|
JawKnee posted:What's the best TFSA to go with? Ally's used to have a pretty decent percentage a couple years back, but it's now 1.2% (which is still higher than TD's, where my chequing is). I think ING Direct is generally the "best" for a high interest savings account. That said, realistically, I hope that as you get more savings you decide to actually use your TFSA room for investing, as it's a fantastic way to get tax free gains, whereas a TFSA just prevents you from losing too much value in regards to inflation. Baronjutter posted:Me and my wife just maxed out our tax free savings thingies and have "a guy" handling our investments. We've got about 40k each in a mix of conservative and moderate mutual funds. I don't know poo poo about the world of finance, but is it generally safe to trust these investment dudes to throw my money into the best places? Honestly, not really. Most financial advisers who are not fee-only, are basically taking 1% per year just to advise you (in every class A type mutual fund share, 1% of the fees goes to the adviser). You would likely be best served by a low cost index approach but most mutual funds are a bit bizarre and by their nature are somewhat inefficient: they usually have to have 5-10% of your 'invested' money sitting in cash... Not to mention having different mutual funds is a bit foolish unless they are narrow in nature, ie, 20% of a US-only equities mutual fund, 20% into an international emerging markets mutual fund, 40% in canadian bond fund, etc. I highly doubt this is the case, and the adviser just bought a few similar ones for no good reason. I don't think you should really take your money 'out' of the banks in Canada, because they make up a huge proportion of our total stock market capitalization and also are the largest, most liquid things on our stock markets. I have a lot of disdain for financial advisers personally and feel like many of them don't add much value but cost a fair chunk of money. You should look and see what kind of fees/MER these mutual funds entail. Near the bottom of my post you can see how much of your total returns they are taking in fees and expenses, and decide whether the probably few hours they have looked at or cared about your personal investments every year justify that much in fees. If you aren't prepared to do ~25-30 hours of reading yourself to become a DIY-er, or aren't 100% certain you have the discipline to remain strong when your investments plummet 20-30% in a single year, then your best bet is to have nearly $100k in investments and get a DFA (Dimensional Funds adviser) or try to see if "Canadian Couch Potato"'s blog links to an adviser in your proximity. I'm a fan of the owner of that blog and from what I know, he only links to advisers who are reputable and actually care about building their clients a proper portfolio. The fees are more up front than you are probably paying in your mutual funds now, but that's because your fees are currently hidden in the mutual funds themselves. (Note: to anyone reading this, sector-specific ETFs/mutual funds/anything are usually very, very dumb. Don't invest in a "healthcare ETF" or "energy ETF" unless you have a very good reason to do so. I have 5% in a mining ETF just to increase my portfolio home-bias to Canadian investments (Many of the largest mining corporations in the world are Canadian-based) and perhaps work as an inflation hedge while still providing capital gains/dividends, unlike gold futures or something.) Also, those double and triple leveraged and inverse ETFs are really stupid too, because of how you are virtually guaranteed to lose money with them as long term holdings. Also, Lexicon, an important distinction in the OP is that active managers do not beat the market, after fees. They often DO beat the market, but their fees eat up those extra gains and then some. Also for those who are not very familiar with DIY investing, a lovely advisor can be good for someone even with their horrible fees, if they prevent that person from going antsy and doing something completely bizarre like selling investments during the downturn in 2008 and missing the subsequent recovery. If you want to look at how much those advisers/mutual fund fees are ACTUALLY skimming, in the long run, off your returns, check this handy (American) tool by Vanguard. Fees can be very huge in Canada: my father actually has Mackenzie Financial Mutual Funds that have a MER of 2.70% (Class A-type). https://personal.vanguard.com/us/insights/investingtruths/investing-truth-about-cost After 25 years, with 6.0% annual returns, 2.7% MER takes 53% of your actual returns, just because those few percentage points cripple your compounding gains. rhazes fucked around with this message at 09:41 on Sep 13, 2013 |
#
¿
Sep 13, 2013 09:33
|
|
|
|
| # ¿ Apr 26, 2024 12:33 |
|
|
Questrade has free ETF purchases (and I think every ETF is available) so a person could just go with that. However, that free ETF promotion could end at some point, not sure.
|
|
#
¿
Sep 13, 2013 15:54
|
|
|
Lexicon posted:True. Questrade's pricing is agressive and awesome... but I'm not too keen on the platform itself. I'm probably going to end up migrating off it at some point. Well, I haven't used anything else so I have no issues with it.. ignorance is bliss I guess. what are your qualms? Midtown posted:Can somebody explain to me in very basic language like you were talking to a child or barnyard animal what is the purpose of a TFSA, in actuality. I am very new at money management having spent many years as a student bumping around various homeless shelters so I'm not savvy on these things now that I'm bringing in Tim Hortons level cash after graduating with a prestigious 4 year BA. Yes, TFSA's are amazing for investing, because certain types of investments are taxed very harshly. This is going into a little extra detail about how things should be arranged. Ie. most bonds are bought at a premium (ie buy for $110 not $100), so they actually pay out more interest (say $30 instead of $20) and have a capital gains loss (ie. $10) when they mature/'expire' (return the initial $100). And interest is taxed regularly, unlike capital gains and dividends which are taxed differently and generally at a lower level. TFSA's aren't ideal for some types of investments, but I wouldn't say they are bad, it's just you prioritize being efficient later on, because if you are investing for retirement seriously, that $5k in contribution room every year should be easily maxed early in the year. For example, you lose 15% of your foreign dividends due to a withholding tax when they are in a TFSA, which a RRSP is exempt and you can get a rebate for a regular account. The best part of a TFSA is the compounding, because if your TFSA doubles in value, all of that is tax free, which is drat awesome, and no, it doesn't take up future contribution room at all. A RRSP is tax-free when you put the money in, but is then taxed when taken out, so all your gains are taxed. And a regular investment savings account would be post-tax money, that is then taxed on any earnings. If you're asking WHERE you can get a TFSA that isn't a plain jane high interest savings account, well, I use Questrade for ETFs, there are many other discount brokerages, but you can get it at TD and use their e-series mutual funds, you can get a ING direct one and pick up the streetwise fund. For those just starting off who want to buy a home in ~5 years, for those who have room in it and want to save for a house, putting it all in bonds/GICs/etc in a TFSA is not a bad idea at all, because you get the contribution room back at the end of the year after you withdraw, unlike a RRSP where you're penalized for withdrawing. So a TFSA _CAN_ be used for shorter-term investing in this way. And remember: DON'T EVER put money in equities/stocks if you need money at a specific time in the near future <10 years. rhazes fucked around with this message at 23:27 on Sep 13, 2013 |
|
#
¿
Sep 13, 2013 23:25
|
|
|
Lexicon posted:It's also highly probable, in my opinion, that marginal rates will be quite a bit higher in future. As I said: tread carefully. I fully agree with thinking taxes going up. I don't disagree personally with an expanded welfare state, but reality is that someone's gotta pay for all the people who bought an iPhone every year and went to Vegas/Mexico/Hawaii every year with their excess income, and only at the age of 40 decided to start saving for retirement despite having kids and their expenses. The government will have to increase the social net for the elderly, because old people vote in droves. People don't realize that you will need an absolutely huge amount in an investment account to life off of it for 30 years with am income even two thirds what you are earning as a worker (having a nest egg of 1.2 to 1.8 million to have a real/inflation adjusted income around 60k, off the top of my head). The retirement age will probably have to be increased at some point just because people are living longer (it's not retire at 60 and die before 75, it's retire at 60 and die around 85).. lot more years in retirement and that means more money needs to be saved. Besides, buying a home is the best investment there is! They aren't making any more land, you know.. after all, it can only go up! What's diversification? rhazes fucked around with this message at 06:26 on Sep 14, 2013 |
|
#
¿
Sep 14, 2013 06:24
|
|
|
Lexicon posted:Yeah. I think it's virtually guaranteed that income taxes need to rise fairly substantially in the next few decades. So many promises have been made by the state that simply cannot be kept under current financing: massive 25-odd year pension schemes for government workers and end-of-life healthcare for the boomers who are now hitting retirement in waves. Obviously, rules can and do change, but my TFSA is basically the foundation of my retirement plan. I'm a young person, so I agree. My opinion is that boomers have essentially presided over governments gradually dismantling the safety nets since the late 80s until now, and bought into that rhetoric because they were bribed by reductions in income taxes (which were paltry compared to the costs of eroding the safety nets and their benefits), so they can have their cake and eat it too. They're just lucky they entered the working force in a very long and prosperous boom. And now we're stuck with a poo poo economy with inflation outpacing interest rates for individuals because otherwise our economy will grind to a halt. And all that fun stuff like entry level jobs paying barely above minimum wage and requiring prior training. I feel like I'm going to have to endure personal austerity in order to retire as comfortably as I want, because of rising taxes to fix the structural deficit/chronic underfunding we have as well as rebuild the social safety nets that were indiscriminately axed. Lexicon posted:Honestly, I'm just a fussy nerd bastard when it comes to web stuff. I have no idea about the long term viability of Questrade, but yes, I hope idiots keep on day-trading so I can essentially never pay fees. I don't think I will ever have to pay much of any, because when you're adding money you almost never need to rebalance. Once I have a bunch more money I will at some point do Norbert's Gambit to do a very cheap currency conversion to USD and purchase some aspects of my portfolio as US-listed Vanguard ETFs, though. At least day-trading is trading equities that have a overall positive return, unlike Forex trading where the expected return is 0%. That's even more insane. I track my Portfolio on Google Finance anyway, so the Questrade interface isn't all that important to me as I don't really care how the stock is doing, except to try to buy ETFs comprised of a basket of foreign stocks when the principal stock markets they represent are also open, to prevent pricing errors.
|
|
#
¿
Sep 15, 2013 01:53
|
|
|
Bleu posted:Since the last time I was employed, the government implemented TFSAs. I finished my current grad studies, and that's pretty great, and I have some GICs ( There is nothing wrong with GICs. GICs are roughly equivalent to bonds (albeit illiquid), which are not a _GREAT_ return mind you, but risk free. I don't know much about bonds and GICs and optimizing, because I am <30yo and currently have 90% in equities and only 10% in short term corporate investment grade bonds (erm, should move to government ones at some point). I think the main take-away difference when you want to compare the two is that bonds are very very terrible in taxable accounts, whereas GICs are more tax efficient when they aren't in a TFSA or RRSP. I don't know much about TD's e-series, sorry, but if you skim the Canadian Couch Potato blog, there are multiple posts on it including the best way to set it up, some posts about this might be as old as 2010, so it may take some digging if you need a lot of detail and are nervous. But, I remember tidbits, briefly, the people in the branches may not even know about the e-series, because it is technically not part of the personal banking part of TD, it's part of the discount brokerage TD-Waterhouse Direct Investing/Discount brokerage. That's why it needs to be converted and the people in-branch probably won't have a clue, so the best way to convert is probably online after creating a regular mutual fund account at a bank branch. You can't exceed your TFSA (well you can and it probably won't ring alarm bells, but there are very nasty penalties for doing so, so don't!), you would have to have a second regular (taxable) ISA (investment savings account) which I imagine is fairly easy to set up once you already have the e-series TFSA set up. Good luck! rhazes fucked around with this message at 09:09 on Sep 15, 2013 |
|
#
¿
Sep 15, 2013 09:03
|
|
) from when I was an intern that are maturing in a month or two. I'd like to move my money into a more favourable investment setup, and indexed mutual funds sound cheap and stable and brainless, which appeals to me. I also have a really low cost of living (no kids, no plan for kids, no intention to own a house, really cheap hobbies), so I plan to make some pretty big contributions when I start working full-time. I get that TFSAs are pretty baller, and they become even more baller when you use them to invest, and I think that hitting the cap is going to be pretty easy for me.
|
Lexicon posted:I think GIC's are a pretty poo poo investment, honestly. For the hassle of setting one up, etc, I'd sooner just have a high-interest online savings account. Fun GIC fact: you need to pay the tax on "earnings" from a multi-year GIC each year, despite not actually receiving that money until the end of the term. Read this, CCP is more eloquent and smarter than me, at least, financially speaking. http://canadiancouchpotato.com/2013/03/06/why-gics-beat-bond-etfs-in-taxable-accounts/ And see how awful it is in practice.. https://www.pwlcapital.com/en/Advis...x-Return-on-CLF Granted, that's extremely low yield, but ouch.
|
|
#
¿
Sep 16, 2013 00:51
|
|
|
reflex posted:Anybody have any advice/recommendations for changing banks? I signed up with TD when I was 14 because they were right by my house, but their savings interest rates/chequing account conditions are absolute poo poo (customer service/branch hours is excellent though) and I'm tired of leaving money on the table for no reason. Is it as easy as walking into another bank and telling them I want to transfer everything over, going to TD and telling them I'm leaving, and then it's done? If their account fees are crap, try finding a credit union. I think selecting a banking option for work direct deposit/emergency fund account/chequing account/internet bill payment is important too. For long term/retirement investing, if you switch your bank you could keep the TD account and convert it to a TD direct investing account to hold e-series, yes.
|
|
#
¿
Sep 25, 2013 18:11
|
|
|
Squibbles posted:Any recommendations of which e-series fund to get? There's quite a few: Canadian Couch Potato lists this portfolio as their e-series portfolio. From the choices you've listed for options, I agree with him. Everything else on that list is crap, for various reasons (active management, ultra-large cap only, European index when there's no other way to diversify to emerging markets, etc) Canadian equity 20% TD Canadian Index – e (TDB900) US equity 20% TD US Index – e (TDB902) International equity 20% TD International Index – e (TDB911) Canadian bonds 40% TD Canadian Bond Index – e (TDB909) My personal flavor would be to have 15% Canadian equity, 25% US equity, 30% international, and 30% bonds though. Note that there is almost no reason to ever have foreign bonds, because all they do is add currency risk. That said, currency risk is not a big deal long term, and hedging reduces returns so I wouldn't suggest it unless you're very near retirement, and even then, you should be diversified to make it a non-issue and be pulling from your best performing assets (which would probably be CAN equities or Canadian bonds) if the Canadian dollar sucks. My reason for weighting Canada lower is that Canada is only 4% of the global stock market cap, whereas the US is 54%. I weigh international a bit higher, because it's my opinion that while the US is huge, it's still 54% of the world. You wouldn't want to over-invest in Apple or something else that can't really grow to a larger proportion of the market than it already is. I think 15% in domestic equities is clearly still a fair amount of home bias. reflex posted:I'm just thinking from a day-to-day banking level. Right now I have a choice to either pay $10/month for my chequings account or never dip below a $2500 balance. When I look at throwing a downpayment out there, $2500/$10 a month is not substantial but it's still $2500/$120 a year. I organize my budget via savings accounts, so I have multiple accounts making 0.35% and when I look at something like ING, I could be getting 1.35%. Agreed, definitely don't pay the banks more than you have to. This reminds me to close out the last remnants of my ING Direct TFSA, I have a miniscule amount of $ in there from when I used to use it as a emergency fund/short term savings. ING Direct Canada was bought out by Scotia Bank recently, if anyone is curious. I may just axe the regular high interest savings there too. Does anyone know what HISA's that Questrade offers (high interest savings account vehicles that are listed as if they're a mutual fund, but are CDIC guaranteed up to $100k), and what kind of fees are associated with buying/selling them through Questrade specifically? rhazes fucked around with this message at 22:11 on Sep 25, 2013 |
|
#
¿
Sep 25, 2013 18:59
|
|
|
I have another question of my own, is there any issues with transferring money from one TFSA to one at another institution in terms of procedure, to ensure that you don't lose that money for your contribution limit in that year and have to wait until next January to re-contribute? Or is TFSA -> TFSA money movement very simple?
|
|
#
¿
Sep 26, 2013 05:05
|
|
|
cowofwar posted:You have to set up a special transfer I think. Wish I could, but it's for my dad/mom and they can't take it out in December because it was in some stupid 2.70% MER mutual funds, but it becomes penalty-free to take out each of their first 3 years' of contribution in February. I looked it up and it's called a "Qualifying Transfer" but nowhere seems to explain how to make one of them, so guess when it comes time I'll call the institutions.
|
|
#
¿
Sep 26, 2013 06:50
|
|
|
Zo posted:I am living overseas for a while but will be back in Canada for a bit over new years, and want to set up an investment account during my visit. I can't speak to opening it but yes after it's open you should be able to do everything online. I am not sure what you mean by using your TFSA as a mutual fund account. You could have 8 TFSAs if you wanted to, at different institutions. Just don't go over the overall contribution limit. So you would need an TD e-series TFSA. If your original TFSA is from TD and can hold mutual funds, then yes you can just convert it. If you're transferring the TFSA, as I just found out, you need to have it transferred by the institution directly, not just take out, transfer, put back in. I don't even know if I answered your question, if I didn't, just ask it again. And welcome to this thread. Don't feel bad asking questions, the more activity in here, the bigger and better it will get and the more we'll all learn.
|
|
#
¿
Sep 26, 2013 08:27
|
|
|
melon cat posted:That depends- are the funds in the TFSA invested in any way? If yes, then you'll need to switch them to a TFSA Savings Deposit (sell the securities they're invested in) or wait for the investments to mature before you can switch the TFSA to a different FI. They are selling the (terrible, actively managed, 2.70% MER) mutual funds once they're eligible to cash in a large proportion of them in february, so it'll be transferred as cash. Does it really take a few weeks? I'd like to think Questrade would be a bit faster, but they are a discount brokerage, and you can't argue with how pretty much nothing you do has fees with them. They'll have a taxable investment account already setup at the destination of course.
|
|
#
¿
Sep 29, 2013 12:28
|
|
|
So, everything I've read suggests this, but just to be clear, the Canada home buyers' plan is in fact tax savings, as you are essentially able to take $25,000 pre-tax money from your RRSP and use it for a home without it being taxed ever, right? And you can also replace it in your RRSP specifically on years where you may earn more money, to reduce your overall taxes paid, during the duration? I'm nowhere near buying a house (probably 5+ years to even start thinking of it, more if the Vancouver housing market is still a mess), but this seems right? Also, is there any recommendations on the best VISAs/MasterCards/AmExs that don't have an annual fee, for those who are super spend-thrift? Finally fixing my banking and card situation, migrating from the crap that is VanCity's ridiculous fees (credit union or not, their chequing account fees are highway robbery) and my $500 student VanCity Enviro Visa. I will be making $64k/yr with pretty much zero benefits but take transit, have no car/car insurance, have a $10 monthly pay as you go phone, and don't pay for utilities/food (yay for well-off parents), just $300 a month. Any kind of cash-back cards with fees would likely be out of the question since my bills are nonexistent and my hobbies are also very cheap. Air Miles type benefits are okay, as I have previously traveled extensively and probably will continue to do so in the future. I previously had my TFSA at INGDirect, but have moved it all to Questrade where it is fully invested, so I opened up a THRIVE account there and setup payroll with the newest bonus promo, so I'm pretty happy with the now-Scotia Bank owned ING/Tangerine.
|
|
#
¿
Dec 8, 2013 03:34
|
|
|
What do you folks use to calculate your internal rate of return on your investments? I'm with questrade, so I have to do it myself. Feeling quite good about myself this week, I managed to rope in 6 people to sign up for ING Direct's (Tangerine soon) $50 promo for new account holders too, so I'm pushing even more money into my taxable account than I was expecting to. I'm okay with buying software (I think my dad has Quicken actually) to calculate it as well..
|
|
#
¿
Dec 23, 2013 00:51
|
|
|
tuyop posted:The only software you need is a calculator. When you are constantly adding money into an account, it will have a different return since it hasn't had the same increase necessarily as money that was in it initially. I'd like to know my actual return. Obviously if you have $100k and it grows to $110k, you have earned 10%. But if you then add $100k more right after, giving you $210k, has your overall return shrunk to 5%?
|
|
#
¿
Dec 23, 2013 01:32
|
|
|
tuyop posted:Does it matter? Average your rate of return over years, not weeks. I'm from a science background. I want to have hard numbers showing that I am outperforming a one-fund ING streetwise portfolio or a mutual fund, without making up a phony google finance portfolio to compare all the time, adding faux contributions, etc.- not rely on my intuition and feeling. I'm not interested in thinking I am doing better than the others, I am interested in knowing how well I am measuring up. I think my background helps me realize my failings as a human in terms of pattern-recognition and has really helped sell me on passive index-based investing, because even if I outperformed the market I'd like to think I'd be able to recognize it was due to luck. I actually had my portfolio in some strange stuff earlier this year (CMW and had a huge equities overweighting to VEE) but I got extremely lucky and got rid of CMW and added more assets to reduce my emerging markets exposure which was way overweighted and had a decent (speculative) return from these dumb/lucky choices. Lexicon posted:I've a spreadsheet that I built a while ago that achieves this. IRR stuff is built right into Excel. I'll post it later on (on phone right now). Cool, I'd love to have it.
|
|
#
¿
Dec 23, 2013 04:19
|
|
|
Thanks! It was a bit messed, though. The negative (current) value has to be at the bottom of the list for it to work. It's fixed here, for anyone who wants to use it. https://dl.dropboxusercontent.com/u/64444407/XIRR%20Example_fix.xlsx
|
|
#
¿
Dec 23, 2013 06:21
|
|
|
Lexicon posted:Weird, really? That doesn't make sense to me, because in cash flow analysis, 'contributions' are negative, followed by a positive 'payoff'. Yes it is. Oh, and I think the issue is the chronology, not the negative signs, because my 'fixed' version still works when I flip the signs. I imagine I could have just changed the excel formula to start at the bottom of the column and go to the top too.. And, my TFSA's IRR for 2013 is 26.42%! (I only finally switched from an ING Savings account TFSA which I used previously/last year into a TFSA at Questrade this year, and maxed it in a few large deposits over the year) rhazes fucked around with this message at 08:01 on Dec 23, 2013 |
|
#
¿
Dec 23, 2013 07:55
|
|
|
blah_blah posted:You almost certainly can't conclude this (that your specific portfolio outperforms some particular combination of funds) with high confidence, given a time frame of even 5 or 10 years -- the variance is simply too large over a time frame as short as that. Oh, well certainly. I just want to be able to know it's return compared to a say, a actively managed fund with a very similar asset distribution in terms of equities/bonds, US/Canadian/Emerging/EAFE, etc. And no I don't expect that huge return in the future- I attribute that to the fortunate time I added funds.
|
|
#
¿
Dec 23, 2013 15:20
|
|
|
If you are planning to use Questrade when you "switch" from mutual funds to ETFs, you shouldn't use mutual funds at all. Questrade has free ETF purchases, and sales are between 4.95 and 9.95, so you can DCA/frequently contribute to them without worrying about commissions obliterating your returns.
|
|
#
¿
Jan 2, 2014 09:47
|
|
|
I think that Jin Won Choi is not particularly brilliant. XBB (and VAB) are medium/aggregate bond funds, with an average duration of what, 7 years? Long term bonds are 20-30 year bonds, and due to the language used, I assume Buffett is referring to those (I'm sure he knows what a long term bond is.)
|
|
#
¿
Jan 2, 2014 16:05
|
|
|
It's not that bad. TFSA is the best place to put everything if there is room, but when room runs out, first move Canadian stocks into a margin account and bonds into the RRSP. Then move US/Intl funds into the RRSP if possible (and hold the NYSE equivalents for that foreign withholding tax exemption), or margin (doesn't really matter if you hold the NYSE equivalents.) Keep your Canadian (and global) REITs in your TFSAs always. Bonds should never be held in a taxable, buy GICs instead if you need fixed income.
|
|
#
¿
Jan 4, 2014 06:01
|
|
|
Jolarix posted:Furthermore, does the above US/Intl tax issue apply to Canadian-based funds which contain US/Intl equities (but which are still based in Canada/CND$)? Example: RBC International Index RBF559 I believe so. The foreign withholding taxes (on dividends) are levied by the government on the fund/stock itself, you don't even see it. There is a tax treaty with the US, so you would have no issue holding US equities in your RRSP to get back the US FWHT (but not international). In a taxable account, you get a tax credit for tax paid on it, so you'd be fine holding US and Int'l there. The take-away message is that in a taxable account or RRSP, you can get US FWHT back, but not international ones. IE VWO, XEF, XEC, VEA, VDU, etc. (You would need a true Canadian version, as most of our ETFs just hold the US ETF that holds the international stocks). I believe that RBF559 would probably pay foreign withholding taxes on dividends for most countries unless we have tax treaties for them. In a taxable account RBF559 would pay them, but you could claim it as a tax credit- unlike holding NYSE:VEA or VDU, where you would only ever be able to recover the US FWHT. That said, RBF559 has a 0.71% MER and assuming realistic dividends of a total or large market index of 2-2.5% assuming a 15% FWHT is a 0.3% to 0.375% "drag" on return every year. If you're in mutual funds and thinking about FWHT, you shouldn't, you should buy ETFs to get an even better RoI. That said, to my knowledge, it's still cheapest to buy VUN, XEF, XEC, or if you are able, even better, VTI, VEA, VWO for your US market exposure. Canadian ETFs and mutual funds directly holding international stocks is only an advantage if you are forced to hold them in your taxable account, and the options available are very poor with high MERs and low diversification (CIE, CWO being the obvious examples, with 0.72%/0.69% MER)
|
|
#
¿
Jan 4, 2014 17:13
|
|
|
Lexicon posted:Asking for a friend: anyone have any suggestions on how optimally to park a largeish amount of USD (think high five figure) at a Canadian bank or discount brokerage for a couple of years? The interest rates on USD-denominated savings accounts are terrible. Something safer than investing in VTI but with a higher return than savings would be ideal. Maybe look into VGSH or BSV (US-listed), or create your own USD market-linked term deposit/GIC by buying USD strip bonds of the appropriate duration that at maturity will pay you back your principal, and say VTI with the remainder? See here: http://canadiancouchpotato.com/2012/06/11/a-homemade-principal-protected-note/ . Not sure how to go about doing that with 50k at a Canadian broker, but you could look into it. I'd say these are your best bets. Looking at USD term deposits, the interest rates are absolutely poo poo. I think the second option would be safest, but could be a lot of work to set up.
|
|
#
¿
Jan 12, 2014 22:31
|
|
|
I'm sticking with Questrade, but I am certain that a lot of medium to big portfolios (say, 300k+) would do well with RBC DI now, if they had the choice. That quarterly inactivity fee is only for teeny accounts- I understand why they have it at most brokerages and I don't find it unreasonable- those tiny accounts probably are a net loss to the company. TD Waterhouse's trades are what, $30, unless you have a large portfolio? I bet they'll have to cut fees as well.
|
|
#
¿
Jan 15, 2014 06:11
|
|
|
Kal Torak posted:But nothing has changed with medium/big portfolios. This only removes the 50K restriction. You can trade for 9.99 at any of the big banks if you have 50K. OK then, well, it's still not good, but at least the people at the wrong brokerage for the amount they have aren't getting fleeced as bad as they used to be?
|
|
#
¿
Jan 15, 2014 06:31
|
|
|
Lexicon posted:An interesting bit of RRSP math from the housing bubble thread. PhilippAchtel has caused me to question a few of my assumptions about the magnitude of marginal tax rate change needed to justify RRSP contributions. What about the fact that your taxable income the year you withdraw is increased when you take it out of the RRSP by $2000, while cashing out the investment fully would only cause you to realize $700*.5 = $350 in income. (Added to $700, is $1050 vs $2000 in income from the RRSP). Yes it would be $1295 in actual money vs $1400, but your tax bracket would be much much higher to receive an equivalent actual amount of cash you receive that year. Taxable accounts are seriously amazing deferral mechanisms for stocks: if you buy and hold, you can defer taxes technically forever to the point of not paying them (unlike a RRSP/RRIF, the government WILL get it's slice of the pie.) Am I missing something here? I don't think so- there's no way RRSPs should be superior (given their unfavourable treatment of cap. gains/dividends) when tax rates are equivalent.
|
|
#
¿
Jan 17, 2014 04:13
|
|
|
cowofwar posted:Someone who has learned financial skills, has had opportunities in life and hasn't grown up in a poor and indebted family can maybe be held to blame for making poor financial decisions. I agree that the poor shouldn't be held to account, considering without someone benevolently teaching them, the best they'll be exposed to are financial shysters and predators. The middle class though, the insanity I see from people who constantly complain about having no money, thinking that a $2/hr raise at work is going to somehow change that. Many of my peers won't switch from their chequing accounts at the big banks where they have to have $1000 in their chequing to have no fees (or just less fees), especially if you include how they "don't pay anything" while getting 0% interest and have to have ALL their investments (crappy mutual funds) there, because they're too lazy to change their pre-authorized payments. It's a good thing that my current workplace has a pension (which I am definitely opting out of, because compared to someone who knows how to optimize their tax-situation/etc, a pension is a bit hamfisted) because when you give someone a dollar, they spend a dollar. Until people realize that that is not a sustainable long term budget, any further financial education is pretty much pointless, sad to say. Perhaps for 5% of people, if you show them how investing into indexes with a low cost brokerage will make them a tremendous amount of money and not enrich the financial industry, they will try to save more, but for the other 95%, no point. They only have pennies to invest anyways. I think most of the "middle" class have given up, really. They're not unhappy enough with their savings and future to actually make changes, and so I don't really feel too much pity for them. I put middle class in quotations, because most of them are significantly less middle-class than the middle class of a generation ago. I consider myself middle class, but to most me and my family/upbringing would be very upper-middle or upper- because the average middle class now pays for college 100% by student loans (they don't open up RESPs for their kids and contribute as part of their budget when they are born like people used to- future planning, what's that??.)
|
|
#
¿
Jan 19, 2014 03:25
|
|
|
Old Fart posted:Here's our situation. Of course a vanilla RRSP can't beat the MPP- you'd have to compare a RRSP with 4% ish employer match to it! The MPP takes about 12% of the 18% RRSP room you get per year- the pension adjustment.
|
|
#
¿
Feb 16, 2014 20:52
|
|
|
Golluk posted:I know I've only been investing for a little over a month now, so its all mostly meaningless, but I can't help but feel conflicted over the results so far. On the one hand, its great that I've gained 1% in a month. It seems to validate the balanced index plan. It'll come with time. I'm assuming you're indexing but- you'll stop checking it a few times daily, then maybe a few times a week, then maybe once a week or every few weeks to see what the new cash distributions/dividends are. The best part about indexing and investing is that it really makes me want to be spendthrift because I know every penny I save long term means an extra penny in my long term investments, not my emergency fund/short term savings and the return is pretty solid, not just GICs or an awful at-inflation savings account.
|
|
#
¿
May 4, 2014 18:14
|
|
|
Generally going with a low/free commission brokerage (AKA Questrade) means that the minimum practical limits are much lower to move into ETFs over index MFs.
|
|
#
¿
May 9, 2014 20:55
|
|
|
The more thinly traded ETFs, stick to limit orders if you're buying large quantities (hundreds of shares). Also, for me at Questrade, I still pay ECN fees (cents on small purchases, but on 10k+ purchases can be more than a few dollars) if my order removes liquidity from the market (either a market order or a limit order that is instantly filled).
|
|
#
¿
May 25, 2014 18:49
|
|
|
slidebite posted:Just did my first buys on RBC:DI for ETFs. Nice job. Those are all solid index ETFs so no need to fret.
|
|
#
¿
May 26, 2014 21:21
|
|
|
Remember guys, if you're investing in non-Canadian bonds, then they should be hedged. Currency volatility will destroy the stability that fixed income is supposed to provide. Doesn't seem like you can find CAD-hedged US govt bonds, so I guess you'd still have to hold a Canadian Govt bond ETF but instead of CAD Corporate bonds you could use some of XEB, XIG, XHY (and a few others are available from BMO) for corporate exposure.
rhazes fucked around with this message at 08:45 on Jun 2, 2014 |
|
#
¿
Jun 2, 2014 08:38
|
|
|
I saw RRSPs explained in a different way, that made them far more attractive than marginal blah blah blah blah explanations which get really, really complicated. I was previously not a fan of RRSPs (I haven't contributed to mine because my situation is a bit complicated despite thinking they are absolutely fantastic now) Given that when you contribute, you 'put in' say $1000, $710 of which is yours and $290 CRA's stake in the account (yes, this depends on current marginal tax rate). Then the growth compounds from capital gains, dividends, income, blah. Let's say over 10 years, the growth rate is 9% annually- a return of 137%. So the account grows to $2367 from $1000, of which $687 is CRA's and $1680 is yours. You then sell this stock and pull it out of your RRSP. If your tax rate is the same, you will end up with $1680 or so. Even if your tax rate increases slightly, they will still be equal to a TFSA (you can test out the math), and by far superior to a taxable account! Compare this to a taxable account, where you put in $710 for comparison's sake. Hypothetically let's say there is a small drag on growth due to dividend taxes of 11% (Canadian eligible dividends), so let's say it grows at 8.5%/year- a return of 126% - ending with $1605. Now, after 10 years, you sell this stock. You will then pay cap gains on this. (1605-710 = 895 * 0.5 = $447.50 of taxes), leaving you with $1157.50. Yes, the RRSP is still vastly superior at similar tax rates. That said, if you know your tax rate will increase as you're expecting big promotions/etc then yes, save the room. And yes, because it does increase your income when you take it out, it can affect OAS clawbacks.
|
|
#
¿
Jul 21, 2014 00:13
|
|
|
Lexicon posted:As far as I know, this one is as good as it gets. No other Canadian card charges the spot forex rate (apparently) - the rest help themselves to a 2.5% margin. I have this card and really like it - the one minor downside is that they have no paperless billing option in the year of our lord 2014 (!). That said, at least they auto-redeem the points. MBNA SmartCash mails you a cheque that you get 6 weeks later. Granted I have tangerine and can deposit it with my phone, but still. It's 1% rewards also doesn't have a cap, unlike MBNA SmartCash.
|
|
#
¿
Jul 26, 2014 18:03
|
|
|
JawKnee posted:I found this: How to apply for a TD e-series fund http://web.stanford.edu/~wfsharpe/art/active/active.htm Read this. Proof that active managed money on average will underperform passive strategies due to higher fees. Then all you need to do is understand that to statistically prove that someone is actually a skillful manager and not just lucky, you need 10 to 15 years of data to even assert that their excellent returns were due to skill and not random chance. And by no means does that imply that they will continue to beat the market.
|
|
#
¿
Sep 9, 2014 03:10
|
|
|
Baronjutter posted:Thanks so much, it doesn't look any harder than managing your own personal bank accounts, just instead of moving poo poo from savings to chequing you're moving it from one mutual fund to another. That can be good, depending on how conservative the portfolios are. If they are fully into equities and not bonds (ie. aggressive), then that is not a great risk-adjusted return. It depends on the fund, but it is likely that you are paying your adviser 1 to 1.25% of the 3-4% MER (since they are probably A-series funds). Likely 1.25% or the higher end, given that he makes more money off you if he puts you in funds that have a higher adviser trailer fee. You would have to find the funds for us to look them up. I have no doubt there are many funds that have similar names, and the same fund has no-load, front-load, DSC load, not to mention other non A-series funds with the same name.
|
|
#
¿
Sep 9, 2014 03:15
|
|
|
|
| # ¿ Apr 26, 2024 12:33 |
|
|
Guest2553 posted:Compounded over long term, high fees eat away a vast majority of your returns. Assuming an annualized return of 7%, paying 2.5% in fees reduces your returns in any given by about a third. It is literally be a difference worth hundreds of thousands of dollars in the long term because those lost earnings don't have a chance to compound and make you those fat stacks. Yep. Go use excel and chart a graph of $100k growing by 7% a year vs growing by 9.5% and notice how big the difference is after 10, 20, 30 years. Just as returns compound (compound interest), fees compound as well.
|
|
#
¿
Sep 9, 2014 03:17
|
|