Author Topic: Canadian Investing  (Read 6770 times)

CanuckStache

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Canadian Investing
« on: March 29, 2014, 09:41:35 AM »
Hi all,

I've currently got about $25k in an RRSP with Investors Group, and owe another $15k that I had pulled out as part of the home buyers plan a few years ago.

After reading Mr Frugal Toque's article about Canadian investing, I had a look at how much IG was charging for the MER and...2.82%!!! That blew my mind. Here's what I've got:
http://globefunddb.theglobeandmail.com/gishome/plsql/igf.fund_pro?fundname=Allegro+Aggressive+Portfolio-A

So, I'm thinking I'd like to take the plunge and open up wither a Questrade or VirtualBrokers account and try to do this stuff on my own. I just have no idea what to invest in or how this stuff really works. Can I just pick a bunch of stocks and essentially create my own mutual fund? I'm fine with having a relatively 'aggressive' portfolio. I just hate the fact I'm giving up nearly 3%. Not to mention dealing with Investors Group has been such a pain in the ass.

Any advice or reading for me to do would be appreciated!

KMMK

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Re: Canadian Investing
« Reply #1 on: March 29, 2014, 10:23:51 AM »
For reading, start with http://canadiancouchpotato.com/.  The Couch Potato site is the best resource for info about index fund investing. There's a lot of info there. Just start with reading the FAQ, Index fund and ETF stuff at the top.

I currently prefer index to ETF as my portfolio isn't that big and I don't want to pay per transaction, so I do the e-series funds through TD.

CanuckStache

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Re: Canadian Investing
« Reply #2 on: March 30, 2014, 02:25:51 PM »
Thanks! That's some great reading. Not sure I get it all just yet, but I think I just need to open an account with an online broker and kinda dive in. I imagine it'll make more sense then.

Ideally I'd like to setup a way to just automatically contribute to a TFSA that has index funds in it. That way I can just put it on autopilot.

Wannabe Mustache

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Re: Canadian Investing
« Reply #3 on: March 30, 2014, 03:35:13 PM »
If you open an online broker account watch for fees.  They can really add up. 

I'm a newbie too with a small portfolio so I've decided to go with TD e-series for now.  It's been a bit of an ordeal getting an account - the people in the branch really don't know much about e-series and if you don't back with TD already you do have to go to the branch. 

This site is really good too http://youngandthrifty.ca/

Good luck.

KMMK

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Re: Canadian Investing
« Reply #4 on: March 30, 2014, 03:45:57 PM »
Thanks! That's some great reading. Not sure I get it all just yet, but I think I just need to open an account with an online broker and kinda dive in. I imagine it'll make more sense then.

Ideally I'd like to setup a way to just automatically contribute to a TFSA that has index funds in it. That way I can just put it on autopilot.

If you go with e-series you should be able to set up an automatic monthly transfer from your checking account, but if I remember correctly the money goes into your main TFSA area and then you have to manually buy the different index fund types. I don't think you could buy the actual funds directly but I could be wrong on that. But once you're set up it only takes 5-10 minutes once a month to make the purchases.

daverobev

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Re: Canadian Investing
« Reply #5 on: March 30, 2014, 06:08:06 PM »
If you go with Questrade, you can pick iShares and do automatic DRIP purchases. I don't do that (micromanager!), but it is one easy alternative to eSeries.

iShares have just cut some MERs too, so they are REALLY inexpensive now. Actually.. damn, maybe I should do some DRIPping myself.

jd

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Re: Canadian Investing
« Reply #6 on: March 31, 2014, 09:24:36 AM »
I've currently got about $25k in an RRSP with Investors Group, and owe another $15k that I had pulled out as part of the home buyers plan a few years ago.

Note that you don't have to repay the HBP to the same RRSP from which you withdrew.  So you could open up a RRSP account somewhere else (i.e. brokerage or e-series), make contributions and declare those as your HBP repayments.

CanuckStache

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Re: Canadian Investing
« Reply #7 on: March 31, 2014, 09:26:30 AM »
Thanks! That's good to know. I just made a couple $k deposit to the IG account and now I'm regretting it. I'm sure if I want to pull out, they're going to charge fees. Any experience in trying to wiggle out of those?

TrMama

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Re: Canadian Investing
« Reply #8 on: March 31, 2014, 09:33:17 AM »
Try talking to the new bank or brokerage. They're generally pretty motivated to get their hands on your money and can help you wrest it away from IG.

CanuckStache

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Re: Canadian Investing
« Reply #9 on: March 31, 2014, 09:49:35 AM »
My IG guy is playing the guilt trip on me. I dunno why - It's only a $20k account, I would think hardly worth the time.

I'm going to call Questrade and see if they can get that account setup asap.

Ottawa

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Re: Canadian Investing
« Reply #10 on: March 31, 2014, 10:01:16 AM »
I started out with TDW - I just recently transferred everything except the RESP out to Questrade.

Here is why:
For RRSP - if you have under 25K in your RRSP you get dinged an admin fee of $113 every year. 
For RESP - charge of $50 per year under 25K
There is a custody fee of $25 per quarter for accounts under 15K. 
It costs 9.99 to buy anything
It costs 9.99 to sell anything
All the above found here: http://www.tdwaterhouse.ca/document/PDF/forms/521778.pdf

At Questrade - no fees for anything!
ALL ETF's can be purchased FOR FREE (useful since I send money over every two weeks!)
Selling is no worse than TDW. (but hey, I don't sell and neither should you - Couchpotato)

See review here: http://canadianprofiteer.com/questrade-review/


CanuckStache

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Re: Canadian Investing
« Reply #11 on: March 31, 2014, 10:05:57 AM »
If you go with Questrade, you can pick iShares and do automatic DRIP purchases. I don't do that (micromanager!), but it is one easy alternative to eSeries.

iShares have just cut some MERs too, so they are REALLY inexpensive now. Actually.. damn, maybe I should do some DRIPping myself.

Is an iShare similar to an index fund? I'm not savvy enough to be pinking individual company stocks. I want something relatively simple :)

CanuckStache

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Re: Canadian Investing
« Reply #12 on: March 31, 2014, 10:19:33 AM »
Signing up for Questrade and already stuck. When I choose a TFSA it asks me:
Do you want -
Long calls and puts
Covered calls

Any ideas?

danzabar

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Re: Canadian Investing
« Reply #13 on: March 31, 2014, 10:51:50 AM »
Thanks! That's some great reading. Not sure I get it all just yet, but I think I just need to open an account with an online broker and kinda dive in. I imagine it'll make more sense then.

Ideally I'd like to setup a way to just automatically contribute to a TFSA that has index funds in it. That way I can just put it on autopilot.

If you go with e-series you should be able to set up an automatic monthly transfer from your checking account, but if I remember correctly the money goes into your main TFSA area and then you have to manually buy the different index fund types. I don't think you could buy the actual funds directly but I could be wrong on that. But once you're set up it only takes 5-10 minutes once a month to make the purchases.

Just to clarify, this is not the case. I have my investment go directly from my chequing account into 4 different indexes (those 4 simple ones suggested by couchpotato). What you have to do sometimes is if you are making a large initial deposit, you have to transfer it to a td moneymarket fund then move it yourself to your index funds. I don't know about questrade, but if you are buying frequently, you want to avoid ETF's and focus on mutual fund index funds, in canada that means td e-series for low mer's.

going2ER

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Re: Canadian Investing
« Reply #14 on: March 31, 2014, 11:09:25 AM »
At PC Financial you can just transfer funds to your TFSA and have it set up so that they are automatically put into mutual funds. I don't know alot about investing, but for now this is what I have been doing and it is little work.

CanuckStache

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Re: Canadian Investing
« Reply #15 on: March 31, 2014, 11:10:14 AM »
At PC Financial you can just transfer funds to your TFSA and have it set up so that they are automatically put into mutual funds. I don't know alot about investing, but for now this is what I have been doing and it is little work.

Thanks - Yeah I could set something like that up but I imaging the PC TFSA has a relatively low interest rate compared to investing?

jasonw223

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Re: Canadian Investing
« Reply #16 on: March 31, 2014, 01:48:42 PM »
Hey, I previously had an account with BMO Investorline and recently switched (February) to Questrade after some fairly extensive research.  I have my RRSP and TFSA through them now.  The signup process was a bit annoying (just say no to options / covered calls etc., and scan/upload your signed documents), but it is working great now.  Most of my money is now invested in VUN (https://www.vanguardcanada.ca/individual/etfs-detail-overview.htm?portId=9557).  And buying ETFs on Questrade is free!  So buying them frequently is fine...

Read the stock series on http://jlcollinsnh.com/ if you have any investing questions at all - he isn't Canadian but does a great job explaining all things money related. 

daverobev

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Re: Canadian Investing
« Reply #17 on: March 31, 2014, 02:20:17 PM »
Signing up for Questrade and already stuck. When I choose a TFSA it asks me:
Do you want -
Long calls and puts
Covered calls

Any ideas?

NO and NO!!

daverobev

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Re: Canadian Investing
« Reply #18 on: March 31, 2014, 02:21:22 PM »
Thanks! That's some great reading. Not sure I get it all just yet, but I think I just need to open an account with an online broker and kinda dive in. I imagine it'll make more sense then.

Ideally I'd like to setup a way to just automatically contribute to a TFSA that has index funds in it. That way I can just put it on autopilot.

If you go with e-series you should be able to set up an automatic monthly transfer from your checking account, but if I remember correctly the money goes into your main TFSA area and then you have to manually buy the different index fund types. I don't think you could buy the actual funds directly but I could be wrong on that. But once you're set up it only takes 5-10 minutes once a month to make the purchases.

Just to clarify, this is not the case. I have my investment go directly from my chequing account into 4 different indexes (those 4 simple ones suggested by couchpotato). What you have to do sometimes is if you are making a large initial deposit, you have to transfer it to a td moneymarket fund then move it yourself to your index funds. I don't know about questrade, but if you are buying frequently, you want to avoid ETF's and focus on mutual fund index funds, in canada that means td e-series for low mer's.

With Questrade, ETF purchases are entirely free. Well.. no I take that back, there is sometimes a small cost if you use 'limit' rather than 'market' (you should!) - like, 5c or something.

daverobev

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Re: Canadian Investing
« Reply #19 on: March 31, 2014, 02:24:08 PM »
If you go with Questrade, you can pick iShares and do automatic DRIP purchases. I don't do that (micromanager!), but it is one easy alternative to eSeries.

iShares have just cut some MERs too, so they are REALLY inexpensive now. Actually.. damn, maybe I should do some DRIPping myself.

Is an iShare similar to an index fund? I'm not savvy enough to be pinking individual company stocks. I want something relatively simple :)

iShares/BlackRock are an ETF provider - http://ca.ishares.com - that you buy through a broker.

So XIC.TO is a TSX-tracking ETF provided by iShares. ZCN is an ETF that follows the same index (the TSX), but provided/run by BMO not iShares. VCN is provided by Vanguard. You can usually tell who runs a particular ETF by the first character of its ticker symbol - 'Z' is BMO, 'X' and 'C' are iShares, 'V' is Vanguard, 'H' is Horizons, etc.

If two ETFs track the same index, generally you should pick the one with the lower MER. iShares have just cut their fees on a few.

danzabar

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Re: Canadian Investing
« Reply #20 on: March 31, 2014, 03:10:35 PM »
Very interesting, so you could purchase the vanguard funds in etf format through questrade?
I may look into this for my TFSA

daverobev

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Re: Canadian Investing
« Reply #21 on: March 31, 2014, 03:29:25 PM »
Very interesting, so you could purchase the vanguard funds in etf format through questrade?
I may look into this for my TFSA

Yes; both Vanguard Canada, and Vanguard US ETFs are available.

Just be aware of withholding taxes etc and currency conversion - in an RRSP it's probably better to hold the US ETF in US$, converting via 'Norbert's Gambit'; in a TFSA or unregistered, VUN.TO might be better. Have a read of CCP..

CanuckStache

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Re: Canadian Investing
« Reply #22 on: March 31, 2014, 06:23:46 PM »
Awesome thanks for all the advice. I've not got an RRSP and TFSA setup with them, just need to complete the transfer. And once thats done, I need to figure out what to purchase. I have a pretty high risk tolerance but I also don't really know what I'm doing. I'll have to do a bunch of reading!