Investment Club..
Jump to Page:
< Previous [ 1 ] [ 2 ] [ 3 ] [ 4 ] [ 5 ] [ 6 ] [ 7 ] [ 8 ] [ 9 ]
Network: Investment Club
Location: Western Hemisphere
Posted on: 07-01-06 22:05:28
Quote:
Orginally posted by kam64
One of my friends says 'do not invest money in RRSPs'. He invested money over 100K in Mutual funds and near to his retirement total value was 110K.
He strongly opposes RRSPs and he feels that money should be made in either in share market or Real estate.
RRSP SUCKS.
Any idea on this topic please. I am still learning Canadian structure.
RRSPs are nothing but investing through mutual funds. Mutual funds, depending on what kind they are, invest in stocks or bonds. Stocks are traded in the stock/share market. So, how can investing in stock market be better than RRSPs when they both could potentially be the same?
RRSPs don't suck. How, where and when the money gets invested through RRSP is what decides whether your returns would suck or not.
There are numerous mutual funds to which investments can be made through a RRSP account. The same ones could also be invested through a regular non-retirement mutual fund account. For examples, check out TD or Scotia Bank or CIBC or Fidelity, etc, etc, etc, etc.
Aggressive funds normally tend to be high risk as well. That means you get good returns during good times but also take a steep fall during bad times, such as what happened during 2001 and 2002. Stock or equity funds are more riskier than bond funds. Balanced funds usually have a mix of stock and bond investments along with some cash reserve. So, if your friend started off on a high risk fund and did not gradually transfer to a more balanced risk fund near the retirement, there is a chance of low, zero or negative returns, especially, if the retirement happens to be during a low stock market period.
Mutual fund investments should be done by taking advantage of principle of average costs. The key is to increase the number of shares in your account. If you invest $1000 when the share price is $10, then you get 100 shares. If you invest when share price is $20, you get 50 shares. By investing at regular frequency, you take advantage of these share price fluctuations and improve the portfolio.
That means, you most probably would get better results investing $10k over 12 months rather than $10k in one month and nothing for the rest of 11 months. Invest more when the share price is low and hence you get more shares and when the share price goes up, you have a higher market value in your portfolio.
Compared to investing directly in a brokerage account (that is, dealing directly by buying and seeling stocks/shares), mutual funds are much more safer and much more diversified. Mutual funds do not demand too much attention from you as it is managed by a professional.
Hope this helps.
-----------------------------------------------------------------
Dimple2001
He gave these numbers for argument purpose and his idea was in RRSP you loose at the end of the day.
He convinced me for RRSP.
We CDs don't need RRSP because we are very conservative and there are other avenues to make money like share market or REAL Estate.
Location: Western Hemisphere
Posted on: 07-01-06 22:20:39
Quote:
Orginally posted by kam64
We CDs don't need RRSP because we are very conservative and there are other avenues to make money like share market or REAL Estate.
Not taking advantage of a tax deductible, tax free investment (earnings not taxed until withdrawal during retirement) such as RRSP is not wise.
See my earlier post. I have a very hard time believing RRSPs are not conservative, but investing in share/stock market is, considering they both could be the same.
Real estate is a nice investment to have. However, I wouldn't consider that as my major portfolio or the only one. Even though the property value might go up, the real money will not be seen by you until you can find a buyer that pays the value of the real estate.
-----------------------------------------------------------------
Dimple2001
RRSP can also be a great tool when it comes to buying a home for the first time buyers.
However in real estate, with a small down payment, the property can carry, providing enormous leverage and with the right amount of equity, the property can generate positive cash flow.
After the mortgage is paid, rental income can be generated indefinitely, providing a stable income during the retirement years.
As far as savings for the future is concerned, if one is saving something regularly and smartly, it can be considered good investment.
Successful are the people who analyse and take action and do not criticise an investment advice- real estate, mutual fund or other.
-----------------------------------------------------------------
Amit Kalia, Broker, REALTOR®
RE/MAX Real Estate Centre., Brokerage
independently owned & operated
100 City Centre Dr, Unit 1-702
Mississauga, ON L5B 2C9
Phone No.: 905-339-5111
Website: https://www.realestate-ontario.com/
Condo Blog: https://condopundit.com/blog/
Location: Western Hemisphere
Posted on: 08-01-06 11:51:53
Well said Amit Kalia.
I happen to have rental properties. In my experience, rental income is good, but I have found finding good tenants to be an issue. After getting burnt with about a $1000 of unpaid charges by one tenant who disappeared on me, I have become extra cautious in filtering tenants.
Personally, I would encourage a diversified portfolio rather than a single entity. A combination of a bank savings account along with mutual funds (RRSPs or otherwise) and GICs would be a nice way to go. Real estate portfolio is definitely a plus.
So far, I've had a positive experience with a well rounded diversified portfolio.
-----------------------------------------------------------------
Dimple2001
If anyone is investing in Indian Stock Market I would love to discuss in stock research. It is going to be 10K in sensex shortly and in next 10 years, if you are bit cautious you can earn comfortably in average 30-50% of your investment per year 'coz in next 5 years sensex will reach 15-16K @ 7-8% GDP growth.
In India you have to pay 10% tax on capital gain for short term and 0% for long term and every pie is completely repatriable. If interested we can have open discussion on stock particular or may have separate forum specifically for it.
-----------------------------------------------------------------
New Guy
---------------------------
We can always do better!
"RRSP SUCKS" ??? Nope.
With the limit on foreign content now removed , Self directed RRSPs are probably the best investment for any new immigrant to Canada with a full time regular job wih no pension plan where tax planning opportunities are limited. Within the RRSP I would suggest buying shares of well established companies with regular dividends and Canada Savings bonds. This is your nest egg. Don't play with it.
After maximizing your RRSP contribution the next best investment would be paying down the mortgage on your primary home.
The next best investment would be India. The rapidly growing middle class will fuel the consumer industry there. Anyone investing in industries which provide the raw materials and infrastructure services cannot lose.
If you are young (below 40) with a good job/business , you could invest in small caps and LSVCCs. These are risky investments and shouldn't be bought unless you have a very stable income source and can live without this money.
Advertise Contact Us Privacy Policy and Terms of Usage FAQ Canadian Desi © 2001 Marg eSolutions Site designed, developed and maintained by Marg eSolutions Inc. |