Travel writer Nora Dunn set up her portfolio when she was working as a financial planner and has been content to leave it pretty much in place.
Investor
Nora Dunn
Occupation
Travel writer
The portfolio
A number of mutual funds, selected to provide a diversified portfolio.
The investor
Nora Dunn's investments have performed reasonably well since they were featured in a Me and My Money column in November, 2010. Over the past five years, her registered retirement portfolio has earned 6.5 per cent annually while the portfolio in her non-registered account has notched an average 5.5 per cent a year.
In 2006, Ms. Dunn sold her Toronto-based financial-planning business to travel the world. Now in her late thirties, she has visited dozens of countries and is currently enjoying an extended stay in the mountains of Peru.
She keeps costs low in various ways. One big money saver has been house-sitting gigs. Remaining expenses are covered with income from blogging , writing travel articles for magazines and authoring books.
How she invests
Ms. Dunn set up her portfolio when she was working as a financial planner and has been content to leave it pretty much in place, preferring to focus more on her travel adventures and location-independent career as a writer. "I have better things to do," she explains. "As long as my finances allow me to live the life of my dreams … I'm not displeased over all."
"I take the long view with my investments, so changes to my holdings are few and far between, and rarely dramatic. Since 2010, I've rebalanced my holdings twice."
In the earlier rebalancing, she toned down risk by moving money out of a growth fund into a dividend fund. In the recent rebalancing that took place in August, she channelled a chunk of her aggressive equity funds into a fixed-income fund, "right before the market correction."
But Ms. Dunn eschews the idea we can time the market. She freely admits that the "divine timing" of her August transaction was "one part strategy and three parts luck." In her registered portfolio, the asset allocation is 70 per cent in stocks and 30 per cent in fixed income. Her non-registered portfolio is more conservative (it contains the proceeds from the sale of her business and serves as a fund for unexpected expenses and/or the future purchase of a house or business).
Best move
It was going with a well-diversified portfolio that didn't require much attention.
Worst move
In the past, watching the markets too much was an emotional roller-coaster ride for her.
Advice
Instead of chasing investment performance, focus on "engineering your finances" to help you live your dreams in a sustainable way while ensuring enough is left over for retirement, she recommends.
Want to be in Me and My Money? Contact Larry MacDonald at mccolumn@yahoo.com or his Website.