Author Topic: DYI portfolio - really dumb question (I'm Canadian)  (Read 4873 times)

Mae80s

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DYI portfolio - really dumb question (I'm Canadian)
« on: November 10, 2014, 01:53:37 PM »
Okay, so after getting educated on the rip-off that are mutual funds and their high MERs, I decided to open up an RRSP with Questrade (online brokerage), with the eye of transferring my RBC RRSP over (I have more that 25K in there, so no transfer fees)when I got a handle on things.

Did some research and decided on which ETFs to invest in too. Now here's my question:

Every time I purchase into ETFs I have to pay a fee. Fair enough, but I'm planning on making regular, weekly contributions. When I spoke to someone at Questrade, I was told that I would have to buy into the ETF (and thus pay the fee) anytime I put more money into the RRSP portfolio. Meaning that those weekly contributions would just be sitting as cash in the portfolio if I didn't buy in. Obviously this is no good.

Did I miss something to this? For those of you who manage your own portfolio and have ETFs how do you make regular contributions?

rocketpj

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Re: DYI portfolio - really dumb question (I'm Canadian)
« Reply #1 on: November 10, 2014, 02:19:00 PM »
Questrade doesn't charge a commission when you purchase ETFs.  They do for other trades, including selling ETFs.  There is no issue for buying ETFs at all.

I routinely buy between one and 5 shares of an ETF on my Questrade account. 

Mae80s

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Re: DYI portfolio - really dumb question (I'm Canadian)
« Reply #2 on: November 10, 2014, 02:21:35 PM »
Questrade doesn't charge a commission when you purchase ETFs.  They do for other trades, including selling ETFs.  There is no issue for buying ETFs at all.

I routinely buy between one and 5 shares of an ETF on my Questrade account.


Thanks for the reply.

Really? Then I was speaking to some incompetent knob when I called them to inquire about this. I was told I'd have to pay $49 to buy the Vanguard ETF I wanted.

If you don't mind me asking, which ETFs to you have?

Le Barbu

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Re: DYI portfolio - really dumb question (I'm Canadian)
« Reply #3 on: November 10, 2014, 02:43:53 PM »
In your situation, I would NOT transfer to Questrade now. Take your time, take baby steps.

First, just split your RRSP 35%RBF556 (Canadian index fund), 35%RBF557(US index fund) and 30% RBF559 (international index fund CAD edged). No bonds if your under 30-40 years old and your financial situation is stable. Your MER will be 0.70% but NO transaction cost and weekly contributions for free. Easy to rebalance or change your plan. Seems high but it's 150$ MER to save a lot of transaction fees on your learnong curve realy worth it.

I'm with RBC and look how you can trick the system after you hit 50K or even 100K

1-Open a RBC Direct Investing RRSP account
2-Buy VCN to replace RBF556
3-Make a Norbert-Gambit (if you don't know what it is, your not ready yet) for your foreign investments
4-Buy VTI to replace RBF557
5-Buy VXUS to replace RBF559

Total transaction cost +/- 50$ and MER arround 0.08%

Every weak, continue to make you contributions for free  with RBF556, RBF557 and RBF559 and once a year, buy the appropriate ETF to keep MER very low.

If you cannot handle not having bonds, get some RBF563 and then VSB or VAB when your buy ETFs.

Keep in touch mate !

sieben

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Re: DYI portfolio - really dumb question (I'm Canadian)
« Reply #4 on: November 10, 2014, 10:09:07 PM »
Hey Mae,

I have a Questrade RRSP and make fairly regular contributions. When you transfer money over it is sitting as cash but you can buy however many ETFs you want. It doesn't cost you any more or any less per share. So if you only end up buying a couple shares a month it's not a big deal.

I've been happy with Questrade so far and I'd be happy to try and help if you have any other questions!

Mae80s

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Re: DYI portfolio - really dumb question (I'm Canadian)
« Reply #5 on: November 11, 2014, 09:01:27 AM »
Thanks to you both! I might take you up on your offer, sieben!

Thespoof

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Re: DYI portfolio - really dumb question (I'm Canadian)
« Reply #6 on: November 11, 2014, 01:44:27 PM »
My monthly deposits sit in cash in my RRSP and I rebalance the portfolio with the new money quarterly.

AJDZee

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Re: DYI portfolio - really dumb question (I'm Canadian)
« Reply #7 on: November 11, 2014, 02:50:27 PM »
You done good by opening a Questrade account with the intention of going the ETF route.

The person you spoke to on the phone that said there were fees.... either didn't realize you were talking about ETFs or was very new and very poorly trained... because Questrade has had this program in place for awhile now - no commission for buying ETFs. It's a very good deal and it's how they differentiate themselves.

You have to pay regular commission when you sell ETFs, but anytime you buy ETFs (Vanguard included) it's free.
You also won't have any fees when you transfer money into the account, assuming you've just set up with your regular canadian bank account and do an electronic transfer.

So go ahead and set up a bi-weekly automatic money transfer into your RRSP account if you like.
What you can't do is set it up to automatically purchase ETFs. You still have to go into your account and put the order in.

http://www.questrade.com/trading/services/free_etf?pid=13-02-00-Qcom-Home-banner-ETFSmall

I've been with Questrade for 8 years now, let me know if you have any other questions and I'll see if I can help!

lifejoy

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Re: DYI portfolio - really dumb question (I'm Canadian)
« Reply #8 on: November 12, 2014, 07:59:50 AM »
I'm doing RBC direct investing, too. Worked out well for me so far.

Mae80s

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Re: DYI portfolio - really dumb question (I'm Canadian)
« Reply #9 on: November 12, 2014, 11:49:50 AM »
Thanks everyone! It looks like I had the wrong letters for the ETF's I wanted.

Have bought what I want - just playing around right now - using just $1000 to play and learn from.

I know Questrade has online videos, etc., but it's really not my style.

I'm SUPER new to this. I barely understand the difference between a ETF and a mutual fund. Ditto with bonds, REITs and the other similar financial jargon and concepts.

Any book recommendations for a newbie? I really like the way MMM writes, so something in a similar style: that's accessible to people who have no financial industry background.

Thanks again!

Le Barbu

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Re: DYI portfolio - really dumb question (I'm Canadian)
« Reply #10 on: November 12, 2014, 12:08:51 PM »
For us Canadians, Canadian Couch Potato is realy accessible for a newbie investor. No Canadian blog compare to MMM but wait, MMM IS a Canadian ! He just live in the US

Aside that, there is Million Dollar Journey and Michael James On Money

drewdeezee

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Re: DYI portfolio - really dumb question (I'm Canadian)
« Reply #11 on: November 19, 2014, 10:50:16 PM »
Thanks everyone! It looks like I had the wrong letters for the ETF's I wanted.

Have bought what I want - just playing around right now - using just $1000 to play and learn from.

I know Questrade has online videos, etc., but it's really not my style.

I'm SUPER new to this. I barely understand the difference between a ETF and a mutual fund. Ditto with bonds, REITs and the other similar financial jargon and concepts.

Any book recommendations for a newbie? I really like the way MMM writes, so something in a similar style: that's accessible to people who have no financial industry background.

Thanks again!

I know how you feel.  Not too long ago, I was also overwhelmed with the idea of investing and didn't know where to start.  I think Jim Collins stock series is the best at explaining stocks, bonds, REITS, and retirement accounts.  http://jlcollinsnh.com/stock-series/

I have the added challenge of moving to Canada so my research has lead me to:

Canadian Couch Potato - great advice on model portfolios and tax efficient allocations

Million Dollar Journey - reviews and comparisons of Canadian banks and discount brokerage firms

Moneygeek.ca - Step by step videos of Questrade, how to open an account, how to buy/sell ETFs, how to convert CAD/USD via Norbert's gambit.