Last updated: Apr-28-2017

    
 
QUESTION & ANSWER
4/29/2017 3:27:24 PM
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Opinions expressed in articles published on this site are solely those of the contributing authors and do not necessarily represent the views or opinions of The Fund Library, its staff or affiliates.

 

By Robyn K. Thompson | Friday, April 28, 2017



Q – I’m turning 65 this year, and I plan to retire from my full-time employment and do some part-time consulting work. My wife also plans to retire, although she’s 61. We own our home free and clear, and we have accumulated about $500,000 each in our RRSPs. My wife and I both employer pension plans that will pay out about $30,000 annually each. I also have about $50,000 in a Tax-Free Savings Account. I expect to get near the maximum Canada Pension Plan benefit, although at my income level, I’m not sure about Old Age Security. We’d like to do some planning, because we’re not quite sure where or how we should start collecting our retirement income. Do you have any suggestions? – Kevin P., Richmond Hill, Ontario

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By Gordon Pape | Friday, April 21, 2017

Q – Here is a question related to mutual fund MERs. Hypothetically, let’s say there are two mutual funds in a portfolio. Fund A has an MER of 2.5% and Fund B has an MER of 1.5%. Both funds report exactly the same return for every year after fees and expenses. My question: In this hypothetical example why should I care about mutual fund MERs if the net return is the same? Actually, why would I care about MER at all? Should I only focus on the return? – Minh T.

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By Robyn K. Thompson | Thursday, April 13, 2017



Q – I’ve recently been getting more information from my advisor about the fees and charges I pay. I’m told this may be because of recent new rules imposed on the financial services industry by securities regulators. However, what I’m not clear on is which of these fees is deductible on my tax return. When I looked into it, the list of what’s deductible and what’s not seems unnecessarily complicated. Can you shed some light on this? – Rikki O., Stony Creek, Ontario

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By Gordon Pape | Wednesday, April 05, 2017

Q – You have previously recommended holding cash reserves in U.S. dollars. Do you recommend any particular vehicles to hold this cash, such as money market funds, savings accounts, etc.? – Don M.

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By Robyn K. Thompson | Friday, March 31, 2017



Q – With our kids growing and starting grade school in the fall, we’re looking to upsize from an apartment to our own home. Because both my husband and I have RRSPs, as first-time home-buyers, we’re looking to supplement our down payment by taking advantage of the RRSP Home Buyer’s Plan. How does this work, and do you think it’s a good idea to take money out of what is really our retirement savings? – Natalie T., Markham, Ontario

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By Gordon Pape | Tuesday, March 21, 2017

Q – I have a good dividend-paying stock and would like to move part of it into a TFSA, where I have accumulated a few years of contribution room, and the remainder into my self-directed RRSP, to which I haven’t contributed for years. If my intention is to reinvest the money back into the same company, but under both the TFSA and the RRSP umbrellas, am I making a sensible move, or should I leave things as they are? I’m 60 years old and drawing a pension. My spouse won’t retire for another five years, and we manage well with our combined incomes for now. – Monica D.

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By Robyn K. Thompson | Friday, March 17, 2017



Q – I recently came across a website that promises me huge returns if I trade something called “binary options.” It seems a pretty easy way to make a quick buck. And all I have to do to open an account is to give them some personal information to confirm my identity for a credit check and some credit card details. But I’m not sure how binary options work. Should I go ahead with this? – Ronnie T., Cambridge, Ontario

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By Gordon Pape | Tuesday, March 07, 2017

Q – Why keep bonds in a portfolio when we anticipate interest rates to go up in 2017? – Peter M.

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By Robyn K. Thompson | Friday, March 03, 2017



Q – I made my annual RRSP contribution again this year, as I have been doing for many years. But I’ve never really paid attention to the Tax-Free Savings Account, mostly because after my RRSP contribution, I don’t have any excess funds left for retirement savings. But this year is a bit different, as I’ve come into an inheritance. A friend suggested I start contributing to a TFSA. Could you tell my what the contribution limits are, and if I get a tax deduction or credit as I do with my RRSP? – Fred J., Scarborough, Ontario

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By Gordon Pape | Friday, February 24, 2017

Q – First of all let me say that my wife and I have subscribed to your newsletter for years and are very happy with the advice that your team provides. My question is about Canopy Growth Corp. (TSX: WEED). I was wondering what your overall impression of this company is in terms of investment. There has been a lot of hype in the news lately that has led to an increase in the stock price but I am wondering if this is just hype or does the company actually substantiate the increase. – Justin C.

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By Robyn K. Thompson | Friday, February 17, 2017



Q – I’ve been reading about something called “CRM2,” which is supposed to make advisor fees more transparent. I saw recently that Horizons ETFs have decided to cancel some of their Advisor class units, as a consequence. Is this something that we as investors should be worried about? I’m not sure I understand the implications of the regulatory changes or how I can tell whether I’ll continue to get value from my advisor. – Charles W., Toronto, Ontario

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By Gordon Pape | Friday, February 10, 2017

Q – My son and his wife have just returned to Canada after living abroad for several years. They have opened TFSA accounts, and I want to give them a head start on investing by transferring in kind some assets from a TFSA account I have to their accounts. This would be a gift, not a loan. We all deal with the same discount broker so that institution would handle the transfer.

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By Robyn K. Thompson | Friday, February 03, 2017



Q – For my RRSP contribution this year, I’m considering a bond fund, perhaps an ETF like the iShares Universe Bond Index ETF (TSX: XBB). I’ve been told these have lower volatility ratings and are safer than stock funds, yet still produce returns that are superior to what you can get on a guaranteed investment certificate or Treasury bills. Still it’s hard to ignore equity returns like those achieved in iShares Core S&P/TSX Capped Composite Index ETF (TSX: XIC). What’s your opinion? – Marc L., Ottawa, Ontario

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By Robyn K. Thompson | Friday, January 20, 2017



Q – I’m a new investor, and I want to start up a Registered Retirement Savings Plan. But I find the information on how much I can contribute and what I can invest in a little confusing. Could you summarize for me? – Shirl D., Toronto, Ontario

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By Gordon Pape | Friday, January 13, 2017

BUILDING WEALTH WITH GORDON PAPE
 

Q – I had several questions regarding mutual funds:

1. Are MERs (management expense ratios) paid yearly?

2. Is 1.90% reasonable for an MER?

3. Most funds offer 4%-6%. The rate of inflation is 2% and 1.9% MER on top that leaves quite a small gain.

4. Are there any funds that come with lower fees? – Bill K.

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By Robyn K. Thompson | Friday, January 06, 2017



Q – I managed to lose money on my portfolio despite the strong performance of equity markets in 2016. I’ve narrowed it down to my actions in selling out of equities after Brexit and again just after the Trump election victory. I guess I believed the media predictions about market “shocks” and “corrections” after what we were told would be “catastrophes” for the markets. Turns out they weren’t such catastrophes after all – but the media, pollsters’, and pundits’ predictions sure were! Do you have any suggestions on how to avoid these types of investing mistakes in 2017? – Trina D., Mississauga, Ontario

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By Robyn K. Thompson | Friday, December 30, 2016

The beginning of the New Year is often a time to turn a new financial leaf: make a budget; pay down debt; save more. That’s all commendable, but these good intentions are mostly forgotten by, say, mid-February. A better idea is to take stock of your entire financial situation. Review what’s important and prioritize the items you need to take action on. Here’s a guide to help you get started.

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By Robyn K. Thompson | Friday, December 23, 2016

Q – I believe that my investment portfolio is fairly well balanced, with about 60%. in equities and 40% in fixed income assets. I do trade from time to time, but generally I stick to a buy-and-hold strategy. But with the recent surge in equities and selloff in bonds, would you recommend rebalancing now? And how often do you recommend rebalancing? – Stefanie D., London, Ontario

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By Robyn K. Thompson | Friday, December 16, 2016

Q – Year-end is fast approaching, and it seems all the experts have reams of tax tips to offer us, many of which seem to apply only to the very wealthy or to businesses with complicated tax structures. Are there three or four must-do year-end tax-saving tips that apply to us mere mortals? – George B., Mississauga, Ontario

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By Robyn K. Thompson | Friday, December 09, 2016

Q – I’ve been researching mutual fund investments on the Fund Library site, and I’ve noticed that in many cases, the same fund is available as a “segregated” fund, but with a much higher management expense ratio. For example, CI Harbour Fund Class A has an MER of 2.44%, but has holdings identical to the CI Harbour Segregated Fund, which has an MER of 3.34%, but which also has generally lower returns. Could you explain the difference between the two types of funds and why seg funds have higher fees? – Margorie S., Toronto, Ontario

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