Comments on: Tips for Your RRSP Contribution

By: Canadian Personal Finance Blog » Blog Archive » Random Thoughts: Standing on Guard for Thee

Fri, 05 Mar 2010 06:43:34 +0000

[...] Canadian Capitalist has some Tips for your RRSP Contribution which is useful, even with RRSP season being over [...]

By: The Rat

The Rat — Wed, 03 Mar 2010 23:26:27 +0000

While I don’t buy funds, I can surely agree with the importance of #1. Having a plan and not just dumping your hard-earned cash into just anything is crucial.

Nice thread.

By: Phil S

Phil S — Mon, 01 Mar 2010 17:07:04 +0000

Everybody should keep in mind that you cannot write off capital losses for taxation purposes from inside either an RRSP or TFSA account.

I am currently going through the exercise of “untangling” my investments by moving all of my fixed income investments into my RRSP / TFSA and I’m trying to move all of my equity investments out of them and into my taxable accounts. It will take years for me to completely untangle everything, which really isn’t surprising because it took me years to get it into the current condition.

But my advice to anybody who has BOTH taxable and non-taxable accounts, is to do it “right” in the first place and only put fixed income in your RRSP and only put equities in your taxable account.

By: Canadian Capitalist

Canadian Capitalist — Mon, 01 Mar 2010 16:10:40 +0000

@Sampson: Good one! But then again, if I were so smart about short-term stock market movements, I wouldn’t be writing about it. I’ll be profiting silently from a beach on the Caribbean.

@Pedro: My understanding is that for many PPNs the best that can be hoped for now is the return of the principal. PPNs typically don’t have a secondary market, so unfortunately, the best bet might be to wait for maturity and resolve never to buy into any sort of principal protection in the future.

By: Pedro

Pedro — Mon, 01 Mar 2010 15:49:45 +0000

@CC: My mom who is only a couple years away from the “official” retiring age of 65 in Canada. She has money in principal protected notes, can you tell me what the down side is?

By: Sampson

Sampson — Mon, 01 Mar 2010 15:11:40 +0000

I think you should sell everything and go into cash. Then be patient, and buy back into the market slowly, when things seem like they are all going down the toilet. Wait until next year’s RRSP deadline, then go all in.

Wait… we’re still in Feb 2008 right?

Go Canada!

By: Alan Smithee

Alan Smithee — Sun, 06 Apr 2008 17:37:42 +0000

The problem with ‘parking’ in a cash or mmkt fund is that the typical investor who does this, do so every year. What tends to happen is that they are procrastinators who take their cheques to whichever bank (a) has the best ads, or (b) can give them a last-minute appointment. Having beat the deadline, the investor feels satisfied with having made their contribution before the deadline, but then typically doesn’t revisit their decision until months, often years, later. By then, their portfolio has a ragtag collection of low-interest bearing investment instruments from different firms. Clearly the best way is to contribute on a regular basis: through payroll if your company can facilitate the payroll deductions or through a pre-authorized payment plan through a brokerage firm FP or Advisor. The best time to revisit is May to December after the RRSP and tax rush and over the summer months when you have time to make careful and measured decisions.

By: Mortgage Refinancing » Blog Archive » Weekend Reading - Feb 22, 2008

Mortgage Refinancing » Blog Archive » Weekend Reading - Feb 22, 2008 — Sat, 08 Mar 2008 09:31:05 +0000

[...] Canadian Capitalist has the perfect article for the current RRSP season (deadline is Feb 29, 2008) called "Tips for your RRSP Contribution". ; My favorite tip is "Park your contribution in a money market fund". ; This will allow you to take advantage of the contribution tax break, but give you some time (and a little growth) while deciding how to invest the money. ; [...]

By: GSB

GSB — Sat, 23 Feb 2008 16:30:34 +0000

I posted this in another forum but am thinking that I will get more informed responses here.

In the last year, I have really been cracking down on my finances and am looking to significantly increase the amount I save or invest. The last item on the list below (Managed Growth Portfolio) is the only RRSP I currently hold and put a monthly contribution into. The other items on the list are ones that I figure have done or are doing well.

[IMG]http://img402.imageshack.us/img402/6044/cibcmutualfundsnz5.jpg[/IMG]

[B]The situation[/B]: When I first started contributing to RRSPs, I went into the bank without a clue and basically had the guy at CIBC tell me what to invest in, I said it was for long term (probably 30 yrs). I am risk tolerant but my wife is not and wants something stable so I was hoping to develop a nicely compromised portfolio that we would both be happy with. I am 30 yrs old and I will receive a government pension in approx 10 – 20 yrs depending on how long I want to work and am probably looking at approx $1500/month to invest.

I realize that most of the items in the list above are from CIBC’s higher risk growth funds and that the fund I currently hold (Managed Growth Portfolio) is a collection of different growth funds combined.

1. What else should I be doing to diversify in order to balance out the higher risk funds?

2. Should I scrap the Managed fund and piece together my own portfolio out of the others that I have pointed out in the list above?

3. Is it really stupid to invest solely in different CIBC “growth” funds?

4. I don’t necessarily want to have everything that I invest to be in an RRSP, what are some other strategies I should be considering?

5. I have read from a lot of sources lately that Index funds are the way to go, is that the same as me picking, for example, CIBC European Index RRSP from the list above? Or is it not the same thing?

6. Is it safe to keep everything within CIBC, which I only do for simplicity’s sake?

7. Can anyone offer up some good “rules of thumb” such as percentages of what to invest in? ie. XX% to RRSP, XX% to Non registered (and what exactly), and XX% to XYZ.

I intend on going to see a financial planner but just want to learn a few more things and do some more research on my own before going so that I have a better idea of what I want done. I can get a good deal through work with [URL="http://www.sisip.ca/en/index.asp"]SISIP Financial [/URL]($5/month w/ free tax returns), they don’t work on commission. Does anyone have any thoughts on if it is a good or bad idea to use them?

By: Canadian Capitalist

Canadian Capitalist — Thu, 14 Feb 2008 22:15:27 +0000

katie: Please note that I didn’t say emerging markets. Emerging markets have weighting in World ex-Canada of 10% and a similar weighting in your portfolio is wise. For instance, the Sleepy Portfolio has a 5% allocation to emerging markets through VWO.

My personal opinion is that emerging markets are currently richly valued, so in my personal portfolios I keep the equivalent allocation in cash waiting for a suitable buying opportunity.

While you can reasonably argue that getting a broad exposure to emerging markets is warranted, my personal opinion is that investing in individual markets isn’t for the faint of heart. It’s true that past performance in India and China has been spectacular. However, that is a poor reason to jump in now. It is also true that these economies are boasting tremendous growth rates and are expected to do so in the future. But there is no correlation between economic growth rates and future stock market returns, so there is no reason to believe that high economic rates will translate into high equity returns.