Last updated: Jun-26-2017

    
 
QUESTION & ANSWER
6/27/2017 1:25:56 AM
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By Robyn K. Thompson | Monday, June 26, 2017



Q – I recently opened a Tax-Free Savings Account, and I was asked whether I wanted to specify something called a “successor holder” or whether I wanted to designate a beneficiary. I’m not quite sure what the difference is. Could you explain why this is important? – Mary L., Kitchener, Ontario

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By Robyn K. Thompson | Friday, June 09, 2017



Q – I just graduated from university, and fortunately I landed a good job in my field of study. But I now find myself with a pretty hefty student loan debt load. Do you have any suggestions on how I can pay this off, or should I just ignore it and hope the Ontario government implements a debt forgiveness program? I’ve heard this might happen as it continues to make big pre-election promises. – Thomas Q., Toronto, Ontario

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By Robyn K. Thompson | Friday, May 26, 2017



Q – Our oldest child is just graduating from grade six, and we’d like to start saving for post-secondary education. We’ve seen some brochures from companies that offer Registered Education Savings Plans, but they seem somewhat complicated, with our funds pooled with other investors. And we’re not even sure we need it. Do you have any suggestions? – Paul and Lorraine T., Peterborough, Ontario

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By Robyn K. Thompson | Friday, May 19, 2017



Q – What are “annuities” and how do they work? – E.O.

A – When you purchase an annuity, you essentially buy a contract under which the issuing company (usually an insurance company) invests the lump sum you provide and guarantees a regular payout with interest over the life of the annuity contract. Typically, monthly annuity payouts are quoted per $100,000 of the contracted amount. Very simply, an annuity provides a guaranteed income stream for life. Annuities are sometimes used as an RRSP maturity option; however, annuities have been less popular for this purpose in recent years, owing to the historically low level of interest rates.

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By Robyn K. Thompson | Friday, May 12, 2017



Q – I’m a novice investor, and I’ve been researching ways to set up an investment portfolio using exchange-traded funds, because of their low management fees. I’ve looked at broad stock and bond index funds as a place to start, but a friend told me I’d get more bang for my buck with a couple of “smart beta” funds added to the mix. Because I consider myself a fairly conservative investor, I think I’d need a portfolio balanced between stocks and bonds, but I’m not sure how smart beta ETFs would fit in. Do you have any suggestions? – Melanie V., Mississauga, Ontario

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By Gordon Pape | Tuesday, May 02, 2017

Q – My husband has dual citizenship with Canada and the U.S. Because of that, we have topped up my TFSA and now have money to contribute to his. To keep things simple for U.S. income tax filing purposes, does it make sense to buy Canadian stocks in U.S. dollars in the plan? The intent is to withdraw profits yearly to fund our southern winter vacation every year and after the initial purchase not have to worry about the exchange rates. I would appreciate any ideas that you have. – D.M.

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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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