tuyop posted:

I need to put some money in an investment that will hopefully generate more return than a savings account but preserve the principal as much as possible in case I need to pay it back (it's a bursary with a service requirement that I might not want to fulfill). What are the risks of losing my contribution room if I put the money in my TFSA and buy a bond ETF? I mean, other than "not 0".

I may never need to touch the money until we take like a mini retirement or FI or something (best case), or I might need to return it intact by September (worst case).

Ashley Madison posted:

I have two TFSAs and a savings account totalling about $10k. I can afford to put aside and additional $2-300 per month. Should I open an RRSP or put that money in to my existing accounts?

PC Financial TFSA - Long-term savings/emergency fun
Mackenzie TFSA - Split 65% in an "Mackenzie Canadian All Cap Dividend Fund Series A" and 34% in a "Mackenzie TFSA High Interest Cash Builder". I am seriously under-informed on what this account is actually doing. My financial advisor opened it for me. The amount I put in to this per month is 30% less than what goes in to my PC TFSA.

tuyop posted:

This person is trying to stealing your money. Sever and manage it yourself.

We need to know your income to answer your registered account question. General wisdom is to save your RRSP room until you're near the top of your earning curve and contribute to your TFSA first.

Golluk posted:

It is a bit tougher to stick to than I thought, and to resist trying to buy low, and not buy high (selling will have to wait another 30 years). Hindsight is a taunting bastard, I'm looking at you S&P 500 that is up 23% from last march.

On that note, I put in another 10k to max out my employer match. I'm inclined to purchase more shares 1-2k worth each month, in some attempt at dollar cost averaging. But at the same time, I'm under the impression long term I should probably just turn it all into more shares now.

Then I'll have the 9k match, so it is more like 19k cash I'll have in my RSP. Figures the markets just jumped up over the last week.

cowofwar posted:

Stick to your monthly contributions with your pre-determined distribution based on risk tolerance. But if an index goes on sale then by all means throw some extra money at it. When the TSX is at a yearly low then you could buy some extra index funds.

Olive Branch posted:

I've been reading The Four Pillars of Investing by William Bernstein, but he seems to dislike ETFs for some reason. What's wrong with buying into bond ETFs rather than your bog standard mutual funds?

tuyop posted:

Can you post a quote that makes you think this? That was... Exactly the opposite conclusion that I took from that book. I mean, I think most of a chapter is almost romantically dedicated to passive mutual fund creators, of which ETFs are one kind.

William J. Bernstein posted:

The criticism most frequently leveled at this book's original printing was the short shrift given ETFs. Indeed, since the book was first published in 2002, the popularity of these vehicles has grown to the point where they are seriously challenging more traditional "open-end" mutual funds. Nonetheless, I remain dubious; there is nothing really wrong with ETFs, but I continue to believe that most investors are better off with the older open-end fund format. I do so for four reasons. First, the commissions and spread costs incurred by trading ETFs quickly eat up their miniscule expense advantage. Many ETFs are in fact more expensive to own than the corresponding Vanguard or Fidelity funds. Second, the convenience of being able to trade ETFs throughout the day is in reality a disadvantage; unless you are able to predict intraday market moves--a fool's errand if there ever was one--you are faced with the often paralyzing choice of exactly when to buy or sell. Third, ETFs carry with them considerable institutional risks. Many ETFs have already been liquidated, and I do not trust most of the ETF providers to support these products over the very long term. Last, avoid bond ETFs at all costs. The so-called authorized participant process by which arbitrageurs minimize the discounts and premiums of these funds to their true net asset value does not work well with thinly traded corporate and municipal bonds. In late 2008, the discounts and premiums on many bond ETFs reached several percent for many of these funds, a problem that is not encountered with open-end funds.

That said, there are some areas in which an equity ETF does make sense. The first is the iShares MSCI EAFE Value Index, for which Vanguard offers no corresponding index/passive open-end mutual fund. The second is the Vanguard FTSE All-World ex-US Small-Cap ETF, which does not charge the 0.75% purchase fee levied on the investor class shares and also carries a much lower expense ratio (0.38% vs. 0.60%). A third would be the iShares EPRA/NAREIT Developed Real-Estate ex-US ETF, for which there is no equivalent open-end fund available for small investors.

Olive Branch posted:

but his adamant stance against ETFs is pretty worrying.

Olive Branch posted:

Sure. I'm quoting from the 2010 version's post-script, after the crash of 2008. Bolding is mine.

For the record, I use Questrade for ETF buying and don't plan on selling any of them anytime soon, nor am I a constant day trader as Bernstein assumes me to be. What gets me is the third and fourth point he raises about institutional risks and how ETF providers probably won't support them for a very long period of time, and most puzzling, the "avoid bond ETFs" advice. The Canadian Couch Potato sees no problems with the Vanguard Canadian Bond Aggregate, and Vanguard itself seems to have been expanding its ETF selections, implying a long-term goal. Granted the latest version of the book was written five years ago and some data may be out of date, but his adamant stance against ETFs is pretty worrying.

tuyop posted:

So, I've just been glancing at my portfolio every few months and if it's supposed to be like, 50/50 stocks/bonds but it's sitting at 52.63/47.37, I just leave it. Should I be rebalancing those few shares if the 2.6% difference is like two shares because of portfolio size?

Kal Torak posted:

The BoC hasn't cut rates since 2009. And in 2010 the BoC raised them 3 times and the banks all raised the prime rate the very next day.

Assuming the banks refuse to cut now and oil eventually bounces back, what happens when the BoC raises the overnight rate back to 1%? Do the banks raise prime to 3.25%? I'm guessing yes.

The Federal Government is losing their mind trying to get a fourth wireless carrier because of those evil Telcos, but nobody cares about the Banks gouging their customers to increase their $30B+ of annual profits.

tuyop posted:

So, I've just been glancing at my portfolio every few months and if it's supposed to be like, 50/50 stocks/bonds but it's sitting at 52.63/47.37, I just leave it. Should I be rebalancing those few shares if the 2.6% difference is like two shares because of portfolio size?

blah_blah posted:

Why is it worrying? There is no significant reason to prefer e.g. Vanguard mutual funds to Vanguard ETFs (and there's only a small number of ETFs that one should even be considering in the first place).

cowofwar posted:

Most people rebalance once a year with purchases. So if you had a 50/50 split and you normally put 5k a year in each, next year just adjust the contributions to bring it back to 50/50. No point eating fees just to make the numbers pretty.

Also why so conservative? 50% bonds is very high.

blah_blah posted:

Why not VTI instead? (i.e., why just the S&P 500)

Olive Branch posted:

EDIT: And his claim that he doesn't trust ETF providers to keep continuing them, as well as how bond ETFs are apparently a terrible idea.

tuyop posted:

I need to put some money in an investment that will hopefully generate more return than a savings account but preserve the principal as much as possible in case I need to pay it back (it's a bursary with a service requirement that I might not want to fulfill). What are the risks of losing my contribution room if I put the money in my TFSA and buy a bond ETF? I mean, other than "not 0".

I may never need to touch the money until we take like a mini retirement or FI or something (best case), or I might need to return it intact by September (worst case).

tuyop posted:

So, I've just been glancing at my portfolio every few months and if it's supposed to be like, 50/50 stocks/bonds but it's sitting at 52.63/47.37, I just leave it. Should I be rebalancing those few shares if the 2.6% difference is like two shares because of portfolio size?

Kalenn Istarion posted:

Don't buy a bond fund as they're just as likely to go down as anything else if (for example) there's an indication that rates will start to go up.

Mantle posted:

Can someone explain why this is the case? I thought rising interest rates would cool down equities and therefore create increased demand for bonds.

jm20 posted:

If interest rates rise (quickly), portfolio managers might want to sell lower interest rate bonds at a discount in hopes of buying higher interest rate bonds. There is only so much money in a fund, and if you are tying up significant capital for low rates of return over a long period, you might see investors move their assets to another fund that is more aggressively managing their bonds.

Mantle posted:

Can someone explain why this is the case? I thought rising interest rates would cool down equities and therefore create increased demand for bonds.

Kalenn Istarion posted:

Short version, rates up = bond prices down

Mantle posted:

If this is the case, is it possible for both equities and bonds to go down if interest rates are too high?

Jan posted:

I very briefly had a group RRSP with my previous employer before I got laid off. I'd like to move that to my Tangerine RRSP savings account so I can have everything in the same place and start up a proper index fund and be a bit more serious about the "investment" part of this RRSP thing. Who is responsible for these transfers, the group RRSP I'm transferring from, or the Tangerine account I'm transferring to? I suppose that in the latter case, I'll need to get account information for the group RRSP?

Mantle posted:

Then is it still safe to say that bonds are a hedge against declining equities? I guess the question I have is, if the Canadian economy is going to suck this year and next, Canadian equities are going down, right? But at the same time, if interest rates go up Canadian bonds will go down as well?

Is this something that is likely to happen over the next 2 years?

melon cat posted:

Tangerine is responsible for the transfer. But, since they're a virtual bank you'll probably need to download and print out a form, complete it, then mail/fax it to one of their central administration offices. It looks like this is the form you need.

A word of caution- when transferring investments, a lot of the financial institutions really drag their feet. They're not exactly in a rush to help you take your money out of their accounts. Your new financial institution is excited to get the transfer moving, but your old FI- not so much. It can take a while for the transfer to be completed, and you might need to call the old bank a number of times to get things moving.

Franks Happy Place posted:

The Canadian dollar had a bit of a bounce up this week, and since I think it's short-lived I decided to take the opportunity to put some of my TFSA fund into a U.S. dollar-denominated index. Just figured I'd take this opportunity to remind everyone that no matter what your diversification strategy (e.g. I'm personally avoiding bonds right now), it's almost never a bad idea to have some degree of currency diversification too!

Franks Happy Place posted: