Author Topic: Canadian Investor Looking for Some Advice  (Read 4497 times)

prux56

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Canadian Investor Looking for Some Advice
« on: May 27, 2015, 11:44:49 AM »
Hey,

new member to this site and forum but finding this great site could not have come at a better time. My wife and I just had twins so I have been in the market for an RESP plan that will work for us. After a little investigation we have decided to go with a TD self-directed RESP and I thought while I was at it I would create a self-directed  RRSP as well as a TFSA. So am looking for some recommendations in the following areas if you folks would be good enough to chime in, they are:

1) Any recommendations on fund choices for the RESP? We plan on maxing out this plan every year ($5000) so that we can get the most out of the government grant portion for the twins.

2) I have about $90,000 in a company RESP plan that  I can move to my new SDRSP and am open to suggestions. We have done pretty well in the last 5 years with the work plan but the fund choices are very limited. I know everyone keeps mentioning the TD e-Series funds but if there are other suggestions I would be happy to hear it.

3) Shame on me for not spending more time understanding the benefits of a TFSA but my wife and I have not utilized this at all. With the new account I have moved over about $5000 to invest and thought it best to ask for a little advice before I jumped in. Once again I am open to suggestions here and would love to get into some dividend investing, if possible.

Thanks in advance for any help and should you require any other information please let me know.

P.

powersuitrecall

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Re: Canadian Investor Looking for Some Advice
« Reply #1 on: May 27, 2015, 11:50:35 AM »
Welcome aboard!

If you are interested in low cost, diverse, passive investing I would start here: http://canadiancouchpotato.com/couch-potato-faq/

RichMoose

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Re: Canadian Investor Looking for Some Advice
« Reply #2 on: May 27, 2015, 12:38:35 PM »
Hey,

new member to this site and forum but finding this great site could not have come at a better time. My wife and I just had twins so I have been in the market for an RESP plan that will work for us. After a little investigation we have decided to go with a TD self-directed RESP and I thought while I was at it I would create a self-directed  RRSP as well as a TFSA. So am looking for some recommendations in the following areas if you folks would be good enough to chime in, they are:

1) Any recommendations on fund choices for the RESP? We plan on maxing out this plan every year ($5000) so that we can get the most out of the government grant portion for the twins.

2) I have about $90,000 in a company RESP plan that  I can move to my new SDRSP and am open to suggestions. We have done pretty well in the last 5 years with the work plan but the fund choices are very limited. I know everyone keeps mentioning the TD e-Series funds but if there are other suggestions I would be happy to hear it.

3) Shame on me for not spending more time understanding the benefits of a TFSA but my wife and I have not utilized this at all. With the new account I have moved over about $5000 to invest and thought it best to ask for a little advice before I jumped in. Once again I am open to suggestions here and would love to get into some dividend investing, if possible.

Thanks in advance for any help and should you require any other information please let me know.

P.

Welcome to the forums and congrats on the twins! The TD e-series funds are effective for RESP plans because they have a low minimum starting investment, no purchase fees, and low MERs. Your timeline for investment will be around 18 years, so take that into account. A good mix would be about 75% stock 25% bond. I would follow the CCP "Assertive" strategy of 25% Canadian Index, 25% US Index, 25% International Index, and 25% Canadian Bond Index. Keeps things simple and make annual rebalancing easy. Once you are within 5 years of use, you can increase the bond portion to 40% or 50% to stabilize the accounts. http://canadiancouchpotato.com/wp-content/uploads/2015/01/CCP-Model-Portfolios-TD-e-Series.pdf

As far as your RRSP and TFSA goes, I would probably look at other options for these accounts because the amount you are investing will be larger. At this point using ETFs makes more sense. Being a former TD Waterhouse customer, I was not overly impressed with their fees, account options, or customer service. I hear much better things about RBC Direct (for big bank brokerages) and I now use Questrade myself because of their extremely low fees. The CCP website also offers great information about ETF investing: http://canadiancouchpotato.com/wp-content/uploads/2015/01/CCP-Model-Portfolios-Vanguard.pdf

There is nothing wrong with dividend investing, especially if your are knowledgeable about how to analyze stock valuations and you take a conservative, long-term approach to investing. However, considering you are on here asking for advice on how to open accounts I would stick with indexing. Even knowledgeable dividend investors are not likely to significantly outperform indexing over the long term.

FI40

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Re: Canadian Investor Looking for Some Advice
« Reply #3 on: May 27, 2015, 01:14:18 PM »
For Canadian investing information, the Canadian Couch Potato blog is ideal for you. Lots of practical stuff there.

If you are interested in learning more about investing I suggest Jim Collins' stock series: http://jlcollinsnh.com/stock-series/

Best of luck and if you have more specific questions the forum is a great resource!

Heckler

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Re: Canadian Investor Looking for Some Advice
« Reply #4 on: May 27, 2015, 03:28:31 PM »
+1 for CCP.

GuitarStv

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Re: Canadian Investor Looking for Some Advice
« Reply #5 on: May 27, 2015, 04:56:09 PM »
I'd also like to recommend CCP.

fb132

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Re: Canadian Investor Looking for Some Advice
« Reply #6 on: May 27, 2015, 05:13:17 PM »
I opened my account with Questrade 2 weeks ago and started investing this week with the CCP reccomended funds, so I also suggest you that. In my case, I kept it assertive (75% stocks and 25% Bonds) simply because the money is long term, but i may (or may not use that stash) someday to partially buy a condo which is why I have my bonds at 25% or else I would go with 90% stocks and 10% Bonds.

nobodyspecial

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Re: Canadian Investor Looking for Some Advice
« Reply #7 on: May 27, 2015, 05:20:13 PM »
It's not totally clear that bonds offer such a strong protection from the vagaries of the stock market when interest rates are 0.5%

By all means buy bonds (or read the CCP article on why you shouldn't) but be careful of the traditional, move higher % into bonds as you get closer to withdrawal advice ...

fb132

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Re: Canadian Investor Looking for Some Advice
« Reply #8 on: May 27, 2015, 05:24:01 PM »
Aren't they the one that suggested just one year ago to keep it 60/40 (They suggest for the ETF to use VAB)??? But I think I am mixing up bonds with Fixed Income, that part confuses me a little.
« Last Edit: May 27, 2015, 05:25:36 PM by fb132 »

prux56

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Re: Canadian Investor Looking for Some Advice
« Reply #9 on: July 22, 2015, 08:55:05 AM »
Hey,

I just wanted to thank everyone for their suggestions and information. I have now set up the RESP account with TD E-series funds and so far the process has been decent.

The other question I had regarding this type of account is how and when do I ensure that the government grant portion is received? I've done some Google'ing but no concrete answers yet. Additionally I wanted to ask about the grant amounts. Since this account is for twins am I allowed to contribute $5000 per kid per year and have 20% grant on each $5000 or is the $5k the total amount?

Thanks,

P.

K-ice

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Re: Canadian Investor Looking for Some Advice
« Reply #10 on: July 22, 2015, 12:22:50 PM »
You can put $2500 each and will get $500 each in grants.

So a total of $6000/year!

There may be a provincial bonus at certain age milestones too.

Check for that, but the bank should automatically take care of the grants.

RichMoose

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Re: Canadian Investor Looking for Some Advice
« Reply #11 on: July 23, 2015, 02:53:35 PM »
You can put $2500 each and will get $500 each in grants.

So a total of $6000/year!

There may be a provincial bonus at certain age milestones too.

Check for that, but the bank should automatically take care of the grants.

+1. Check with TD, but I'm sure they automatically do the grant application for the Federal grant. Not sure about the provincial ones though.

PharmaStache

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Re: Canadian Investor Looking for Some Advice
« Reply #12 on: July 23, 2015, 03:10:00 PM »
Hey,

I just wanted to thank everyone for their suggestions and information. I have now set up the RESP account with TD E-series funds and so far the process has been decent.

The other question I had regarding this type of account is how and when do I ensure that the government grant portion is received? I've done some Google'ing but no concrete answers yet. Additionally I wanted to ask about the grant amounts. Since this account is for twins am I allowed to contribute $5000 per kid per year and have 20% grant on each $5000 or is the $5k the total amount?

Thanks,

P.

The government grant portion will just appear in your account a month or so after you make your deposit.  So if you deposit $500, you will eventually see another $100 added.  It just goes into a money market and you can then move it into your e-series.

prux56

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Re: Canadian Investor Looking for Some Advice
« Reply #13 on: August 18, 2015, 09:21:11 AM »
Hello,

I just wanted to thank everyone for their replies to my initial question. As an update, I have opened a TD account and purchased all E-series funds for my TFSA and RRSP accounts and have been quite pleased so far. Not a real banner year so far but I'm better of then when I started.

I do have another question that I could use some advice on though. I was speaking about my TD accounts with an older relative who was looking to open up and max out their TFSA. So I wanted to ask what peoples' thoughts were on whether E-series or Vanguard funds made more sense for a newly opened TD Waterhouse account with a large initial purchase and the max contribution amount per year. If you're willing to share your thoughts on which investment option makes the most sense given this situation it would be appreciated.

Thanks,
P.

nobodyspecial

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Re: Canadian Investor Looking for Some Advice
« Reply #14 on: August 18, 2015, 09:28:36 AM »
If they are investing in pretty much the same index (SP500, international, etc)   then the only difference is the fee.

As to whether it's a good idea to invest $50K (the TFSA max) as a lump sum just now. The long term view is that it's always a good time to invest - but if the investor is 70years old and might need cash in the next few years rather than in 30-40years you might want to think about other options.

RichMoose

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Re: Canadian Investor Looking for Some Advice
« Reply #15 on: August 18, 2015, 09:43:06 AM »
Hey Prux, glad to see things are working out well for you. If your relative is doing large lump sum purchases, the Vanguard ETF will be a bit cheaper so that's the route I would go.

fb132

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Re: Canadian Investor Looking for Some Advice
« Reply #16 on: August 18, 2015, 01:47:06 PM »
Hello,

I just wanted to thank everyone for their replies to my initial question. As an update, I have opened a TD account and purchased all E-series funds for my TFSA and RRSP accounts and have been quite pleased so far. Not a real banner year so far but I'm better of then when I started.

I do have another question that I could use some advice on though. I was speaking about my TD accounts with an older relative who was looking to open up and max out their TFSA. So I wanted to ask what peoples' thoughts were on whether E-series or Vanguard funds made more sense for a newly opened TD Waterhouse account with a large initial purchase and the max contribution amount per year. If you're willing to share your thoughts on which investment option makes the most sense given this situation it would be appreciated.

Thanks,
P.
I invest with Vanguard, the fees are low so I can't complain.

prux56

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Re: Canadian Investor Looking for Some Advice
« Reply #17 on: August 19, 2015, 10:01:42 AM »
Hey Tuxedo,

thanks for the reply. The contribution would be in one lump sum. From the reading I have done I am leaning toward the vanguard funds and I would expect that the account owner would keep the funds there for at least 5 years.

P.