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Entrepreneur favours a low-cost portfolio

Ramis Jamali, 30

Occupation

Entrepreneur

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The portfolio

Core is made up of index funds from the TD e-Series family (TD Canadian Index, U.S. Index, European Index and Bond Index).

The investor

After graduating from university, Ramis Jamali completed the Canadian Securities Course and Chartered Financial Analyst program while working as an investment adviser. He discovered the job was more about pushing products, so he left and started some online business ventures – notably financialhighway.com and excessreturn.net.

How he invests

Mr. Jamali follows a buy-and-hold, mainly passive investment strategy. "My core holdings consist primarily of index mutual funds and ETFs, and I try to increase returns with a small portfolio of individual stocks," he discloses. His target asset allocation is 70-per-cent stocks, 20-per-cent bonds and 10-per-cent cash. It's rebalanced annually.

"I don't believe in paying high investing fees as they erode returns over the long term," says Mr. Jamali. Consequently, he is "a big fan" of the TD e-Series index funds because they charge "extremely low" management expense ratios (MERs) for broad market exposure.

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Index funds can also be used to set up a dollar-cost averaging plan, where money is regularly transferred (without commissions) from a bank account or paycheque into the funds. Averaging into the market this way can be easier on the nerves than paying a lump sum. And the saving process is effectively automated, making it easier to stick to a saving goal.

Recent moves

"I have been increasing my exposure to emerging markets through Vanguard [exchange-traded funds]. As the world economy improves, I believe emerging markets will be the main beneficiaries of global growth."

Also, he is reducing fixed-income exposure. Interest rates are at record lows and as they return to higher levels, bond prices will fall and have a negative impact on portfolio returns.

Best move

"Dumping BCE in late November of 2008, just before the [leveraged buyout] failed and the stock tanked from the $40s to $25…."

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Worst move

"Sticking with Yellow Media stock till the bitter end…."

Advice

"Keep your investments boring and costs low. If you are looking for excitement, try bungee-jumping. Set up a solid index, or ETF, portfolio – and use a dollar-cost averaging plan."

Want to share your strategies?

E-mail mccolumn@yahoo.com

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