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Learning, Sharing, and Teaching => Investor Alley => Topic started by: Stasher on December 30, 2015, 01:36:16 PM

Title: Almost Canuck time for 2016 TFSA deposit
Post by: Stasher on December 30, 2015, 01:36:16 PM
So....first off it is too bad the Liberal Govt took away my $10,000 contribution limit and left me with $5,500 to invest.
With that being said I am curious on how fellow TFSA savers will spend their limit this coming January.

I currently hold my TFSA in Vanguard ETFs following the 3 fund portfolio of the Canadian Couch Potato (assertive risk)
http://canadiancouchpotato.com/wp-content/uploads/2015/01/CCP-Model-Portfolios-Vanguard.pdf
25% VAB Vanguard CND bond index
25% VCN Vanguard TSX index
50% VXC Vanguard FTSE Global index (recommended switch from VUN)

#1 keep current strategy and rebalance funds when I deposit
#2 deposit all into VXC to follow the one fund strategy mention by JLCollinsnh

I like the simplicity of #2 but also like the idea of VCN being "on sale" right now.
Look forward to everyone's thoughts.


Title: Re: Almost Canuck time for 2016 TFSA deposit
Post by: Retire-Canada on December 30, 2015, 04:01:28 PM
I will just follow my asset allocation come early Jan when I max my TFSA. I have been buying a lot of VCN lately. I will likely buy more when I fill my TFSA.

I haven't paid attention to the various ETFS I hold lately so I'm not sure where they sit relative to my asset allocation.
Title: Re: Almost Canuck time for 2016 TFSA deposit
Post by: Jon_Snow on December 30, 2015, 07:49:39 PM
11k, cocked and loaded for Jan 1.
Title: Re: Almost Canuck time for 2016 TFSA deposit
Post by: Stasher on December 30, 2015, 07:53:47 PM
I think with the lower value of the VCN I may just stick with the current allocation, oil will rebound and most oil equities right now are down around 40% at least right now. Long term should be looking good and of course that is what we are all about right.
Title: Re: Almost Canuck time for 2016 TFSA deposit
Post by: nobodyspecial on December 30, 2015, 08:35:37 PM
Buying more VXC on the 2nd before the CDN$ drops further

Title: Re: Almost Canuck time for 2016 TFSA deposit
Post by: Joan-eh? on December 30, 2015, 10:04:05 PM
There is an official petition. Please consider signing and passing along to everyone you know.

Also warn people that you have to confirm your participation on the follow up email.


Good luck.... Maybe we can make a change?!


https://petitions.parl.gc.ca/en/Petition/Details?Petition=e-3
Title: Re: Almost Canuck time for 2016 TFSA deposit
Post by: Stasher on December 31, 2015, 11:05:34 AM
Thanks for the link Joan-eh , I have signed the petition.
Title: Re: Almost Canuck time for 2016 TFSA deposit
Post by: Sarnia Saver on December 31, 2015, 11:28:58 AM
Sadly, without depleting my reserves I do not have the max available to plug into my wife and I's TFSA on Jan 1.  However, we do have auto deposits set up to max through the year, with the added bonus of dollar cost averaging.  We invest in TD Bank's 'e-series' as they allow for cost efficient small deposits throughout the year and average a 0.3% MER on my allocations (33% CDN Bond Fund, 15% CDN equity, 15% International equity, 37% US equity).  Not the most efficient method, as Vanguard ETFs are definately cheaper, but access through one bank account, no cost smaller deposits and a very competitive cost has so far kept me with TD's e-series funds.
Title: Re: Almost Canuck time for 2016 TFSA deposit
Post by: ptgearguy on December 31, 2015, 03:31:40 PM
Paying off debt for me. Hope to work on my TFSA next year.
Title: Re: Almost Canuck time for 2016 TFSA deposit
Post by: Heckler on December 31, 2015, 04:56:37 PM
Mortgage free in February, so will open up the wifes TFSA and fill up on 45k of VCN throughout the year after topping mine up in February.   VAB, VUN, XEF and VEE are in the RRSPs.
Title: Re: Almost Canuck time for 2016 TFSA deposit
Post by: nobodyspecial on December 31, 2015, 07:19:09 PM
VCN?

Is everybody suddenly super-patriotic or have we  discovered a new source of income beyond oil that is too expensive to mine, commodities nobody wants and bank charges?

 
Title: Re: Almost Canuck time for 2016 TFSA deposit
Post by: Stasher on December 31, 2015, 07:27:30 PM
VCN?

Is everybody suddenly super-patriotic or have we  discovered a new source of income beyond oil that is too expensive to mine, commodities nobody wants and bank charges?

 

That was my thought on VCN , extremely natural resource based companies and then the big banks. It is very poorly diversified, the only argument I have for buying it and as mentioned here is that stocks are so low that when oil does rebound we could make some nice gains.
Title: Re: Almost Canuck time for 2016 TFSA deposit
Post by: Heckler on December 31, 2015, 07:38:35 PM
VCN only because VUN and XEF have increased so much this past year, and VCN is down and under allocated.  Buy low, sell high.

  Its not the only thng Ill be buying, just not in TFSA.
Title: Re: Almost Canuck time for 2016 TFSA deposit
Post by: Heckler on December 31, 2015, 07:40:52 PM
What are other low cost etf alternatives for Canadian equity indexes?
Title: Re: Almost Canuck time for 2016 TFSA deposit
Post by: Retire-Canada on December 31, 2015, 07:44:26 PM
VCN?

Is everybody suddenly super-patriotic or have we  discovered a new source of income beyond oil that is too expensive to mine, commodities nobody wants and bank charges?

Super patriotic? Nope. Well diversified globally yes.

Living in Canada? Yes.

It makes sense to for me to hold Canadian equities. If you are living in Canada and see no hope for the Canadian economy in the medium to long-term than it's time to move. If you do believe that the Canadian economy will rebound buying VCN now while it's priced relatively low and available in Canadian dollars also makes sense.

VCN is just part of my AA. Whatever is priced low gets bought to rebalance my AA. For the time being that's been VCN and to a lesser degree VEE. In the future it will be other ETFs.
Title: Re: Almost Canuck time for 2016 TFSA deposit
Post by: nobodyspecial on December 31, 2015, 08:08:08 PM
What are other low cost etf alternatives for Canadian equity indexes?
Why would you own Canadian equity at all ? Just because you have a maple leaf on your passport.
If you were in Luxemburg you wouldn't be looking for a Luxemburgois ETF

Arguably you should be short on the country you live in. If the economy does well you can expect your job/salary/house to appreciate so you want your stocks anti-correlated to the home market.

The bigger concern is that even in a commodity led economy the TSX is dominated by a few domestic banks.

Title: Re: Almost Canuck time for 2016 TFSA deposit
Post by: Heckler on December 31, 2015, 08:38:55 PM

Why would you own Canadian equity at all ?

For the same reasons already mentioned above, plus diversification.

http://topforeignstocks.com/2013/06/16/a-review-of-tsx-composite-vs-sp-500-returns/
Title: Re: Almost Canuck time for 2016 TFSA deposit
Post by: Eggman111 on December 31, 2015, 09:12:20 PM
I do the same 3 ETFs as the OP except 20/20/60 VAB/VCN/VXC instead of 25/25/50, to have more outside of Canada and have 80/20 stocks to bonds for a bit more risk/reward.

I've asked myself why have even any specific Canadian equities, and the reasons others have listed apply, as well as these:

1. Lower expense ratio than VXC or VUN, without converting dollars.

But more importantly,

2. Reduces risk of portfolio value decreasing in CAD if the dollar happens to greatly increase in value compared to major currencies. Since I love Canada and plan to make it my home base no matter where I might travel, it makes sense to keep a reasonable amount of my asserts in CAD.

I'm not thinking the dollar is going anywhere up anytime soon, but it goes up and down in cycles, and in the long term I want to be prepared either way.

Sent from my Nexus 5 using Tapatalk

Title: Re: Almost Canuck time for 2016 TFSA deposit
Post by: Retire-Canada on January 01, 2016, 06:35:12 AM
If you were in Luxemburg you wouldn't be looking for a Luxemburgois ETF

If Canada had a population of 0.5M that would be a useful analogy.

If Victoria BC was a city state I'd probably invest in a bigger local market like Canada and the US.
Title: Re: Almost Canuck time for 2016 TFSA deposit
Post by: Kaspian on January 04, 2016, 09:20:39 AM
I'd stick with your original plan, Stasher.  Annual tinkering is why the majority of passive investors underperform the markets.  You can always justify to yourself that it isn't tinkering, but it is.  It's the siren call to do "something".  Personally, I'm just moving $5,500 worth of bonds from a non-registered account into my TFSA.  I know I really shouldn't hold bonds at all in a non-registered account for tax reasons (as per CCP) but my RRSP and TFSA are both maxed--and I want to stick to the proper allocation. 
Title: Re: Almost Canuck time for 2016 TFSA deposit
Post by: Retire-Canada on January 04, 2016, 09:23:56 AM
I'd stick with your original plan, Stasher.  Annual tinkering is why the majority of passive investors underperform the markets.  You can always justify to yourself that it isn't tinkering, but it is.  It's the siren call to do "something".  Personally, I'm just moving $5,500 worth of bonds from a non-registered account into my TFSA.  I know I really shouldn't hold bonds at all in a non-registered account for tax reasons (as per CCP) but my RRSP and TFSA are both maxed--and I want to stick to the proper allocation.

^^^ this. :)

I just sent Questrade $5500 for my TFSA account. Over the next day or so I will update my ETF values/% and figure out what I need to do to rebalance my AA.

Then I will do it whatever that suggests I buy. Have a plan you believe in and stick to it.
Title: Re: Almost Canuck time for 2016 TFSA deposit
Post by: Stasher on January 04, 2016, 09:28:36 AM
Ya I think that is what I will do guys, thanks for the input but one last thing.... thoughts on bonds ? Im holding VAB still.
I just read this yesterday from Boomer and Echo
http://boomerandecho.com/my-2015-portfolio-rate-of-return/
Happy to know that my returns were as good since I hold the same mix (except the addition of VAB)
Title: Re: Almost Canuck time for 2016 TFSA deposit
Post by: Kaspian on January 04, 2016, 09:47:36 AM
Ya I think that is what I will do guys, thanks for the input but one last thing.... thoughts on bonds ? Im holding VAB still.
I just read this yesterday from Boomer and Echo
http://boomerandecho.com/my-2015-portfolio-rate-of-return/
Happy to know that my returns were as good since I hold the same mix (except the addition of VAB)

Ersh, man alive!  What the hell is Boomer & Echo doing?!!

Quote
Unfortunately, the heavy exposure to Canadian stocks meant a dismal performance for this fund and it lost 2.9 percent for me on the year. With the loan now paid off I will liquidate this fund and transfer the money over to my TD account in the coming weeks.
...
I use my judgement to decide which fund to invest in with the idea of maintaining a 33% allocation for each fund. That becomes trickier when the Canadian markets stumble and U.S. markets surge, but I’ve managed to stick to that rough guideline.
...
Last year I decided that my investment returns had more to do with luck than skill (we were in a massive bull market, after all) and so I made the switch to my two-ETF solution.



Really tinkering around!!  And then deciding at the end that the portfolio did pretty well last year?  I don't think there should be "luck" or "skill" involved in a passive portfolio.  Annual re-writing of "the plan" isn't a "plan" at all.  Liquidating something because it didn't do well in one calendar year? 

Honestly--my portfolio is up in value for 2015 (CCP "balanced" TD e-Series).  However, I know the only reason it's up last year isn't "luck", "skill", or "judgement", it's simply because the 20% US Equity portion of my portfolio is up in value because the Canadian dollar is down.
Title: Re: Almost Canuck time for 2016 TFSA deposit
Post by: Cookie78 on January 04, 2016, 10:05:26 AM
I think with the lower value of the VCN I may just stick with the current allocation, oil will rebound and most oil equities right now are down around 40% at least right now. Long term should be looking good and of course that is what we are all about right.

Thanks for posting this thread. I'm an investing noob, so it's a helpful reminder for me.

I keep justifying small changes to my asset allocation based on new information (resulting in less VAB, and more VCN and VXC). I need to make sure I'm making rational long term decisions, not just reacting to the market.

:)
Title: Re: Almost Canuck time for 2016 TFSA deposit
Post by: Stasher on January 04, 2016, 10:16:47 AM
I think with the lower value of the VCN I may just stick with the current allocation, oil will rebound and most oil equities right now are down around 40% at least right now. Long term should be looking good and of course that is what we are all about right.

Thanks for posting this thread. I'm an investing noob, so it's a helpful reminder for me.

I keep justifying small changes to my asset allocation based on new information (resulting in less VAB, and more VCN and VXC). I need to make sure I'm making rational long term decisions, not just reacting to the market.

:)

We are al in the same boat, some of us just sound fancier some times but at the en of the day we all need help to keep on track to FIRE
Title: Re: Almost Canuck time for 2016 TFSA deposit
Post by: Stasher on January 04, 2016, 12:36:51 PM
I should share that this is where I based my portfolio off for investment
http://canadiancouchpotato.com/model-portfolios-2/
I just deposited my $5,500 this morning into my iTrade account and will rebalance with the added contribution to meet my AA on probably friday as I am waiting for the Q4 dividend deposit from Vanguard and will be set for the year.
I make roughly $26/month off VAB and then $170/quarter off VXC VCN > $1000/yr on dividends roughly for 2015 so not bad at all (based on $45K total book value)
That number should increase nicely after new deposit and rebalance
Title: Re: Almost Canuck time for 2016 TFSA deposit
Post by: Jon_Snow on January 04, 2016, 07:56:53 PM
First sizeable purchase for my newly bolstered 2016 TFSA (actually, DW's, still need to address mine)...bought 300 shares of a REIT I've had my eyes on for a while now. Enough to provide around 23 bucks of non-taxed monthly income...not too shabby. :)
Title: Re: Almost Canuck time for 2016 TFSA deposit
Post by: AngryOcean on January 04, 2016, 08:08:33 PM
I've been doing the ccc model as well. But with this year's I thought I would explore a little bit of CDZ. The Canadian dividend aristocrats etf. See how it performs and add a little higher monthly dividend income to the portfolio
Title: Re: Almost Canuck time for 2016 TFSA deposit
Post by: Heckler on January 04, 2016, 09:37:41 PM
How does CDZ compare to VDY?  I e been considering VDY instead of VCN for my spouses TFSA
Title: Re: Almost Canuck time for 2016 TFSA deposit
Post by: elaine amj on January 04, 2016, 09:48:18 PM
Sadly, without depleting my reserves I do not have the max available to plug into my wife and I's TFSA on Jan 1.  However, we do have auto deposits set up to max through the year, with the added bonus of dollar cost averaging.  We invest in TD Bank's 'e-series' as they allow for cost efficient small deposits throughout the year and average a 0.3% MER on my allocations (33% CDN Bond Fund, 15% CDN equity, 15% International equity, 37% US equity).  Not the most efficient method, as Vanguard ETFs are definately cheaper, but access through one bank account, no cost smaller deposits and a very competitive cost has so far kept me with TD's e-series funds.

For all your reasons, we too decided to use e-series for our monthly investments. I was thinking of sticking to Vanguard but realized the lack of automation would not be a good thing for us. I do buy Vanguard funds when I have a lump sum to invest.
Title: Re: Almost Canuck time for 2016 TFSA deposit
Post by: K-ice on January 05, 2016, 09:57:00 AM
What about asset location?
I am trying to learn about this.

First step select your allocation:

25% VAB Vanguard CND bond index
25% VCN Vanguard TSX index
50% VXC Vanguard FTSE Global index (recommended switch from VUN)

I see no problems with this.

OK now decide where you should put it.

Lets assume neither your RRSP or TFSA are maxed out.
I think I would put VAB into my RRSP and then the rest into my TFSA as I would expect them to make more gains.

If you have so much money that you also need to invest in taxable things become a bit different.
The Location for tax reasons becomes important.
Of course max out your TFSA and RRSP first then with any overflow:

I would keep VCN in the taxable because of the eligible Canadian dividend tax credit.

Also you may want to split up your VXC into 25% VTI and 25% VXUS in American dollars.  Keep the VTI in your RRSP since there is no foreign withholding tax on US investments in your RRSP.

I am still learning all of this stuff but deciding where to put things is almost as important as your allocation.

Check out this link too:

[1]   http://www.moneysense.ca/invest/asset-ocation-everything-in-its-place/

It says:

“First, asset location is not a concern if all your savings are in tax-sheltered accounts, especially if your portfolio is relatively small. If you have some contribution room left in your RRSP or TFSA it rarely makes sense to hold investments in non-registered (taxable) accounts. Asset location becomes important only when your tax-sheltered accounts are maxed out.”




Title: Re: Almost Canuck time for 2016 TFSA deposit
Post by: Cookie78 on January 05, 2016, 10:48:29 AM
What about asset location?
I am trying to learn about this.

First step select your allocation:

25% VAB Vanguard CND bond index
25% VCN Vanguard TSX index
50% VXC Vanguard FTSE Global index (recommended switch from VUN)

I see no problems with this.

OK now decide where you should put it.

Lets assume neither your RRSP or TFSA are maxed out.
I think I would put VAB into my RRSP and then the rest into my TFSA as I would expect them to make more gains.

If you have so much money that you also need to invest in taxable things become a bit different.
The Location for tax reasons becomes important.
Of course max out your TFSA and RRSP first then with any overflow:

I would keep VCN in the taxable because of the eligible Canadian dividend tax credit.

Also you may want to split up your VXC into 25% VTI and 25% VXUS in American dollars.  Keep the VTI in your RRSP since there is no foreign withholding tax on US investments in your RRSP.

I am still learning all of this stuff but deciding where to put things is almost as important as your allocation.

Check out this link too:

[1]   http://www.moneysense.ca/invest/asset-ocation-everything-in-its-place/

It says:

“First, asset location is not a concern if all your savings are in tax-sheltered accounts, especially if your portfolio is relatively small. If you have some contribution room left in your RRSP or TFSA it rarely makes sense to hold investments in non-registered (taxable) accounts. Asset location becomes important only when your tax-sheltered accounts are maxed out.”

I screwed this up when I started and put VAB in my my TFSA. I hope to max both my TFSA and RRSP this year and haven't yet needed a taxable account, so it's not a huge deal. But is it worth the cost to change VAB to put it in my RRSP instead now, or just leave it alone and start buying new shares in RRSP? So far I haven't touched anything, except buying new shares each month.
Title: Re: Almost Canuck time for 2016 TFSA deposit
Post by: Retire-Canada on January 05, 2016, 11:00:08 AM
I screwed this up when I started and put VAB in my my TFSA. I hope to max both my TFSA and RRSP this year and haven't yet needed a taxable account, so it's not a huge deal. But is it worth the cost to change VAB to put it in my RRSP instead now, or just leave it alone and start buying new shares in RRSP? So far I haven't touched anything, except buying new shares each month.

If you want to hold VAB in your RRSP I'd sell it in the TFSA and buy it in the RRSP. Transaction costs are minimal as long as you aren't doing stuff all the time.
Title: Re: Almost Canuck time for 2016 TFSA deposit
Post by: Cookie78 on January 05, 2016, 01:03:27 PM
I screwed this up when I started and put VAB in my my TFSA. I hope to max both my TFSA and RRSP this year and haven't yet needed a taxable account, so it's not a huge deal. But is it worth the cost to change VAB to put it in my RRSP instead now, or just leave it alone and start buying new shares in RRSP? So far I haven't touched anything, except buying new shares each month.

If you want to hold VAB in your RRSP I'd sell it in the TFSA and buy it in the RRSP. Transaction costs are minimal as long as you aren't doing stuff all the time.

Thanks. :)
Title: Re: Almost Canuck time for 2016 TFSA deposit
Post by: Heckler on January 05, 2016, 01:12:07 PM
But why do you think you screwed it up?  The point is to hold bonds in a tax exempt or deferred account.
Title: Re: Almost Canuck time for 2016 TFSA deposit
Post by: Le Poisson on January 05, 2016, 01:19:55 PM
Since I only opened my TFSA this year, I have $40,000 in available space, and Momma has another $40,000 in hers. Don't think we'll max it out.  Wish we could though :)

I'm on the same allocation as you , but since I only started in May, its going to take a while to get the DCA to kick in. My initial deposit is now about 75% of the account, so a long time until I get balanced out there. WHat is nice though, is that I am already seeing the trending smooth out and the climb beginning. I was VERY concerned with VCN when I first started, but now its sortof a puppy that bumbles along peeing on all the wrong trees. Someday it will come to its senses. I like it anyways. Waiting for it to start behaving.
Title: Re: Almost Canuck time for 2016 TFSA deposit
Post by: Kaspian on January 05, 2016, 02:40:22 PM
Someday it will come to its senses. I like it anyways. Waiting for it to start behaving.

Wait 'til the price of oil begins to creep back up.  You'll be very happy you DCA into that all this time while other people kicked the dog to the curb at the market bottom.  ...I don't know when that will take place, but it will eventually. 
Title: Re: Almost Canuck time for 2016 TFSA deposit
Post by: Cookie78 on January 05, 2016, 03:08:22 PM
But why do you think you screwed it up?  The point is to hold bonds in a tax exempt or deferred account.

It's not a huge deal, but my understanding is that Bonds are better in RRSP because they have lower growth rates over time and RRSP's are taxed when you eventually pull that money out. Higher growth investments are better in TFSA.

Title: Re: Almost Canuck time for 2016 TFSA deposit
Post by: K-ice on January 05, 2016, 08:06:44 PM
Cookie78

Check with your bank. You can probably do an "In kind" transfer from your TFSA to your RRSP without actually selling the VAB.
You will save a bit in fees.

It's harder to go the other way because there are tax consequences.

Also, you can't top up your TFSA again until 2017 so you may want to pull this location rebalancing in December 2016.

I did something similar with stocks I had in a taxable & transfered them over to the TFSA.

It triggered a "deamed deposition" on the stocks at that day but at least they grow tax free from now on.

I put the terms I learnt doing this in "". Learning the bank lingo.
Title: Re: Almost Canuck time for 2016 TFSA deposit
Post by: human on January 05, 2016, 08:44:17 PM
Just curious, why do some of you have so much cash on hand that you can max out the tfsa on day one? I invest every payday. I assume you all want to earn as much tax free as soon as possible, but aren't you missing out on gains in the meantime?

It would take me only two months to max out my tfsa. However I'm going to be shoveling money into my rrsp until Feb 28 in order to get taxes back to reinvest. The refund could then go into the tfsa. Unless of course you have all managed to max out your rrsp? I have a bunch of room.  . . Just curious if maxing out the tfsa at the start of the year is some sort of strategy and what the reasoning behind it is.
Title: Re: Almost Canuck time for 2016 TFSA deposit
Post by: Stasher on January 05, 2016, 10:16:45 PM
Just curious, why do some of you have so much cash on hand that you can max out the tfsa on day one? I invest every payday. I assume you all want to earn as much tax free as soon as possible, but aren't you missing out on gains in the meantime?

It would take me only two months to max out my tfsa. However I'm going to be shoveling money into my rrsp until Feb 28 in order to get taxes back to reinvest. The refund could then go into the tfsa. Unless of course you have all managed to max out your rrsp? I have a bunch of room.  . . Just curious if maxing out the tfsa at the start of the year is some sort of strategy and what the reasoning behind it is.

Some of us have maxed our current year TFSA and RRSP limits so I build up extra in my savings account rather than putting in a taxable account and then dump into my tax sheltered accounts in January/March for the start of the next calendar year.
Title: Re: Almost Canuck time for 2016 TFSA deposit
Post by: Retire-Canada on January 06, 2016, 06:59:51 AM
Just curious, why do some of you have so much cash on hand that you can max out the tfsa on day one? I invest every payday. I assume you all want to earn as much tax free as soon as possible, but aren't you missing out on gains in the meantime?

It would take me only two months to max out my tfsa. However I'm going to be shoveling money into my rrsp until Feb 28 in order to get taxes back to reinvest. The refund could then go into the tfsa. Unless of course you have all managed to max out your rrsp? I have a bunch of room.  . . Just curious if maxing out the tfsa at the start of the year is some sort of strategy and what the reasoning behind it is.

I maxed out my RRSP/TFSA in 2015 well before the end of the year. So I started putting money into a taxable account. The last two months of the year I kept my savings cash because I was feeling unsettled about my work situation and want to have some liquid $$ in case I was not working. Things turned around so I had ~$5500 handy and dumped it into my TFSA for an early year win and morale boost to get 2016 off to a great start.

I just checked my accounts and Vanguard dumped my dividends into my accounts as well so I actually have over $5700 to invest in my TFSA today.

Since I am not 100% sure on my RRSP limit for 2016 [haven't done my taxes yet] I don't want to hit that first as I don't want to over contribute. Now that TFSA is maxed for this year I'll start on the RRSP and do my taxes before I get into the danger zone.

As soon as RRSP is maxed I'll just switch to my taxable accounts again for 2016.
Title: Re: Almost Canuck time for 2016 TFSA deposit
Post by: elaine amj on January 06, 2016, 08:11:26 AM
Just curious, why do some of you have so much cash on hand that you can max out the tfsa on day one? I invest every payday. I assume you all want to earn as much tax free as soon as possible, but aren't you missing out on gains in the meantime?

It would take me only two months to max out my tfsa. However I'm going to be shoveling money into my rrsp until Feb 28 in order to get taxes back to reinvest. The refund could then go into the tfsa. Unless of course you have all managed to max out your rrsp? I have a bunch of room.  . . Just curious if maxing out the tfsa at the start of the year is some sort of strategy and what the reasoning behind it is.

DH and I were talking about this yesterday - whether we had the $11,000 on hand to max out our TFSAs. We use YNAB to budget our money and I am trying to stick to its methods. At first I was thinking we would need to move the money from our taxable investments. But then I realized - we have the cash - they're all just categorized to different sinking funds. I have about $5k available in our savings category. I will get the other $5k from "borrowing" from my sinking funds. The money is in my bank account anyway - it is just earmarked for other things. I'll just use it this month instead - not too worried as I'll refill the money by next month and I have plenty of buffer room over and above that.
Title: Re: Almost Canuck time for 2016 TFSA deposit
Post by: GuitarStv on January 06, 2016, 08:37:58 AM
Just curious, why do some of you have so much cash on hand that you can max out the tfsa on day one? I invest every payday. I assume you all want to earn as much tax free as soon as possible, but aren't you missing out on gains in the meantime?

It would take me only two months to max out my tfsa. However I'm going to be shoveling money into my rrsp until Feb 28 in order to get taxes back to reinvest. The refund could then go into the tfsa. Unless of course you have all managed to max out your rrsp? I have a bunch of room.  . . Just curious if maxing out the tfsa at the start of the year is some sort of strategy and what the reasoning behind it is.

Some of us have maxed our current year TFSA and RRSP limits so I build up extra in my savings account rather than putting in a taxable account and then dump into my tax sheltered accounts in January/March for the start of the next calendar year.

Yep, that's what we do every Jan 1.
Title: Re: Almost Canuck time for 2016 TFSA deposit
Post by: Kaspian on January 06, 2016, 09:26:08 AM
Just curious, why do some of you have so much cash on hand that you can max out the tfsa on day one? I invest every payday. I assume you all want to earn as much tax free as soon as possible, but aren't you missing out on gains in the meantime?

It would take me only two months to max out my tfsa. However I'm going to be shoveling money into my rrsp until Feb 28 in order to get taxes back to reinvest. The refund could then go into the tfsa. Unless of course you have all managed to max out your rrsp? I have a bunch of room.  . . Just curious if maxing out the tfsa at the start of the year is some sort of strategy and what the reasoning behind it is.

Some of us have maxed our current year TFSA and RRSP limits so I build up extra in my savings account rather than putting in a taxable account and then dump into my tax sheltered accounts in January/March for the start of the next calendar year.

Yep, that's what we do every Jan 1.

+1.   Normally what I do too.  This year I decided it wiser to immediately move $5,500 in bonds from a taxable account to the TFSA.  (Bond dividends = highly taxed!)  I'll use the extra I've built up in my high interest savings account (and from my tax return) to instead top off my RRSP after I have my tax assessment back in March.  I don't have much annual RRSP room (about $3K) because of a pension plan.  The remainder of the money I'm sitting on will go into my non-registered account to rebalance things.
Title: Re: Almost Canuck time for 2016 TFSA deposit
Post by: Retire-Canada on January 06, 2016, 09:35:31 AM
Ran my AA numbers this morning and I was low on VCN and VUN, but high on my Int'l ETFs.

So I bought a bunch of VCN & VUN. I didn't get things fully rebalanced, but they are close enough I am happy to wait for my next monthly addition to keep moving the needles around. I don't feel like selling and incurring transaction costs when buying ETFs is free.
Title: Re: Almost Canuck time for 2016 TFSA deposit
Post by: human on January 06, 2016, 05:31:11 PM
Thanks everyone for the replies to my question. I get it now. I'm late to investing so I have lots of room, it will probably take me two more years to fill everything up. Then I won't have much non taxable every year. I'm a civil servant with a pension so that rrsp room will shrink once I fill up unused years.
Title: Re: Almost Canuck time for 2016 TFSA deposit
Post by: powersuitrecall on January 07, 2016, 12:01:52 PM
I like doing the RESP contributions right away so I get the free $ from the gov't sooner.  Now that it's done, we'll contribute to our TFSAs every couple of weeks until we max out.
Title: Re: Almost Canuck time for 2016 TFSA deposit
Post by: elaine amj on January 07, 2016, 04:34:24 PM
Good point! I didn't even think about that. I'll plan to divert a chunk of RRSP savings to my kids RESP a few months from now. In the meantime, we just both maxed out our TFSAs and still need to fill up last year's RRSPs before the deadline. We didn't track our contributions well over the last year so I have no idea how much contribution room we both have. Going to do our taxes early and once we know how much, we'll put a chunk of money in our RRSPs. Dh already transferred 10k to his RRSP account last week.
Title: Re: Almost Canuck time for 2016 TFSA deposit
Post by: Stasher on January 08, 2016, 02:51:02 PM
Deposit confirmed monday from my online transfer and now I just did my VCN VXC and VAB trades today.
The extra big drops this week on the markets gave me a little bit of an extra discount "at the till"
Now lets hopefully see the year gradually rebound
Title: Re: Almost Canuck time for 2016 TFSA deposit
Post by: Heckler on January 08, 2016, 08:42:56 PM
Deposit confirmed monday from my online transfer and now I just did my VCN VXC and VAB trades today.
The extra big drops this week on the markets gave me a little bit of an extra discount "at the till"
Now lets hopefully see the year gradually rebound

$5500 divided by three?   Are you considering all your accounts as one asset allocation? 
Title: Re: Almost Canuck time for 2016 TFSA deposit
Post by: Retire-Canada on January 09, 2016, 07:12:44 AM
$5500 divided by three?   Are you considering all your accounts as one asset allocation?

That is what I do and I would take the opportunity to rebalance my accounts when I add money so even if my desired AA was split evenly into 3rds I would not be buying each ETF in equal measure.
Title: Re: Almost Canuck time for 2016 TFSA deposit
Post by: Heckler on January 09, 2016, 07:20:52 AM
My point wasn't equal division or not.  I was wondering if he split $5500 into three funds in his TFSA contribution, for the simple reason of efficiency and reduction of trading fees (even Questtrade will charge you to sell them).  I'm assuming his TFSA isn't his only account.

https://www.bogleheads.org/wiki/Asset_allocation_in_multiple_accounts#Principles_of_asset_allocation_across_multiple_accounts


My TFSA holds only VCN.

VAB, VUN, XEF and VEE are in the RSPs.
Title: Re: Almost Canuck time for 2016 TFSA deposit
Post by: Retire-Canada on January 09, 2016, 09:10:26 AM
My point wasn't equal division or not.  I was wondering if he split $5500 into three funds in his TFSA contribution, for the simple reason of efficiency and reduction of trading fees (even Questtrade will charge you to sell them).  I'm assuming his TFSA isn't his only account.

https://www.bogleheads.org/wiki/Asset_allocation_in_multiple_accounts#Principles_of_asset_allocation_across_multiple_accounts


My TFSA holds only VCN.

VAB, VUN, XEF and VEE are in the RSPs.

How do you save on trading fees by either:

- holding same ETFs in all accounts
- holding only specific ETFs in specific accounts

I have mostly the same ETFs in my TFSA and RRSP. I hold only VCN in my non-reg account because I am taxed on those dividends.

I look at the overall AA for all my accounts when I rebalance by making additions to my accounts [free at QT as you note] so I don't see how there would be any extra costs doing it this way.
Title: Re: Almost Canuck time for 2016 TFSA deposit
Post by: Stasher on January 09, 2016, 12:44:45 PM
Super simple...
One TFSA self traded brokerage account in which I hold the 3 Vanguard funds based on my AA
I deposited the $5500
I opened up my spreadsheet that handles my Asset Allocation rebalancing a
 - entered value of each fund currently
 - entered that I will be depositing 5500 plus any cash dividends sitting in the cash portion of the tfsa
 - entered my portfolio asset allocation percentages
Spreadsheet computes how much to buy of each fund so essentially I just rebalanced to meet my 25-25-50 AA

Yes there is a cost $9 per trade, this is why I only try to the one deposit and purchase per year.
Title: Re: Almost Canuck time for 2016 TFSA deposit
Post by: nobodyspecial on January 09, 2016, 01:15:02 PM
They charge for buying ETFs?
Title: Re: Almost Canuck time for 2016 TFSA deposit
Post by: Stasher on January 09, 2016, 01:37:58 PM
They charge for buying ETFs?

Mutual funds are free but ETF's have a trade fee
http://www.scotiabank.com/itrade/en/0,,3693,00.html

Title: Re: Almost Canuck time for 2016 TFSA deposit
Post by: Heckler on January 10, 2016, 09:39:53 AM
When it came to my lifes savings, I chose to stick with my major bank's self directed brokerage which charges $9.95 to buy or sell. Therefore, the number of holdings I have increases my trading costs. Between the two of us, we also have 5 accounts, which I treat as one AA as per the link I previously provided.

As already stated, its irrelevant for someone buying through Questrade, and someone with just a single account it doesnt matter either.  But even in Questrade, your dividend growth will compound quicker if your holdings are large enough to DRIP instead of cash.

My assumption about a 40+ year old who claims a mustache is that he also holds more than a TFSA and that maxing out on $5500 in January wont be his only contribution. Thus the information I linked about efficiently managing AA in multiple accounts may have been relevant. 
Title: Re: Almost Canuck time for 2016 TFSA deposit
Post by: Heckler on January 10, 2016, 09:44:20 AM
What will it cost you at Questtrade to sell?  How will you take a $40k per year out of those accounts holding multiples of the same fund across accounts?
Title: Re: Almost Canuck time for 2016 TFSA deposit
Post by: Heckler on January 10, 2016, 09:49:12 AM
http://www.questrade.com/pricing/DIY-Trading/fees-and-rates/exchange-ecn-fees

Oh, here it is.  $0.0035 per share to sell a TSX ETF.  I guess that makes number of holdings irrelevant.

Im curious - have you Questrrade guys calculated your future trading costs when you want to take funds out?

Title: Re: Almost Canuck time for 2016 TFSA deposit
Post by: nobodyspecial on January 10, 2016, 01:49:44 PM
Oh, here it is.  $0.0035 per share to sell a TSX ETF.  I guess that makes number of holdings irrelevant.

Im curious - have you Questrrade guys calculated your future trading costs when you want to take funds out?
Most ETFs are around the $30 mark so that's a 0.01% fee
Probably want to sell a few months worth of expenses at a time, I think there is a $5 minimum fee
 
Title: Re: Almost Canuck time for 2016 TFSA deposit
Post by: Retire-Canada on January 11, 2016, 07:01:13 AM
Im curious - have you Questrrade guys calculated your future trading costs when you want to take funds out?

Having ETFs duplicated across RRSP/TFSA lets you rebalance as you make additions throughout the year. If I held just one ETF in my TFSA for example I'd have to wait a year to make a change to it. This way until I have maxed out both of my RRSP/TFSA I can continue to push my AA back towards the plan.

The maxing out typically happens late summer/early fall so then there is a few months until I add again in January.

Since I am adding funds most of the year I can top off any dividends to full shares so they get reinvested now.

QT charges ~$5 - $10 commission to sell. I'll be taking money out of my RRSP first and leaving my TFSA alone possibly still adding to it from RRSP. If I take money out from a single ETF 2-4 times a year it gives me the opportunity to keep rebalancing on the way down.

I haven't nailed down a plan on exactly how/when the money will come out and the fees may well change by that point so I don't have a cost analysis done.
Title: Re: Almost Canuck time for 2016 TFSA deposit
Post by: Mmm_Donuts on January 16, 2016, 07:07:03 AM
Just did my buy yesterday. I'm glad I held off a bit.

I bought 200 shares of VDU. It was falling, so I can only hope I didn't buy a falling knife, but I took the plunge. TFSA is now fully funded and fully invested!
Title: Re: Almost Canuck time for 2016 TFSA deposit
Post by: Retire-Canada on January 16, 2016, 07:21:31 AM
Just did my buy yesterday. I'm glad I held off a bit.

I bought 200 shares of VDU. It was falling, so I can only hope I didn't buy a falling knife, but I took the plunge. TFSA is now fully funded and fully invested!

The Int'l developed world isn't going to disappear. Let's say VDU drops another 10% this year who cares in 10 years+? There is no way to know what will happen. Just invest when you can and don't worry.

I bought VDU at all sorts of different prices over the last 12 months. I'll just keep buying it in accordance with my AA. Sometimes it will be cheap and sometimes it will be pricey.
Title: Re: Almost Canuck time for 2016 TFSA deposit
Post by: Mmm_Donuts on January 16, 2016, 07:37:59 AM
Just did my buy yesterday. I'm glad I held off a bit.

I bought 200 shares of VDU. It was falling, so I can only hope I didn't buy a falling knife, but I took the plunge. TFSA is now fully funded and fully invested!

The Int'l developed world isn't going to disappear. Let's say VDU drops another 10% this year who cares in 10 years+? There is no way to know what will happen. Just invest when you can and don't worry.

I bought VDU at all sorts of different prices over the last 12 months. I'll just keep buying it in accordance with my AA. Sometimes it will be cheap and sometimes it will be pricey.

This is what I love about index investing. Just keep buying, thorough highs and lows, because it's not like it's ever going to zero. Having an AA and sticking to it helps tremendously, because it takes the guesswork and fear out of the whole process. (former stock picker here!)
Title: Re: Almost Canuck time for 2016 TFSA deposit
Post by: Retire-Canada on January 16, 2016, 08:16:31 AM
This is what I love about index investing. Just keep buying, thorough highs and lows, because it's not like it's ever going to zero. Having an AA and sticking to it helps tremendously, because it takes the guesswork and fear out of the whole process. (former stock picker here!)

Agreed.

Realizing my old financial advisor had no more of a fucking clue what was going to happen than I did was amazingly liberating and empowering.
Title: Re: Almost Canuck time for 2016 TFSA deposit
Post by: Heckler on January 16, 2016, 08:21:47 AM

Agreed.

Realizing my old financial advisor had no more of a fucking clue what was going to happen than I did was amazingly liberating and empowering.

+1

Realizing my financial adviser was up to her eyeballs in debt is what drove me to learn and liberate myself.