I disagree. Can you stomach a 30% market drop without panic? What is your time line?
What to avoid? What is the safet index fund? What gives best return if you are long term?
And registered funds and taxes so which registered funds? Which should you do puy money in RRSP
or pay down loan?
Very important decisions need to be made before you choose index funds.
The choice is not about the index fund, the choice is about how much risk you want to have. Passively managed market index ETFs give you the best Sharpe ratio, so, this should be your only stock investment. If you want less risk, invest part of your money in that ETF, part in fixed-income ETFs. The risk tolerance depends on your investment horizon and general attitude toward risk. However, the portfolio that consists of these two ETFs is the best portfolio for everyone (the only difference is how much to invest in each - the proportion depends on the person's risk attitude). Which exact ETF to choose from that family of ETFs does not really matter as long as the MER is low and the total market value (a good proxy for liquidity for ETFs) is high.
Taxes are a very different animal. The decision to put money in RRSP is very complex, but the main factor is your projected income (and, thus, tax brackets) when you retire and today. Assuming you are not financially constrained (e.g., you can always pull equity from HELOC), any fixed-income investment should be in RRSP (since all gains there will be taxed at the regular rate). If you are in high tax brackets, you may consider buying ETFs that follow the market by buying and selling derivatives instead of holding stocks: while they have a higher MER, they pay no dividends, and all your profit is taxed at a lower capital gain rate.
