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First off, thanks so much for putting this thread together OP. I've just finished paying off my OSAP debt and had already begun putting my monthly savings into Investors Group mutual funds to help out a friend whose recently started at the company. After reading this, I have obviously pulled all my money out and am beginning to look at lower overhead options. Are these e-Series funds perfectly liquid? My main concern is I currently drive A LOT for work, and am driving a beater. Naturally, I'm going to keep it going as long as practical but at some point I will need to outlay for a new ride. With this sensitivity to liquidity, does it make sense to put it in a TD e-series, or should I just go to a PC Financial savings account for the interim? My main problem is the window for saving could be 6 months or 18, not sure at this point.
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Oct 28, 2013 17:37
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cowofwar posted:Budget your money better. Every month have a portion of it set aside to different savings horizons. A short term emergency fund (liquid), a medium term purchases fund (vacations/cars/houses - semi-liquid) and a long term investment fund (market). I'm completely open to this, I just never understood the practicality of it. If I have a $1000 surplus at the end of every month, if I didn't pay cash for my car why wouldn't I put every penny of it where I know there is a guaranteed return of [whatever the car loan interest is]%? Psychologically I know it has some benefits, but I'm not the personality type to spend every dollar I earn.
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Oct 28, 2013 19:46
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Baronjutter posted:Yeah I got a 0.9% financing for my car so I simply invested that money I would have paid cash for the car for but at way higher returns. Except when you get the choice between 0.9% financing and a $4000 cash discount, suddenly 0.9% becomes more like 10%. Unless you are getting 0.9% from someone that isn't the dealer, in which case I need to loan shop a lot better. Edit: beaten
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Oct 28, 2013 21:14
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This is most likely a series obvious question but I'd like to confirm with you experts. If I wanted to take a short position on a particular stock, say, hcg.ca, which is traded on the TSE all I would need to do is open a questrade account, put some money in it from my online banking, and click some buttons on their web ui right? Then, if the shares go from $80 to $160 I would lose my entire investment or have to add more money to cover the loss. However if it went from $80 to $0 my initial investment would increase 8-fold. Yeah? Econ101 panning out for me?
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Jan 24, 2014 04:38
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I appreciate the forewarning guys, truly I think you guys are pros and I love these threads. I've read this thread in its entirety, the housing bubble thread in its entirety, and whatever analysis I can get my hands on regarding Canada's economic situation. The truth is I am 100% positive doomsday is coming and I'm willing to take the risk for the opportunity of reward. I intend on placing a small bet on the situation with the understanding it is a high risk investment, and really more analogous to gambling than anything else. I did some more reading after that post and now understand I will be paying interest to the broker covering my short sale, and that there are other options including put options and LEAPS. Am I correct in saying you guys are being hyperbolic when suggesting my potential loss is infinite. Yes, of course, if HGC.ca went to $1000/share I'd owe 12.5 times my initial investment, but the reality is that a broker would force the sale long before that happened (or you could build that into the order with whatever broker you use). My big question was how one practically completes trades in Canada. Are all of these things possible via Questrade?
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Jan 24, 2014 15:31
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FrozenVent posted:If you bet $5 on roulette, the most you can lose is $5. Well this is actually pretty interesting and I'd like to pose some followup questions. I think it's safe to say you can set up a short sale so that the maximum you would lose is your initial investment. You make sure your broker sells before you start owing them money past your initial investment. I don't intend on utilizing margin investing in this case, because that would certainly scare the hell out of me and your warning would be quite astute. As far as I'm concerned placing an investment of any kind is gambling. If you buy a house in Canada right now, you are making a bet that the value of the house will appreciate, and certainly the majority of Canadians presently are operating on this principle. When I look at the present housing market conditions, and Canada's economic situation as a whole, the thought of purchasing a house is what would frighten the hell out of me. I actually feel much more secure with my HCG roulette table! I should clarify, I don't think the world is going to come to an end, but I do think the current state of Canada's economy is ridiculous and there is pain coming. I would like to profit from to offset all the extra taxes we'll be paying to cover the coming defaults! I do of course realize that a more risk averse position for someone with my opinion regarding the Canadian economy would be to purchase more foreign investments rather than short selling, which is inherently risky.
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Jan 24, 2014 16:04
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FrozenVent posted:Why do you think the economy is going down the shitter? The basic Cole's notes of why I think the economy is going down the shitter is that real estate speculation in this country has been the reason we have weathered the last 5 years like superstars. Instead of feeling the same pain as the United States in 2008 we actually propped up our economy with cheap lending not for productive purposes, like building businesses that produce exports or investing in municipal infrastructure, but to build a shitload of condos in Toronto, Vancouver, and Calgary, and megahouses in the suburbs that surround them. If you look at the real estate situation in Toronto right now it makes absolutely no sense. There is a tonne of money floating around because developers are cashing in on consumers who are using mortgages (backed by the CMHC aka every Canadian taxpayer) that they are taking out with little financial consideration(It Will Go Up!). The jobs in Toronto are primarily in the financial sector, which guess what, is largely centered around our awesome and very profitable real estate market. It's a system that doesn't actually produce anything useful and is based on a closed loop of lax lending criteria and the assumption that prices of houses never fall. I don't understand why people treat houses and stocks inherently differently. Yes you can live in a house and you can't live in a stock. But the true cost of a house isn't that it has four walls and a roof, it's that the real estate is near somewhere you can generate income. If the income you're receiving is generated from housing speculation, is any wealth actually being created? I don't think so. I understand now that most people complete short sales without collateral and use margins instead. That is not and will never be my intention. That poo poo is scary as hell.
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Jan 24, 2014 16:26
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Lexicon posted:I don't think he means doomsday in the literal sense - more like a Sept-2008 type event, but within the Canadian economy. That is excellent advice not going on deaf ears. Your mobile computing example is excellent. The hindsight for that one I suppose would have been that the second you saw Google produce Android you should have known that Google usually has success with the things it pours money into and Android was a good product. On the same hand if I had made the same estimation for RIM and Microsoft's mobile devices one would be losing money out my rear end. It's gambling. It certainly is! I was debating this question last night. I know very little about HCG's actual holdings. In terms of where they own property, how they're leveraged, the terms of their debts that they hold, etc. The thing that gave me the most comfort was reading their Q3 forecasts: quote:Outlook I don't agree with any of that and think it's horse poo poo. I am making a gamble that we've pulled on the yarn to its limit and 2014 will be the year that the consumer is finally tapped out and the collapse will come. There are a bunch of ways I could be wrong about this of course. Maybe the devaluing of the CAD drives exports up, a war in Saudi Arabia opens up, and the Canadian economy remains strong making the home equity bubble not such a big deal via the Canadian consumer having lots of purchasing power via those profits. I'm betting that those things don't happen!
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Jan 24, 2014 16:40
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FrozenVent posted:You're looking at a single segment of the economy in a vacuum, though. Be careful. How I see the exchange taking place is: Say I short $1000 worth of $77 HCG. I would have $1000 in my brokerage account to cover that investment. If the prices goes past $154/share (probably a lower # due to the interest I must pay the broker) I have run out of my $1000 and would force the call on the short sale to ensure I don't exceed my initial collateral. I suppose what I'm gleaning from this is my $1000 is never actually held by the broker, it's still with me, or why would I be paying them interest? So in reality what I would do is have to say to put the order in that if it ever exceeds $154/share, call the short and I will cover the $1000 that I agreed with myself about back at $77/share. I can see how this would get out of hand in a hurry if you didn't have the constitution to stop the loss at your completely personally agreed upon acceptable loss.
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Jan 24, 2014 16:52
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Lexicon posted:This right here is why indexing is so great. There is so much loving bullshit and uncertainty all the time. Always has been, always will be. Indexers say: "gently caress it - I'll buy companies in the proportion that they exist in the economy, and rebalance occasionally... and forget about everything else". It's liberating. I will give that a listen for sure. I should state that I am 100% onboard with the indexing investment strategies in this thread, and the general personal finance philosophies of BFC. By the end of 2014 I will have a diversified profile together consistent with what you guys recommend, but I am just entering the world of financial positives. I've been working for 2.5 years post graduation and my OSAP is paid (can't beat a guaranteed 5.5% return can you!), my emergency fund is in place, and I am now starting to save cash in a savings account for my inevitable car failure / desire to buy a house (if the collapse happens and certain things in my personal life coalesce). Once those things are in place I'm very excited to start saving for retirement using the set it and forget it (with low MER) strategies found in this thread. They are awesome and Lexicon you are personally responsible for me closing an Investors Group account I had opened to help out a friend earlier this year. Big thanks for that.
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Jan 24, 2014 17:05
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Saltin posted:Why not just buy an Indexed Inverse ETF like HXD if you are bearish? It's not complicated. Yes, after reading Kalenn's incredibly insightful post (you explain that about 100x better than the wikipedia article) the drawbacks of a short sale become quite apparent. That seems like a much better idea than what I previously.
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Jan 24, 2014 21:00
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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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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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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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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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I have to say I am pretty pleased with the advice this thread gave me way back about not shorting the housing bubble as I had planned. Instead to take the safer route of buying a fund like HXD. Well, I did, in August. My only question now is whether or not this current correction will kick off the run on housing. I've definitely noticed that fringe properties are already showing weakness in good economic areas (so many REDUCED signs) and I wonder if this sort of fear could kickstart something.
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Oct 15, 2014 14:29
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Could someone provide a link or explanation as to the most efficient way to liquidate/buy new positions to maximize tax advantages in TFSAs?
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Dec 12, 2014 00:20
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Mantle posted:Also, USD assets that yield dividends held in a TFSA are subject to withholding tax so you probably don't want to put them there if your savings strategy lets you put them in your RRSP. This was the sort of thing I was talking about. It seems like there's a few rules with the way the cap space works that can be optimized from some of the things I've read in here. Let's say you buy $5000 worth of a mutual fund January 1st 2014 and it loses $500 of its value that year. You liquidate your loss December 24th 2014 to lock in that loss. Do you get any cap space back? Am I overthinking this? I just see a lot of posts about "harvesting losses" and want to make sure I'm not missing out on any gains. So far my strategy has been to buy ETFs couch potato style and let them sit there, but it seems like strategic rebalancing can be used for tax advantage.
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Dec 12, 2014 07:20
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