Last updated: Feb-22-2017

    
 
QUESTION & ANSWER
2/23/2017 5:57:56 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, 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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By Robyn K. Thompson | Friday, December 02, 2016

Q – I turned 71 this year, and I still have a rather large RRSP to which I’ve been contributing. I understand that I have to convert my RRSP into another type of registered plan, but I’m not clear as to what my options are or what the deadline is. A friend told me that I have until the day before I turn 72 to choose what to do with my RRSP. Is that correct? – Fred J., Kingston, Ontario

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By Robyn K. Thompson | Friday, November 25, 2016

Q – I’m a little confused about the definitions of various fund categories. I was researching fixed-income funds to add to my portfolio as defensive hedges against market volatility. I looked at CIBC Monthly Income Fund Class A, thinking it was a bond fund, but discovered that it is actually categorized as a Canadian Neutral Balanced fund, which can include equity holdings. Could you explain how funds are categorized and how to tell whether a fund is a true fixed-income fund? – Marilyn C., Richmond, B.C.

A – Until the late 1990s, there had been no standard method of fund categorization. Fund classification was a hodge-podge of competing methods and processes developed independently by Canada’s larger media and data companies. But that changed with the proliferation of mutual funds in the late 1990s, as industry and consumer demand for a uniform method of fund classification resulted in the formation of the Canadian Investment Funds Standards Committee (CIFSC).

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By Robyn K. Thompson | Friday, November 18, 2016

Q – I’ll be getting ready to retire in a couple of years, but I’m not really sure if I’m financially fully prepared for it. I have a pension plan through my employer and a small RRSP. Do I really need a financial plan as well, especially since my wife will be working for another few years? – Sid L., Kitchener, Ontario

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By Robyn K. Thompson | Friday, November 11, 2016

Q – With the election of Donald Trump as U.S. president, I feel that political uncertainty is going to increase stock market volatility, so I’m considering realigning my portfolio, which now consists of a mix weighted to more aggressive growth-oriented mutual funds and ETFs with a few fixed-income funds added to mitigate risk. What are your thoughts about rebalancing to a more defensive portfolio, and what should I include? – Wayne S., Gloucester, Ontario

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By Robyn K. Thompson | Friday, November 04, 2016

Q – I’ve seen some promotions recently for Financial Literacy Month. What’s this all about? Why is the government concerned about whether I can balance my bank account every month? – Nadia S., Thornhill, Ontario

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By Robyn K. Thompson | Friday, October 28, 2016

Q – Could you explain the tax consequences of bond mutual funds compared to interest-bearing GICs? Thank you. – K.N., Manitoba

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By Robyn K. Thompson | Friday, October 21, 2016

Q – I watched the U.S. presidential debate between Donald Trump and Hillary Clinton this past week, and I’m now really concerned about the impact the election results might have on financial assets. I’m wondering whether I should increase my asset allocations to safe-haven investments like commodities, real property, precious metals, coins, or gems – things that might hold their value if chaos erupts after the Nov. 8 U.S. election. – Ramesh P., Markham, Ontario

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By Robyn K. Thompson | Friday, October 14, 2016

Q – We’re looking to buy our first home, and we’ve heard about some recent changes to mortgage lending rules announced by the government. But we’re not sure what these changes are or whether we would be affected. Could you explain? – Trish E., Toronto, Ontario

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By Robyn K. Thompson | Friday, October 07, 2016

Q – I’m finding that my credit card balances are running ahead of my ability to pay them off fully every month. This has got me worried, because I’d like to buy a house in the near future and I’m worried that my credit card balances will affect my ability to get a mortgage. Do you have any suggestions for paying off credit card debt? – Randy D., Scarborough, Ontario

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

Q – I’m a recent graduate, and I’m just getting started in my career with a new employer. My employer offers a group RRSP as a benefit, but I’m a little nervous because the managers of the plan may invest in stocks and preferred shares that traded on stock markets. The RRSP is a government-registered plan, so I’m wondering whether my RRSP contributions would therefore be insured or protected against losses in the stock market. – Fiona L., Mississauga, Ontario

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