Véronique Bonenfant claims to have had a rather atypical investment career, like many things in her personal and professional life. (Photo: courtesy)
SPOTLIGHT ON MY TFSA is a section where individual investors share their good and bad investment moves with us while putting their portfolio for professional review.
(Illustration: Camille Charbonneau)
Age : 41 years old
Occupation: municipal inspector
TFSA value: $ 53 765
Strategy: ETF + an individual security
Nice Shot : they have always been thrifty and curious
Bad shot: after waiting a long time before investing
Target : have greater financial flexibility
His advice to the investor starting: “taking care of your possessions is rewarding”
“I have had a rather atypical investment career, like many things in my personal and professional life,” says this Gaspé native. After studying forensic technology in Quebec, he worked in private companies in Gaspé, including a judge in Percé, before finally settling in his hometown of Gaspé. “I started at the Municipality as a receptionist, then after the course I climbed the rankings and became a municipal inspector. “
He has always loved numbers (and money – “I say it without embarrassment”) and believes he got it from his mother, who calculated everything. “At home there were always pieces of paper blackened by calculations. She was also the one who kept my father’s books. During his he years as a student, he remembers using an envelope system to manage his various budget items: “one for the phone, one for food, the other for rent. “
“I have always lived below my means,” says the one who does not change her lifestyle even when salary increases occur. “Since the start of the pandemic, I have also been hyper-saving. I manage to save 40 to 45% of my salary. In view of her saving prowess, her brother even friendly dubbed her” El Cheapo. “He laughs at it at the phone and brings an often overlooked nuance to thrifty people: “Buying at a discount or planning your old age doesn’t mean you’re stingy. On the contrary, savers are often generous because they can afford it.”
Opening her TFSA will be a real via crucis for her – in three acts. It must be said that the sharp decline in the markets in 2008 had already dampened her enthusiasm as an investor. “I had asked my advisor to liquidate my investments in my RRSP. He will still try the TFSA experience the following year, when it was created in 2009, but will use it as a savings account for current operations. “I had misunderstood the concept and ended up getting a warning from the Canadian Revenue Agency for excessive contribution. This scam prompted him to shut down his TFSA.
Scorched by her experience, she will wait until 2017 to reopen a TFSA again, this time in a brokerage account. An acquaintance will tell him about a company with potential, Quest Rare Minerals. “My third slap. I invested a few thousand dollars and three weeks later it was worth nothing! That’s when she takes a step back and starts reading and researching. “I’ve read the Quebec classics. Books by Pierre-Yves McSween, Fabien Major and Nicolas Bérubé. You will also regularly consult the blogs of Retirement 101from Dividends and ETFs and of Retired youth.
In March 2020, when the pandemic incident occurs, it is sitting on a good jackpot. “I had over $ 40,000 ready for implementation and was better prepared.” For his return, he is counting on exchange-traded funds. I couldn’t do worse than the market, he told himself. Using the BMO banking ETFs, he will buy holdings in the main indices of the American market: the S&P 500, the Nasdaq and the old Dow Jones index. He also takes a stand in his he only individual title, Air Canada (CA, $ 22.97). “My reasoning was that the stock could only rebound with the resumption of air traffic. “
Véronique Bonenfant, who has a good pension fund at work, says she is investing long-term. “The only detour I would take would be to fund unpaid leave to go and whet the Bonefish in Cuba,” says this fly fisher.
In the eyes of a professional
Placements Idema president Ian Gascon believes he made the right choice by opting for index ETFs, which are investment tools with low management fees. He also hails her resilience, her frugal side, and the fact that she’s motivated to learn more about investing. However, he cautions: “Just because they’re ETFs doesn’t necessarily mean they’re good investment solutions. You also need to know how to choose them correctly. “
He notes that the investor clearly has a “bias” for the Uncle Sam market, with nearly 85% of the portfolio in US equities. “It seems too much to me, because it is a question of betting on this particular market. It suggests diversifying into different asset classes (international and Canadian equities, fixed income securities, etc.) that will not be too correlated with each other. “The ETFs he owns – mostly large-cap stocks – will have a correlation of perhaps around 98-99%, which is extremely high. “
Ian Gascon advocates better diversification and also questions the importance of holding the Air Canada individual title. “It’s a little out of the way and it’s a greater risk, although it can probably tolerate it.” On the other hand, he believes that adding a bond stake could further stabilize his portfolio. “However, you have to choose your fixed income exposure carefully, again there are different asset classes and risks. “
It also notes that the investor has opted for two S&P 500 funds, one of which (Hedged) offers protection against currency risk. Ian Gascon has written several articles on this topic. “In summary, I would say that it is generally beneficial for a Canadian investor not to be hedged for the currency when investing internationally. This limits the volatility of the portfolio. “
The portfolio manager believes he can, among other things, consider investing in all-in-one ETFs, which are ultimately funds within a fund. Many of these products offer greater diversity and even exposure to fixed income securities. “Better diversification across multiple asset classes will reduce volatility in all market environments. This will also promote more stable returns and prevent it from making impulsive decisions. “
If you too would like to share your TFSA investment strategy with Les Affaires readers and have your portfolio analyzed by a professional, write to us at firstname.lastname@example.org
TFSA by Véronique Bonenfant (approximate value of $ 53,765)
|Titles||Symbols||% of the total|
|ETF on the BMO S&P 500 index||ZSP.TO||37%|
|BMO S&P 500 Hedged to CAD Index ETF||ZUE.TO||24%|
|BMO Nasdaq 100 Equity Hedged to CAD Index ETF||ZQQ.TO||14%|
|BMO Dow Jones Industrial Average Hedged to CAD Index ETF||ZDJ.TO||9%|