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Email this2:43 pm
Why are people putting their TFSA money into bank or credit union savings accounts paying a lousy 1 or 2 percent? Think about buying a blue chip stock , like BMO that pays a dividend of about 5.5%, or Rogers Sugar that pays about 11%. Both payouts appear solid.
J.J.
5:35 pm
Agree about not holding cash in a TFSA, and buying dividend-paying blue-chips is a definitely a much better way to generate some savings in this climate. I'm not so sure about that sugar play though. Sugar has always been a hard one to figure out because it's price never seems to track the economy predictably like the usual commodity players do (e.g. oil and gold generally move in seperate directions relative to the economy, etc...). Dividends can be yanked at the pleasure of the trust's board of directors, and if the sugar rush stops, you know that big 11% yield is going to have a big red bullseye on it, not to mention that the units of the underlying fund could plummet into oblivion. Too much of a risk for my taste.
3:52 am
The negative issue I see with holding stocks in your TFSA is you cannot replace lost funds till the end of the year. While stocks are up now, a year ago they were down 50%.
I agree with the principal of holding stocks in your TFSA, but in practice one should think about it first (risk/reward) before going forward.
Mike
3:45 pm
good point Jack. Why does anyone use the GIC in the TFSA? Guaranteed Insufficient Capital investments lick. Invest in stocks like BMO, BNS, CIBC, RBC, TDCT and SEE the advantage really work. Or, you can actually get some nice high yielding income stocks and take advantage of the TFSA. The 2-3% GIC's don't make any sense since the same bank stocks you are giving your money to are yielding a nice 4-5% dividend. Banks don't go bankrupt in Canada, you people should know that by now. Invest smarter & live better! Just my 2.5 cents...
If you're buying a fundamentally solid blue-chip stock for the long term, then why would you even consider dumping it when it's at a bargain price at a 50% sale! That's when you buy more, which can be done outside the TFSA if you've already maxed it out. Then dump it in the following year.
BTW I put my $5k in last year into a nice income trust stock and it's worth over $7,400. Another friend bought some TD bank and almost doubled his investment. Why let the real bank crooks (i.e. RBC) make all the money? Get wise people!:wink:
3:04 am
@bruceker
What does someone ask at TD Bank to get that stock? Can you ask your friend what his exact TD trust/stock is called?
4:06 am
What would one ask if they were interested to buy a blue chip stock ex. BMO. Would I go into my branch and and speak with a financial advisor and let them know I would like to buy a BMO blue chip stock?
Thanks for replies in advance,
Cheers
2:06 pm
Sunshine: All you need to buy "blue chip stocks" (or any stock, bond, mutual fund, etc...) is an account with a brokerage firm. There are generally two types of brokerage firms: full-service and discount. A full-service broker provides you with advice on how you should invest your money, then buys and sells securities (stocks, bonds, mutual funds, etc...) on your behalf. A discount broker doesn't provide advice on how you should invest your money; they just provide you with a connection to the financial markets so you can buy and sell securities yourself. Obviously you should have an investment strategy in place before you use a discount broker. Discount brokers are cheaper because no investment advice is provided (although most of the good discount brokers provide a wealth of investment tools and research on their websites from which you can create your own investment plan). An example of a full-service broker is RBC Dominion Saecurities, and an example of a Discount Broker is RBC Direct. Both are owned by Royal Bank of Canada. If you're new to investing, you might want to make use of a full-service broker until you become comfortable with the financial markets, then you can transfer your investments to a discount broker once you feel comfortable managing your own money. Hope that helps.
12:27 am
Hi. was going to enter the TFSA this year put 10gs in. Is at Coast Capital member but only 1% geesh with inflation at 1.3% doesn't add up.
I don't want to be chasing promo's, just want a better rate that won't go down anymore and will go up as July 1st 2010 Bank of Canada will be raising rates. With ING USA been dumped spurned on by the EU, what will happen to ING CANADA? Try communicating with ING Canada what the future holds, nobody's talking. They have a great rate for TFSA 3%, and they say its not a promo. Scotia Bank is at 2% but won't confirm whether it's a promo or a set rate lol.
I might focus on PC Financial, shop superstore exclusively and the pc points really add up having mastercard, savings and chequing their as well. Use Coast Capital for online banking bills and stuff.
Considering all financial institutions be it the Big Banks or little fry's, their whole existence survives on the Fractional Reserve System which they create credit out of practically nothing: ie. yours and mine deposits or loans. You deposit $10,000 each and everyone of these financial institutions are supposed to keep in reserve 10% (but do they?) and they can loan out 9 x that amount + interest, and it multiplies continually. Don't we the people who feed their greed deserve a better return on "our money we are lending them"?
Watch youtube Money is Debt 48min long or so. Great eye opener!
3:02 am
yes we do... but nobody is forcing us to use that service,or that bank to put our money in
if it pisses u off so much
leave ur money under ur bed and make 0%
then the bank could nt lend ur money with that 10% reserve
11:32 am
March 25, 2009
Offline
yes we do... but nobody is forcing us to use that service,or that bank to put our money in if it pisses u off so much leave ur money under ur bed and make 0% then the bank could nt lend ur money with that 10% reserve
Sometimes I wonder if taking it all out of the bank in cash and leaving it at home is much safer than the bank. Plus I'd just be missing 0.8% anyways on the cash so is the reward worth the risk???
Plus it would be great to do a bank run on a Friday busy time and demand 100% of your cash with everyone in line listening as they bank says "Sorry sir, we don't have that much cash in our vault!!!
Have a great day
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