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Rick Rickshaw posted:This article attempts to explain that: You know, I thought of that explanation (unique situation basically), but while I think most people would agree that we've had some pretty interesting times in the past 10-20 years, I don't know if I'd be so sure it's special snowflake and we won't see major comparable expansions/contractions in the next 10-20 years either. I'm really on the fence for a long-term plan. Could use some input here though, I went through the exercise of putting our RBC Direct Investing accounts into excel and seeing how our funds dispersed in prep for our TFSA and RRSPs this year.  Fixed Income includes bond funds and GICs. Primarily VSC, VGB, XRB, VAB, VSB and some laddered GICs. The cash % in this chart will be re-invested into something. Global includes everything EXCEPT North America (Europe, Asia, emerging markets are glomped together). Primarily VDU, XEF, VXC, XEC. There is some cross into the US here too (IE: VXC) Canada primarily: VCN, XIU, XCS and about 40% individual equities (I did not think it was that much in individual equities). US primarily: VUS, ZDY, VUN, VFV and about 2-3% individual equities Here is my gut plan: Sell most of my individual CDN equities and roll the $$ into CDN index funds. The vast majority of our CDN equities are Royal bank and Manulife which have done very well from when I bought them. Some of the smaller stuff, not so much but it's nothing I'm going to cry about. For the balance of our cash/contribution room this year, put about 70%+ into Canada (I think the upside is higher at this point than down) and the remaining into fixed. The amount of our $$ this year will probably have a 5% (give or take) impact to the % values. Mrs. Slidebite isn't keen on any more global exposure in general and doesn't think we should put much, if anything else into US based on the $$ situation. Thoughts? I purposely have some cross-over between some of the funds but I'm not against consolidating.
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Apr 25, 2015 19:07
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Isn't it your wife who thinks that index funds offered by financial companies like Vanguard and TD are less secure than mutual funds with high MERs offered by similar or identical companies? How's that going?
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Apr 25, 2015 20:31
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Way too Canadian heavy for my taste. I'm 10% Canadian equity myself, and that's arguably too much.
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Apr 25, 2015 21:07
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tuyop posted:Isn't it your wife who thinks that index funds offered by financial companies like Vanguard and TD are less secure than mutual funds with high MERs offered by similar or identical companies? How's that going? Lexicon posted:Way too Canadian heavy for my taste. I'm 10% Canadian equity myself, and that's arguably too much.
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Apr 25, 2015 21:17
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slidebite posted:You really think so? I've been at 0% for a while now, and the case for doing so has only gotten a LOT stronger since.
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Apr 25, 2015 21:19
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Franks Happy Place posted:I've been at 0% for a while now, and the case for doing so has only gotten a LOT stronger since. I'm not quite this bearish, nor do I have the laughable attitudes of many in the Housing Bubble thread (who seem to think the country's about to collapse) but 10% is more than enough for my tastes. Even in great times, it's hard to argue for much more. Small, poorly-diversified economy and all that. And these aren't great times - lots to be pessimistic about.
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Apr 25, 2015 21:23
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Lexicon posted:Way too Canadian heavy for my taste. I'm 10% Canadian equity myself, and that's arguably too much. Lexicon, I have like 20% Canadian equity, 10% Canadian bonds, 10% Canadian REITs. What's going to happen to me in the next like 5-15 years? 
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Apr 25, 2015 21:23
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What are you guys doing who don't have any/much Canadian? The CCP model after all is very Canadian heavy.
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Apr 25, 2015 21:23
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HookShot posted:What are you guys doing who don't have any/much Canadian? U.S. equities in a U.S. denominated index, European equities in CDN. I'm thinking of cashing out the latter soon and shifting to an African/South American focused fund, but basically I'm bearish on anything China, bonds, or Europe/Russia. American equities are still top of the heap IMO.
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Apr 25, 2015 21:29
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HookShot posted:What are you guys doing who don't have any/much Canadian? I'm transitioning to this: 40% U.S. equity 30% International equity 20% Canadian bonds 10% Canadian equity
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Apr 25, 2015 21:29
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Cool, thanks guys!
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Apr 25, 2015 21:30
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The Canadian $$, especially towards US markets, gives me pause for anything approaching 20%. HookShot posted:What are you guys doing who don't have any/much Canadian? It's not just the CCP models either. I am not scared of the Canadian market. Granted we're not huge, but I actually see the hydrocarbon based resource side sort of playing a quasi foil to the export side. Hydrocarbons go up, $$ goes up, manufacturing goes down. Other way around, hydrocarbons take a big poo poo, dollar takes a big poo poo, manufacturing exports improve. Other resources get thrown in the mix based on world demand, and the financials should be as stable as they can be. We don't have the big tech sector of course, but that's not necessarily a bad thing either. Maybe I'm grossly simplifying it 
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Apr 25, 2015 21:50
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slidebite posted:The Canadian $$, especially towards US markets, gives me pause for anything approaching 20%. Could you elaborate? What's the logic here?
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Apr 25, 2015 22:00
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Purely currency fluctuation. Granted that's always going to be an issue to a point, but basically dropping 20% in 6 months either makes buying more US funds unpalatable and skews your RRR.
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Apr 25, 2015 22:10
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Capital spending in the us is going down. Canada mostly exports to the us.
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Apr 25, 2015 23:25
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tuyop posted:Lexicon, I have like 20% Canadian equity, 10% Canadian bonds, 10% Canadian REITs. What's going to happen to me in the next like 5-15 years? Sell your REITs
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Apr 25, 2015 23:41
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sbaldrick posted:Sell your REITs I'm waiting for them to go on sale!
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Apr 25, 2015 23:57
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slidebite posted:Thanks for the link. This distribution is overweighted on canadian and international equities given its conservative nature (40% fixed income). It should be more like 40% fixed, 45% US, 5% Canadian, 10% international to reflect the actual global market cap reality.
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Apr 26, 2015 00:42
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Those of you holding little Canadian equity or funds: if you've got US-listed ETFs, aren't you all paying US withholding taxes on your accounts?
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Apr 26, 2015 03:01
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Olive Branch posted:Those of you holding little Canadian equity or funds: if you've got US-listed ETFs, aren't you all paying US withholding taxes on your accounts? Not in RRSP, protected by the tax treaty
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Apr 26, 2015 17:37
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But won't you have to pay taxes on it eventually when you withdraw the money? What about TFSAs?
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Apr 26, 2015 18:39
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slidebite posted:Purely currency fluctuation. Granted that's always going to be an issue to a point, but basically dropping 20% in 6 months either makes buying more US funds unpalatable and skews your RRR. Respectfully, I don't think you've thought this through. That USDCAD fluctuates is irrelevant. The point is to be diversified across many industries and countries - so you're an owner of many businesses and placing lots of small bets. The currency is simply a unit of account; an implementation detail. You can't do a good job of diversifying if you're too heavily weighted in Canada. Canada is a poorly diversified place. Obviously when it comes time to withdraw, the realities of currency start to matter - you want to have decent spending power where you live, etc. But until then, in an accumulation phase, diversification is key.
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Apr 26, 2015 18:58
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Olive Branch posted:But won't you have to pay taxes on it eventually when you withdraw the money? What about TFSAs? Canadian taxes yes, withholding taxes no. TFSA are not covered by the old tax treaty, they are too new. You only pay the tax on dividends anyways, it's a pretty small percentage. And most of canadian Vanguard ETFs used to just hold the corresponding american fund shares instead of holding an index portfolio. Then withholding taxes are unavoidable and paid directly by the fund which contributes to worse MERs we get around here.
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Apr 26, 2015 19:04
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iv46vi posted:Canadian taxes yes, withholding taxes no. If, after doing some more research, I do a portfolio revision on my TFSAs and RRSPs and decide to swap a few of these ETFs for something else, would I be able to sell and buy entire chunks of my portfolio without having to worry about capital gains (either now or in the future), or would the fees hit me like in a margin, taxable account?
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Apr 26, 2015 19:19
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Olive Branch posted:I've still got much to learn about the tax system regarding investments, even though I've got the basics down on indexing. I'm currently following the Canadian Couch Potato Vanguard portfolio with its three ETFs (VAB, VXC, and VCN), but as I keep reading on this thread, people tend to think too much Canada weighing is not a good idea given the gloomy prospects. Would US-listed ETFs in our RRSPs be denominated in US dollars, meaning I'd have to convert my Canadian currency into US to buy them? CCP has covered this issue in some detail: http://canadiancouchpotato.com/2014/02/20/the-true-cost-of-foreign-withholding-taxes/ So yes, you'd have to convert to US dollars to hold US-listed ETFs in your RRSP to avoid the witholding tax. But, as iv46vi pointed out, this is witholding on dividends, and when you factor in the cost of currency conversion, it really depends on the amount you want to invest (CCP suggests 5 figures for it to make sense financially). If you sell your ETFs in a TFSA or an RRSP, you do not have to worry about capital gains, they are both registered accounts. People are not necessarily saying too much Canada is bad because of gloomy prospects. Too much Canada is bad, period, full stop. You already earn a living in this country, and perhaps own property. How much more exposure do you need? The entire purpose of diversification (as Lexicon pointed out above) is to limit your exposure to any one market (placing lots of small bets in a wide spread). It just so happens that Canada, in this respect, is not attractive as it is heavily dependent on a small number of fluctuating markets (natural resources, energy, and financials). Aagar fucked around with this message at 20:18 on Apr 26, 2015 |
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Apr 26, 2015 20:15
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Saltin posted:At this point in time it does not expire. Ummm, am I missing something here? CPP doesn't have a limit based on income, only OAS has a clawback and it only starts kicking it at around $70k (individual income) and fully eliminates OAS at $114k (individual income again). I don't think it's so cut and dry to say 'TFSA is better than having a pension'. With RRSP refunds (that can be saved and invested) and matching plans, etc with employer plans, my instincts say there's got to be some area where taking advantage of those options is better than a TFSA.
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Apr 26, 2015 20:18
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Lexicon posted:Respectfully, I don't think you've thought this through. That USDCAD fluctuates is irrelevant. The point is to be diversified across many industries and countries - so you're an owner of many businesses and placing lots of small bets. The currency is simply a unit of account; an implementation detail. You can't do a good job of diversifying if you're too heavily weighted in Canada. Canada is a poorly diversified place.  I get what you are saying and of course agree with diversification, but if it matters when you withdraw into CDN$ how does the exchange rate not matter when you buy? Especially if we are talking about an index/equity/fund where the returns are not large or volatiile? If I am buying a bunch of US based funds when the Canadian dollar is arguably lower than its typical equilibrium zone, those funds need to perform that much better than the currency does over time. Now I agree, over the long term, hopefully it isn't an issue, but it might take quite some time to make up that 20% (or whatever) in fluctuation depending when you bought. A long enough time that those funds might have been better invested in a lower-risk if lower return, less volatile investment. I am not saying I'm right, I'm just an uneducated self directed investor that's only gotten into this the past year, but that's how I view it. I also agree the Canadian economy isn't massive nor as diversified as the US economy (or others for that matter) and a person would be foolish to completely have all their eggs in Canada, I'm not so sure I would agree that 20% is crazy high.
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Apr 26, 2015 22:07
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Canadian Couch Potato has an article addressing home bias, and their reasoning for why the recommend the proportions in their portfolio. http://canadiancouchpotato.com/2012/05/22/ask-the-spud-does-home-bias-ever-make-sense/ They claim that in developed markets, long term gains are pretty comparable, therefore, there's no clear optimal ratio between them. Trying to manage currency risk pro-actively or currency hedging is just making bets like timing the market. Just stick to your target ratio and let your rebalancing method of choice handle currency fluctuations the same way it handles all market fluctuations.
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Apr 26, 2015 22:41
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HystericFactor posted:Canadian Couch Potato has an article addressing home bias, and their reasoning for why the recommend the proportions in their portfolio. Their justification isn't particularly good.
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Apr 26, 2015 23:20
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CPP holdings http://www.cppib.com/en/who-we-are/at-a-glance.html
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Apr 26, 2015 23:40
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There you go, canadian equities 8.5%. The rest is probably bonds etc., since there is little difference in dividends and a huge difference in tax and FX related headaches when it comes to holding foreign bonds.
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Apr 27, 2015 03:43
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Hello, Just a few questions if anyone can help please. I understand the bare basics of options but something I'm unclear about is lets say I buy call options that if I were to exercise them would cost me $10000, suppose the price rises so that the option is in the money. Do I literally need 10k in cash to exercise the option to profit from it? I understand I could also sell the option but I'm not sure if that is more or less profitable than exercising it? Also for registered accounts, lets assume you contribute the limit and are willing to take some risks. How would a margin account work for these accounts? Suppose I had 10k in a RRSP in holdings and I want to apply for a margin account, would that credit be only useable in a taxable account because I'm at my limit with the RRSP? Lastly if I understand correctly, the whole ideal of margin accounts is that some other security is the collateral meaning I can't play around with it day trading? Or do I just need to maintain a dollar value? If it's the former I don't understand the advantage of a margin account if your collateral needs to be in long positions? Thank you for you help, if this is the wrong place let me know please where to ask instead.
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Apr 27, 2015 05:06
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EchoBase posted:Ummm, am I missing something here? CPP doesn't have a limit based on income, only OAS has a clawback and it only starts kicking it at around $70k (individual income) and fully eliminates OAS at $114k (individual income again). I don't think it's so cut and dry to say 'TFSA is better than having a pension'. With RRSP refunds (that can be saved and invested) and matching plans, etc with employer plans, my instincts say there's got to be some area where taking advantage of those options is better than a TFSA. No you're not missing anything - I should have just said OAS, but what I meant was you'd be collecting both, obviously. What I said is that I would rather have a million dollar TFSA than a pension (benefits aside). If it helps, the context is "on the day that I retire". I think you'd need to crunch some serious numbers to prove it is an objectively better method to save, which is what I think you are arguing, and that's fine, because it's not my point. My point is I would rather have a million of completely untaxable money on the day I retire than a taxable pension. The pension benefits are obviously a factor, but I said benefits aside. You are correct that the merits of TFSA versus RRSP are nuanced, but they have been discussed a million times in this thread already. I'd still take the million dollar TFSA over anything. Saltin fucked around with this message at 13:59 on Apr 27, 2015 |
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Apr 27, 2015 13:55
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Some good news to Canadian income tax filers! Due to a gently caress-up in which they accidentally declared the wrong deadline, the Canada Revenue Agency has decided to stick with its mistake and has extended its deadline to May 5th at 3:00am. Cross-posted from the CanPol megathread.
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Apr 28, 2015 17:50
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I just opened up a Tangerine account, and one of my co-workers said their financial advisor said it wasn't actually a bank and to be careful. Is this advisor full of it? Or should I dismiss the concerns?
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Apr 28, 2015 18:50
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virinvictus posted:I just opened up a Tangerine account, and one of my co-workers said their financial advisor said it wasn't actually a bank and to be careful. He's full of it. It's a real bank and owned by Scotia. Your deposits are insured by CDIC up to 100K just like any other Canadian bank.
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Apr 28, 2015 18:57
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virinvictus posted:I just opened up a Tangerine account, and one of my co-workers said their financial advisor said it wasn't actually a bank and to be careful. Lol, the advisor is either an idiot or spreading FUD for nefarious/greedy purposes.
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Apr 28, 2015 19:02
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mojo1701a posted:Some good news to Canadian income tax filers! Due to a gently caress-up in which they accidentally declared the wrong deadline, the Canada Revenue Agency has decided to stick with its mistake and has extended its deadline to May 5th at 3:00am. Oh thank God, I haven't even started my taxes yet.
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Apr 28, 2015 20:59
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Got my refund yesterday  Debt free!
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Apr 29, 2015 00:12
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FrozenVent posted:Got my refund yesterday
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Apr 29, 2015 04:02
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