Investment Q&A

Q: Hi Team,

I am trying to help a family member with a simple solution for investing in stocks in their RRSP account. Im leaning towards VT due to no withholding taxes but I would like your opinion as well. Im thinking currency diversification is a good thing with VT too as there are other Canadian holdings (XDIV) in their TFSA.

Thanks

Q: My grandson is 21, he has just opened a TD trading account. He will have $12000 to invest now . And he expects to contribute about Seven to two thousand this year. Can you recommend two or three investments to start with. Thank you . Chuck

Q: A family member (41) has roughy $15000. to invest
Currently has $2000 in XIC and the balance of $13000. in cash in a TFGS.
I was thinking VGT, XLI but would like your suggestions please
The goal is to be able to add a similar amound every year for a while.
Thank you.

Q: Hi

My question is about structuring and managing a portfolio across multiple registered and unregistered accounts. Please forgive if this question has been asked before.

Between 4 family members (including two young children) we have 11 trading accounts on the go, including 5 unregistered (3 Cdn and 2 US), 2 tfsa’s, 2 rrsp’s, and 2 resp’s. My approach to date has generally been to try to diversify within each account and try not to duplicate between accounts, with an eye to overall diversification.

This results in three problems (at least): sub-optimal diversification within and across accounts, too many holdings (which are difficult to monitor) and a low average $ value per holding. For example, 11 accounts times ten positions per account is 110 holdings. As for low value, a 10% holding on a $50,000 registered account is $5,000, which represents only 0.5% of an aggregate $1,000,000 value (example).

I have been thinking of treating all of the accounts holistically rather than individually while accounting for tax considerations of course. My goal is to try to get the number of holdings down to 20 - 30, with an average value of 3% - 5% of aggregate portfolio value. I find the main difficulty to be in structuring the lower value accounts.

Two approaches I have been mulling over:

1) Scrap the individual account diversification approach and perhaps only hold 1 - 3 positions in lower value accounts. This approach would probably mean that no account on its own will be diversified but the aggregate portfolio will be (hopefully).
2) Try to maintain the account diversification approach by investing in only one etf per account until the account eventually reaches a size sufficient to hold more positions (then I suppose the approach would flip to the first approach). The idea being that each account would hold a different etf (and at least be somewhat diversified) that would contribute to the overall diversification of the aggregate portfolio.

Do you have any comments or guidance on managing multiple accounts? How do investment professionals manage their own family accounts? Any best practices that you are aware of, or good articles that you can direct me to? Any considerations besides tax; for example, how do you apportion risk between family members and accounts?

Thanks
Derek

Q: My 27 year old daughter has about $45,000 in a TSFA to invest in ETFs for a 2-3 year time period. Would a whole market ETF such as Vanguard's VRGO or VEQT be advisable?

Q: What is your take on buying VEQT ETF? Do you see the potential of growth as the ETF is opened recently, or it is risky? thanks.