the need arise.
I’m currently switching between using EQ Bank and Tangerine savings account, as they battle between the highest savings account interest rates. Tangerine recently offered a 6 month promo of 2.5%, as opposed to EQ Bank’s impressive 2.30% regular interest rate. I’m currently holding funds with Tangerine – but the moment EQ Bank raises their rates, or the Tangerine promo runs out, I will switch back. Read more about opening an EQ Bank account and switching funds between banks.
Ironically, one of the most stable aspects of my portfolio over the last 2 months has actually been my cryptocurrency portfolio! While the values of the different currencies have gone up and down, the overall portfolio value stayed basically the same, rising by $6.66!
As the table above shows, I’m still down about 20% on my Bitcoin and other crypto’s. But to reiterate from previous posts, this is my ‘fun’ investment. I got into crypto with the idea that it could all go down to $0 . It acts as a very small part of my overall portfolio, so I’m not too worried about the losses.
Investment Portfolio Growth Roundup
There you have it! September and October are prime examples of how a bad month in the index markets can affect your portfolio. The key as always is to keep your portfolio diversified, and remember that you should be in it for the long haul if you are invested in TD e-Series funds (or other index funds). And when prices are down, don’t panic and BUY MORE!