If you’re following (or making the switch to) a Passive Investing strategy using low-cost index funds and/or ETFs, you can rest easy knowing that you’re not paying the high fees associated with actively managed funds.
While you do save on fees by managing your portfolio yourself, it can be time-consuming (and frankly, boring) to calculate how much of which asset(s) you should be buying to rebalance your portfolio.
That’s why we created Passiv.
The goal is to automate the tedious aspects of managing a portfolio, such as doing the rebalancing calculations, making trades, and investing deposits or dividends as they come into your account. These tasks get especially monotonous if you’re managing your entire household’s investments.
If you’re ready to cross those items off your To Do list and take back your precious free time, then Passiv is here to help!
Here’s how to get started in a few simple steps.
Step 1. Create a Passiv account.
If you haven’t made a Passiv account already, just click that Sign Up button in the top right corner.
Step 2. Link your brokerage account.
Once you’re logged in, you’ll be asked to link Passiv to your Questrade account. This is done through Questrade’s API and you log in on Questrade’s website, so Passiv never sees your login credentials.
Step 3. Set a target asset allocation for each account.
Note that, unlike a robo-advisor, Passiv doesn’t pick assets or set allocations for you, so the next step is to set up your target asset allocations. After you link your account(s), you’ll notice “Setup” prompts beside each account. Click Setup and you’ll see there are two ways to set your target allocation: by importing your current Questrade holdings as a target, or by building a portfolio from scratch. To change any percentages, click Edit targets and then Save when you’re done.
Step 4. Create a multi-account portfolio
Here's where you can start to unlock the deepest powers of Passiv. If you have multiple accounts, you may decide that you want to manage all of these accounts as one portfolio.
Multi-account portfolios allow you to treat more than one account under a single portfolio strategy. Think of it like having the same rule so that all of your accounts act accordingly.
Using this feature allows you to create portfolios with various levels of risk tolerance and/or time horizons. For example, you may want to create a long-term strategy portfolio with your family’s RRSP accounts and another more speculative portfolio with your margin accounts. You would then create two portfolios: the first multi-account portfolio would include both yours and your partners' RRSP's, while the second portfolio would include just your own margin account.
You may also want to manage your investments in a tax-efficient manner because your tax bill is one aspect of investing you can control. You would then create a multi-account portfolio for the accounts that will be optimized for your tax sheltering strategy, such as your RRSP's if you are buying US-based ETFs that pay out dividends.
To create a multi-account portfolio, go to the Settings page and then to Connections & Accounts. Select the account you want to move and drag it to the desired portfolio. To create a new portfolio, drag an account to New Group.
Step 5. Sit back and let Passiv do the rest.
Once you’ve set your target allocations, Passiv will calculate the accuracy for each account and calculates the trades that will bring your account back into alignment with your chosen target. For updated information, just click the Refresh button.
By default, Passiv is set to only calculate Buy trades. This means that when you have new cash in your account, it will indicate which assets in your portfolio are currently underweight, and how many units will bring your portfolio back to its target allocation.
The Buy-Only setting is helpful with a brokerage like Questrade, where you don’t pay a commission to buy ETFs, but you do pay commission to sell. However, if you’d like to sell assets as part of your rebalancing, you can enable Sell calculations by scrolling down to the Controls box and turning the “Allow selling to rebalance” switch to On.
How do you know when you need to make a trade? Passiv will let you know when new cash hits your account, whether that’s in the form of dividends, a new contribution, or an account transfer. When you get one of these emails, your Passiv dashboard will have calculated trades waiting for you. You can then go to your brokerage’s website and make these trades.
Or, rather than having to go to yet another website and log in there too, you can simplify your financial To Do list even further by using Passiv’s One-Click Trades feature. This feature is available to all Passiv Elite subscribers. To become an Elite subscriber click here.
