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tax free savings account
December 28, 2021
5:35 am
savemoresaveoften
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Bobbyjet11 said
Another option is investing in index funds such as those offered by Tangerine.
 

There is absolutely no benefit to invest in an index funds managed by a third party. All you are doing is paying away extra management fee for nothing.
Just pick a well established ETFs offered by Blackrock or Vanguard. An index ETF such as XIU etc you are paying 10bps in fee. Tangerine managing your money for you and put it into such a fund, you are paying another 20-50bps ON TOP in fees.
Dont do it !

The one biggest enemy to your portfolio return is management fee. Even at 50bps a year, 40 years = 20% of your assets gone. I always shake my head when paying are paying away 1-2% a year to their advisors and say its worth it...

December 28, 2021
5:55 am
Alexandre
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I would like to comment on:

with Safe investments you are losing money due to inflation.

It seems many, even in advance age, are fixated on idea of "die rich." Which forces unnecessary exposure to riskier investments.

My "investment strategy" is different: I plan not to die broke. What's the difference? Well, as long as I have enough money to complement pension plus government social security payments till the end of my expected lifespan, I don't care if some of it is lost due to inflation.

Example: suppose, I am 80 and plan to live till 100. Also suppose, currently I need to spend $1,000/mo from my savings to keep my lifestyle, as that is enough to complement government payments. I expect that I'll need to spend $2,000/mo of my money by the time I hit 100 to keep up with inflation. Also, that there is no hyperinflation, just gradual inflation causing gradual increase of my spending.

With these assumptions in mind, if I currently have $400,000 in cash (HISA, TFSA), I don't need to play on stock market. I can keep it all in Savings, sleep well, and even have few dollars left at the age of 100 if I manage to hit that milestone.

----
So, why did I put "investment strategy" in brackets? Because, I don't invest: no stock holdings, no precious metals, no bitcoins - just HISA and TFSA. I live simple life reassured that every evening, after stock market closure, I still have all my money - it won't shrink because of some stupid tweet from some today's celebrity or from anything else.
It also frees my time to do something useful, instead of wasting it following stock markets and investment trends.
----

PS. Yes, I know, in this community I am an outlier. 🙂

December 28, 2021
6:24 am
savemoresaveoften
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Alexandre said
after stock market closure, I still have all my money - it won't shrink because of some stupid tweet from some today's celebrity or from anything else.
It also frees my time to do something useful, instead of wasting it following stock markets and investment trends.
----

PS. Yes, I know, in this community I am an outlier. 🙂  

If your stock holdings are blue chip dividend paying stocks, you dont have to follow the market nor care whatever / whoever is tweeting day in and day out.
The only downside I see in owning stocks in a retirement portfolio is IF you need to withdraw regularly to supplement your other income, then yes there are times when you will be selling in a down market, which is never ideal. However having said that, I am not sure what cost more at the end, being 100% in cash and lose out to inflation or the steady selling of stocks over time.

December 28, 2021
6:44 am
Alexandre
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savemoresaveoften said
If your stock holdings are blue chip dividend paying stocks, you dont have to follow the market nor care whatever / whoever is tweeting day in and day out.

Correct me if I am wrong, but I think at some point of time, in the last 20 years, both Nortel and BlackBerry were considered blue chip stocks. Just saying.

December 28, 2021
9:30 am
Dean
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Alexandre said

Correct me if I am wrong, but I think at some point of time, in the last 20 years, both Nortel and BlackBerry were considered blue chip stocks. Just saying.  

Not to my knowledge, Alexandre.

Just because a company is fairly big (or popular), doesn't make it 'Blue Chip'.

Nortel & BlackBerry never fit this bill

Dean

sf-cool " Live Long, Healthy ... And Prosper! " sf-cool

December 28, 2021
9:48 am
HermanH
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With these assumptions in mind, if I currently have $400,000 in cash (HISA, TFSA), I don't need to play on stock market. I can keep it all in Savings, sleep well, and even have few dollars left at the age of 100 if I manage to hit that milestone.

Very sound. What if you live to 110? I think that folks are actually worried about running out at the very end; the worst / most vulnerable possible time to do so.

PS. Yes, I know, in this community I am an outlier. 🙂  

We outliers need to stand together. 🙂

December 28, 2021
9:59 am
Bill
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No need to die rich, you can spend A LOT of money in your last decade or so to improve your quality of life. For example, I know a wealthy old couple who can afford to pay a nice, young person to live with them in their roomy house, 24/7, cooking their meals, looking after them, etc., nicest quality of life possible that they wouldn't have without their money (arranged and managed by a nearby daughter who checks in almost every day). I've also seen old folks who relied on society/gov't to look after them in their last years and it can be not very pretty sometimes.

Also, fwiw, I spend almost no time on my investments (especially compared to some on here who chase short-term promos, transfer accounts, close accounts, open accounts, transfer money here and there because they can get another 1/4% elsewhere when a gic matures, make appointment at a branch to qualify for a free waffle maker, etc), I set things up way back and don't really micro-follow what the market's doing, trends, etc. Sometimes I'll come up with what I think is a good idea so I might do a trade or two but that's just because I like to do it, it's pretty much unnecessary.

By the way, being 80 and planning to live to 100 makes little sense as your life expectancy at that point is about 8 more years or so, give or take depending on health, income level, etc.

December 28, 2021
10:40 am
ronjoh
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canadian.100 said

ronjoh said

I've mentioned this before, but my plan is to go with HIS until interest rates stabilize and then I will probably go with an ETF balanced portfolio. I have spent many hours (and years) trying to beat the market with different strategies.  

You plan to wait until interest rates "stabilize" and then go with your ETF strategy. How would you know that interest rates have stabilized any more than you would know the stock market has "stabilized"? XEQT (an ETF) is still a "stock market" equity investment.
That is why people use a ladder for GIC purchases and why people diversify in the stock market when creating a portfolio. Don't shop endlessly for a multitude of strategies to "beat the market". Bouncing around to "different strategies" is not a good strategy. As you say you have spent many hours and years trying to "beat the market" without success. Again, use discipline and keep it simple. It works!  

This is as simple as it gets. 50% in XEQT (which is a totally balanced ETF Equity portfolio) and 50% in HIS for the fixed income portion. I rebalance the XEQT / HIS back to 50/50 as required.

December 28, 2021
10:42 am
savemoresaveoften
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Alexandre said

savemoresaveoften said
If your stock holdings are blue chip dividend paying stocks, you dont have to follow the market nor care whatever / whoever is tweeting day in and day out.

Correct me if I am wrong, but I think at some point of time, in the last 20 years, both Nortel and BlackBerry were considered blue chip stocks. Just saying.  

Those names were growth stocks and not pay much if any dividend.
Maybe I will be a bit more specific, invest in good dividend paying names like telcos, cad banks, pipelines. Think of the utilities in monopoly the game.

Last but not least, even if u put money into Nortel, or even Br-X (which I did on both), as long as ur portfolio is diversified, you will come out fine in the end. I know I did 🙂

December 28, 2021
12:42 pm
Norman1
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savemoresaveoften said

Last but not least, even if u put money into Nortel, or even Br-X (which I did on both), as long as ur portfolio is diversified, you will come out fine in the end. I know I did 🙂

That's what matters: The overall return of the portfolio. The few inevitable losers don't.

Those long term TSX 300 return numbers do include the impact of losses from failures like Nortel and Bre-X. When a company is removed from an index, the index is not recalculated to erase the company's past contribution or detriment to the index.

December 28, 2021
1:13 pm
Brimleychen
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I shared those views from Alexandre & savemoresaveoften, and especially for those hard earned money on TFSA, I prefer to just making a few cents without paying tax. Our whole financial industry have been pushing all kinds of gambles (ie. so-called investments). The only thing for savers for sure is protection by government insurance. This is only thing is matter for me.

December 28, 2021
4:45 pm
Dean
Valhalla Mountains, British Columbia
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Brimleychen said

I shared those views from Alexandre & savemoresaveoften, and especially for those hard earned money on TFSA, I prefer to just making a few cents without paying tax. Our whole financial industry have been pushing all kinds of gambles (ie. so-called investments). The only thing for savers for sure is protection by government insurance. This is only thing is matter for me.  

But when we factor in Inflation (now @ ~5%) those 'few cents' you refer to , are actually in the Negative.

Thanks to today's Inflation, with HISA's & GIC's, we're not winning ... we're Losing. sf-frown

My two devalued centavos,

    Dean

sf-cool " Live Long, Healthy ... And Prosper! " sf-cool

December 28, 2021
4:48 pm
HermanH
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GICs, TFSAs, HISAs, and all other guaranteed rates are all losers. It's just a matter of finding the option for 'losing less fast'. sf-smile

December 28, 2021
5:41 pm
Bobbyjet11
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HermanH said
GICs, TFSAs, HISAs, and all other guaranteed rates are all losers. It's just a matter of finding the option for 'losing less fast'. sf-smile  

Exactly. Saving at guaranteed rates is actually damage-control..... but you're not going to lose 20 percent of your savings in a few days which could easily happen to risk-takers in an unpredictable market.

December 29, 2021
4:59 am
2of3aintbad
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HermanH said
GICs, TFSAs, HISAs, and all other guaranteed rates are all losers. It's just a matter of finding the option for 'losing less fast'. sf-smile  

I suggest that you remove "TFSAs" from your sentence. A TFSA is a type of account that can hold GICs, HISAs, stocks, mutual funds, etc. There is no way that you can justify that a "TFSA" is a loser.

December 29, 2021
1:53 pm
mechone
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savemoresaveoften said
If your stock holdings are blue chip dividend paying stocks, you dont have to follow the market nor care whatever / whoever is tweeting day in and day out.
The only downside I see in owning stocks in a retirement portfolio is IF you need to withdraw regularly to supplement your other income, then yes there are times when you will be selling in a down market, which is never ideal. However having said that, I am not sure what cost more at the end, being 100% in cash and lose out to inflation or the steady selling of stocks over time.  

I have all dividend paying stocks US and Canadian ,I don't care and sleep good as long as they pay a dividend . When the market dips and people panic i buy more . Have I lost yes 3 stocks , 1 in oil, 2nd one in liquior and the 3rd was a blue chip General Electric, however all the rest have made me money and some pay monthly . I own 40 dividend stocks with a 5000 as a min purchase . One stock enbridge pays me 1900 dollars a year ,my gas bill is 1200 so home heating is free and 700 goes in my pocket. Another one Hydro One same thing .

December 29, 2021
6:39 pm
Loonie
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mechone said

One stock enbridge pays me 1900 dollars a year ,my gas bill is 1200 so home heating is free and 700 goes in my pocket. Another one Hydro One same thing .  

Good for you! That's something I can really understand.
I found that insurance is one of my single biggest expenditures when all added up, although have aged out of disability and life insurance now. I should probably invest in insurance companies. It's always a good policy to make money off those who are making money off you as you can understand their market. They pretty much have a monopoly. But one has to keep an eye on infrastructure too.

December 29, 2021
6:43 pm
Bill
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I wonder about pipeline stocks, New York City will allow no more gas hookups on new buildings (have to go electric because apparently it's "green"), so if that lunacy's a harbinger things might change for pipelines, no? Agree on Hydro One, everything's going electric, I bought some about 3 months ago.

December 29, 2021
7:08 pm
Kidd
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Quebec was allowed to say NO to a LNG gas facility and pipe line.

https://www.cbc.ca/news/canada/montreal/lng-quebec-saguenay-1.6111248

I could see, no gas hook ups in earthquake prone areas but no hook ups in new york is just crazy. Americans burn coal to make electricity.

December 30, 2021
12:51 pm
mechone
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No new hook ups in New york is kind of funny. There will be more natural gas fired hydro plants eating the gas, and good luck NYC is solid bed rock no easy drilling for ground source, however they do have the Ocean and the grid will need a major upgrade

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