HawthorneVillager.com

I know the markets have been on the down lately, but is it THIS bad??

This is my rate of return from my Manulife account:

Since July 1, 2008 -8.0%
For the past 1 year -11.2%
For the past 3 years * 0.4%
Since February 22, 2005 * 1.6%

Sorry if I sound ignorant, but isn't that just brutal?? I'm not investing in high-risk, I simply just want to make a little bit of money for my retirement, that's all.

Is this the same story for everybody right now? Or should I look at moving my money away from these people? At this rate.. it's better to keep my money in a bank account... sheesh!

I would keep in a money market fund..... like a regular savings account... but you just cant touch it until you retire.

It makes no difference who your RRSPs are with, what matters is what you invest in. At the present, everyone is on the same boat... we're all sinking until.... the economy starts to get better world wide.

the good thing you can do is to keep it were it is at the present. moving institutions results in added fees unless you're not happy where you are for whatever reason.

This leads me to my next question....

Lets say I have 10k in my RRSPs. My house closes in March. Should I put an additional 10k in my RRSPs from my Savings account, then take the 20k out for First-time home buyers plan?

I would get a pretty good tax refund..

If you had left your money invested in the TSX Composite Index it would have been (based on index alone doing quick google finance lookups)

Since July 1, 2008 -24.0%
For the past 1 year -22.0%
For the past 3 years -0.93%
Since February 22, 2005 +13.0%

But actually it would have been a leeetle bit better than the #'s I posted, cause it doesn't include distributions/dividends that you get, which are generally higher than say the ishares index MER. The above is just the increase in index. My opinion, is by investing in the index's yourself, over the long run your returns will be higher than most 'managed' accounts. But in the short terms, the risk and volatility are usually higher. i.e. you'll see that since 2005, the TSX has done much better than you...but if you just got into the TSX in the past year, or July, it would have been worse. I.e. index is good for the long term,but not always good for short-term.

But of course, you can possibly offset this short-term risk by doing asset allocations, i.e. percentage in money market or bonds so not just being in equities.

http://www.canadiandividend.com/

Do not construe the information provided here as authoritative investment advice. All information provided is for informational purposes only. It is not intended to be financial, legal, accounting or tax advice, nor should it be relied upon as such. I'm not not a licensed financial planner.

Jonzo,

In order to pull money out from your RRSPs under the home buyers plan, the money has to be in the RRSP for a minimum of 90days. Pulling out any money that isn't in there the minimum of 90 days the gov't will consider taxable income when you file your tax return.

Yeah, I know it has to be in for 90 days.

What if I switch my accounts to a guarnteed investment account with no rules for now (ie, only 0.25% interest) but I can take out the money whenever I would like.

Jonzo, if you're just going to keep your cash liquid, why take a crappy rate like 0.25%? You could put it in President's Choice or ING's high interest savings accounts where you can take it out at pretty much anytime (factoring in time to transfer between accounts) and at the moment I know they are running promotions with very high interest rates... PCF is offering 3.75% on new money, ING as part of their early signup for the TFSA is doubling the interest until Dec 31, then automatically putting it into a TFSA for you so you don't pay tax on the interest between Jan 1 and when you take it out.

I'm sure there are other institutions too, it's just that those are the two I use for work/personal so have seen their web pages recently.

That PC account.. is it 3.75% for the time being, or indefinitely?

Which is the better deal for my situation (in your opinion), the ING or PC account?

The 3.75% at PCF is on their main page, and it says this:


And Mike, you're off a bit on the PCF calculation... if you have >$1000 in there, then it is 3.05% on the entire amount.

So basically, if you've got less than $1000, it's ING all the way, and with the double interest promotion, which says:



Well, I'm not sure on a few terms. ING pays interest monthly normally, and they say they'll double your December 31st interest payment, so it might just be one month of interest doubling. They also will probably limit it to $5000 since that would be the maximum they could auto-move on January 1st into your TFSA. That being the case, even if they double the interest for the 2 and a half months you'd have it in, you're only talking an extra $31.25, worst case you're talking an extra $12.50 if it's just the December payment. (Of course if you're married and your spouse has another $5000 that would be $63 or $25).

The only downside to ING is that it takes longer to get to your checking account (a few days) than it takes PCF to move it from their savings to their free checking (overnight). I also bank with PCF since everything is free, so in my case it was just easier to keep it there, but with the new promotions I may open an ING account, since my existing savings don't count as new money, so I'm still getting 3.05.

In the end though, I think either are equally good for you, and both are WAY better than 0.25%, so do whatever works best for you. If you shop at Loblaws/Superstore anyway, the convenience might win out. If you never go there, ING might be more convenient.