My 2018 RDSP Report Card

Last year, my son’s Registered Disability Savings Plan (RDSP) had a rate of return of -2.2%.

Is that bad?

No, not really. In fact it’s in line with the industry benchmark. My portfolio is based on the Canadian Couch Potato TD e-Series model portfolio . Last year, the model portfolio returned -2.1%.

It’s important to look at the long term picture. We opened the RDSP in 2013. The rate of return from then to the end of 2018 is 5.5%.

And we care because……?

The point is that anyone can manage RDSP investments without paying for a financial advisor or having any investment knowledge. All you have to do is setup a low cost portfolio (such as the one linked above), add money every year, let the government add the grants and bonds and in the long run, you will be well ahead of those who pay too much for financial advice.

2 thoughts on “My 2018 RDSP Report Card”

  1. Another option if your timeline is 5 + years is simply to plonk your money into a solid canadian dividend stock like Laurentian Bank (pays 6% dividend and has NEVER missed a payment or cut the dividend) and enroll in their DRIP program that automatically and cost-free, reinvests the dividends in more stock. You can also find big Canadian utilities or banks paying 4-5% annually. Remember the rule of 70. Divide your % return into 70 and then tells you approximately how long the capital takes to double. a 5% annual return will double every 14 years. Long term these companies always make money. In the 1-2 year timeline sure you may see a loss, but look at the long-term charts. It’s always up. If you’ve opened a RDSP for a very young child, just set up this type of program and literally never open or look at a statement. If you do, you fall into the emotional trading trap of panic selling when the market is down 5% and missing the long term upward trajectory.

    1. Thanks Keith. I would not disagree with you. That is certainly a good way to invest in the long run if you have the backbone for it. The problem is that the majority of “investors” will panic and sell at the bottom of the market once they realize that their one stock has decreased in price by 60%. For those without your fortitude, I would recommend a low cost balanced portfolio to smooth the ups and downs.

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