Canadian Finance and Investing Thread - Paying More is our National Pastime

The Something Awful Forums > Discussion > Ask/Tell > Business, Finance, and Careers > Canadian Finance and Investing Thread - Paying More is our National Pastime

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Guest2553: Aug 3, 2012

Gonna start the process to open up a questrade account tomorrow and direct transfer my TFSA. Only got 10k to work with but will be dumping about 2k/money til it's maxed and then buy buy buy. In the meanwhile I'll look into some ETFs to purchase and maybe bump the thread with updates every now and again as I learn what I'm doing :toot:

.

e. ^^^^ half the reason I'm going questrade is because there's no fee to buy so you don't get dinged for making frequent low volume trades. Lexicon mentioned on the last page that Index funds are more of a 'babby's first investment tool' too. I know that TD charges fees for buying and the lowest they go is $9.95 once you have 50k so ETFs might be better for you.

But please keep in mind that I'm at home drinking to Dexter re-runs and don't know poo poo about poo poo.

vvvv thanks :v:

Guest2553 fucked around with this message at 07:57 on Jan 2, 2014

# ? Jan 2, 2014 05:28

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# ? May 14, 2024 09:56

Lexicon: Jul 29, 2003; I had a beer with Stephen Harper once and now I like him.

Guest2553 posted:

maybe bump the thread with updates every now and again as I learn what I'm doing .

You should definitely do this. If nothing else, it'll keep the thread alive.

Guest2553 posted:

Lexicon mentioned on the last page that Index funds are more of a 'babby's first investment tool' too. I know that TD charges fees for buying and the lowest they go is $9.95 once you have 50k so ETFs might be better for you.

But please keep in mind that I'm at home drinking to Dexter re-runs and don't know poo poo about poo poo.

A note on terminology - precision is pretty important with all this stuff.

An index fund is a fund (either mutual fund or ETF) that seeks to replicate the performance of a major stock index such as the S&P500. That's where 'passive' comes from in the active/passive debate - it's merely replicating the index itself and not trying to be clever about picking stocks. For example, XIC is an ETF that seeks to replicate the performance of the S&P/TSX Capped Composite Index. A rough mutual fund equivalent, offered by TD e-series is TDB900. Both are index funds.

So as for babby's first investment tool: I would say it is generally preferable to start with low cost index mutual funds (TD e-series is the only real option here), and then graduate to index ETFs (a plethora of options - I'm fond of Vanguard's offerings). The former has zero transaction fees, but higher MERs, while the latter has nonzero transaction fees with lower MERs. Perhaps more importantly, ETFs are a far more sophisticated investing tool (additional asset classes, treatment of currency, novel tax arbitrage, etc)

It's possible to effectively make use of both: I contribute weekly to an e-series portfolio (to get dollar cost averaging exposure to the ups and downs of the market), then I'll sell those in a batch at yearly or semi-yearly intervals, and move them into my ETF holdings.

# ? Jan 2, 2014 06:03

Kashwashwa: Jul 11, 2006; You'll do fine no matter what. That's my motto.

Vehementi posted:

Reading through this entire thread... I don't know if it's been corrected yet but I did not see it on the first page of posts.

There is no penalty for "early" withdrawing of RRSPs, aside from it possibly being a bad idea depending on your other income that year.

The "withholding tax" is not a penalty: it is them simply taking the tax early, just like your employer withholds income tax on your salary. If this ends up being more (or less) tax than is appropriate (calculated as if the money withdrawn from RRSP is standard income), then this is all fixed come tax time.

Example:

You are 25 and you lose your job at the end of 2013 and have no income in 2014. In mid-2014, you withdraw $5000 from your RRSP and pay "withholding tax" of 5% or 10% or whatever it is. You earn no other income in 2014. Your tax refund for the 2014 tax year (received in early 2015) will refund those taxes, because the government guessed wrong and took extra (it turned out that you are under the $9000 allowance, under which you pay 0% tax rate).

Example:

You have $100k of income and want to buy a boat or some poo poo so you pull $5000 from your RRSP like a dumbass. 5% or 10% or whatever is withheld. During tax season next year, you will actually owe even more tax, because that $5000 should have been taxed at your marginal rate which is like 38% or some poo poo so you're going to get a tax bill for ~$1500.

Thanks so much for explaining this... I was still misunderstanding RRSP withdrawal. This makes converting my RRSP into a TFSA so much simpler.

# ? Jan 2, 2014 06:12

blah_blah: Apr 15, 2006

blah_blah posted:

I'm looking at transferring about 200k (a little bit more) from CAD to USD. Is Norbert's Gambit the best way to do so (looks like I'd be paying the bid-ask spread of about 0.2% over the spot rate), or can I get competitive rates on a transaction of that size through TD Waterhouse/BMO InvestorLine/etc? Are companies like KnightbridgeFX a reasonable alternative in this amount range?

blah_blah posted:

Anyone have any thoughts on a somewhat weird situation? I was a dumbass and didn't open a brokerage account in Canada before becoming a US resident and now it seems impossible to (which kind of takes Norbert's Gambit off the table). Anyways, I have about 250k CAD that I want to move over to USD and invest in the US (rationale: better investing options, potential CAD deflation, tax implications to leaving money in Canada). What are the alternatives, from best to worst? I assume they basically are to call up large banks (I have accounts with BMO and TD) and ask how brutally they will shaft me on a currency conversion of that size, or talk to forex companies (who presumably would shaft me slightly less but tie up my money for a much longer period of time).

Finally took care of this over the holidays using TD Waterhouse.

Anyways, the whole process, using Norbert's Gambit, was really easy. The simplest version, which I did, works as follows:

Pick an interlisted stock on the TSX/NYSE with low volatility and high volume (TD Bank is probably the candidate stock which works the best, it has a higher share price than other Canadian banks so the bid/ask spread penalty works out to be a bit less)
Prepare an online buy order through for the desired amount of the interlisted stock on the TSX (hence, in Canadian dollars) that you want
Call up the phone trading desk, explain what you have set up, and tell them that you want them to:
1) journal the shares over to the corresponding interlisted stock on the NYSE as soon as the buy completes
2) place a sell order for all of the stocks as soon as the buy completes
Note that this generates a pretty hefty commission -- the base phone commission plus a small amount per share. For the volume I did, it was around $200. My understanding is that the commission is substantially lower through RBC Direct Investing or BMO InvestorLine, but time was of the essence for me.
Wait a couple of tense minutes for the sell order to complete, and withdraw your USD cash in a few business days after the journaling is complete

The commission cost me about 7 bps and the bid/ask spread+market fluctuations cost me something in the area of 10 bps. That means that the effective exchange rate I was getting was spot + 0.17% -- way better than you are going to get anywhere else. If you have a bunch of CAD that you want to exchange for USD (or vice versa), this is awesome and I highly recommend looking into it.

# ? Jan 2, 2014 06:39

Vehementi: Jul 25, 2003; YOSPOS

^^^ what is bps? It sounds like cents per share or something? Ah 100ths of a percent. http://www.investopedia.com/terms/b/basispoint.asp

Kashwashwa posted:

Thanks so much for explaining this... I was still misunderstanding RRSP withdrawal. This makes converting my RRSP into a TFSA so much simpler.

I... is that a thing people do? I suppose if you are in a low income year and have a lot of unused TFSA contribution room, you could withdraw from RRSP and put it into TFSA in order to just never pay tax on that money basically.

Vehementi fucked around with this message at 06:46 on Jan 2, 2014

# ? Jan 2, 2014 06:40

Lexicon: Jul 29, 2003; I had a beer with Stephen Harper once and now I like him.

blah_blah posted:

Finally took care of this over the holidays using TD Waterhouse.

Anyways, the whole process, using Norbert's Gambit, was really easy. The simplest version, which I did, works as follows:

Pick an interlisted stock on the TSX/NYSE with low volatility and high volume (TD Bank is probably the candidate stock which works the best, it has a higher share price than other Canadian banks so the bid/ask spread penalty works out to be a bit less)
Prepare an online buy order through for the desired amount of the interlisted stock on the TSX (hence, in Canadian dollars) that you want
Call up the phone trading desk, explain what you have set up, and tell them that you want them to:
1) journal the shares over to the corresponding interlisted stock on the NYSE as soon as the buy completes
2) place a sell order for all of the stocks as soon as the buy completes
Note that this generates a pretty hefty commission -- the base phone commission plus a small amount per share. For the volume I did, it was around $200. My understanding is that the commission is substantially lower through RBC Direct Investing or BMO InvestorLine, but time was of the essence for me.
Wait a couple of tense minutes for the sell order to complete, and withdraw your USD cash in a few business days after the journaling is complete

The commission cost me about 7 bps and the bid/ask spread+market fluctuations cost me something in the area of 10 bps. That means that the effective exchange rate I was getting was spot + 0.17% -- way better than you are going to get anywhere else. If you have a bunch of CAD that you want to exchange for USD (or vice versa), this is awesome and I highly recommend looking into it.

Wow, $200 in commissions? I do Norbert's Gambit all the time with Investorline, and it costs me two trades at $9.95 per trade (and that's over the phone - they charge at the online rate because it's a transaction their interface can't handle).

Also, to minimize market risk, you can use an ETF called DLR / DLR.U. It exists purely as a vehicle for Norbert's Gambit.

# ? Jan 2, 2014 07:33

blah_blah: Apr 15, 2006

Yeah ... ideally I would have been able to open a RBC DI or BMO IL account but there were some real-world complications (which is why the quoted posts are from several weeks ago, and I just got around to doing it now) that necessitated doing it through TD Waterhouse.

I was being flippant about the market risk -- IMO it's much better to use TD.TO/TD because the bid-ask spreads relative to share price are much better. TD has a pretty stable stock and enough volume that even gambits over 1M shouldn't be an issue at all (mine probably would have closed even faster in normal circumstances -- I did it on one of the slowest trading days of the year). Ignoring commissions, my understanding is that doing the gambit with DLR / DLR.U costs upwards of 20 bps even in a best case scenario.

e: to remove unnecessary quote

blah_blah fucked around with this message at 08:21 on Jan 2, 2014

# ? Jan 2, 2014 08:13

Lexicon: Jul 29, 2003; I had a beer with Stephen Harper once and now I like him.

^ Good to know. I'll try with TD next time and compare to my historical results (I'll post a comparison here). The spread seemed very reasonable last time I did it with DLR but what you're saying makes sense.

# ? Jan 2, 2014 08:18

rhazes: Dec 17, 2006; Reduce the rectal spread!
Use glory holes instead!

An official message from the British Columbia Centre for Disease Control

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

Guest2553: Aug 3, 2012

gently caress, tablet erased my post.

Anyways...I'm looking to keep things simple and east, especially while starting out, so the couch potato strategy seems like a good starting point for me. CCP's model portfolios have a 60/40 equities/bond split (equities further broken down into 20%CAN/40%US). The bond percentage seems a bit high given the very low interest rates and my ability to accept a lot more risk in the long term. I was thinking something like 25-30% bonds would be more reasonable, in part based on some internet wizard's rule of thumb stating "Maximum tolerable Loss X 2 = maximum equity allocation". Is that total crazytalk?

My biggest thought is that in the short term I'm better off investing rather than waiting for the perfect allocation (since there isn't one) and let compound interest do it's thing.

Guest2553 fucked around with this message at 09:58 on Jan 2, 2014

# ? Jan 2, 2014 09:55

Vehementi: Jul 25, 2003; YOSPOS

^ I'm going to be making that choice soon and this post my friend pointed me to seems to agree with you. http://www.moneygeek.ca/weblog/2013/06/01/open-challenge-canadian-couch-potato/

# ? Jan 2, 2014 11:14

Jolarix: Feb 28, 2004; Your reading skill has increased by +1 point(s).

I found a sample Risk Tolerance Questionnaire (from TDCT) that helps establish your "Investor Profile". Might be useful to some here: http://tinyurl.com/risktol

# ? Jan 2, 2014 15:41

rhazes: Dec 17, 2006; Reduce the rectal spread!
Use glory holes instead!

An official message from the British Columbia Centre for Disease Control

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

Lexicon: Jul 29, 2003; I had a beer with Stephen Harper once and now I like him.

rhazes posted:

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.)

Yeah, this guy seems to be at least partially disingenuous or misinformed. He keeps referring to XBB as a "long term bond ETF". Almost half of the maturities are in the 1-5 year range: http://ca.ishares.com/product_info/fund/overview/XBB.htm

That said, of all things investing - bonds are the most opaque and mysterious to me right now. I'm entirely in cash right now (I liquidated everything for easier & cheaper migration to Investorline), and I can't see myself ending up with 40% bonds when all is said and done. Maybe 20% XBB at most.

# ? Jan 2, 2014 18:05

Guest2553: Aug 3, 2012

It seems kinda douchey that he refers to himself as "Dr" and sells portfolios on a website that looks only a step removed from a geocities template.

Thanks for that risk questionnaire as well; it turns out I straddle the moderately/very aggressive line :v:

EDIT: Also who wants to "refer" me to questrade?

e2. vvvv Both you and tuyop hit me up at about the same time so I gave you both my info and whoever gets back to me first wins mine. My wife will be making an account too so you should each get one (eventually).

Guest2553 fucked around with this message at 19:01 on Jan 2, 2014

# ? Jan 2, 2014 18:14

Kal Torak: Jul 17, 2003; When Giles sends me on a mission, he says "please". And afterwards I get a cookie.

Guest2553 posted:

It seems kinda douchey that he refers to himself as "Dr" and sells portfolios on a website that looks only a step removed from a geocities template.

Thanks for that risk questionnaire as well; it turns out I straddle the moderately/very aggressive line

EDIT: Also who wants to "refer" me to questrade?

I can. PM me your name, phone number and email.

# ? Jan 2, 2014 18:34

Lexicon: Jul 29, 2003; I had a beer with Stephen Harper once and now I like him.

'Dr' Jin Choi's credibility rapidly dropping...

moneygeek.ca posted:

Hi there,

If you're looking for MoneyGeek, you're in the right place. However, due to reasons I can't discuss publicly, the site is down for now. Hopefully, the site will be back up quickly but there are no guarantees. We ask for your patience as we work out the issues.

In the meanwhile, we'll continue to run our blog and make available our free book, so that we can provide investment education and market commentary. If you have any questions, please send me a line at info@moneygeek.ca.

Sincerely,

Dr. Jin Choi

# ? Jan 2, 2014 18:53

Jolarix: Feb 28, 2004; Your reading skill has increased by +1 point(s).

What is the easiest / cheapest way to receive a Equifax/Transunion report? Am I entitled to receive it once/year for free, or similar?

# ? Jan 2, 2014 19:13

DariusLikewise: Oct 4, 2008; You wore that on Halloween?

Jolarix posted:

What is the easiest / cheapest way to receive a Equifax/Transunion report? Am I entitled to receive it once/year for free, or similar?

You're eligible for a credit report each year. which you can get by filling out a small form and sending in two pieces of government photo ID.

http://www.equifax.com/ecm/canada/EFXCreditReportRequestForm.pdf

It's not like the credit score report you get from equifax if you pay, but a breakdown of all the things credit companies look at. Current credit/past credit/credit inquiries if I remember correctly.

# ? Jan 2, 2014 19:20

Guest2553: Aug 3, 2012

It's been a couple years since I looked into it, but yes if you're willing to wait for a mailed copy after submitting a form.

It was worth my 15 bucks or so to have it done on the spot.

# ? Jan 2, 2014 19:21

Vehementi: Jul 25, 2003; YOSPOS

Arg, Questrade doesn't accept my credit union when creating an account. Hopefully their support can help...

edit: nevermind, I did not read the tooltip on the other field saying I can just use the generic credit union of BC one.

edit 2:

VVV YUP

Vehementi fucked around with this message at 22:41 on Jan 2, 2014

# ? Jan 2, 2014 22:05

Guest2553: Aug 3, 2012

Vehementi posted:

Arg, Questrade doesn't accept my credit union when creating an account. Hopefully their support can help...

edit: nevermind, I did not read the tooltip on the other field saying I can just use the generic credit union of BC one.

Jesus christ this online application form is horrendous. It took an hour or so to create an account because the applet kept crashing halfway through. It can't accept my address so I have to use my parent's address which it doesn't like but will at least take. My job category is nothing close to any of the limited options that are presented. It doesn't like my employer's address. And I'm only partway through. :suicide:

# ? Jan 2, 2014 22:40

Vehementi: Jul 25, 2003; YOSPOS

My eSign failed... they gave me a bunch of questions about financial institutions I have never so much as opened an account of any type with, so the correct answers were "none of the above" for everything. It gave me 2 sets of such questions and both failed. Time to mail poo poo like a retard. gently caress.

# ? Jan 2, 2014 22:46

Lexicon: Jul 29, 2003; I had a beer with Stephen Harper once and now I like him.

Guest2553 posted:

Jesus christ this online application form is horrendous. It took an hour or so to create an account because the applet kept crashing halfway through. It can't accept my address so I have to use my parent's address which it doesn't like but will at least take. My job category is nothing close to any of the limited options that are presented. It doesn't like my employer's address. And I'm only partway through.

Minor but persistent annoyances about Questrade's online infrastructure was the main driver in precipitating my consolidation from there over to Investorline. Trades cost double there ($10 vs $5, and that's at the Flat-Fee Threshold rate) but for me it was worth it given how few trades I do per year (and how easily I get annoyed by bad web apps).

# ? Jan 2, 2014 22:47

Guest2553: Aug 3, 2012

Off the table until I get back to Canada unfortunately. Going through their ~~dissertations~~ user agreements makes me wish I had this much latitude when determining my own job performance :allears:

EDIT: Never heard of the Canadian Investor Protection Fund before but I'm glad it exists.

e2: double gently caress this stupid bullshit loving verification poo poo I want to invest with someone else out of spite now. I have my loving credit report in front of me gently caress you for telling me who I have a loan with when the loving papers are on my desk gently caress fuckity poo poo gently caress. Urrgh.

Guest2553 fucked around with this message at 23:39 on Jan 2, 2014

# ? Jan 2, 2014 23:13

Grouco: Jan 13, 2005; I wouldn't want to belong to any club that would have me as a member.

Vehementi posted:

My eSign failed... they gave me a bunch of questions about financial institutions I have never so much as opened an account of any type with, so the correct answers were "none of the above" for everything. It gave me 2 sets of such questions and both failed. Time to mail poo poo like a retard. gently caress.

Same thing happened to me. Each question was "None of the Above," unless I've had my identity stolen... You can upload the documents. Screw mailing them in.

# ? Jan 2, 2014 23:20

slidebite: Nov 6, 2005; Good egg

So what are your plans with the tfsa this year? I am seriously looking at being uncharacteristically lopsided for me at least and putting it all in Amazon.

# ? Jan 2, 2014 23:25

tuyop: Sep 15, 2006; Every second that we're not growing BASIL is a second wasted; Fun Shoe

slidebite posted:

So what are your plans with the tfsa this year? I am seriously looking at being uncharacteristically lopsided for me at least and putting it all in Amazon.

I'm just going to take $5500 to a casino and play poker. Same thing, really, but I'll have to pay taxes on my returns!

Are there any casinos that are TFSA compatible other than the stock market?

# ? Jan 2, 2014 23:28

Grouco: Jan 13, 2005; I wouldn't want to belong to any club that would have me as a member.

tuyop posted:

I'm just going to take $5500 to a casino and play poker. Same thing, really, but I'll have to pay taxes on my returns!

Are there any casinos that are TFSA compatible other than the stock market?

You're saying I can't hold my bet365 account in my TFSA... :canada:

# ? Jan 3, 2014 00:01

slidebite: Nov 6, 2005; Good egg

tuyop posted:

I'm just going to take $5500 to a casino and play poker. Same thing, really, but I'll have to pay taxes on my returns!

Are there any casinos that are TFSA compatible other than the stock market?

I'll take my odds on Amazon over poker though.

Don't get me wrong, I know a single equity by definition is pretty much the epitome of gambling, but I have very little in individual equities and if I'm going to gamble, I'll do it in the TFSA. I've been meaning too since well, last year. :negative:

Edit: The rest of my portfolio is quite diversified. RRSPs this year will be mostly index funds across the board with about 25% cash, which is already heavily weighted in my RRSP and LIRA. With a couple of small exceptions ($<1K) the equities I do hold are financial industry.

slidebite fucked around with this message at 00:55 on Jan 3, 2014

# ? Jan 3, 2014 00:40

Vehementi: Jul 25, 2003; YOSPOS

If you're going to use gambling as an example at least don't choose the one game that *isn't* rigged against you.

# ? Jan 3, 2014 00:48

tuyop: Sep 15, 2006; Every second that we're not growing BASIL is a second wasted; Fun Shoe

I think poker is the perfect analogue to market timing or buying individual securities. The market is not trying to take your money like a casino is, so it's not like roulette or keno or whatever, and with a bit of knowledge and luck you can "win" and come out ahead. It's still gambling rather than investing but it's not a rigged game of chance.

# ? Jan 3, 2014 01:06

slidebite: Nov 6, 2005; Good egg

Fair point, and this probably goes without saying, but not all equities are equal. Equating poker with, say, a Canadian Bank stock is only a fair comparison in the sense that it is possible you will lose some money on a bank stock in the long run. However, you will almost certainly lose all of it in poker. That said, I am not foolish and have all my eggs in 1 basket and I'd certainly never invest anything in an equity I couldn't afford to lose.

Anyhow, forget about Amazon chat, what basic strategies do most employ with the TFSA? Basically mirror other accounts or do you diverge to more/less risk?

slidebite fucked around with this message at 01:58 on Jan 3, 2014

# ? Jan 3, 2014 01:31

Lexicon: Jul 29, 2003; I had a beer with Stephen Harper once and now I like him.

slidebite posted:

Fair point, and this probably goes without saying, but not all equities are equal. Equating poker with, say, a Canadian Bank stock is only a fair comparison in the sense that it is possible you will lose some money on a bank stock in the long run. However, you will almost certainly lose all of it in poker. That said, I am not foolish and have all my eggs in 1 basket and I'd certainly never invest anything in an equity I couldn't afford to lose.

Anyhow, forget about Amazon chat, what basic strategies do most employ with the TFSA? Basically mirror other accounts or do you diverge to more/less risk?

I think individual equities in a TFSA is a spectacularly bad idea. Loss of principle => no capital loss and you lose the contribution room forever. That has a pretty large opportunity cost.

# ? Jan 3, 2014 05:00

Sassafras: Dec 24, 2004; by Athanatos

Sassafras fucked around with this message at 03:25 on Jan 19, 2014

# ? Jan 3, 2014 07:53

slidebite: Nov 6, 2005; Good egg

Lexicon posted:

I think individual equities in a TFSA is a spectacularly bad idea. Loss of principle => no capital loss and you lose the contribution room forever. That has a pretty large opportunity cost.

Flipside, no taxes whatsoever on gains. I think the chances of gains over losses on "good" (loaded term I know) mitigate the loss side, but that's my opinion. TFSA in my opinion, although admittedly idealistic, is looking at the upside. I don't have all ups completely in my portfolio, but they certainly outnumber the downs, all things being equal I'd prefer to take the tax free gains than worry about capital losses, no question. Do you differ?

e: So do most of you mirror your TFSA to reflect your risk in other accounts? For the most part, I do but I am thinking to go out on a limb a little (lot) more myself.

slidebite fucked around with this message at 10:06 on Jan 3, 2014

# ? Jan 3, 2014 08:49

tuyop: Sep 15, 2006; Every second that we're not growing BASIL is a second wasted; Fun Shoe

slidebite posted:

Flipside, no taxes whatsoever on gains. I think the chances of gains over losses on "good" (loaded term I know) mitigate the loss side, but that's my opinion. TFSA in my opinion, although admittedly idealistic, is looking at the upside. I don't have all ups completely in my portfolio, but they certainly outnumber the downs, all things being equal I'd prefer to take the tax free gains than worry about capital losses, no question. Do you differ?

e: So do most of you mirror your TFSA to reflect your risk in other accounts? For the most part, I do but I am thinking to go out on a limb a little (lot) more myself.

When I get to that point, I'm just going to treat all my accounts as part of the same portfolio, so yeah, the TFSA holdings are part of the same 80/20 stock/bond mix that I have and so on. But this whole capital losses thing adds another dimension to it that I hadn't thought of. What asset classes are best to have in a TFSA?

I think we're both now asking the same question.

# ? Jan 3, 2014 16:31

Lexicon: Jul 29, 2003; I had a beer with Stephen Harper once and now I like him.

slidebite posted:

Flipside, no taxes whatsoever on gains. I think the chances of gains over losses on "good" (loaded term I know) mitigate the loss side, but that's my opinion. TFSA in my opinion, although admittedly idealistic, is looking at the upside. I don't have all ups completely in my portfolio, but they certainly outnumber the downs, all things being equal I'd prefer to take the tax free gains than worry about capital losses, no question. Do you differ?

e: So do most of you mirror your TFSA to reflect your risk in other accounts? For the most part, I do but I am thinking to go out on a limb a little (lot) more myself.

It's not just capital losses you need to worry about though. If you put $X of RIM into your TFSA in 2011, and the stock plummets, you've lost the opportunity to write off against your gains and you've lost that TFSA room forever. That just magnifies greatly the already substantial loss of $X itself - you no longer are entitled to $X worth of tax free growth over the next 40 odd years.

Basically, if I were going to do the stock picking thing - I'd do it in a non-registered account. You can probably guess which I think is a more likely outcome in general: gains or losses. That's opposed to index investing - where you can't help but make money over a long enough period if you're low-cost, diversified, patient and re-balancing.

As for the portfolio split - tax efficiency is an important considerations. Roughly speaking, I'm aiming to have REITs, bonds, US/international equities in my TFSA, and preferred shares and Canadian equities in my non-registered (preferential dividend treatment). I don't have an RRSP right now.

# ? Jan 3, 2014 16:44

blah_blah: Apr 15, 2006

Lexicon posted:

As for the portfolio split - tax efficiency is an important considerations. Roughly speaking, I'm aiming to have REITs, bonds, US/international equities in my TFSA, and preferred shares and Canadian equities in my non-registered (preferential dividend treatment). I don't have an RRSP right now.

For US/international equities in your TFSA, you will be incurring foreign withholding taxes that you won't be able to recover.

# ? Jan 3, 2014 21:27

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# ? May 14, 2024 09:56

Lexicon: Jul 29, 2003; I had a beer with Stephen Harper once and now I like him.

blah_blah posted:

For US/international equities in your TFSA, you will be incurring foreign withholding taxes that you won't be able to recover.

I know. Not much I can do about that except open an RRSP, which is incompatible with my current tax situation.

# ? Jan 3, 2014 21:31

The Something Awful Forums > Discussion > Ask/Tell > Business, Finance, and Careers > Canadian Finance and Investing Thread - Paying More is our National Pastime

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