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You'll have more time to work on your investment portfolio when you retire, but will you want to spend your leisure time that way?

A reader who is three or four years from retirement has asked whether he should stay with an individual blue chip dividend stock portfolio, or replace it with an exchange traded fund holding blue chip stocks. As an observer of people more than someone who write about investing for a living, I tilt toward keeping the stocks.

Many of the Canadian equity funds covered in the first installment of the 2018 ETF Buyers' Guide are an ideal substitute for a portfolio of blue chip stocks. Arguably, these ETF are better. Better diversified, and cheaper to manage because you'd be buying and selling shares of one fund rather than many individual stocks. Many professional money managers can't beat the returns of ETFs, so it's no stretch to imagine that individual investors are similarly challenged.

But the sort of DIY investor who builds a retirement fund over the years by managing a portfolio of stocks is likely to want to, if anything, become more hands-on in retirement. You can definitely over-manage a portfolio by focusing too much it. The risk is that you over react to short term events and make buy and sell trades that end up destroying value instead of building it. On the other hand, a retiree might have the time to rebalance in a more timely way, to reinvest cash rather than letting it pile up while earning nothing, and to research possible investment opportunities that might otherwise go unnoticed. The question is, would you want to spend your time this way in retirement?

My sense is that people who manage their own stock portfolios do it partly for the love of investing, and not just because it's so cost-effective. So here's what I suggest for this reader: Try keeping the stock portfolio going, but be mindful of over-tweaking if it turns out that you spend more time looking after it than you used to.

Every year or two, re-evaluate. ETFs are a very good option if you want to spend less time on your portfolio, or if you feel you're no longer getting the best results.