Search found 24 matches

by CalgaryGuy
27 Jan 2021 10:12
Forum: Financial Planning and Building Portfolios
Topic: putting addtional equity exposure in TFSA through financial engineering
Replies: 14
Views: 1429

Re: putting addtional equity exposure in TFSA through financial engineering

Shante wrote: 26 Jan 2021 17:18 This week I have slowly been working my way through an old bogleheads thread that brings the perils of leverage into sharp focus: https://www.bogleheads.org/forum/viewto ... =10&t=5934

Very cautionary reading.
Very interesting reading! I'm still not done but fascinating. To be clear I'm not sure I see what I was suggesting as a leveraged portfolio. The leverage is backed by bonds in the RRSP ultimately. Granted you can still experience a form of "ruin" as you TFSA can go to zero. The interesting thing about 2x leverage (or more) is if you commit to doing it for a very long time, ruin seems inevitable. Eventually stocks will lose 50% of their value. Ruin or risk of ruin seems to happen every 10 years or so now.
by CalgaryGuy
26 Jan 2021 08:09
Forum: Financial Planning and Building Portfolios
Topic: putting addtional equity exposure in TFSA through financial engineering
Replies: 14
Views: 1429

Re: putting addtional equity exposure in TFSA through financial engineering

When you go to scenario two and start shifting things around, keep in mind whether or not you are changing the equity/bond mix (asset allocation) overall for your part of the money. If you are increasing equity exposure on an AT basis, of course your expected returns will increase. If you decide to do that, fine, but be aware why it's happening rather than thinking you've found a free lunch. :) Thanks IdOp. I was struggling with how to frame this, but this is an excellent. You can trace the expected return increase back to increasing your after tax exposure to equities. The source of the apparent free lunch is very much the result of not framing the scenarios in terms of after tax allocations. With that perspective, you would need to consi...
by CalgaryGuy
25 Jan 2021 15:10
Forum: Financial Planning and Building Portfolios
Topic: putting addtional equity exposure in TFSA through financial engineering
Replies: 14
Views: 1429

putting addtional equity exposure in TFSA through financial engineering

Imagine you have a typical portfolio with stocks in TFSA and stocks and bonds in your rrsp. You lament not having more room in your tfsa for equity because the returns would be tax free: TFSA: 10k stocks (index) RRSP: 10k stocks (index), 10k bonds. You could use options to put all of your equity exposure in your tfsa (LEAPS would be ideal I suppose): You now have TFSA: combo of stocks and options that results in 20k worth of exposure to equities, and sell your stocks in your rrsp TFSA: 20k exposure to equity index RRSP: 10k bonds+ 10k cash equivalent or bonds handwaving :) Now your exposure to equities is the same for the whole portfolio and assuming a good result out of equities, your TFSA is supercharged to get all of your equity premium....
by CalgaryGuy
19 Jun 2018 23:50
Forum: Property: Owning, Renting, Managing, Investing and Mortgaging
Topic: TD HELOC Variable Rate Increases
Replies: 22
Views: 5711

Re: TD HELOC Variable Rate Increases

Does anyone understand the insurance companies perspective here? The only thing I can think of is there is another large entity with lawyers interested in the payout if they have to make good on a large claim.
by CalgaryGuy
19 Jun 2018 23:39
Forum: Under the Mattress: Protecting Your Money
Topic: to buy new or used car?
Replies: 1590
Views: 126862

Re: to buy new or used car?

Shakespeare wrote: 19 Jun 2018 22:11
That said, a lot of vehicles have AWD these days
True, but not always full-time. My 2003 CR-V was FWD until the front wheels slipped.
I'm not really a car guy. Is there a benefit to full time AWD? My understanding has always been part time AWD would give you better mileage. Is there a downside to the part time?
by CalgaryGuy
09 Jun 2018 23:53
Forum: Taxing Situations
Topic: Holding mortgage in RRSP: Am I missing something?
Replies: 14
Views: 1164

Re: Holding mortgage in RRSP: Am I missing something?

Thanks for the responses! I never really considered that the tax free compounding might actually shift the decision, albeit rarely.
by CalgaryGuy
05 Jun 2018 20:08
Forum: Taxing Situations
Topic: Holding mortgage in RRSP: Am I missing something?
Replies: 14
Views: 1164

Re: Holding mortgage in RRSP: Am I missing something?

Thanks Eclectic12, that was my question.

I should have been more clear. My question was about the tax implications of going with anything but the lowest possible rate. Are there any circumstances in which it would actually be a good idea to go with anything other than the lowest rate possible on a mortgage in your rrsp if you can't deduct the interest?
by CalgaryGuy
31 May 2018 21:18
Forum: Taxing Situations
Topic: Holding mortgage in RRSP: Am I missing something?
Replies: 14
Views: 1164

Holding mortgage in RRSP: Am I missing something?

I actually think holding your mortgage in your RRSP is usually not the best idea in general but there is a specific issue I am curious about. Half the articles on this imply you can charge yourself a high-ish interest rate and that is a good thing. This sounds way off for your personal residence. Voluntarily paying your RRSP a high interest rate is like voluntarily placing money in your RRSP without a tax deduction. Your giving that money a tax liability and is unlikely to work out) Surely you should go for the lowest interest rate possible (unless the interest is deductible)? I'm asking because I find it very difficult to explain this to people and am starting to think I might be missing something. I have great respect for people on this b...
by CalgaryGuy
09 Jun 2017 09:00
Forum: Stocks, Bonds, ETFs, Funds, REITS and More
Topic: The Second Cup Ltd. (TSX.SCU)
Replies: 12
Views: 1052

Re: The Second Cup Ltd. (TSX.SCU)

I often think this is where investors miss most of their opportunities (myself included, I won't be buying it). Things do look grim, but the chances of turnaround are not zero, so the stock must have value. That value might be twice what it is trading at right now, given its expected return. Most investors won't touch it though.
by CalgaryGuy
27 May 2017 23:24
Forum: Property: Owning, Renting, Managing, Investing and Mortgaging
Topic: Housing Bust 2017
Replies: 342
Views: 28761

Re: Housing Bust 2017

We just bought in Calgary. We were looking in Brentwood, Charleswood, and Varsity. These are nice older areas (more central) with good schools near the University. Despite all the talk about a weak housing market in Calgary, every home we were really interested in had bidding wars and was gone on the first night. The home we bought had a bidding war on the first night.
by CalgaryGuy
27 Jan 2007 10:32
Forum: Financial News, Policy and Economics
Topic: Invest in Russia
Replies: 39
Views: 5594

Arthur wrote:Northbeach, on the subject of Arar, where was it ever proved he was tortured, what facts other than his whining were ever shown that he was tortured and he sure looks pretty healthy to me, but then $10,000,000 will do that for you.

Rasputin.
http://www.ararcommission.ca/eng/17.htm
by CalgaryGuy
03 Jan 2007 17:51
Forum: Under the Mattress: Protecting Your Money
Topic: Deposit Rates: ING etc. (2007)
Replies: 347
Views: 5704

Re: ICICI issue

Stan wrote:I have been using ICICI for about 18 months and until now no problems.
Over the holidays they did an upgrade(?) and I have now lost the ability to move $ into or out of the account. Contacted them 24 hours ago and they said it will be fixed in 48 hours. I will keep you posted.

Has anyone else encountered this?

Stan
I encountered this and it was fixed in real time.

Added: That is when I called, the agent was able to change it right away.
by CalgaryGuy
06 Nov 2005 20:17
Forum: Stocks, Bonds, ETFs, Funds, REITS and More
Topic: Real Return Bonds
Replies: 1545
Views: 242853

Shakespeare wrote:If they [iShares € Inflation Linked Bond ETF] were held in an RRSP "mark-to-market" rules, if applicable, would be irrelevant.

Provided they could be held in an RRSP, of course.
Could you explain this "mark to market rule" ?

....Somehow I feel like I'm back in school wondering if my question is really stupid, but figuring it best to know the answer either way.
by CalgaryGuy
06 Nov 2005 20:05
Forum: Stocks, Bonds, ETFs, Funds, REITS and More
Topic: Real Return Bonds
Replies: 1545
Views: 242853

Dispite the caveat above you should be able to purchase any publicly traded FTSE-listed stock or ETF via your broker provided they have a reciprical relationship with a UK broker. That's interesting, especially in light of "No person resident in Canada for the purposes of the Income Tax Act (Canada) may purchase or accept a transfer of shares in the Company unless he or she is eligible to do so under applicable Canadian or provincial laws." Remember the furor over changes to ITA with respect to NRTs and FIEs? Perhaps this is a veiled warning that these ETFs aren't exempt like US-listed ETFs and investors may be required to mark them to market for tax purposes. (Although strictly speaking the wording says they're illegal, not just...
by CalgaryGuy
25 Oct 2005 19:59
Forum: Stocks, Bonds, ETFs, Funds, REITS and More
Topic: BGI Proposed Changes to XIC and XGV
Replies: 108
Views: 27845

It's a sad statement about the state of the Canadian financial services industry that no one seems to think there is even a possibility of TD stepping up and competing (cutting the mer for example).

What are the consequences for small investors who own units if TD were to throw in the towel? How would they unwind this?
by CalgaryGuy
20 Oct 2005 20:19
Forum: Financial News, Policy and Economics
Topic: 10 Questions for John Bogle
Replies: 175
Views: 83795

The miracle of compounding has worked wondrously differently for those who owned Japanese stocks in 1982 and still hold them today.(PDF chart) I have recently started wondering about this example. It is presented often. For those Canadians who owned japanese stocks your long term results seem to look very different: from http://makeashorterlink.com/?G3602250C Nikkei 225 Price Index Annualised Returns at June 30, 2000 ($CDN) 1 year 14.8% 2 years 20.5% 3 years -0.7% 4 years -3.5% 5 years 0.6% 10 years -0.1% 15 years 8.6% 20 years 10.0% 25 years 11.6% And thats not bad at all. I understand Japan had deflation but I don't know much about their experience. I also understand that exchange rates track inflation over the long term. Could this expl...
by CalgaryGuy
07 Oct 2005 00:15
Forum: Stocks, Bonds, ETFs, Funds, REITS and More
Topic: Share Buybacks
Replies: 222
Views: 40513

They usually have little upward effect on the stock price. Haven't seen any evidence yet. :( What I was hoping for was an academic study showing that, as companies buy back more shares, their returns over subsequent periods decrease. And returns for companies which buy back the most shares decrease the most. Ideally, the study should span 20 or more years. I'm sure the abuses you noted exist. But what is the average effect? go to http://scholar.google.com/ search for : share repurchases performance. A quick glance indicates that stock repurchases cause above average returns for value stocks, but no real effect for growth. I only read the abstracts, but they all seemed to point in that direction. One paper explained this by saying it preven...
by CalgaryGuy
25 May 2005 21:40
Forum: Retirement, Pensions and Peace of Mind
Topic: RRSP Questions
Replies: 687
Views: 104586

Re: Stocks from Non-RRSP to RRSP

[quote="r_a_"]I have stocks that are in a non-registered online broker account. If I have additional room for RRSP contrbutions, can I somehow directly transfer the stocks and put them into my RRSP account? Or will I have to sell, transfer the money, then buy again? That would double the commision payments. Has anyone here done this?[/quote]

My discount broker won't charge you for contributions in kind but they do charge for swaps. Sometimes they forget you have a choice to transfer it either at the high or low for the day (whatever suits you best). Its best to remember to tell them or they might pick for you.
by CalgaryGuy
17 Mar 2005 00:20
Forum: Financial Planning and Building Portfolios
Topic: Foreign Inflation protected Bonds
Replies: 11
Views: 1919

My boss is British and I asked him about these once. He said you have to be a resident of the UK. This strikes me as the reason you don't hear much about the others as well. You just can't get them.
by CalgaryGuy
15 Mar 2005 22:29
Forum: Under the Mattress: Protecting Your Money
Topic: How does this no money down real estate work?
Replies: 12
Views: 2448

For years I have been watching these real estate ads for no money down. Let's see, if by my recall there are lawyer fees, land transfer fees and commissions involved. How can this be done, IF in fact it can be? Those fees can surely be rolled into the mortgage. Scotia Bank has the no down payment version. They accomplish this by "giving" you the downpayment of 5% required for insurance. They also say: ....You will be required to repay the pro-rated amount of the 5% downpayment received if your mortgage is paid out, assumed or early renewed before maturity. .... So there you have it. The mortgage is insurable because the 5% down payment exists. The bank recoups the 5% by giving you an unreasonable interest rate that you are locked...
by CalgaryGuy
12 Mar 2005 23:47
Forum: Stocks, Bonds, ETFs, Funds, REITS and More
Topic: DRIPs/SIPs/Synthetic DRIPs
Replies: 353
Views: 71828

Thanks for the information, guys! I believe I understand now, and I'll have a look at the Canadian moneysaver to clarify the process.
by CalgaryGuy
12 Mar 2005 00:24
Forum: Stocks, Bonds, ETFs, Funds, REITS and More
Topic: US TIPS
Replies: 152
Views: 30964

[quote="Shakespeare"][quote]What do TIPs at 1.8% offer that RRBs at 2%+ don't, other than currency diversification?

A point I made a couple of weeks ago was that, as we age, we might want to replace foreign equities by foreign indexed bonds in order to obtain diversification with lower risk.[/quote]

I believe dagan may be asking what the nature of the risk you are lowering is. My guess is TIPS are safe over the long haul even for a Canadian since, as I understand it, a currency tracks inflation in it's home country (in the long run). In the short run, I guess having both tips an rbbs may protect an investor from changes in real interest rates, Is that what you had in mind?
by CalgaryGuy
11 Mar 2005 18:24
Forum: Stocks, Bonds, ETFs, Funds, REITS and More
Topic: DRIPs/SIPs/Synthetic DRIPs
Replies: 353
Views: 71828

Participating in DRIPS

I recently bought a REIT and called Scotia Mcleoud Direct to enroll me in the sponsored DRIP (One of the ones using ComputerShare). The guy said this was not possible. He did offer to enroll me in a synthetic DRIP but then I miss out on the extra 3% dividend and can't have partial units.

I had assumed enrollment in sponsored DRIPS were something brokers did as a matter of course....Does anyone have a discount broker that does this for them ?
by CalgaryGuy
09 Mar 2005 19:59
Forum: Stocks, Bonds, ETFs, Funds, REITS and More
Topic: iUnits S&P/TSX 60 ETF
Replies: 10
Views: 3686

worryfreeinvestor wrote:However, Garp, it invites the question of how to replicate the Toronto composite. There is an iUnit Mid-Cap ETF, so I suppose the portfolio should be a mix of the iUnit S&P/TSX 60 and the Mid-Cap, plus the other iUnits to the degree that they are not components of these two.
I use TD's etf instead of iunits for this reason. They track the entire TSX Composite. The mer is slightly higer at 0.25%....

http://www.tdassetmanagement.com/content/p.../p_OurFunds.asp