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Displaying 191 to 200 of 228 Records.
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<Pension reform >
<Trust conversions>
<Worthless shares>
<Metals stocks>
<RRSP blues>
<TFSA rules>
<Portfolio funds>
<Where to invest?>
<India and China>
<Smaller institutions>
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Pension reform
I have a question on pension reform. Is anyone looking at addressing the clawback of seniors' benefits, e.g. Old Age Security, that occurs when one has dividend income that is subject to the 40% gross up? - R.M.G.
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This is an issue I have raised several times in various forums but no one in the government has seen fit to address the problem. A couple of years ago I asked the Finance Department to give me an explanation for this unfair policy. They waffled. It's pretty clear they can't rationalize this tax grab but no one wants to say so. I can't estimate how much it would cost in foregone revenue to change this practice but I can't imagine it's a lot. Perhaps the Conservatives don't feel there are enough votes in it to bother. - G.P.
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Trust conversions
What are the tax implementations of a trust like Yellow Pages changing to a corporation? When I sell, how do I handle it on my income tax? - Charles
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Yellow Pages Income Fund completed its conversion to a corporation, known as Yellow Media Inc., on Nov. 1. The share exchange is tax-free, under special rules governing trust conversions. Canadian investors who hold the shares in non-registered accounts will benefit from the fact that all future monthly payments qualify for the dividend tax credit.
The conversion has no affect on the tax status when you sell. You use the cost incurred when you purchased the original trust units, less any adjustments, as your base to calculate a capital gain or loss. - G.P.
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Worthless shares
I have shares of a company that is dissolving and the shares are worthless. The last dividend payout was a $1.46 per share and that same day they dropped by the same amount, to zero. The stock is in a RRSP account and I am being charged 1% penalty on the $1.46 rate but they are worthless. What is my best option? - Ralph B.
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It's not clear to me why you are being charged penalty interest on the shares but the obvious course of action is to swap them out of the account at fair market value, which in this case is zero. Your broker should be able to handle this for you. - G.P.
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Metals stocks
Do you have any recommendations regarding silver, copper, and uranium as some recent commentaries are suggesting substantial increases are possible. - Ken S., Alliston ON
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We have recommended mining stocks relating to all three metals in the Internet Wealth Builder newsletter. Copper picks include Quadra FNX Mining (TSX: QUX), which we selected in August at $10.53 and was recently trading in the $14.50 range, and Inmet Mining (TSX: IMN), another August selection that has moved from $49.08 to about $65.
Our silver recommendation is Silver Wheaton (TSX, NYSE: SLW) which we advised buying in September at $25.75 and which has since moved to over $35.
For uranium, our choice is the leader in the industry, Cameco (TSX: CCO, NYSE: CCJ). It was recommended in July 2008 at $38.77, just before the bottom fell out of the stock market. The shares dropped to below $20 at one point but are now back to close to the original recommended price.
All these stocks, and the underlying minerals, have had strong runs and are nowhere near as cheap now as when they were recommended. So the risk at this point is higher. You should only buy now if you are firmly convinced the commodities boom will continue. - G.P.
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RRSP blues
I moved to the USA in March 2003. I have RRSPs at the Royal Bank of Canada and BMO. What can I do to manage these investments to ensure diversification and try to get the best return on investment? I also have a Savings Deposit in the RRSP account with Royal Bank and I was told I could only purchase a GIC with the funds in this account. I need to get as much information as possible on any and all options I have with my money that is invested in Canada. Any information you can provide will be greatly appreciated. - Rick C.
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You're out of luck, I'm afraid. The U.S. tightened its rules on foreign accounts a few years ago and now Canadian brokers have their hands tied and cannot take instructions from people in the U.S. You really have very few options now, beyond investing in GICs or cashing out. - G.P.
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TFSA rules
Can I buy and trade stocks within a TFSA and keep all the profits and stay within the guidelines of the rules? Example: If I bought 100 shares in Cameco and sold them for a profit in a few months, could I keep buying and selling to make more money? Would this be okay inside a TFSA? - Allan T.
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Absolutely! If you have a self-directed TFSA with a brokerage firm, you can do as much stock trading as you want. All the profits you make within the plan will be tax-sheltered and will not attract any tax when you take money out. - G.P.
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Portfolio funds
I am wondering what your thoughts are on the portfolio mutual funds that seem to be gaining in popularity? I am referring to those funds that actually hold a variety of mutual funds based on a conservative, balanced, growth, or aggressive growth asset allocation. Is this an approach that you might suggest for someone just starting out with a small portfolio of say $5,000 to $10,000? If so, are there some specific portfolio funds that you would recommend? - Chris Y.
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You are right - these funds of funds are becoming increasingly popular and in fact are outselling stand-alone funds. The reason appears to be the attraction of one-stop shopping. No need to carefully build a portfolio, just buy one off the shelf. The problem is the overwhelming majority of these portfolio funds are mediocre or worse. I recently did a fresh study of them and reached the same conclusion as in the past - a well-managed balanced fund will perform better. Among my choices: Dynamic Power Balanced Fund, Steadyhand Income Fund, and AGF Monthly High Income Fund. - G.P.
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Where to invest?
Which is wiser: to invest my TFSA in the stock market or in GICs, since I'm close to 65 years old. - George N.
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Neither is "wiser" - it depends on what you want to achieve with your Tax-Free Savings Account and your degree of risk tolerance. If you are using the account as a source of emergency funds, short-term GICs might be the best bet. However, the returns will be negligible because of current low interest rates so the amount of tax you actually save will be only a few dollars.
If you want to use the TFSA to try to maximize tax-free investment earnings, then the stock market is one option. Aggressive equity mutual funds or ETFs are also possibilities. In the end, it's your call. - G.P.
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India and China
Since both the Chinese and Indian economies are likely to grow, do you have any recommendations as to how your members can invest there, such as currency-hedged funds? - Ken S., Alliston ON
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BlackRock Canada offers Canadian-dollar versions of two U.S. ETFs that invest in these countries. The iShares China Index Fund (TSX: XCH) invests exclusively in units of the iShares FTSE/Xinhua China 25 Index Fund. It trades on the New York Stock Exchange as FXI. The Canadian version was launched at the beginning of this year and there are two main differences between it and FXI: it is denominated in Canadian dollars and carries a higher management fee of 0.85%.
The iShares S&P CNX Nifty India Index Fund (TSX: XID) was launched at the same time and is structured in the same way. It invests in units of the iShares S&P India Nifty 50 Index Fund (NDQ: INDY) which has an excellent long-term record with a 10-year average annual compound rate of return of 20.2% to Oct. 31. As with the China fund, you'll pay a slightly higher management fee for the Canadian dollar version (0.98% vs. 0.89%).
Claymore doesn't offer a dedicated India fund in Canada but you can invest in the country through the Claymore BRIC ETF (TSX: CDQ). They also offer a single-country China ETF under the symbol CHI. - G.P.
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Smaller institutions
I enjoy being a subscriber to the Internet Wealth Builder newsletter and have a question regarding cash investments. I have a high interest savings account with ING Direct and was considering opening an account with either President's Choice Financial or Ally. I deal with TD Waterhouse but the high interest accounts they offer pay 1.2% interest, while ING and PC Financial pay 1.5%. Ally pays the highest at 2% but I am concerned about dealing with them as they are new to the marketplace. All are covered by deposit insurance. I had hoped TD Waterhouse would offer a rate comparable to ING or PC Financial as they are a discount brokerage and it would be convenient for their investors. Would you have any concerns about a newer institution? - Peter H.
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As long as the institution is a member of the Canada Deposit Insurance Corporation (CDIC) or a provincial equivalent, I would not be concerned as long as your deposit does not exceed the coverage limit.
Although the brand name "Ally" is new, the company is not. In the U.S., Ally Bank is the old General Motors Acceptance Corporation (GMAC) which has been relaunched with a new image. In Canada, the Ally savings accounts and GICs are actually held by ResMor Trust, which is the CIDC member. The GMAC connection remains through a division of the company called Ally Auto Financing. - G.P.
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1999 - 48 Questions