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Discussing Investments
Great post.

My risk tolerance has certainly gone down as I've gotten older (I used to seek 20% return, then 10%, now I'm more of a 6%-8% kind of guy since I have start to accumulate wealth).  I find anything lower than 5% tough to stomach considering the inflation erosion factor.

I would actually prefer if interest rates went back up to a more 'normal' (if there is such a thing) level.  Not the levels that existed in the 80's, but over double what we're seeing now (somewhere in the 6%) range would be better (and healthier) for the real economy.

I've found Suncor to be a great short and long term play as I find the stock fluctuates, but still trends in the upwards direction.

Another point on investments that some may not know - if you borrow money to invest into a dividend bearing stock, the interest you pay is tax deductible.
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Thanks given by: Nanuuk , Highstyx
Invest in Weed in Canada.

Trudeau promises it'll be worth his while to make you bankrupt.
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(2017-01-11, 05:06 PM)art_vandelay Wrote: Another point on investments that some may not know - if you borrow money to invest into a dividend bearing stock, the interest you pay is tax deductible.

Thanks I forgot to mention that for Pouzar. If you're sitting on money, pay down your mortgage and then borrow to invest. Of course, don't take some guy's opinion on the internet about this. You may wish to engage a qualified broker to discuss. This will cost money, but it is YOUR MONEY you're trying to protect.
I used to do the Hokey-Pokey, but I turned myself around.
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(2017-01-11, 04:51 PM)Nanuuk Wrote: Interesting thread. I scanned over that last few pages and didn't see anything on what a person's risk tolerance is. Apologies if I missed it. Pouzar, you and your wife may have different risk tolerances, Value stocks vs. Growth Stocks?, stock market vs. ETF's or mutual funds?

When you are younger you may be willing and able to stomach a riskier investment. By that I mean, can you sleep at night leaving your investments alone or are you willing to be very active in monitoring the market? And your tolerances will change as you grow older where you look for safer investments.

As, at least one other poster has said, getting out of debt relative to your house should be a priority. But not at the total exclusion of making investments for your retirement. You need a plan for both. In you are high income and expect to be earning less in retirement, max out your RRSP first. Use your income tax refunds to either invest in your TFSA or put money down against your mortgage or at a minimum pay a lump sum on every anniversary to the principle. Look at doubling up mortgage payments as well. You'd be surprised how quickly that adds up.

In Alberta, we are in a downturn. But it is still not as bad as it was in the 1980's in my opinion. Why? Because back then interest rates went up to 18% for mortgages. If interest rates sky rocket again (the US Fed is talking about raising rates 3 or 4 time in 2017), a lot of people and governments are going to be in a world of hurt. Hence the one poster's comment about being largely in cash right now.

Myself? I'm a steady has she goes investor. Not a novice, but not an expert. My first investment was in the company I used to work for, Petro-Canada. At the time, Petro-Canada was privatizing and the company offered to match an employee's purchase. So I bought it and still own Suncor (SU) shares after all these years. As they are with my discount broker, they are Dividend Reinvestment Investment Program (DRIP) shares. Whenever a dividend is paid out, they are re-invested. So, as you can imagine as the years go by you acquire and accumulate quite a number of shares. With a young family this requires discipline to do. There is always something that you can use the money on.

Similarly I bought some RY about 10 years ago. I own some Fortis (FTS), some Pembina (PPL), some Capital Power (CPX), some Peyto Exploration (PEY), some TD (TD), and until recently an investment trust A & W (AW.UN). All of these I have and hold, despite market ups and downs, because they all pay dividends. And they are all stable companies. A&W did too, but I sold on the old Axiom - Pigs Get Slaughtered. My bad, I should have kept them as they pay a great monthly dividend and continue to go up. I also owned CNR for a while a sold too early before they really went up. I should have known better. A buddy of mine has owned them for years and they've split at least 3 times (1 share = 2 or 1 share =3). This usually happens when the stock valuation gets too expensive and the company wants to keep its float (# of outstanding shares) fluid. The reverse can also happen, but I haven't seen that in many years.

I did lose money on a Gold Stock (Alamos) which was a speculative buy. Which leads me to my next point. If you use your TFSA to dabble in the market, remember you cannot claim your investment fees and you cannot claim any investment losses when you sell. So if you find a good blue-chip stock such as RY, TD, or any Canadian Bank, sit back and enjoy life and watch your money grow. Or you can buy a mutual fund to spread the risk. Most discounter brokerages have online tools to have you make a choice.

Another point. You know that I'm old school. Keeping your money in an E-Savings Account will pay you relatively paltry interest, but it will grow over time. Remember the rule of 72. Interest rate X years = 72 will double your money. So, if we were in the 80's with high interest rates at 12%, money in a savings account would have doubled in 6 years. Why would anyone do this when investing in the stock market might pay you (hypothetically) 25%? Because in the stock market you could just as easily lose 25%. When in cash you don't have that risk. Steady as she goes...

Edit:  And lest people think I'm some sort of millionaire, I'm not. I'm not talking about 100's of shares in every case. Diversification is a good idea though. So I own two banks, two utilities, two oil companies, one pipeline company and really should diversify more. But I am holding some cash in this non-registered portfolio.

Whoa - so much information.

Great post and thank you very much for taking the time to post - it actually is quite helpful.
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I have a question... I have a TFSA with about 20k in a few CIBC mutual funds. I'd like to cash in some of them and invest in a particular stock. They aren't public yet but I would like to buy at their IPO which is coming up this year.
Is that easy to do, is it a side phone call or meeting with my bank or do I need to move the investments to another institution?
I know I could probably call my bank but want to hear how others use Tfsa to invest.

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If your bank has buy/sell I don't see why you can't. Just be aware that the mutual fund valuation may not be current and the actual price you get may be more or less. Mutual funds are a collection of stocks or bonds and its valuation may be delayed. Also remember market timing is a mug's game. Best to set your strategy, i.e. sell your mutual funds with the view to buy stocks and don't worry about the timing.
I used to do the Hokey-Pokey, but I turned myself around.
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(2017-01-11, 11:06 PM)PaliSENS Wrote: I have a question... I have a TFSA with about 20k in a few CIBC mutual funds. I'd like to cash in some of them and invest in a particular stock. They aren't public yet but I would like to buy at their IPO which is coming up this year.
Is that easy to do, is it a side phone call or meeting with my bank or do I need to move the investments to another institution?
I know I could probably call my bank but want to hear how others use Tfsa to invest.

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My TFSA is used in a similar fashion.  It's currently split between mutual funds, stocks, and cash.

You should be able to call your bank to make the transaction if you don't have a self directed account (in which case you could make the changes yourself).
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(2017-01-11, 11:06 PM)PaliSENS Wrote: I have a question... I have a TFSA with about 20k in a few CIBC mutual funds. I'd like to cash in some of them and invest in a particular stock. They aren't public yet but I would like to buy at their IPO which is coming up this year.
Is that easy to do, is it a side phone call or meeting with my bank or do I need to move the investments to another institution?
I know I could probably call my bank but want to hear how others use Tfsa to invest.

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Not generally easy to do.  Banks tend to get an allotment and those would go to their big clients to buy first.
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Here's another question, I have a friend who works there and I can buy pre-IPO shares through him. Can I do that through my TFSA?

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(2017-01-12, 07:58 AM)PaliSENS Wrote: Here's another question, I have a friend who works there and I can buy pre-IPO shares through him. Can I do that through my TFSA?

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I've never bought pre-IPO shares but in theory you should be able to.  You would need to coordinate the funds through your bank to the company selling the pre-IPO opportunity.

A TFSA is just another type of bank account which can be used to buy a whole basket of different things (I think it's possible to buy a house through a TFSA).
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Thanks maybe I will look into it (if I haven't missed the opportunity already)

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(2017-01-12, 07:58 AM)PaliSENS Wrote: Here's another question, I have a friend who works there and I can buy pre-IPO shares through him. Can I do that through my TFSA?

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 IPO's are treacherous territory. Newbies aren't always as the seem.. or as they are presented, by their promoters
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It's a "growing" industry with an established company, so I'm willing to take the risk

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This right here is all the investment advice you need:



Guess what? I got a fever, and the only prescription is more cowbell!
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I'm getting out and staying away from anything related to the auto industry - Magna in my case. There is probably going to be buying and selling points but I don't have the time to watch things that closely. Trump could cause too much havoc with the industry over the next little while and every time he opens his mouth it provides too much unknown risk in some sectors.
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My company started an RRSP thing with Sun Life Financial. Do you guys get involved in the whole RRSP gig?
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(2017-01-16, 12:47 AM)TheNumber13 Wrote: My company started an RRSP thing with Sun Life Financial. Do you guys get involved in the whole RRSP gig?

I assume they will match your contribution so if you contributed 4% of your salary the company will match that or up to a certain amount.  Don't know all your personal information but considering you live at home, you should be maxing out what the company allows to get the most benefit.  Also note IF you were to move out of home and buy yourself a place, you can withdraw the money from your RRSP tax free for a portion of the down payment and only need to repay back into your RRSP over a period of time the original amount.
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(2017-01-12, 08:03 AM)art_vandelay Wrote:
(2017-01-12, 07:58 AM)PaliSENS Wrote: Here's another question, I have a friend who works there and I can buy pre-IPO shares through him. Can I do that through my TFSA?

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I've never bought pre-IPO shares but in theory you should be able to.  You would need to coordinate the funds through your bank to the company selling the pre-IPO opportunity.

A TFSA is just another type of bank account which can be used to buy a whole basket of different things (I think it's possible to buy a house through a TFSA).

I believe this to be correct which would explain why the interest rate is so incredibly low and in my opinion not really a great way to make money grow. the interest rate on my TFSA is 0.8%. How is anyone supposed to build wealth with that sort of return? I need to figure out where else to put this money.
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Tfsa is an investment account. So you don't let it sit in savings but when you invest using your Tfsa you also don't pay tax in the money your investment grows.
If you just go buy stocks and they double, you pay tax on that money, but if it's through a Tfsa, it is tax free.

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PaliSens - that is correct.  It's just another type of bank account where you can do whatever you want with it (stocks, bonds, savings account, etc.).  But like you said the growth is tax free, as opposed to a conventional non-registered account.  If someone chooses to leave it in a savings account, the risk is low (almost nothing) but so is the return.

TN13 - we make a point of maxing out our RRSP's contributions every year.  It's No. 1 on our priority (ahead of TFSA's, vacations, etc.).  That being said, the money should be set aside for retirement so if you're looking to pull it back at some point it may not be the best investment vehicle for you.

This does bring up a good debate though - friends of mine and I generally have different views when it comes to RRSP's, TFSA's, and non-registered accounts.  My order of preference is:
  1. RRSP's
  2. TFSA's
  3. Non-Registered ("normal") bank accounts.
They disagree, with varying orders of the 3 items I put above.  Ultimately I think it's because everyone's investment goals are different (tax deferral, long term or short term saving, etc.), but I'm curious if anyone else has any thoughts on this.
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