In Praise Of TFSA's

[Mel Gibson]

I'm always worried about potential loss. I want a guaranteed investment (which is what I have)  not chance of losing anything.

There is ALWAYS the risk of loss.  Shares go up and down.  It is up to you to minimize the risk if you want security.



And by minimizing risks, look at shares that are proven.  Do you think that the Royal Bank, for instance, is going to disappear anytime soon?  McDonald's shares are expensive, but they also have proven themselves over time.  Do you think McDonald's will disappear overnight?



Know what you want out of an investment.  Coca Cola, McDonald's, Canadian Banks, etc, etc, etc, aren't going anywhere but up slowly but surely.

[Annie]

But there's so many other investors and I would have to make an investment of an amount I may not be able to afford at once.  If there's a guaranteed investment, that's what I like. I have a couple but a little more investment would be nice.

[Mel Gibson]

But there's so many other investors and I would have to make an investment of an amount I may not be able to afford at once.  If there's a guaranteed investment, that's what I like. I have a couple but a little more investment would be nice.

You can buy one $0.30 share if you prefer.  Literally, thirty cents.



However, most buy/sell fees are now around $10.00/trade, so may not be wise.  However, nothing is stopping you from buying one penny share...

[Annie]

Bah I'm not willing to spend anything extra, I don't like to gamble.

[Mel Gibson]

There is no "guaranteed investment."  That is a fallacy through and through.  Doesn't matter who tells you otherwise.



The only way for your investment to grow, is for the company to increase profits and/or desirability for its investors.



Nobody can guarantee this.  Not one person can.  So, look around!

[Annie]

Ohhh yes there is! I haz one! In fact I have 2! RDSP and RESP

[Mel Gibson]

Well, they pay barely no interest, and then punish you for pulling out that cash before ten years.



Take that as you will.  This doesn't apply to shares in a TFSA...

[Annie]

But if you don't pull RDSP before 10 years there's a lot extra in there, believe me. Hubby and I will be able to take a few trips with it. And RESP it's till the youngest is 30 and it gains interest on top of monthly contributions (for kids education)

[Mel Gibson]

It works.  Understand that it isn't available either, to most of the population...

[Annie]

I know, RESP is but RDSP isn't.

[Mel Gibson]

Gotta run.  This world needs some dirt moved tomorrow, very early.  Lots of dirt.  Tons of dirty dirt.  And it must be moved.



Dirty dirty dirt.  Filthy and foul.

[Annie]

Ok get your butt to bed

[Anonymous]

This means buying and selling on your own.  You can buy anything listed on the market.  Never buy mutual funds.  The banks take too much.  You can buy essentially the same thing with a self-directed...  "IShares" is a good example.

Mel Gibson, our TFSA's are in mutual funds except for some separate stocks that we bought..



We are satisfied with our return..



But, we are interested in ETF's too.

[Anonymous]

Gotta run.  This world needs some dirt moved tomorrow, very early.  Lots of dirt.  Tons of dirty dirt.  And it must be moved.



Dirty dirty dirt.  Filthy and foul.

I'm glad to see you seem to be pulling urself out of the rut you were in Mel. Keep busy, make money and take it easy on the lager.

[reel]

This means buying and selling on your own.  You can buy anything listed on the market.  Never buy mutual funds.  The banks take too much.  You can buy essentially the same thing with a self-directed...  "IShares" is a good example.

Mel Gibson, our TFSA's are in mutual funds except for some separate stocks that we bought..



We are satisfied with our return..



But, we are interested in ETF's too.

Fash, both mutual funds and ETFs are a pool of stocks that is put together to diversify and reduce the risk vs. purchasing an individual stock.  ETFs are very simple.  A set of stocks are pooled when the ETF is started and the composition doesn't change.  With a mutual fund, you have a fund manager that plays with the balance of the stock composition in the pool, trying to make more money.  The catch with mutual funds is that fund managers are rarely successful at beating the market long term, but you still have to pay an exorbitant fee to that fund manager (whether he wins or loses with your money).  Over time, the ETF has consistently been demonstrated to be the same or better than a mutual fund, but you pay no management fees.  



Since the fees are something like 1-3% per year, the mutual fund has to do substantially better than the ETF to make you more money and they almost never do.  The bank would much prefer to sell you a mutual fund because they claw back part of that fee from the manager if they sell you the mutual fund.  For some odd reason, people are convinced that mutual funds are lower risk, when in fact they are just a steady drain.