Author Topic: question for canadian investors  (Read 1891 times)

fullpampers

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question for canadian investors
« on: February 04, 2015, 11:09:48 AM »
Hi,

I recently started catching up on unused RRSP. I opened an account with Questrade. I'm kind of new to this.

I used the Complete couch potato portfolio from canadian couch potato. But they changed this year and i can't find the old ones.

So I had two questions.

First, I buy US ETF's for the US/World portion of my portfolio to save on foreign income tax, since they are held inside an RRSP. I use norbert's gambit to save on CAN/USD conversion fees. I make contributions at every paycheck, and when i have enough for the trouble, I go ahead and do that.

Should I check the currency rate before I change money to buy ETF's? My gut tells me there is no way to tell what the dollar might do, so just go ahead and buy the ETF's whenever I can, but I figured there was no harm in asking more knowledgeable people.

Second question:

The actual portfolio.
For bonds I have VAB.TO and XRB.TO. REITS is ZRE.TO (this is about 10-15% of portfolio, I might ease up on those for a while).

For Canadian market i have FTSE Canada All Cap Index ETF  (VCN.TO) (25-30%)

for US/World Total Stock Market (VTI) and Total International Stock (VXUS) (around 50%-60%) (I haven't bought VXUS yet)

Does this look alright to you? The percentages vary, because  haven't settled on a specific plan yet, and I re-balance frequently by buying more ETF's.

On the newer model portfolios, Canadian couch potato uses VXC, which is from vanguard Canada, So I'm guessing I'd get screwed on the foreign income tax.

Also, since Vanguard total world stock (VT) holds US and world stocks, would it be better to just buy this instead of Total Stock Market (VTI) and Total International Stock (VXUS)?

Thank you!
J-S
 

Heckler

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Re: question for canadian investors
« Reply #1 on: February 04, 2015, 11:48:52 AM »
If you are catching up and new to this, why go all in on the currency complications?   Look at VUN instead if VTI.

What's your portfolio value?   If relatively low, keep it simple.  VAB, VCN, VUN.

Kaspian

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Re: question for canadian investors
« Reply #2 on: February 04, 2015, 12:00:52 PM »
Here's a link to the old one.  I used the Way Back Machine.

http://web.archive.org/web/20140208012542/http://canadiancouchpotato.com/model-portfolios/


fullpampers

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Re: question for canadian investors
« Reply #3 on: February 04, 2015, 01:39:40 PM »
Thanks! I'll save that page.

As for VUN, maybe I misunderstood, but since it's a canadian ETF holding US stocks, you pay foreign income taxes and they are not recoverable.

But if you hold directly a US ETF holding US Stocks in an RRSP, the foreign income taxes do not apply

Heckler

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Re: question for canadian investors
« Reply #4 on: February 04, 2015, 02:44:49 PM »

As for VUN, maybe I misunderstood, but since it's a canadian ETF holding US stocks, you pay foreign income taxes and they are not recoverable.

But if you hold directly a US ETF holding US Stocks in an RRSP, the foreign income taxes do not apply

Correct.  However, I weighed the cost and hassle of trading in USD and went simple with VUN in my RRSP.   So far it's up 6.4% since I bought in early December so I'm not complaining.

fullpampers

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Re: question for canadian investors
« Reply #5 on: February 05, 2015, 11:43:41 AM »
hmm, I'll have to look into that.

Doing norbert's gambit I changed about 2k Can to US and it cost me 9,99 in fees when I sold the ETF  if I remember correctly. I looked in my questrade transactions but can't seem to find exactly what the fees were. Seemed like a good deal compared to the 2% transactions fees charged by questrade, but i haven't compared it with the costs of having VUN and paying the Foreign Income Tax.