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Me And My Money

Investments you can sleep on Add to ...

Charles Martineau, 25

Occupation: Graduate student in finance

Portfolio: All exchange-traded funds - Claymore 1-5 Year Laddered Government Bond, iShares MSCI Emerging Market, iShares MSCI EAFE Index (C$ Hedged), Claymore China Fund, and iShares S&P 500 Index (C$ Hedged)

The investor:

Montreal resident Charles Martineau can tell you the difference between the three variants of the Efficient Market Theorem. He has a bachelor of commerce degree in finance from Concordia University and is currently studying toward a master's degree in international finance at HEC Montréal. Mr. Martineau also posts on financial matters at charlesmartineau.com.

His approach:

With his all-ETF portfolio, it's not surprising Mr. Martineau is a "100-per-cent" buy-and-hold, passive investor. However, that's not forever: He plans to add individual stocks, until they comprise 20 per cent of his portfolio. His allocation to bonds follows convention and is roughly equal to his age. He has taken foreign diversification to heart - and then some. All of his equity position is outside of Canada (and mostly hedged to the Canadian dollar). In the future, he intends to add exposure to U.S. small-cap value and Canadian stocks.

A recent transaction:

He recently purchased the Claymore China ETF. "This ETF is managed by a company led by passive-investing pioneer Burton Malkiel [and sold to Canadians by Claymore]" he reports. "What makes it appealing is that it is more diversified than other Chinese ETFs such as the FXI [iShares FTSE/Xinhua China 25 ETF]"

Best move:

Mr. Martineau started investing just over a year ago and so far is happy with all his moves. They don't keep him awake at night and he doesn't need to look at his portfolio every day.

Worst move:

"Not buying Wells Fargo when it was around $8 during the recent crisis. I wanted to buy the bank's shares but something kept me away - perhaps it was inexperience."


A buy-and-hold approach is recommended. "Your gains from investing take a nasty hit when your transaction and management costs are high," he says. He also advises staying "away from those who pretend they can forecast financial markets with accuracy - compounding of returns and patience are your best friends."

Special to The Globe and Mail

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