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me and my money

Michael Wiener

Michael Wiener


Cryptographer, working for a technology firm

The portfolio

Four exchange-traded funds (ETFs): Vanguard FTSE Canada All Cap Index (VCN), Vanguard Total Stock Market (VTI), Vanguard Small-Cap Value (VBR) and Vanguard Total International Stock Market (VXUS)

The investor

Michael Wiener's portfolio once consisted of stocks. Now, it holds four ETFs that track stocks in Canada (30 per cent), United States (45 per cent) and international markets (25 per cent).

How he invests

At first, Mr. Wiener enjoyed picking stocks "but the constant study and vigilance became a chore." When he realized he couldn't "possibly know more than the investment pros who dominate trading in the stock market," he decided to become an index investor.

As for his index portfolio, he wants to be diversified globally to spread stock-market risk. The weights assigned to the markets are simply what he feels most comfortable with. The important thing is to rebalance back to them on a regular basis.

The allocation to U.S. stocks is spread nearly equally across VTI and VBR; the latter ETF delivers a tilt toward small-cap value stocks (which academic studies have found earn a premium over the broad stock market).

He is happy with a 100-per-cent equity ETF portfolio (and a three- to six-month emergency fund) because stocks historically have provided the highest returns in the long run. Smoothing stock-market volatility with a bond allocation would only lower those returns.

Moreover, Mr. Wiener feels he can be aggressive in his risk-taking because he has secure employment, no debt and a willingness to adjust his retirement date based upon stock market conditions. Market fluctuations don't keep him awake at night, either. Not until he is getting close to retirement will he consider fixed-income investments.

Mr. Wiener likes Vanguard ETFs because of their rock-bottom fees. His four ETFs charge a blended annual expense under 0.10 per cent (VTI, VBR and VXUS are listed in the U. S.). Getting costs down is important because they can substantially cut into returns over the long run.

For example, a fund that charges two per cent a year will leave 40 per cent less capital at the end of 25 years. As he notes: "If Fund A would have grown your money to $1-million over 25 years without expenses, the after-expenses figure would be about $600,000." For details on the mathematics, see Mr. Wiener's explanation.

Best move

Switching to index investing.

Worst move

Holding onto options in a former employer's stock during the tech boom in 2000. The gains evaporated but he still owed taxes on the phantom gains.


If you are running your own stock portfolio, guard against overconfidence, he advises. It is hard to beat the investment professionals.

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