Marc Ryan, 61
Occupation: Retired lawyer, based in Montreal
Portfolio: iShares Canadian S&P/TSX 60 Index exchange-traded fund (ETF), iShares MSCI Emerging Markets Index ETF, Ontario Hydro strip bond, Royal Bank of Canada preferred shares, RioCan Real Estate Investment Trust and other holdings.
A life in financial markets
Early in his career as a lawyer, Marc Ryan worked for three years at the Autorité des marchés financiers, the securities commission in Québec. Afterward, he spent 26 years with BCE Inc. and Bell Canada, first as a securities lawyer and then as a senior manager.
In retirement, he does occasional consulting work. He also keeps busy with posting content to a free, educational website that he set up for independent investors. It can be found at independentinvestor.info.
A savings system
Mr. Ryan maintained a high rate of savings during his working years. "I invested 6 per cent of my gross salary in BCE and Bell Canada shares, and the employer contributed a matching 2 per cent under an employee savings plan," he says. "In most years I also put aside and reinvested 100 per cent of annual bonuses."
Over time, he diversified away from his BCE/Bell shares into other investments to avoid having a concentrated portfolio (and because he was already financially exposed to his employer through his pension). By retirement, virtually all his BCE/Bell holdings had been sold.
How he runs his portfolio
At first, he tried picking individual stocks. But the results were unimpressive. Now he adheres to passive index investing.
His style is conservative since his "portfolio is expected to constitute an important source of retirement income" for him and his wife. Of note, the allocation to fixed-income securities is set roughly equal to their ages, as many financial advisers would recommend.
Other aspects of his portfolio: He limits expenses by investing directly in fixed-income securities versus bond funds, he minimizes taxes by holding debt securities in registered accounts and Canadian equities/preferred shares in taxable accounts, and he crystallizes capital losses annually by selling off losers in taxable accounts and reinvesting in similar, but not identical, investments.
It was investing "100 per cent of our RRSPs in ladders of provincial government strip bonds," he reports. "Over time, the power of compounding pretax interest has been awesome … it is a true portfolio for dummies since there are typically only one or two trades per year."
Not rebalancing enough (away from stocks and towards bonds) after the stock market had moved up so much in 2007.
Some themes from his website:
Savings and managing costs are the key to a successful retirement portfolio, not chasing returns;
Don't try to beat the market - there are too many smart people out there trying to do the same thing;
Money is better spent getting advice on asset allocation as opposed to paying fees to mutual fund managers or full-service brokers
Special to The Globe and Mail
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