Investment Q&A

Q: Regarding the question about a U.S. citizen holding mutual funds in a RRSP account, my tax professional advised me that anything can be held in a RRSP account since they are covered by a tax treaty.

If Canadian mutual funds or trusts are held outside of a RRSP extra tax forms must be filed, which can be expensive. U.S. stock can be held in any account.

Q: Hi,

I'll be taking over my spouses RRSP account. She's dual citizenship, American/Canadian and we've had mixed counseling with respect to whether she can hold mutual funds in an RRSP or not. Can you shed some clarity on whether or not she can? Can she hold US listed stocks?

Any other comments on an RRSP account of someone of dual citizenship would be much appreciated.

Best,

Cam

Q: If holding for the long term, does it make more sense (taxes) to have these stocks in a RSP instead of a cash account?

Q: I am retired and hold GE, Wells Fargo and JPM inside my RRSP. I am still a few years away from having to convert my RSP to a RIF. Considering where the Can dollar is trading I am thinking about realizing my currency gains by selling these 3 stocks and replacing them with Canadian financials and maybe a pipeline such as Enbridge. What are your thoughts on this strategy ?

Q: RIF withdrawals/ deposit: Lots of interest in TFSA's these days - but some of your customers might be in the same situation as I was re 2015 RIF withdrawals.

I believe the mandatory withdrawal rates were lowered after January 1, 2015. I had taken out my required % .... and then later in the year advised that the difference between the old %withdrawal and the new % withdrawal could be re-deposited in my RIF until Feb or March of this year.

Do you have any information on this? If so, it might be a useful option some folks by re-depositing the difference and reduce their 2015 income tax.

Thanks.

Q: If I transfer a stock in kind to my RRSP account,is it advantageous to pick one that is down a bit that you think will eventually come back up(Altagas,Vermilion,etc)or Sunlife that I am up on price on.Thanks Don

Q: A comment on Jimmy's question. As probably he might know,the 10% is only withholding tax, transferring securities from his RRSP to his son's account will be subject to taxation at his marginal tax rate on the full value of the transfer. He may have to pay extra or get back some money depending on his tax situation for the year of transfer. He may also consider selling the security in his RRSP take the money and buy the security back in his son't account, that if commission is less than the $ 50 charged to transfer the security, however he has to be aware of price fluctuation which may benefit or cost him extra. Hope that helps.

Q: I understand that you don't give tax advice but a general answer would be OK or if any members know the answer. I purchased 350 shares of Enercare at 14.68 Lets assume I would like to move them in kind to my non registered account. There is a $50.00 and I would pay 10% in tax up front of today's value. ECI currently at $16.11 So I would need to have cash of roughly $615.00 in my RRSP and the 350 shares of ECI gets moved to my non registered account. My question is once in the non registered account what is my average cost? Is it $14.68 back when I purchased it or is it $16.11 when I moved it over?

Thanks Jimmy

Q: Hi, for a 30 year old person with a 50K portfolio in a RRSP. I was wondering on your thoughts of these ETFs. 30% in VCE (vanguard FTSE Canada), 20% in VSB (vanguard short term bond),
30% in VSP (S+P 500 hedged), 10% in ZRE (equal weight reits) and 10% in ZWB (covered call Canadian banks). Any substitutions or thoughts greatly appreciated and asked for! Thanks, Donn

Q: Hi,
What stocks would you recommend in a TFSA and in a RRSP today?

Q: I have a stock in my RRSP which has risen from $50 to $100. I have been advised to sell this stock ( pay approximately 20% tax), re- buy this same stock ( at the current $100 price) but place it in a TFSA. Does this make financial sense?

Q: what growth stocks would be a good addition in my sons RRSP long term.
he has 30% in bds 10 % in preferred and 10 in rei.un,he also has 2 mutual funds:
BCM 800 12% and NCE 9 %
equities BNS 8%
fcr .5 %
IPL 9%
STN 6%
the rest is cash,but thinking of selling part of the BCM fund.
thanks for your advice

Q: Good morning. Unfortunately, I have a large part of my holdings locked into a company RRSP program. There are decent, not great, mutual funds to choose from. I have about 18 years to retirement and am almost 100% in equities. What would your rough advice be for %-age in large cap dividend, midcap, and small cap be? With funds it is tough to get as low a weighting in financials and materials as you recommend. Amy suggestions? Thanks, as always for your excellent service!

Q: Currently IGM comprises about 2.3% of my portfolio and is in an RSP. Total Financials are 27%. Dividend payback is about 4% but I think I should take my losses of 20% and utilize the proceeds in Communications (5%), Basic materials (1%) or Utilities (5%). What do you think? The other option is to add new money to the low sectors and hold IGM.
Thanks
Bob

Q: Hi Peter and co.
I recently scaled back on my US holdings in my RRSP in order to lock in my gains from capital and currency appreciation. I was lucky enough to buy the majority of my US holdings when the Canadian dollar was close to par with the US. My next step is to invest these proceeds into Canadian companies. When the Canadian dollar gets back on to an even playing field with the US, I may again look to increase my exposure in the US.
Considering this is my RRSP and I am 36 years old, what percentage of my holdings, in your opinion should I keep in US companies? My goal is to continue to see growth from my US holdings while minimizing currency risk.

Thanks!

Q: Hi Peter and team
It is time to invest this years contributions in my 35 year old's RRSP which is currently structured: 5% Sylogist(SYZ),15%Telus(T),3% Surge(SGY),18% CDZ,13% Brookfield Renewable(BEP.UN), 4% DHX media(DHX.B), 4% Exco (XTC) and 38% cash.
What would be your recommendations for deploying the cash for diversification and growth, indicating if possible percentages. I have been considering Currency Exchange (CXI) and Alimentation (ATD.B) and some Heath Care but unsure of which ones. Should I consider increasing Exco to an 8% position. I would greatly appreciate your views on this.
Regards
Kathy

Q: Regarding Linda's question on washing within RRSP. RBC Direct for a few years now, has both US and Canadian currency accounts in RRSP, TSFA and all other accounts. Thus when you trade US securities they stay in US $ and you are not hit with currency exchanges coming and going. I find this feature a huge advantage.
steve

Q: Just wondering if I should hold Vee, fez, and vxus inside a registered or non registered account. I thought I read somewhere that if held in a registered account, the withholding tax of 15% would apply (unlike us equities in a registered account), and there is no way to recoupe since it is in a registered account. What are your thoughts on this?
Thanks again for the great service.

Q: I have sold some of my shares in CSU to bring down my allocation from 10% ( thanks to you by the way)
I now have enough cash to buy a new company with a 5% allocation in my RRSP. I'm thinking of VNR, ZRE or AW.UN.
At this moment which one would you purchase?
My RRSP is not quite your Income Portfolio but close.

Thank you

Q: My question relates to what one should hold in an RRSP for minimum taxation long term.
I have quite a diversified portfolio but I rely more on dividends from stable companies instead of bonds for "fixed income." I treat all accounts as one account for diversity.
Some rules of what to put where are clear eg Cdn dividend stocks go in cash accounts to get best tax treatment. However if cdn dividend stocks are held in an RRSP I conclude you lose the favourable tax treatment because when you take money out, its taxed at the marginal rate. REITs appear to be better because the yield is not all dividends. My conclusion is that the priority for picking stocks to hold in an RRSP should be US dividend payers and interest paying securities first and Cdn REITs after.
Does this make sense?