Search found 1092 matches

by martingale
27 Apr 2009 23:04
Forum: Property: Owning, Renting, Managing, Investing and Mortgaging
Topic: Variable vs Fixed Rate Mortgage
Replies: 31
Views: 4744

Re: Variable vs Fixed Rate Mortgage

I_DRIP wrote:HMy thinking is, rates can only go so much lower, and I feel that their is significant risk of interest rates jumping significantly upwards.
Start out with the pragmatic question: If rates went to 15% would you still be able to afford the payments? If not there is no debate--go fixed and eliminate the risk of that happening.

If you COULD afford the payment then it comes down to gambling on the future and I wouldn't want to hazard a guess as to which way they'll go. It does seem they can't go much lower, but who knows what would happen in a deflationary environment.
by martingale
27 Mar 2009 02:28
Forum: Taxing Situations
Topic: 2009 Ontario budget
Replies: 86
Views: 7190

Mailing out cheques is a fairly effective economic stimulus, Dalton is giving "Helicopter Bill" a run for his money. The only problem is the first cheque isn't coming out until next year meaning it may be too late. It would be better if the mailed the full $1000 ASAP.
by martingale
22 Feb 2009 02:48
Forum: Financial Planning and Building Portfolios
Topic: Asset Allocation using Leverged ETFs
Replies: 5
Views: 1120

You've at least not accounted for fees. The fees on the leveraged funds are in the range of 1.15% versus 0.17% for the non-leveraged version of the ETF's for example in the case of the TSX S&P 60 index. That claws back a substantial chunk of the difference in performance; the question is then whether the tracking error inherent in the leveraged version eliminates the remaining difference. (The tracking error is inherent because the 200% is "before expenses" and presumably the derivatives strategy used by the leveraged fund is not without additional cost.) It is still possible that this strategy is going to have nearly the same return but with less risk. If the fund guarantees that you will never lose more than the money you pu...
by martingale
10 Feb 2009 22:24
Forum: Financial Planning and Building Portfolios
Topic: Investing if inflation is coming
Replies: 104
Views: 10842

If you think inflation is coming, and you think that the banks are underestimating it, and you have a variable rate mortgage then convert your variable rate mortgage to fixed at the lowest rate you can negotiate.

If you do not have a mortgage, then take out a fixed rate mortgage, and invest the proceeds into real return bonds. Aim for a mortgage amortization period equal to the duration on the RRB you buy.

If the banks are underestimating future inflation then that will either allow you to deflate away your mortgage and/or profit on the spread between your mortgage rate and the return on a RRB.

Of course if inflation turns out to be less than forecast then this works against you in exactly the same way and to the same degree.
by martingale
22 Dec 2008 13:34
Forum: Stocks, Bonds, ETFs, Funds, REITS and More
Topic: Real Return Bonds
Replies: 1545
Views: 242873

I think the point is that while the return for stocks has to be greater than 2% in the long run, the long run can be quite a long time in coming.

Alternately it could come sooner than anyone expects...
by martingale
21 Dec 2008 22:40
Forum: Stocks, Bonds, ETFs, Funds, REITS and More
Topic: Real Return Bonds
Replies: 1545
Views: 242873

Icarus, at that point you're essentially operating as a market maker yourself, except with higher operating costs and fees than the real market makers.

Just don't enter market orders, put in what you believe to be a fair bid or ask and stick it out. If nobody bites and you are impatient improve your price incrementally until someone does. At some point as you advance through the spread someone will take your order.
by martingale
11 Dec 2008 03:00
Forum: Under the Mattress: Protecting Your Money
Topic: TFSA Account Offerings & Questions
Replies: 945
Views: 137559

You could dodge the transfer fee by withdrawing all the money on December 31st and depositing it fresh with a new institution on January 1st, or thereabouts--at least in the early days when the TFSA likely only has one asset in it you'd pay $20 in trading fees to sell and then buy, which is less than spending $125.
by martingale
07 Dec 2008 22:56
Forum: Taxing Situations
Topic: Withholding Tax Questions - RESP, RRSP, TFSA, RRIF
Replies: 135
Views: 34385

I might try it in year one just because it'd only be a few dollars and it would be interesting to see for myself how it is handled.

As a longer-term strategy it's obviously a big concern.
by martingale
01 Dec 2008 01:40
Forum: Financial Planning and Building Portfolios
Topic: Asset Allocation: RRSP vs. TFSA vs. Non-Registered
Replies: 15
Views: 3072

bucejos wrote:I suspect (although I don't know) that there will be a withholding tax within our TFSA which we won't be able to claim back (as we would in a non-registered account).
That's a good question. Anyone know the answer?
by martingale
01 Dec 2008 01:33
Forum: Property: Owning, Renting, Managing, Investing and Mortgaging
Topic: Avoid TD Bank for Mortgages
Replies: 47
Views: 3573

banker wrote:Huh? Says who? I have never heard of a prepayment penalty like that.
True. I was just calculating the extra interest that you would pay if you stuck it out to the end.
by martingale
30 Nov 2008 21:35
Forum: Property: Owning, Renting, Managing, Investing and Mortgaging
Topic: Avoid TD Bank for Mortgages
Replies: 47
Views: 3573

This mistake may cost you roughly $10,000-15,000 per $100k of your mortgage so it is worth following up aggressively and getting it fixed if it is possible for you to fix it--that estimate of your loss is assuming that variable rates stay well below 5.9%, a big if! That is a large enough sum that it is potentially worth your while to seek legal advice--I doubt that you have much of a hope but you never know, Canada has some pretty tough consumer protection laws and it's possible that something might be in your favour provided the evidence you have in the e-mails is solid enough and your wife uninformed enough. I would not wait much longer to find out. I also would not strike back with "petty" threats to take your business elsewher...
by martingale
30 Nov 2008 21:26
Forum: Financial Planning and Building Portfolios
Topic: Asset Allocation: RRSP vs. TFSA vs. Non-Registered
Replies: 15
Views: 3072

Why do you feel equities are, or will be the faster appreciating assets, especially considering the tax free compounding of interest vehicles? Plainly they aren't always, but historically they have been, and in theory over long time periods they should be. Bonds and equities are claims on the same underlying stream of income but bonds are paid first and are therefore always less risky. Less risk, less reward--but of course the risk, as we've recently seen, is very real. Emergency money is just as close at hand in a TFSA. How many emergencies do you have that the minor problem of waiting to put it back into a TFSA make it smarter to leave it outside the protection of a TFSA. If the alternative was "emergency money taxed or untaxed"...
by martingale
30 Nov 2008 19:09
Forum: Property: Owning, Renting, Managing, Investing and Mortgaging
Topic: Avoid TD Bank for Mortgages
Replies: 47
Views: 3573

I don't think the relationship you have with your bank is worth nearly as much as it used to be--if it was ever worth much.

I think sophisticated credit scores have largely replaced relationships when it comes to what the bank will offer you; along with what information you bring with you to the bargaining table (it helps a lot if you can quote what is on offer elsewhere or know what has been offered to other customers.)
by martingale
30 Nov 2008 16:24
Forum: Financial Planning and Building Portfolios
Topic: Asset Allocation: RRSP vs. TFSA vs. Non-Registered
Replies: 15
Views: 3072

Asset Allocation: RRSP vs. TFSA vs. Non-Registered

The choice of which securities to put in which account is somewhat complicated. Here's a stab at it, and some of the reasoning: -- It is better to have bonds in RRSP, and equities in TFSA: this is to minimize the tax at withdrawl time by putting the faster appreciating assets in the tax-free account -- Emergency money, despite the tax hit, should be kept in a non-reg bank account where it is closest at hand as there is a small penalty on withdrawl from TFSA (no in and out privileges--you have to wait a year) -- As ever the non-reg account should usually be biased towards Canadian equities or equities that earn primarily capital appreciation, due to the dividend tax credit and the tax of cap gains at only 50% In light of this I will aim to m...
by martingale
28 Nov 2008 01:32
Forum: Under the Mattress: Protecting Your Money
Topic: TFSA Account Offerings & Questions
Replies: 945
Views: 137559

How does the "wait a year" rule work on redepositing a withdrawl? Can you make a withdrawl next december and redeposit it in January? In that case transfers ought not to be a huge concern.
by martingale
26 Nov 2008 19:58
Forum: Stocks, Bonds, ETFs, Funds, REITS and More
Topic: RBC Direct Investing to offer 1% again
Replies: 271
Views: 51596

How to save $4

So to get your money in and out of RBC you need an RBC bank account. You can get a savings account free but since you can't write cheques on a savings account you can't link this savings account to your account at another bank (e.g., PC Financial allows you to link any account you can write a cheque on.) If you open up an RBC banking account they will want to charge you $4/month for the privilege of moving your money in and out.. but.. They have a "multi product" promotion going on and as far as I understand if you have BOTH an investment with RBC and you also have a "rewards" card with RBC then they will waive the $4 fee. The RRSP will count as your investment, but what about the credit card? It turns out one of the rew...
by martingale
23 Nov 2008 01:18
Forum: Retirement, Pensions and Peace of Mind
Topic: RRSP Questions
Replies: 687
Views: 104586

All that said I imagine the security regulators are not going to be particularly interested in spending time and money going after someone who was simply trying to convert currency and who did not particularly impact the market. "Intent" would enter back into it in the "we have bigger fish to fry" discussions that would likely be had were a Norbert's Gambit to ever make it on their radar. It's also not clear you would be in violation if your two trades matched with two other counter-parties since in that case the intent-less stricture against trades that do not affect beneficial ownership would not apply. The practical implication is if you want to be surer that the gambit is legal (regardless of fish frying enforcers) y...
by martingale
23 Nov 2008 01:11
Forum: Taxing Situations
Topic: crisis idea for Harper - eliminate capital gains temporarily
Replies: 11
Views: 863

I hate to be the one to throw cold water on the party but a cut in any investment tax would encourage more saving and less spending. Ordinarily a very good thing, but just now it seems that people and firms are hoarding cash in anticipation of bad times to come. Of course it is this very act of hoarding cash which brings on the bad times (or at least worsens them). While investing in the market is better than hoarding cash, from the government's point of view better still if you spent that money. So they are likely to concentrate on putting spendable rather than investable dollars into pockets. If you were to inject your savings into some corporate treasurer's account, the treasurer would likely turn around and sock it away in a money marke...
by martingale
22 Nov 2008 19:07
Forum: Retirement, Pensions and Peace of Mind
Topic: RRSP Questions
Replies: 687
Views: 104586

Norbert Schlenker wrote:Not that I can see. The rule is meant to prevent "painting the tape", i.e. conducting a trade at something other than FMV. The gambit is arguably two trades, both at FMV, both with unrelated third parties.
There are sections of that rule that ignore intent. If you wind up trading with yourself via the market you are in violation regardless of intent, from the way that it's written.
by martingale
21 Nov 2008 14:43
Forum: Retirement, Pensions and Peace of Mind
Topic: RRSP Questions
Replies: 687
Views: 104586

Norbert Schlenker wrote:UMIR
Doesn't that document, the beneficial ownership rule specifically mentioned there, make Norbert's Gambit illegal? Maybe not because you might be buying and selling from different people.
by martingale
21 Nov 2008 14:41
Forum: Retirement, Pensions and Peace of Mind
Topic: RRSP Questions
Replies: 687
Views: 104586

Rickdl wrote:I'd be the beneficial owner of both the cash account and the rrsp.
Spousal RRSP. You might still run afoul of some other term though; and risky if you're unsure of the speed of execution since you could lose heavily if someone else got the "winning" side of the trade, especially if you face a computerized trader.
by martingale
21 Nov 2008 14:37
Forum: Retirement, Pensions and Peace of Mind
Topic: RRSP Questions
Replies: 687
Views: 104586

When would you ever want to pick high on an in-kind contribution?
by martingale
17 Nov 2008 22:14
Forum: Financial Planning and Building Portfolios
Topic: RRSP vs Taxable Investment vs Mortgage vs "x"
Replies: 89
Views: 11529

I agree. Order of priority ought to be:

1. Pay off all debts
2. Build emergency fund
3. Build up TFSA (these days!)
4. Home or RRSP depending on you

You never know what life will throw your way (especially these days). Only reason TFSA comes before a home (if you want a home) is because it seems like a good place to start saving up the down payment.

Note that the emergency fund should not be used as a down payment.
by martingale
11 Nov 2008 00:11
Forum: Retirement, Pensions and Peace of Mind
Topic: Group RRSP - Questions
Replies: 104
Views: 17180

If you leave the money there for 20-30 years it's a wash. If you take it out earlier obviously the matching funds are a win--you start out 100% up on your investments, effectively, and although yes you pay tax and although yes you pay a high MER it takes a long time to erode a 100% gain.

Still, after 20-30 years it will erode. How many people stay at the same employer that long though? I imagine at some point the money will be removed and deposited somewhere with a sensible MER.
by martingale
09 Nov 2008 22:13
Forum: Under the Mattress: Protecting Your Money
Topic: TFSA Account Offerings & Questions
Replies: 945
Views: 137559

Taggart wrote:I would think if you withdrew your money in a calendar year, then you have lost your contribution room for that amount in that particular year
Looks like you're right. That's unfortunate, as I was planning to use the TFSA for my emergency cash for the first year or two. The inability to put the cash back after the emergency is over (well, for a year) makes it less attractive for that purpose.

Oh well.