Want to open a brokerage account and need help. - Page 2
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Thread: Want to open a brokerage account and need help.

  1. #11
    Junior Member
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    Jan 2017
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    Thanks for the information so far everyone. Its been very helpful. So is it better to purchase stocks in a TFSA or a marginal account?


  2. #12
    Senior Member
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    Oct 2010
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    For Canadian stock ... TFSA first, IMO. The key is here there are no Canadian taxes, only the US 15% withholding taxes on US stock dividends.

    For American stock, it may depend on one's income level. Some higher income people far prefer to pay the 15% on the small amount of dividends versus say 23% on the capital gain when sold and 36% on the non-eligible dividends paid for Canadian taxes.


    Depending on one's situation ... an RRSP may work even better but the RRSP has the future tax liability of the tax level at the time of withdrawal. One can make assumptions and check but one won't know for sure until the withdrawal happens.


    Cheers

  3. #13
    Junior Member
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    Jan 2017
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    How can I tell if an ETF is traded in Canadian dollars? I was looking at XIC but it don't know if it's price of $24.54 is Canadian or American. ( just so you know I am not buying stocks or ETFs yet until I understand what I am doing )
    Is anything that is listed TSX under exchange done in Canadian dollars?

    Also Electic12 you said " for Canadian stocks TFSA first " does that include Canadian ETFs?
    American ETFs would be better in an RRSP to get away from the 15% withholding tax. Is that right?

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  5. #14
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    May 2016
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    Quote Originally Posted by Silversurfer View Post
    How can I tell if an ETF is traded in Canadian dollars? I was looking at XIC but it don't know if it's price of $24.54 is Canadian or American. ( just so you know I am not buying stocks or ETFs yet until I understand what I am doing )
    Is anything that is listed TSX under exchange done in Canadian dollars?

    Also Electic12 you said " for Canadian stocks TFSA first " does that include Canadian ETFs?
    American ETFs would be better in an RRSP to get away from the 15% withholding tax. Is that right?
    Generally, yes the exchange reflects the currency used for trading. The exchanges do have some codes they use to help distinguish between symbols.

    .A .B .X .Y - indicates a class of common shares. If present there is usually a second listing on the exchange for the same security. Usually distinguishes between voting rights for shareholder meetings

    .UN - indicates a type of "corporate" structure. Is a unit of the listing entity such as a trust unit rather than a common share. ETF's trade as units I believe.

    .PR.# - indicates a preferred share followed by a letter indicating the series of preferred share for that listing. The series indicates the terms of the shares which you can sometimes find on a company's website but often you need to phone your broker to find out. Preferred shares rank higher than common shares, in the event of the listing going through bankruptcy proceedings.

    .U - on the TSX this indicates the symbol trades in US dollars.

    .DB - indicates debentures listed for trading. These rank higher than preferred shares in the bankruptcy process.

    .WT .RT .IR - indicate warrants, rights, or installment receipts. These are generally a method to purchase common shares on specific terms for a limited period time.

    The NASDAQ exchange also uses symbols with five letters where the fifth letter has a special designation. Often they indicate a foreign listed stock or a class of shares. The US exchanges also have foreign stocks trading as standard listings or as 'American Depository Receipts'.

    At the risk of making things complicated...

    Each exchange listing reflects a chosen method of balancing asset ownership, legal liability, tax liability, and management control. Which listings you place in which account type is your method of helping manage your assets, tax liabilities and investment returns. It is not necessary to be completely optimized, how you manage your investments can change over time. I don't think a person's knowledge and understanding of investing stops growing - it is more like oh there is something else to invest in that I didn't know about, not sure I want to get involved in that right now.

    You are doing good trying to understand the account types and to control your money allocation. Especially for people just starting to save money the TFSA is a nice account type, how you choose to manage non-resident tax withholding is up to you.


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