I decided to do my own investing

[My Dream]

ladelfina

MyDream.. don't run off

Thanks for the great advice, I just needed some time to sort things out, although I'm hoping this forum can help guide me through the rest.

AltaRed apologized, and I think you can take some of his advice exchanging the words "why did you not?.." for "why don't you...?"

I've sat here rereading my threads, and coming to the conclusion that good advice is something that doesn't come along that easily, so you're right in saying that I need to read the true message being given. Now it's my turn,.....I apologize if I was whiney or complained more than I should.

You are "lucky" in that your wife is basically on board.

That I do realize and I going to do my best in securing our future together.

People, I have several issues which I need to take care of before I jump in full time into ....." Getting the most out of you're money". So be prepared to get a lot of investment related question from me in the near future. Heck I may even resort to asking how to take stains out of clothes.

It's glad I found this forum.

 

[My Dream]

I've been trying to do as much reading about investing as posible but have only come out with a major headache each time. I'm finding this to confusing so I think my best bet is to start a new thread re questions.

 

[JohnEyles]

That sucks, but at least you can get the ETF's...................

What's wrong with ETFs ? Not as big a selection of them I guess (at least at
Vanguard), but still enough to get a decent diversified stock portfolio. None for
bonds though - I guess "bond ETF" is kinda an oxymoron. They're also a bit
cheaper (notwithstanding Vanguard's Admiral shares).

I thought about opening a Vanguard account to be able to trade their mutual
funds without the $50 fee Schwab charges, but decided it wasn't worth the
trouble, given I could do ETFs for $12.95.

I also read that ETFs tend to have less capital-gains distribution (so less
tax to pay during your buy&hold period) but I really wonder if that's right.

 

[My Dream]

I appreciate the reply JohnEyles , but I'm how you say, investment illiterate. I don't even know what ETFs are. To tell you the truth, I don't even know how our portfolio is even invested. I have to take this one step at a time.

PS. I'm living in Canada. I should actually post that in my sig.

 

[JohnEyles]

I appreciate the reply JohnEyles , but I'm how you say, investment illiterate. I don't even know what ETFs are.

Well, all I can say is, I am glad there is at least one person here who knows, how
you say, less about this crap than me. Fortunately for both of us, there are a lot
of really knowledgeable and helpful people here; stick around awhile and you will
learn a lot.

ETF means "exchange traded fund" and it's kinda like a mutual fund and kinda
like a stock. For the Vanguard ones, there is an ETF corresponding to many (but
not all) of their mutual funds. As far as I know, they don't have a webpage
showing the correspondences, but you can guess from the names and verify
by using finance.yahoo.com to plot their historical charts on top of each other
and see if they're virtually identical. For example, you'll find that the ETF with
ticker symbol VTI is pretty much the same as the mutual fund VTSMX. There
are pros and cons of each; a quick web-search should turn up an article or two
explaining the differences. Of course, for you, the relevant issue is that (if I
read here correctly) only the ETFs are available to you in Canadia. Of course,
they have trading commissions, but if you have a decent broker those should
be insignificant (e.g. only a few tenths of a percent) if you make decent-sized
trades; even Schwab, not exactly a discount broker, charges only $12.95.
Of course, if you're periodically investing a few hundred dollars per month, even
this is unacceptable, and I'm not sure what I'd suggest. Hope this helps.

 

[My Dream]

Yes it does help, thanks JohnEyles. I'm in the process of changing financial institutions, when that is complete and I have total control of my portfolio, I think it's best that I start a new thread. Hopefuly I can then get the best advise this forum has to offer.
One step at a time.

 

[brewer12345]

What's wrong with ETFs ? Not as big a selection of them I guess (at least at
Vanguard), but still enough to get a decent diversified stock portfolio. None for
bonds though - I guess "bond ETF" is kinda an oxymoron. They're also a bit
cheaper (notwithstanding Vanguard's Admiral shares).

Umm, look around. There are several bond ETFS:

- AGG: tracks the Lehman Aggregate bond index
- TIP: TIPS
- LQD: A and Baa rated corporates
- TLT: long treasuries (10 to 20 year maturities)
- SHY: 1 to 3 year treasuries

Vanguard was supposedly starting up a bond ETF, but I haven't heard anything about it in a while.

 

[My Dream]

Umm, look around. There are several bond ETFS:

- AGG: tracks the Lehman Aggregate bond index
- TIP: TIPS
- LQD: A and Baa rated corporates
- TLT: long treasuries (10 to 20 year maturities)
- SHY: 1 to 3 year treasuries

Vanguard was supposedly starting up a bond ETF, but I haven't heard anything about it in a while.

brewer12345 , you're post looks very impressive, I just wish I knew what the heck it meant. Please don't try to since at this point I still woudn't understand. I think I need more Ram in my head. Come to think about it, my hard drive(located in my head) is pretty well loaded up also. Let me guess, someone is going to suggest getting rid of a lot of spam.....

 

[brewer12345]

MD, I have a suggestion for you. The vast majority of the investments that most of us own are composed of stocks and bonds. There are lots of abbreviations and complexities that you can layer on top of that, but at the bottom of all of it are stocks and bonds. So to get started in learning how all of this works, I would suggest that you concentrate on learning:

- What is a stock? what is a bond?
- What have the istorical risks and rewards been from the stock market/bond market?
- If you own some of each, how do these offset each other? What does it mean for the whole portfolio if stocks tend to zig while bonds are zagging, and vice versa?

If you can get your mind around these things, all the rest of it will fall into place.

 

[My Dream]

Thanks brewer12345 , this is what I do know at this point in time.

-I'm paying to many fee's with IG so I'm transfering all money out of IG and attempting to move it all to TD Waterhouse so that I can do my own investing.
-Our portfolio consisted of
DW rrsp
My rrsp
kids resp
mutual funds
I don't really know what how they're allocated other than they are all spit between 35 funds.

I will take you're advice and concentrate on learning.

 

[FinanceDude]

Thanks brewer12345 , this is what I do know at this point in time.

-I'm paying to many fee's with IG so I'm transfering all money out of IG and attempting to move it all to TD Waterhouse so that I can do my own investing.
-Our portfolio consisted of
DW rrsp
My rrsp
kids resp
mutual funds
I don't really know what how they're allocated other than they are all spit between 35 funds.

I will take you're advice and concentrate on learning.

It's in 35 FUNDS Are you kidding me? What "advisor" did that?? Dump their butts.............that's irresponsible.............

If you need help getting a handle on which funds should be dumped and why, PM and let me know. TD waterhouse is a pretty decent place to learn about the markets............

 

[saluki9]

BTW:

Vanguard does allow international investors. They have a subsidiary in Ireland that allows people form almost any country to invest. The accounts min is $100K

Schwab offers the same thing with minimums of $25K

 

[My Dream]

It's in 35 FUNDS Are you kidding me? What "advisor" did that?? Dump their butts.............that's irresponsible.............
If you need help getting a handle on which funds should be dumped and why, PM and let me know. TD waterhouse is a pretty decent place to learn about the markets............

That was my thoughts exactly, but when I questioned it, my response was to diversify, and don't keep all you're eggs in one basket.

When we went with IG, it was at a time when sleep was more important than looking after my money. Although my DW pays all the bills, she knows less about Investing than I do, which is little to none. I relyed on IG to do what they do best.

The bottom line is I'm going to pay deferred service charges which only amount to aorund $1,500. since we've been with them for about 9.5 years. Now TD Waterhouse wants to charge $45. per fund to manually move them over to the same account so we don't pay capital gains.

Just a thought here people. Since this was my last year employed, how about I wait until Jan. 07 to move them over and possibly save the $45. per fund charge from TD and deal with the capital gains?

By the way FinanceDude thanks for you're generous offer; I just may take you up on it when I'm ready. If you don't mind me asking, do you live in Canada? I wish everyone would post it in there avatar so I don't have to keep asking.
Thanks

 

[ladelfina]

MyDream, I don't understand the TDW $45/item charge.. on their web site the only $45 charge seems to be for transferring OUT of a 'registered account' INTO a non-registered account. Is that what you want to do? Can you explain? I looked here http://www.tdwaterhouse.ca/trading/ascs.jsp because that didn't sound right to me.

Not being Canadian I don't know much about the rules, but is there a reason that you'd want to transfer OUT of tax-sheltered accounts AT TDW? What do you mean by "TD Waterhouse wants to charge $45/fund to manually move them over to the same account so we don't pay capital gains"? I wouldn't think that TDW would be charging you anything for moving funds IN to TDW from IG.. if there are costs they would be on IG's end, no?

Selling funds (esp. out of a tax-sheltered account) and taking capital gains just to get them out of the hands of Broker X and/or to avoid fees may not be the way to go. Keep the tax-sheltering coverage until you need the cash to live on and transfer the investments you want to keep IN KIND if you want to change brokerages but avoid cap gains for now.

You have a lot of time between now and January to go over these 35 funds and see if there are any worth keeping, once you get a basic idea of what you want in terms of asset allocation and simplicity. You say the IG funds were only getting you 2%.. was that in overall growth or just dividends? If the funds have not appreciated much, then, sure, take the cap gains "hit" (in this case maybe a "light tap") and start from scratch. Or, you may want to wait and hold onto a few that have appreciated the most and sell them off in later years if they are not right for your long-term objectives. (Of course, if you can only hold the IG funds within IG, then ignore this whole paragraph and the one above it )

The whole point of funds is that they do the diversification for you. You could make an argument for holding 5 funds or 10.. but 35 indeed seems overkill. You could probably have OK equity diversification with 35 individual stocks, much less funds.


I found a site called http://www.efficientmarket.ca/ that talks about self-directed investing in Canada. The Intelligent Asset Allocator is mentioned on the front page, so without going into the nitty-gritty of the site contents I will assume you'll find some helpful direction there. Do take FinanceDude up on his offer. I know accountingsucks is in Canada.. anyone else?

Schwab has extra fees for international accounts (not sure about Vanguard). If you don't like TDW's fees, maybe compare their transfer and account costs with E*Trade, which has a native Canadian set-up?
https://www.canada.etrade.com/pages/home/fees3.shtml

 

[kcowan]

...I found a site called http://www.efficientmarket.ca/ that talks about self-directed investing in Canada. The Intelligent Asset Allocator is mentioned on the front page, so without going into the nitty-gritty of the site contents I will assume you'll find some helpful direction there. Do take FinanceDude up on his offer. I know accountingsucks is in Canada.. anyone else?...
https://www.canada.etrade.com/pages/home/fees3.shtml

TDW charges to move in-kind holdings into your existing account from another broker because "it is a manual process". This does not apply when you first open an account with them. Their trading fee is C$9.95 if you make over 30 trades/quarter or have more than C$500k with them. No annual fees. Except C$25/yr for small RRIFs.

 

[ladelfina]

Hmm.. if I were looking at 35 funds * $45 = $1575 to consolidate at TDW I would consider opening a new account at a new brokerage like E*Trade and putting them there for free, unless there is some reason that the OP is in love with TDW. If the latter, at the very least I would try using the threat of taking everything out of TDW help negotiate those fees down.

If he put everything into E*Trade and decided he liked TDW better at some later date, then could he not open a "new" TDW acc't. for free? 2 account closure fees can't equal anywhere near $1500.. (or am I missing something?).

 

[Nords]

TDW charges to move in-kind holdings into your existing account from another broker because "it is a manual process".

Why do companies charge these types of fees?

Because they can.

However investors moving to a lower-cost providor are usually ahead even after paying the escape fees.

 

[My Dream]

MyDream, I don't understand the TDW $45/item charge.. on their web site the only $45 charge seems to be for transferring OUT of a 'registered account' INTO a non-registered account. Is that what you want to do? Can you explain? I looked here http://www.tdwaterhouse.ca/trading/ascs.jsp because that didn't sound right to me.

Not being Canadian I don't know much about the rules, but is there a reason that you'd want to transfer OUT of tax-sheltered accounts AT TDW? What do you mean by "TD Waterhouse wants to charge $45/fund to manually move them over to the same account so we don't pay capital gains"? I wouldn't think that TDW would be charging you anything for moving funds IN to TDW from IG.. if there are costs they would be on IG's end, no?


You have a lot of time between now and January to go over these 35 funds and see if there are any worth keeping, once you get a basic idea of what you want in terms of asset allocation and simplicity. You say the IG funds were only getting you 2%.. was that in overall growth or just dividends? If the funds have not appreciated much, then, sure, take the cap gains "hit" (in this case maybe a "light tap") and start from scratch. Or, you may want to wait and hold onto a few that have appreciated the most and sell them off in later years if they are not right for your long-term objectives. (Of course, if you can only hold the IG funds within IG, then ignore this whole paragraph and the one above it )

Great questions ladelfina , it confused the heck out of me also. First off, the reason for moving part of the portfolio out of IG is because we have been averaging approximately 2% per year over the course of 9.5 years. The way I determined that was to subtract my present amount by my principal amount and figured a 2% per year gain. IG is going to charge me DSC for any amounts that have not been with them for the terms of the agreement. That amounts to around $1,400. TDW wants to charge $45. per fund for the reason kcowan stated...."TDW charges to move in-kind holdings into your existing account from another broker because "it is a manual process". If I were to cash in with IG I don't believe TDW would charge the $45. per fund fee, but I would have to pay capital gains. That may be a better option but I would have to wait until 2007 to do that. By the way, the funds with IG are IG's funds.......I believe.
The reason for going to TDW is because I already have 40% of my funds with them and they seem to be very competitive in there rates.

I hope I've answered your questions ladelfina.

 

[kcowan]

...If I were to cash in with IG I don't believe TDW would charge the $45. per fund fee, but I would have to pay capital gains. That may be a better option but I would have to wait until 2007 to do that. ...

I would ask to speak with an advisor at TD and explain the dilemma that you have. I supect you can negotiate a lower fee for transferring but I suspect that holding IG funds may not be allowed. If you explain that you will switch them as soon the the DSC charge goes away, they might negotiate a lower fee to get the larger $ in your account?