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So.. in the future I might be relocating to the US. Is it safe to assume I'll be able to get my Canadian Broker (VB) to transfer my holdings to a US one? Or will I actually have to sell off my holdings? Also, once the transfer is done if it can happen, how does this affect my US\Canadian tax filing? Will I only need to file US taxes for my investments from the beginning date of the transfer?
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Jul 10, 2014 02:31
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Those are some complicated questions. Tax becomes terribly confusing whenever you add a border. But if you are ceasing to be a resident, you are going to have a deemed disposition on all your property which includes your investments. Your best bet is to seek some real advice from a real tax accountant.
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Jul 10, 2014 03:35
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Lexicon posted:XIC. They're down to 0.05% MER. I prefer XIU for liquidity. It trades at phenomenal volumes daily. It's the top 60 only, but thats more than enough to mirror the general index pretty much exactly.
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Jul 10, 2014 14:31
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Saltin posted:I prefer XIU for liquidity. It trades at phenomenal volumes daily. It's the top 60 only, but thats more than enough to mirror the general index pretty much exactly. This is the one I use.
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Jul 10, 2014 14:38
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Saltin posted:I prefer XIU for liquidity. It trades at phenomenal volumes daily. It's the top 60 only, but thats more than enough to mirror the general index pretty much exactly. Understandable. I guess I like the additional diversification of the smaller caps in there, but as you say, it's not really making a difference in terms of adherence to the index. For the same reason, I favour VTI over VOO.
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Jul 10, 2014 15:03
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Lexicon posted:Understandable. I guess I like the additional diversification of the smaller caps in there, but as you say, it's not really making a difference in terms of adherence to the index. For the same reason, I favour VTI over VOO. That's cool, but never underestimate the power of high volume. With lower volume funds when the amount of money invested becomes sizeable it can take quite a while to collapse a position without adversely affecting your price. You can move the price quite a bit if you decide/need to sell a large amount in one day. Sometimes there aren't enough buyers. The fund you listed isn't exactly "low volume", and it'll probably never be an issue, but it isn't high enough for me. With XIU you could sell a million dollars worth of shares all at once and probably have them settle all within a couple pennies of each other in seconds. I like that. A lot. I tend to get my smaller cap exposure in direct equity investment. I probably shouldn't, but I do. Saltin fucked around with this message at 20:33 on Jul 10, 2014 |
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Jul 10, 2014 20:30
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^^ Noted, for the future when I have an unfathomably large portfolio 
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Jul 10, 2014 20:35
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slidebite posted:What's the go-to Canadian equity ETF? VCN? e: XIC it is!  Based on the above conversation, I'm not worried about our accounts hitting 7 figures anytime
Guest2553 fucked around with this message at 05:27 on Jul 14, 2014 |
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Jul 11, 2014 04:17
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Thanks for the discussion in the volue with XIU. Never thought of that before, really. What about Intl/non US funds? Thoughts on XEF?
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Jul 11, 2014 17:24
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slidebite posted:Thanks for the discussion in the volue with XIU. Never thought of that before, really. I hold XEF and a bit of XEC (as a very long term, TFSA play).
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Jul 11, 2014 17:32
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slidebite posted:Thanks for the discussion in the volue with XIU. Never thought of that before, really. I'm holding VEF in my TFSA but it's a pretty recent buy.
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Jul 11, 2014 17:33
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Hi guys, I just got myself set up with a self directed investment account at TD. I know, you can't time the market etc. However, that being said, I am a housing doomsdayer who expects the collapse sometime in the next 1-2 years (which like everyone else I've been saying since 2010, sigh). What I would like to do is set myself up in a very conservative position so that when these bubbly equity markets pop I am in a position to make good buys. However, currently I have a bunch of CAD sitting in a savings account. What is the best way to reduce currency risk without getting chewed by fees? If I moved this over to a blend of low-MER international/japanese/US index mutual funds would that would serve the purpose? Other thoughts I've had is holding physical silver and foreign currencies, but the transaction costs to do that are extremely cost prohibitive. [edit] Just dug through some of my old posts and the recommendations you folks had. HXD is a really interesting option and I think I am going to make it a part of my portfolio. Corrupt Cypher fucked around with this message at 19:09 on Jul 11, 2014 |
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Jul 11, 2014 18:59
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slidebite posted:Thanks for the discussion in the volue with XIU. Never thought of that before, really. I hold ZEA because it will eventually hold all international securities directly. It is a newer fund, so the volume/liquidity is a bit lower for now. I also hold XIC, VUN, and XBB. All long-term positions.
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Jul 11, 2014 19:11
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Corrupt Cypher posted:Other thoughts I've had is holding physical silver and foreign currencies, but the transaction costs to do that are extremely cost prohibitive. I won't try and dissuade you, but I will invite you to justify to yourself why this is a good idea. Silver is a shiny metal, Currency, foreign or otherwise, is paper that becomes less valuable by the year. Neither pay you to own them. Neither is a very good foundation upon which to build wealth.
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Jul 11, 2014 19:14
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Lexicon posted:I won't try and dissuade you, but I will invite you to justify to yourself why this is a good idea. Silver is a shiny metal, Currency, foreign or otherwise, is paper that becomes less valuable by the year. Neither pay you to own them. Neither is a very good foundation upon which to build wealth. I am completely in agreement with what you've said. Where I'm coming from is that I'm just entering the investment market now and I see some very crazy equity bubbles across the world. Canadian housing, Chinese assets, and the effects of QE in the US. When I step back and look at it, it doesn't look like there could be a worse time to put cash into the market. I would relate it to an old lady dumping all of her mattress cash in Q1 2007 into the stockmarket only to see the bubble pop at that exact time. What I'd rather do is keep that cash (mitigating currency devaluation as best as possible) on the sideline for when the market goes on sale again a la 2008.
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Jul 11, 2014 19:23
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Corrupt Cypher posted:Other thoughts I've had is holding physical silver and foreign currencies. A dollar's worth of gold bought in 1801 would be worth about 73 bucks by 2011. The same dollar invested in the US stock market would be worth $10.15 million*. I don't imagine silver would be very far off the former. Precious metals are speculation that won't come through for you when you need it most.  Unless the whole monetary system is in danger. Maybe.*source: Millionaire Teacher, ch 8. Guest2553 fucked around with this message at 19:31 on Jul 11, 2014 |
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Jul 11, 2014 19:27
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Corrupt Cypher posted:Hi guys, I just got myself set up with a self directed investment account at TD. I know, you can't time the market etc. However, that being said, I am a housing doomsdayer who expects the collapse sometime in the next 1-2 years (which like everyone else I've been saying since 2010, sigh).
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Jul 11, 2014 19:30
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cowofwar posted:If you're concerned about the equity markets why would you hedge with silver instead of gold? Ehhhhh I went on a Peter Schiff bend for a while and read a bunch of his stuff. I completely agree there is no intrinsic value and it is a bullshit investment, but when I start thinking about how QE has effected capital markets it's hard for me to not think that about Bank of America stock either. Why silver instead of gold? If you compare historical/present values it appears that silver is relatively undervalued compared to gold right now.
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Jul 11, 2014 19:46
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Corrupt Cypher posted:I am completely in agreement with what you've said. Where I'm coming from is that I'm just entering the investment market now and I see some very crazy equity bubbles across the world. Canadian housing, Chinese assets, and the effects of QE in the US. When I step back and look at it, it doesn't look like there could be a worse time to put cash into the market. I would relate it to an old lady dumping all of her mattress cash in Q1 2007 into the stockmarket only to see the bubble pop at that exact time. All of this was true six months ago, and yet not being invested in equity markets from then until now is shaping up to be an expensive mistake. I'm not saying that what you're saying isn't likely directionally true - but timing is everything, and it's unknowable. You're better off coming up with a time horizon and asset allocation risk tolerance you can handle for your existing portfolio, not fussing around with silver or whatever. edit: also, if you're so concerned about QE [inflating assets], isn't that an argument to buy equities, rather than avoid them?
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Jul 11, 2014 19:51
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Lexicon posted:All of this was true six months ago, and yet not being invested in equity markets from then until now is shaping up to be an expensive mistake. I'm not saying that what you're saying isn't likely directionally true - but timing is everything, and it's unknowable. You're better off coming up with a time horizon and asset allocation risk tolerance you can handle for your existing portfolio, not fussing around with silver or whatever. I guess to some degree what I'm seeking is to make a quick buck on an economic downturn so I can re-invest in "on sale" assets, which for the reasons you've already stated is quite risky compared to the tenants of a well diversified, indexed, risk allocated profile. I see your point and I appreciate it. The second part I don't understand though. US equities have exceeded their pre-bubble peak as of now despite what many are calling an artificial recovery made possible by QE and not supported by real economic growth (corroborated by GDP/cap going crazy but incomes not moving at all). How would buying Bank of America stock now when it is peaking follow my logic?
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Jul 11, 2014 20:05
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Corrupt Cypher posted:The second part I don't understand though. US equities have exceeded their pre-bubble peak as of now despite what many are calling an artificial recovery made possible by QE and not supported by real economic growth (corroborated by GDP/cap going crazy but incomes not moving at all). How would buying Bank of America stock now when it is peaking follow my logic? Well the logic, as I understand it, would go "The drat Fed is printing so many dollars, so all those dollars are chasing up the price of assets, so I should buy some assets, i.e. equities, so my purchasing power is preserved".
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Jul 11, 2014 20:31
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Corrupt Cypher posted:The second part I don't understand though. US equities have exceeded their pre-bubble peak as of now despite what many are calling an artificial recovery made possible by QE and not supported by real economic growth (corroborated by GDP/cap going crazy but incomes not moving at all). How would buying Bank of America stock now when it is peaking follow my logic? The truth is that the American economy is in a renaissance. It's not a renaissance the entire country is sharing in - it is one of corporate profits and performance, and it is almost entirely benefiting the top 5-10% of the country, with the traditional working class left in the dust thanks to manufacturing going bye-bye. Add to that the fact that the middle class was wiped out due to real estate investments and associated leveraging in 2008, and things are not fantastic for the average person in the USA right now. Things are very good for the top 10% or so. QE is definitely correlated to the bump in equities, but they started phasing that out ages ago now (in market terms), and the market has only responded by continuing to grow. There are plenty of people who thought the bike would fall over when the training wheels came off, but it has not. I would suggest this is because the underlying fundamentals of the corporations comprising the markets are mostly solid (i.e. they are profitable). Sustainable? Who the gently caress knows. I think without manufacturing making a comeback the US is in trouble long term. Some smart people think this too and it is being taken seriously. I generally don't bet against the US long term. All of this said, I definitely think a correction of 10-15% is in the mail, and it's coming soon. I have no idea how soon, sorry all. Best of luck waiting for the opportunity of a lifetime to return. They call it that for a reason. Saltin fucked around with this message at 22:58 on Jul 12, 2014 |
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Jul 12, 2014 22:56
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I watched an interview on BMN a while back talking about how most of the growth is driven by increases in efficiency rather than underlying growth in demand or revenues which is a concern. They're hoping demand returns before they run about of mergers, acquisitions and optimizations.
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Jul 13, 2014 04:06
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cowofwar posted:I watched an interview on BMN a while back talking about how most of the growth is driven by increases in efficiency rather than underlying growth in demand or revenues which is a concern. They're hoping demand returns before they run about of mergers, acquisitions and optimizations. I would not disagree with this - it's a big part of the reason the middle class is getting bent over. Efficiency means technology is reducing menial or low value creation jobs that typically paid pretty well in the past thanks to unionization. It's a balancing act of course, because without enough paychecks being handed out you don't have enough consumers, and despite what right wing dumbasses in the US will tell you, it's the consumer that creates jobs.
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Jul 13, 2014 17:48
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Ok, I have a quick question about tax planning since that poo poo is pretty convoluted and I haven't been able to find a satisfactory answer. I'd like to retire early with a half pension by 50. My TFSA will soon be maxed out so I'm trying to evaluate what my next account investment should be. Plan A is an RRSP, plan B is buy-and-hold index funds in an unregistered account, DRIP the dividends and sell as necessary to stay in a favourable tax bracket. On the surface it seems like Plan B would be better for me because 'capital gains taxed at half the marginal rate'+'not having to pay withholding penalty for early RRSP withdrawal' is preferable than 'tax deferral' Is there something else I should be considering? I need to sit down with a financial adviser sometime but it won't be an option for a while as I currently work abroad. Thanks!
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Jul 14, 2014 05:06
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What's your current gross income / marginal tax rate, how old are you and do you expect your income will increase significantly? These are all rather important points to consider when you're thinking about RSRP.
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Jul 14, 2014 06:39
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Guest2553 posted:Ok, I have a quick question about tax planning since that poo poo is pretty convoluted and I haven't been able to find a satisfactory answer. I would recommend RRSP depending on your marginal tax rate. Even if you are retiring at 50, you are still going to need money until you die which will hopefully be in the 85-95 range so you can wait to use your RRSP funds until they convert to a RRIF at 71 and you need to start making withdrawals. Also, it's not really a penalty, just a withholding tax which gets reconciled when you file your income tax return every year. I don't think you would want to make withdrawals all year and then get hit with a huge tax bill in April. It's just like tax deductions on your salary every week/month. I don't understand why not having to pay a withholding tax would be preferential to tax deferral. That doesn't compute with me. Kal Torak fucked around with this message at 15:30 on Jul 14, 2014 |
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Jul 14, 2014 15:01
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Guest2553 posted:Ok, I have a quick question about tax planning since that poo poo is pretty convoluted and I haven't been able to find a satisfactory answer. If you have a high-ish marginal rate right now, it would likely be foolish to not use the RRSP. And if you're marginal rate is not especially high, it would be foolish to use it. It's strictly an arithmetic question, based on your marginal rate now, and your expected marginal rate in retirement. Also, you should probably read this: http://www.michaeljamesonmoney.com/2014/03/debunking-rrsp-myths-with-pictures.html Don't get too too hung up on the dividend/cap gains thing.
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Jul 14, 2014 15:17
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Ah poo poo how did I not think of including that  Currently in the 26% bracket, improbable that I'll ever climb out of it. I'd probably be in the 22% bracket post retirement. The way I was thinking it, a pension would put me in the 22% bracket anyways,so any RRSP withdrawals would be taxed at that rate,  oops, didn't realize withholding reduced tax liability at the end of the year) whereas unregistered account oh okay I see where I dicked up my math. I'm contributing in a 26% bracket and would be paying another 11% using an unregistered account.Thanks goons Canada's tax laws still seem pretty arcane though 
Guest2553 fucked around with this message at 18:45 on Jul 14, 2014 |
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Jul 14, 2014 18:41
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26 is sufficiently low that it may not be worth sheltering right now, especially if you know you have a floor on your retirement marginal in the form of a pension. But once you're in the 40+ territory - get that poo poo sheltered. The key, of course, is not to squander the refund on bullshit as most people do, but to treat it as the cash flow today, to be invested, that was received in exchange for giving the CRA a stake in the RRSP account in future.
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Jul 14, 2014 21:49
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Lexicon posted:26 is sufficiently low that it may not be worth sheltering right now, especially if you know you have a floor on your retirement marginal in the form of a pension. Where the are you getting this 40+% tax bracket? The highest federal rate after 26 is 29, and that's it. And provincial taxes are even lower. What am I missing here? I fully admit that I know poo poo about Canadian taxes beyond the basic brackets for payroll and the capital gains rate deduction.
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Jul 14, 2014 23:05
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leaves of logic posted:Where the are you getting this 40+% tax bracket? The highest federal rate after 26 is 29, and that's it. And provincial taxes are even lower. What am I missing here? I fully admit that I know poo poo about Canadian taxes beyond the basic brackets for payroll and the capital gains rate deduction. Provincial and federal taxes are additive. So if you're in the 26% fed rate plus (say) 11% provincial bracket your total rate is 37%. So if you were quoting a 26% rate for your federal rate only, you're probably closer to mid-high 30s and should be maxing your RRSP.
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Jul 14, 2014 23:09
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leaves of logic posted:Where the are you getting this 40+% tax bracket? The highest federal rate after 26 is 29, and that's it. And provincial taxes are even lower. What am I missing here? I fully admit that I know poo poo about Canadian taxes beyond the basic brackets for payroll and the capital gains rate deduction. If you make 150K or more in Nova Scotia, you pay 50% (29% federal, 21% provincial) on amounts above 150. I believe that is the highest in the country.
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Jul 15, 2014 00:29
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Thanks, guys. I'm a dum dum and should've just done the math.
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Jul 15, 2014 01:49
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Lexicon posted:26 is sufficiently low that it may not be worth sheltering right now, especially if you know you have a floor on your retirement marginal in the form of a pension. Once I repatriate the case will be stronger to use the RRSP as provincial tax will be far above what I pay as an expat (for reference, I paid only about 20.5% of my net income). With that in mind I think I'm better off using my oldest contribution room so as not so lose it and save the rest for when I'm under a way higher bracket. Most of my contribution room is eaten up by my pension so the RRSP would be roughly equivalent in size to a TFSA anyhow. Refunds would obviously be for investing as well. e. thanks again for helping me figure this poo poo out Guest2553 fucked around with this message at 04:21 on Jul 15, 2014 |
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Jul 15, 2014 02:09
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Guest2553 posted:Once I repatriate the case will be stronger to use the RRSP as provincial tax will be far above what I pay as an expat (for reference, I paid only about 20.5% of my net income). With that in mind I think I'm better off using my oldest contribution room so as not so lose it and save the rest for when I'm under a way higher bracket. Most of my contribution room is eaten up by my pension so the RRSP would be roughly equivalent in size to a TFSA anyhow. You don't have to worry about your RRSP contribution room 'aging'. Once you've earned it you can use it. There's no expiry.
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Jul 15, 2014 16:35
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Kalenn Istarion posted:You don't have to worry about your RRSP contribution room 'aging'. Once you've earned it you can use it. There's no expiry. Yeah Guest2553 - it's good that you're researching this, as you seem to have started with several false premises
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Jul 15, 2014 16:44
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 It would seem so, yes I heard there was a 7 year expiry date for contribution room by (what I thought was) a financially savvy dude at work and ran with it ever since.I like to think of myself as a learned man so it spooks me a bit to find out how uncommon knowledge on these topics are  Welp, looks like the learning never stops in this thread. Thanks again, until the next time
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Jul 15, 2014 18:01
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Guest2553 posted:
Certain losses expire, so he may have conflated the two, but it's been a while since I dealt with them and I don't want to give you bad info by guessing from my increasingly rusty memory.
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Jul 15, 2014 18:21
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Back in 2004 and earlier, non-capital losses could be carried forward for a period of 7 years. That has since been changed and now you don't lose them for 20 years. Perhaps that's what the dude from work was referring too.
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Jul 15, 2014 18:28
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