How do you manage your balance in your equity exposure when withdrawing a lump sum of money?

Hey Mat,

Many thanks for your insightful answer. Indeed, there's no rush, the money is compounding and I have time to study my options. The downside to transferring from Wealthsimple Invest to Trade however, is that it's only possible to transfer the whole account at once (100% in-cash transfer). The only way around would be to withdraw bits of the money in a cash account, while taking care not to exceed the TFSA contribution limit. Now might be a good time to consider this since we're close to the end of the year.

I'll be looking at XAW as a potential replacement. For now, I might withdraw a few thousands from Invest (and take some profits) to refill my emergency fund and make some more contribution room for my TFSA next year.

Sorry I was not clear enough in my third question 🙂

You guessed right, I was referring to rebalancing after a withdrawal. I'm 30, so still in the early stages of my investing journey. There's indeed plenty of time to rebalance over time, so that shouldn't be a concern.

Thanks a lot!

Hey there,

So there is no perfect answer here. However, if you're plan is to go to self-directed investing, then it makes sense to move your WS Invest account to WS Trade. Now, I don't believe there is any rush to do it all at once. If this were me, I'd like move it over in chucks as I've identified equities or ETFs that I'd like to invest in. So as an example, say i have 10K in my WS Invest acccount and I seen an oppotunity in stock or ETF XYZ. I'd like my exposure to that particular asset to be around $2K. At that point in time, I'd move the 2K and buy it.

Since your WS Invest account is funded already, it is still compounding and making you money so there is no need to rush over all the holdings. Unless of course, you have a plan for that $$ already. Know what I'm saying?

In terms of your concerns re: International exposure, that is an easy fix. As you mentioned, you can simply by an International ETF like XAW. Alternatively, if you like the international holdings in your WS Invest account, you can either just leave that portion there or mirror that in your WS Trade account. Bottom line, there are several ways to address the international exposure aspect and I would not consider that a deciding factor in the move. I have three separate accounts, there is no 'need' to have but one.

It is worth noting that if one is looking to withdraw money in 3-5 years, this is still a shorter period timeline in the investment world. So it is important to take that into consideration when making your investment decisions. If it were me, the closer I got to withdrawal day, the more I'd consider moving my equity into fixed income as it really is the only way to guarantee capital preservation.

I am unclear about your last question - managing balance? Are you referring to how to balance your account after withdrawal? Without knowing your specific situation, if you are years out from retirement there is plenty of time to rebalance through new capital invested. When i first started out I cared less about a balanced portfolio and more about buying good stocks at good prices. As I get closer to retirement I start to pay more attention.

Mat