No frictional costs whatsoever – no brokerage costs, no commissions. However, if you are contributing say $200/month to your savings then perhaps you can only enroll in 4 DSPPs – not an ideally diversified portfolio – but to each his own…

Usually these are only available through blue chip companies (which is a good thing!) I remember seeing a list of all companies with DSPPs in North America somewhere – I’m sure it’s on the web too.

On the side note – IB allows FX trades as well, good for someone like me to convert foreign currency without paying high spreads to banks.

End date bias can be extreme. There is also something called universe inclusion bias – sometimes group averages are lower than normal because they included all the funds that became delisted. On the other hand sometimes group averages only include the funds that currently exist and have dropped the performance data of the crappy funds.

So my point is that looking at performance numbers and comparing indices and benchmarks is not so cut and dry. I’m not trying to say everyone should be in managed product either, it’s almost like your yard: you KNOW how to do it, but sometime you’d rather someone else do it. A simplistic analogy I realize, but nonetheless some people just do not want to be bothered with their investments or financial plans. Others are much more empowered.

There IS a group of super smart dudes out there on Bay street that charge $800/month for their portfolio guidance and that’s it. They have averaged 20%/year for the last 25 years although with a higher beta than the TSX if I’m not mistaken using an earnings momentum valuation model.

Warren Buffet is a prime example of an active manager – he’s averaged 28%/year for 5 decades. But these are extreme cases and these are people much smarter than myself – they do not follow modern portfolio theory, and are engaged in their investments to a larger degree than non-financial professionals.

He asked them to compare the long term rate of return between someone who put their money in January 1st of every year VS someone who put their money in at the very peak of the market for the year VS someone who put their money in at the very bottom of the market every year.

After 30(?) years there was only 1(?)% difference between “the best timer” and “the worst timer”. Moral of the story is that you can pull your hair out trying to get the timing right, but really it is all about time and getting the money in.

But theory and practice are two different things. In practice it is easy to deal with seeing the contributions “mask” the volatility.

In theory you should figure out how long you will save and how much, and get a loan and put it all now. Ultimate volatility, but if the markets do what they have done for the last 200 years you have the best outcome.

Jeremy Siegel’s book “stocks for the long run” have a chart that shows stock, bond, and commodity performance over 200 years – very cool.

But, one feature I like about Td e-fund is you can contribute small $$ each time and do Dollar-Cost Averaging investing. Given current volatile equity market, it’s hard not to time the market if you trade ETFs in trading accounts. Who knows if you will get the timing right or not?