Liquid’s RRSP and TFSA Performance

3 Year History

Usually when investors talk about expected market returns we like to look at historical averages. Over the past 115 years stock markets in the developed world delivered an annualized return of roughly 8.5%. This means we can probably assume that a normal range would be somewhere between 6% and 11%.

I use TD as my discount brokerage at the moment. It has a useful tool to help me gauge my portfolio performance over the years. Most of my stocks are held in registered accounts such as TFSAs or RRSPs, which have preferential tax benefits. πŸ™‚ Here is a quick overview of how my securities in those accounts have performed over the last 3 years. The green line represents my portfolio performance.


As we can see my overall stocks have achieved a 7.33% annualized rate of return since Sept 2012. This is not that surprisingΒ and falls within the 6% to 11% range of a normal market return. πŸ™‚ Also since I can’t use margin to borrow and invest inside these registered accounts, none of my stocks in this chart uses any leverage.

The blue line represents the Canadian stock market index, which has only returned 8.65% over the last 3 years, or 2.8% annualized. This means I technically beat the market here in Canada by more than 4% a year, which is just peachy keen! πŸ˜€ But that’s probably because I hold some U.S. stocks in my RRSP and TFSA.

The purple line represents the S&P 500 index in the U.S.Β The graph shows it has climbed 80.22% since 2012. But keep in mind that this factors in the currency exchange. Otherwise, the return in $USD is closer to 47%, which is still pretty dope. The U.S. currency has become very strong over the past couple of years. Any Canadian who held U.S. stock would have seen double-digit returns even if the price of their stocks didn’t change domestically in U.S. dollars. πŸ˜€

Here are a few things I learned from this performance chart.Β I’ll be keeping these things in mind going forward.

  • It’s possible to pick and choose individual stocks without underperforming the market index, as long as you have the discipline to buy and hold most of the time.
  • Canadian stocks rely too much on commodity prices. Whenever oil and metal prices fall the market really struggles. πŸ™
  • Buy some foreign currencies to hold investments that are denominated in those currencies.
  • Diversify globally. Holding a Canadian equity index fund, like the Vanguard Canada All Cap Index ETF, (symbol VCN,) would have barely even beat inflation over the past 3 years, and even the past 5 years.

That being said, investing in stocks is a long time strategy. 3 years hardly shows any long term alpha effects. My plan is to continue buying large, successful business that pay out dividends and grow their profits over time. πŸ™‚ As usual to see what specific stocks I have in my accounts you can look through the portfolio menu on the top of the site, the stocks category to the right, or search this blog for particular company names.

Random Useless Fact:
Research showsΒ that men are 1.5 times more likely to develop parkinson’s disease than women.


image source:


Notify of

Inline Feedbacks
View all comments
09/28/2015 4:43 am

I’m not sure about your first point. You did say you have non canadian equity in your holding, so a canadian only index is not a “fair” benchmark.

If you want to calculate the impact of your stocks picking, you need to use a similar mix. If you have 80% canadian stocks and 20% US then try using a mix of 80% VCN and 20% VUN as a benchmark.

09/28/2015 5:35 am

Agreed. The two benchmarks used are completely useless; most comparisons are useless. What you should be using is your own required (and/or desired) return benchmark needed to accomplish your financial goal.

I know using TSX/S&P makes it familiar and easy for people to relate, but it’s wrong and propagates the misguided mindset.

As well, the 6-11% range of future returns is very high. A lot of smart people have stated average annual stock returns will settle within a much lower bound, 3-6%, for the next couple of decades.

Other than that, nice work! ?

09/28/2015 11:42 am

When I saw 1.08 usd vs 1 euro, I immediately take money out of my s&p 500, and put into European mutual fund. It has since declined a little bit. However, I feel in the long term, as the euro strengthen against the US dollars, regardless how much the market make, I would stand to make a big profit.

My brokage doesn’t allow me to buy individual foreign stocks. However, when I realized Canadian banks are listed in the us stock exchange, I launched my mini Canadian bank etf. (Canadian dollars was 1.15 vs 1 usd at some point) when the Canadian dollar recover, this should be sweet! As the Canadian entering the recession, I don’t know how this will play out, it could be a long wait. In the meanwhile, I guess the Canadian banks are issuing 4-6% dividend yields, which is way better than putting my money in a saving account.

Would you ever consider forex trading? My friend did forex for awhile, and she was living like a queen. Then, her and her partner broke up, that ended the party.

09/29/2015 5:27 am

Not sure why you think high liquidity means you could win in possibly the most manipulated asset type in the world.

Might as well go to the race track and have some fun losing your money!

09/28/2015 5:02 pm

“I just need to find a balance between what I want and what’s realistic”

You have to remember that “the market” simply records the aggregate return of all participants/trades. Most participants (amateur and professional alike) do not beat “the market”; this means that the very small percentage of winners are winning by a lot in order to raise the aggregate to its final level.

In other words, what you want and what’s realistic can be the same thing. To do so, however, you might have to do a lot more work than just buying a lazy index fund.

09/29/2015 7:41 am

You are doing awesome! My USD stocks are rockin’ while my CAD stocks are plummeting due to commodities. I’ve been having trouble in the last couple months due to the unstable market conditions. Time to change up some strategies πŸ™‚

09/29/2015 12:21 pm

LI, been reading your blog for a few months now. Really great fact-based analysis and insight. Having said that, what evidence do you have that makes you believe you can outperform the benchmarks? I’d present this infographic from JPMorgan as evidence that individual investors do not outperform the market:

09/30/2015 5:38 am

Respectfully, a 3-yr return isn’t proof that you’re able to outperform the markets over time. If someone had Valeant in their portfolio this year, they are almost guaranteed to outperform the TSX. That doesn’t mean that they are able to replicate their outperform each year though. There are towers full of people who work from morning to night trying to outperform the TSX & S&P. Again, with all due respect, I don’t think this is the best use of your time.

From your blog, you have evidenced an ability to add value through other financial assets. And you’re able to utilize leverage for those investments, which is something you favor. Unless you happen to be the CDN Bill Miller, it’s extremely likely that you’ll underperform the TSX over a 20-30 yr period. Since your focus is on dividends, maybe you look at purchasing a dividend ETF that would provide greater return for the risk you’re willing to take.