What do you guys do with your cash? Banks pay almost 0 meanwhile i dont really wanna piss away my cash in the stock market. Anything relatively safe witha decent return out there?
Post by Chuck U. Farlie on Feb 4, 2015 18:29:40 GMT -5
I use to invest in stocks, but I got tired of doing the research needed to stay on top of things.
Now, just mutual funds. In particular I invest in a couple low fee indexed funds, as very few managed funds have out performed the indexes in the long run, and managed funds have higher fees. Research TD e-series funds if that is a route that appeals to you.
Known aliases: Diesel, Motorcycle Mike, Chuck U. Farlie.
Rides: 2009 DRZ400S, 2013 Vstrom 650.
I use to invest in stocks, but I got tired of doing the research needed to stay on top of things.
Now, just mutual funds. In particular I invest in a couple low fee indexed funds, as very few managed funds have out performed the indexes in the long run, and managed funds have higher fees. Research TD e-series funds if that is a route that appeals to you.
If you hold a mutual fund in a Registered Plan (such as RSP, RIF, RESP or TFSA) distributions paid by a mutual fund and any capital gains realized are generally sheltered from tax. Any amount you withdraw from a Registered Plan (excluding TFSA) is generally fully taxable. Amounts withdrawn from a TFSA are not taxable.
I use to invest in stocks, but I got tired of doing the research needed to stay on top of things.
Now, just mutual funds. In particular I invest in a couple low fee indexed funds, as very few managed funds have out performed the indexes in the long run, and managed funds have higher fees. Research TD e-series funds if that is a route that appeals to you.
Can I do these TD e-series funds in my TFSA?
Yes.
A TFSA (or RRSP) are just vehicles for your money. Think of your investments as the passengers in your vehicle. Difference being is TFSA (max contribution of $5500/yr) uses after tax dollars and you're not taxed on the gains within the account or when withdrawing, whereas with an RRSP, you get a tax refund on your deposited amounts and you're taxed against your income level when you withdraw.
Also, with TD eFunds, you have to hold them for minimum 90 days before selling, without incurring penalty. Not really an issue if you apply a dollar cost averaging approach and a passive investing style. Just remember to re-balance your portfolio at regular intervals to ensure you're getting the most of your money.
Any links to what e-series funds will give a decent return with not a whole lot of risk? anything with over the 1% return i'm getting right now would be good.
Post by Chuck U. Farlie on Feb 6, 2015 10:32:45 GMT -5
TD investment won't help you with e-series... because it is a low fee self-managed thing. It can also be a bit of a pain to set up at first for the same reason.
The easiest way to set it up is walk into a branch and open a TFSA Mutual Fund account (or RRSP, or regular... whatever you want, just open a mutual fund account). They will ask you a bunch of questions to gauge your risk-tolerance, etc, just humour them. At the end they will ask you what do you want to buy... at this point it doesn't matter. Throw $100 in a money market fund or whatever and setup easyweb access.
It is very important to remember that there is no guarantee here. You get 1% in your bank and that won't change -- you could get -10% one year on a mutual fund. You only lose that money if you sell though, so if this is for the long haul and you are patient you can come out ahead.
As for me, I bought $8000 in the Canadian Index about 2 years ago. It has had it's ups and downs but is currently at $10500. I bought the US index about 1 month ago, $4100 in and it is at $4294.
Tangerine also offers mutual funds that are easier to get into, but slightly higher fees... I like the equity growth fund over there -- it has had a 11.77% gain in the past year and 14.58% gain in the past three years.
Known aliases: Diesel, Motorcycle Mike, Chuck U. Farlie.
Rides: 2009 DRZ400S, 2013 Vstrom 650.
So I already have a HIGH INTEREST TFSA SAVINGS ACCOUNT and MUTUAL FUND RSP. I would need to change the TFSA savings account to a mutual fund account? Because I would rather do it there.
You can start the process right away for the easy web setup.
Also, make regular contributions and regular intervals. This is called Dollar Cost Averaging. You buy more when it's cheaper, you buy less when it's expensive, but it all balances out in the end (with index investing).
A good balance would be to have a CAN fund, US fund, INTERNATIONAL fund and Bonds. the CAN/US/INTL offset the Bonds, so a 'growth' portfolio would be 70% CAN/US/INTL, 30% Bonds. Adjust accordingly. Later if you want to branch out, you would want to add dividend paying ETF's that cover preferred shares of established companies on the market index of your choice (iShares/Vanguard) and a REIT (Real Estate Investment trust) as that's investing in real estate, without getting caught up in the housing mess.
Lots of free info out in the world, investopedia is your friend if you have questions or want to see videos on 'how things work'. Anyone working at a bank is there to sell you something, first and foremost, so just keep that in mind.
"There's never enough time to do it right, but there's always enough time to do it twice."
So I already have a HIGH INTEREST TFSA SAVINGS ACCOUNT and MUTUAL FUND RSP. I would need to change the TFSA savings account to a mutual fund account? Because I would rather do it there.
edit: Thank you for your help so far.
You don't need to change it, you can go open a Mutual Fund TFSA along side. It is up to you if you want to keep some money in the savings account or put it all in the mutual fund account.
I keep both... my TFSA savings account earns very little, but since there is no penalty to withdraw the money it is essentially my emergency account.
Known aliases: Diesel, Motorcycle Mike, Chuck U. Farlie.
Rides: 2009 DRZ400S, 2013 Vstrom 650.
