Canadian Capitalist

While chatting with a friend, I found out that it is not common knowledge that if you didn’t contribute to a Registered Education Savings Plan (RESP) in previous years, you can catch up on contributions and possibly still get the lifetime maximum Canada Education Savings Grant (CESG) of $7,200 that your child can receive. It’s [...]

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The Sleepy Portfolio continued to tread water in the second quarter of 2008 losing 1.08% through the quarter. The only winner was Canadian equities with XIC posting an 8% gain from the first quarter. Foreign equities had a poor quarter — US equities were down about 5%, EAFE markets were down 6.3% and emerging markets [...]

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Vanguard recently introduced a ETF to capture exposure to the world’s major equity markets weighted by their market capitalization. The ETF, which started trading last week on the NYSE Arca exchange under the ticker symbol VT, charges a MER of 0.25%. While the ETF is an interesting addition to the Vanguard stable, it is hard [...]

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Norm Rothery (also featured in this video interview with Jon Chevreau) recently wrote that the ultra-low commissions offered by the discount brokers allow investors with large portfolios to buy the stocks that comprise an index directly and avoid the fees involved in holding ETFs. The concept is interesting but small investors who want to faithfully [...]

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I thought I’d share one of the less appreciated benefits of passive investing after reading Million Dollar Journey’s post on working hard for our money instead of doing the things we value more. Like most Canadians, we work extremely hard - between us we have two day jobs, write a blog, attend graduate school, raise [...]

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I was surprised to see that the modest expectations for returns from equities (”real returns from stocks can be expected to be in the neighbourhood of 4% to 5%”) assumed in the post on Smith Manoeuvre earlier this week came in for some criticism. Fortunately for me, among the “experts” counselling investors to temper their [...]

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The siren song is irresistible: “Make your mortgage tax deductible” or “Want to beat the tax man?” — is that a trick question? Who doesn’t? This is also accompanied by a warning — “Don’t try this at home. This stuff is so complicated that you need our help to do it”.
While there is no [...]

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Purpose of Portfolio
The purpose of the portfolio is to provide steady growth of capital until retirement and an inflation-adjusted, after-tax income of $50,000 every year in retirement.
Return Expectations
We expect pre-tax, inflation-adjusted returns of 1% from cash, 2% from bonds and 4% from stocks and REITs. We expect a dividend yield of 2% from stocks [...]

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Exchange-Traded Funds (ETFs) are great products for investors only if: (1) they have rock-bottom fees, which means that investors keep what they don’t pay and (2) they have low turnover, which allows investors to create portfolios that are highly tax efficient. While they can nominally be called “ETF-based”, two new products fail to sport either [...]

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Many thanks to Charles for the note Credential Direct (read review here) is now washing rates when U.S. Dollar denominated securities are bought and sold in RRSP accounts on the same day. Charles quotes from their April 2008 newsletter:

FX FLAT TRADES (Washing Rates)
Pay less for US trades. Now when you execute a US$ buy/sell transaction [...]

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