Comments on: This and That http://www.canadiancapitalist.com/this-and-that-67/ Helping you invest and prosper Sat, 11 Feb 2012 12:40:17 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Canadian Dream http://www.canadiancapitalist.com/this-and-that-67/#comment-81821 Canadian Dream Fri, 16 Nov 2007 20:35:05 +0000 http://www.canadiancapitalist.com/2007/11/15/this-and-that-67#comment-81821 CC - Thanks for the mention. I'm still trying to figure out where the year went. It feels like I just started reading your blog not too long ago. Tim CC – Thanks for the mention. I’m still trying to figure out where the year went. It feels like I just started reading your blog not too long ago.

Tim

]]> By: Loonies And Sense http://www.canadiancapitalist.com/this-and-that-67/#comment-81735 Loonies And Sense Fri, 16 Nov 2007 14:54:47 +0000 http://www.canadiancapitalist.com/2007/11/15/this-and-that-67#comment-81735 Thanks for the mention! Thanks for the mention!

]]> By: Phil S http://www.canadiancapitalist.com/this-and-that-67/#comment-81716 Phil S Fri, 16 Nov 2007 14:28:41 +0000 http://www.canadiancapitalist.com/2007/11/15/this-and-that-67#comment-81716 CC. The income from preferred shares is a qualified dividend for the dividend tax credit. It is actually more tax advantageous for you to earn qualified dividends when you are still working. Once you are retired and your earned income drops to zero, then I don't think you would be as concerned about qualified dividends versus interest income as your basic exemption will usually take care of a lot of the taxes that you'd be normally on the hook for compared to when you're working. In other words, the tax efficiency aspect isn't as much of an issue if your earned income is zero. My mother is in that situation where she is retired and her total income from everything is essentially non-taxable, which is why income splitting from my father makes sense for them (my father has a full government pension). CC. The income from preferred shares is a qualified dividend for the dividend tax credit. It is actually more tax advantageous for you to earn qualified dividends when you are still working. Once you are retired and your earned income drops to zero, then I don’t think you would be as concerned about qualified dividends versus interest income as your basic exemption will usually take care of a lot of the taxes that you’d be normally on the hook for compared to when you’re working. In other words, the tax efficiency aspect isn’t as much of an issue if your earned income is zero. My mother is in that situation where she is retired and her total income from everything is essentially non-taxable, which is why income splitting from my father makes sense for them (my father has a full government pension).

]]> By: Canadian Capitalist http://www.canadiancapitalist.com/this-and-that-67/#comment-81703 Canadian Capitalist Fri, 16 Nov 2007 14:07:32 +0000 http://www.canadiancapitalist.com/2007/11/15/this-and-that-67#comment-81703 To tell you the truth, I've never looked at preferred shares. Maybe, when I am retired and looking for tax-efficient income... To tell you the truth, I’ve never looked at preferred shares. Maybe, when I am retired and looking for tax-efficient income…

]]> By: The Financial Blogger http://www.canadiancapitalist.com/this-and-that-67/#comment-81655 The Financial Blogger Fri, 16 Nov 2007 11:50:49 +0000 http://www.canadiancapitalist.com/2007/11/15/this-and-that-67#comment-81655 thx for the mention! thx for the mention!

]]> By: Phil S http://www.canadiancapitalist.com/this-and-that-67/#comment-81639 Phil S Fri, 16 Nov 2007 11:22:03 +0000 http://www.canadiancapitalist.com/2007/11/15/this-and-that-67#comment-81639 The problem that I had with preferred shares is that each series of preferred shares with each issuer of preferred shares has different expiry dates, terms and conditions. Also, the proceeds of the sale of the preferred shares are used for different things, only some of which are asset backed, but many of which are not. It requires a lot more due diligence to figure out what it is that you're buying. In income trusts, the asset class that the preferred shares are being compared against, all of the data is presented to the potential investor in the quarterly report. For me personally, I don't have enough spare time to dig that deeply into the terms and conditions, credit quality and expiry dates of the preferreds, so I just stay away from them. By the way, most preferred shares are very thinly traded, which is another problem with them - there is often up to a 5% price difference between high bid and low ask, so you will likely lose 5% of your investment just trying to execute the transaction. And since most of the preferreds only yield about 5%, then you're basically losing an entire year's worth of distributions trying to execute the trade. The problem that I had with preferred shares is that each series of preferred shares with each issuer of preferred shares has different expiry dates, terms and conditions. Also, the proceeds of the sale of the preferred shares are used for different things, only some of which are asset backed, but many of which are not. It requires a lot more due diligence to figure out what it is that you’re buying. In income trusts, the asset class that the preferred shares are being compared against, all of the data is presented to the potential investor in the quarterly report. For me personally, I don’t have enough spare time to dig that deeply into the terms and conditions, credit quality and expiry dates of the preferreds, so I just stay away from them. By the way, most preferred shares are very thinly traded, which is another problem with them – there is often up to a 5% price difference between high bid and low ask, so you will likely lose 5% of your investment just trying to execute the transaction. And since most of the preferreds only yield about 5%, then you’re basically losing an entire year’s worth of distributions trying to execute the trade.

]]> By: thickenmywallet http://www.canadiancapitalist.com/this-and-that-67/#comment-81499 thickenmywallet Fri, 16 Nov 2007 02:53:44 +0000 http://www.canadiancapitalist.com/2007/11/15/this-and-that-67#comment-81499 Thanks for the mention! Its funny that preference shares have become the forgotten sibling in the investment family. Perhaps they will make a comeback when the income trust tax is finally levied. Thanks for the mention! Its funny that preference shares have become the forgotten sibling in the investment family. Perhaps they will make a comeback when the income trust tax is finally levied.

]]> By: FourPillars http://www.canadiancapitalist.com/this-and-that-67/#comment-81477 FourPillars Fri, 16 Nov 2007 02:14:08 +0000 http://www.canadiancapitalist.com/2007/11/15/this-and-that-67#comment-81477 Thanks a lot for the mention. Carrick was one of the reasons (among others) for my diversification out of Canadian equities. I remember reading an article of his from around the beginning of 2006 where he suggested diversification because the dollar had done so well and oil was very high. Thanks a lot for the mention.

Carrick was one of the reasons (among others) for my diversification out of Canadian equities. I remember reading an article of his from around the beginning of 2006 where he suggested diversification because the dollar had done so well and oil was very high.

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