Why Robb Engen’s 4-minute RRSP portfolio is tough to beat

I spent a total of four minutes working on my RRSP portfolio last year.

It wasn’t benign neglect:  my two-ETF all-equity portfolio really is that simple! I made four trades, which took about a minute each after determining how much money to invest, in which of the two ETFs to allocate the investment, and how many shares that would buy (plus a few seconds to enter my trading password).

The buying process is easy since I don’t have any bonds in my portfolio. I simply add money to the fund that brings my portfolio closest to its original allocation – 25 per cent VCN and 75 per cent VXC.

I don’t expect my four-minute portfolio to change much this year. I still plan on making four trades this year in my RRSP, and now that I’m contributing regularly to my TFSA again I’ll make an additional four trades in that account. Add 12 monthly contributions to my RESP and that brings my total time spent on investing to just 20 minutes a year.

Back when I was picking stocks I’ll bet I spent a good three hours a week reading about individual stocks and market trends, plus another hour a week staring at my portfolio and playing around with stock screeners. That adds up to over 200 hours a year spent obsessing over my portfolio and trying to find an edge with my investments.

4-minute portfolio 

Was it worth it? For me, it wasn’t. That’s why I made such a massive change to my portfolio in January 2015. After five years of successfully picking dividend stocks I realized I could do just as well, and probably even better over the very long term, with a passive approach – all while expending a tiny fraction of the time and effort on investing. I switched to a two-ETF investing solution and haven’t looked back, or more accurately, haven’t looked at my portfolio aside from a cursory glance in two years.

Has investment performance suffered? Hardly. This four-minute a year portfolio was up 18.08 per cent in 2015, up 8.76 per cent in 2016, and is up 5.66 per cent year-to-date. Compare that to the benchmark I used for my dividend stock portfolio, iShares’ CDZ, which was down 11.53 per cent in 2015, up 20.93 per cent in 2016, and is up 1.3 per cent year-to-date.

When it comes to return on time invested, my four-minute portfolio is pretty tough to beat.

RobbEngenIn addition to running the Boomer & Echo website, Robb Engen is a fee-only financial planner. This article originally ran on his site on March 5th and is republished here with his permission.

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