In case you haven’t been following along, every two weeks I am contributing $1,000 into the 70/30 portfolio. About 10 weeks ago, I contributed the first $1000 into the 70/30 Portfolio with Questrade. Here is a recap from August 26th 2019:
Now it’s time to contribute another $1,000 into the portfolio. I’m going to be buying just the right amount of individual index funds to keep my target allocations (+/- 5%) within my chosen range. To start, in my Allocation Tool, I adjusted the unit price so that it is current. I then bought approximately $1,000 worth of index funds in a way that kept my allocations relatively close to my original target goals. Feel Free to use my Allocation Tool: allocationtool11062019-
The 70/30 portfolio is up $122.77 including the $9.66 in dividends so far. Next $1,000 contribution will be around November 20th 2019. This is a great portfolio for retirement, because most of the gains come from capital appreciation. If the $122.77 in gains came solely from dividend income we would have to pay about 20% this year (depending on your tax bracket) in taxes or $24.56. Thankfully, the 70/30 portfolio is extremely tax efficient both now and in retirement. In retirement, we can harvest the capital appreciation completely tax free thanks to the adjusted cost basis (ACB) way of accounting. It’s not uncommon to sell upwards of $50,000 in shares per year and pay absolutely zero in taxes.