Pushing myself a bit here, but it was stunning what I managed to learn in a couple of recent weeks, and I prefer to get this right before finalizing investments (I don't want to move things again shortly after).
Edited to add: I think I narrowed my question down better thanks to the first reply from Tuxedo below. So, please consider reading this post before replying: http://forum.mrmoneymustache.com/investor-alley/canada-us-listed-etfs-%28withholding-taxes-currency-exchange-fees%29/msg488275/#msg488275I'm interested in the Canadian Couch Potato Model Portfolios:
http://canadiancouchpotato.com/model-portfolios/I am not interested in the UberTuber -too complex for me.
I am
most interested in the Complete Couch Potato re: lowest fees, and real estate inclusive.
Moving from .44% fees to .18% fees saves me $520/yr.
The $520 isn't enough to move me, but the increased diversification is.
But then we get into two matters:
US withholding taxes, and
currency exchange fees
I'm not quite grasping those, even though I have read and re-read the following pages, too:
http://canadiancouchpotato.com/2012/09/17/foreign-withholding-tax-explained/http://canadiancouchpotato.com/2012/09/20/foreign-withholding-tax-which-fund-goes-where/https://www.pwlcapital.com/en/Advisor/Toronto/Toronto-Team/Blog/Justin-Bender/September-2012/Foreign-Withholding-Tax-RevisitedI plan to allocate a lump sum annually, buy and hold, rebalance annually if that.
So, not lots of trading.
At this point I will
not be using an RRSP (long story) or other recognized retirement account (any of which would be exempt from US withholding taxes).
Money would be in an RESP (withholding taxes applied and not recoverable), RDSPs (for now I assume withholding taxes applied and not recoverable), and non-registered accounts (withholding taxes applied but recoverable).
Questions:1. If I'm not trading regularly, are currency exchange fees largely moot for me? Can I take those out of the equation?
2. Eliminating bonds, and putting half my money into non-registered accounts and half into accounts for which withholding taxes are not recoverable, what might I do?
I think CPP is maybe saying, for lowest fees:
Put into non-registered account any of the following US Equities:
iShares S&P 500 (IVV)
Vanguard S&P 500 Hedged to CAD (VSP)
Vanguard S&P 500 (VFV)
Put into non-registered account the following International equities:
TD International Index (TDB911)
3. For the RESP and RDSPs, to which the US withholding tax is applied and not recoverable, how do I determine what way to go? I am taxed at the lowest rate in Canada (15%, and $0 on the first $42,000 income).