Starting a self-directed account? Here is what can help start your portfolio.
Tags: Self Directed Account, Personal Finance, Financial Planning, Financial Independence, Etf Purchase

Last year I decided to switch from a robo-advisor to a brokerage for my investment management. While generally being cheaper, with brokerages I had to do some things previously provided by the robo-advisor, such as creating a portfolio, rebalancing it over time, reinvesting dividends. However, savings on the robo-advisor’s monthly fee seemed to be worth the trouble.

I developed several Excel templates to help me do the job of creating my portfolio and rebalancing it. My templates are available at www.etsy.com/ca/shop/PocketHamsterCA

When the transfer to the brokerage had been completed, I ended up with available cash in my tax-advantaged account. The first step was to acquire ETF units to achieve the desired stocks / bonds ratios.

These are some of the features of my portfolio:

1) It is a tax-advantaged account, so the cash that I have in the account is all I can work this (i.e. I don’t borrow to make trades)

2) I use a “Ridiculous” strategy from “Canadian Portfolio Manager” blog https://cdn.canadianportfoliomanagerblog.com/wp-content/uploads/2020/01/Model-ETF-Portfolios-iShares-2019-12-31-Ridiculous.pdf

3) I use Questrade to manage my self-directed account

My initial purchase template can be used for other portfolios and brokerages, but my explanations are based on the features above.

This is the portfolio I am using: 10% bonds, 90% stocks, recommended for RRSP, RRIF, LIRA and LIF accounts.

And this is how it looks in the template:

The currency of the ETFs is added to the template to account for the currency conversion.

Notice that ETFs in the template are sorted alphabetically because this is the way Questrade presents them and it is easier for updating the information.

Adding ETF expenses to the template is not necessary but a useful feature to be able to calculate your weighted average expense ratio for the whole portfolio. You can obtain ETF expenses from EFT data sheets. Questrade provides them when you purchase ETFs or you can simply Google them.

If any of your ETFs are valued in USD, add FX rate from the page header in Questrade (when logged in, go to Accounts → Summary → click on the name of the account you are working with).

Cash amount is displayed on the Investment Summary page:

Type it into the template. It should look something like this:

Next step is to provide the current ask price so that the formula calculates the number of ETF units to be purchased with the available cash. To obtain prices go to Trading → Buy/Sell in your Questrade account. No worries, you are not actually purchasing yet, only checking the prices.

Type the ETF symbol in the order window and copy Ask price to the template. Proceed with all remaining ETF symbols.

Formula will propose quantities of ETF units to be purchased to bring the allocation in your portfolio to the target.

Now you are ready to purchase the ETF units. Please note that the actual purchase price can deviate from the price you have looked up earlier, if you are working on the template while the market is actively trading.

Type in the amount of commission charges for each purchase to bring you to the correct cash balance after all purchases are made.

And you are done!

You will need to rebalance regularly to adjust the uneven growth / decline in the value of various ETFs in your portfolio.

Initial purchase template is available at: www.etsy.com/ca/shop/PocketHamsterCA

Disclaimer: I am not a certified financial planner and this article does not constitute financial advice. Please do your own research before acting on the material of this article.