# What are you buying with TFSA $ ?



## Franky Jr (Oct 5, 2009)

If I add a new position I am looking at CKI(Clarke) BBL(BHP ADR). I was almost certain I would just load up on oil stocks but the price jump as of late is shying me away from that. So I guess I am still pondering what to buy.


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## Canadian (Sep 19, 2013)

I wouldn't be concerned with this price "jump". Sure, some of the names have rebounded x% but look at the net position - many of them still trading at deep discounts compared to a few months ago. We haven't seen the end of this oil drama and, more importantly, we haven't seen the impact of lower oil prices on company earnings. For the next while I'll be looking to add to my positions in COS, SU, CNQ, and possibly establish a position in XOM or CVX in my RRSP.


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## supperfly17 (Apr 18, 2012)

Franky Jr said:


> If I add a new position I am looking at CKI(Clarke) BBL(BHP ADR). I was almost certain I would just load up on oil stocks but the price jump as of late is shying me away from that. So I guess I am still pondering what to buy.


Buy more Chartwell csh.un, more Teck tck.b, more Baytex bte. And thats its for January.


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## scorpion_ca (Nov 3, 2014)

Reit - zre


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## gladaki (Feb 23, 2014)

Canadian said:


> I wouldn't be concerned with this price "jump". Sure, some of the names have rebounded x% but look at the net position - many of them still trading at deep discounts compared to a few months ago. We haven't seen the end of this oil drama and, more importantly, we haven't seen the impact of lower oil prices on company earnings. For the next while I'll be looking to add to my positions in COS, SU, CNQ, and possibly establish a position in XOM or CVX in my RRSP.


I guess you will wait for First Quarter before putting any thing in...
I will be adding SU if it goes to 32 again


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## Canadian (Sep 19, 2013)

gladaki said:


> I guess you will wait for First Quarter before putting any thing in...


My tax return will be my next large contribution - hopefully to be received in March. This will be around when these companies release 2014 annual results. Either way, I welcome lower prices as I plan on holding these names for a few decades.


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## daddybigbucks (Jan 30, 2011)

I had some room left in my TFSA from a withdrawl this year. So I put some money in today and went on a spree. 
I usually find in January the markets go on a bit of a tear with all the small investors buying with the new TFSA money. I thought id jump in early to grab an extra 5%.

I bought all gold and copper stocks as I didn't have much time to do research. G, ABX, cum, and BBL.

End of January ill probably do it all over again.


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## 0xCC (Jan 5, 2012)

daddybigbucks said:


> I had some room left in my TFSA from a withdrawl *this year.*


You might want to have a close look at those TFSA rules again...

From this page: http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/tfsa-celi/cntrbtn-eng.html 

The TFSA contribution room is made up of:

your TFSA dollar limit plus indexation, if applicable;
any unused TFSA contribution room from the previous year; and
any withdrawals made from the TFSA in the* previous year*.​


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## daddybigbucks (Jan 30, 2011)

0xCC said:


> You might want to have a close look at those TFSA rules again...
> 
> From this page: http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/tfsa-celi/cntrbtn-eng.html
> 
> ...


you are correct. 
I wonder what will happen. I don't assume much considering the banks don't even keep track of my tfsa withdrawls/additions.

Thanks for the _head's up._


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## 0xCC (Jan 5, 2012)

daddybigbucks said:


> you are correct.
> I wonder what will happen. I don't assume much considering the banks don't even keep track of my tfsa withdrawls/additions.
> 
> Thanks for the _head's up._


I think you will find that the banks submit TFSA contribution/withdrawal to the CRA. I would expect that sometime in 2015 you will get a letter from the CRA saying you over-contributed and that you have a 1% penalty to pay (since you said that you contributed recently I assume that means you contributed in December which means you only have one month of over-contribution which results in a 1% penalty, details on the page I liked to above), there also may be a penalty of all of the capital gains on that over-contribution but I am not 100% sure of that.

You might slip under the radar if you withdraw today and contribute back again on Friday...

EDIT: Looking into the capital gains penalty stuff a little bit more it seems that this only applies to non-qualified investments which normal TSX-traded stocks aren't so there shouldn't be a penalty greater than the 1% per month of over-contribution. Having said that this advice is worth exactly what you have paid for it which is $0...


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## Eclectic12 (Oct 20, 2010)

daddybigbucks said:


> you are correct.
> I wonder what will happen. I don't assume much considering the banks don't even keep track of my tfsa withdrawls/additions...


Tens of thousands of Canadians received letters from CRA indicating they have over-contributed to their TFSA, with a demand to deal with it as well as requiring the 1% per month penalty be paid in the early years of the TFSA (the 2012 letters are estimated at about 75K) ... so I'm not sure why you are thinking the banks aren't reporting these things to CRA, when they clearly are.

http://www.thestar.com/business/per.../21/tfsa_penalty_letters_are_in_the_mail.html
http://www.theglobeandmail.com/glob...ur-tfsa-land-you-in-tax-jail/article17123629/


Part of what makes a TFSA over-contribution so expensive is how long it can take for CRA to notify you. The banks seem to be reporting once a year in the first quarter as all the articles I've seen mention a May/June time for CRA to be mailing out the letters.

If you've over-contributed, the earlier your remove the excess - the better.

I personally don't want to give the gov't any more money through penalties so I keep a current balance, similar to a keeping a current balance for one's chequing account.




0xCC said:


> I think you will find that the banks submit TFSA contribution/withdrawal to the CRA. I would expect that sometime in 2015 you will get a letter from the CRA saying you over-contributed and that you have a 1% penalty to pay (since you said that you contributed recently I assume that means you contributed in December which means you only have one month of over-contribution which results in a 1% penalty, details on the page I liked to above), there also may be a penalty of all of the capital gains on that over-contribution but I am not 100% sure of that.


My understanding is that the 2015 TFSA contribution room *might* mean the OP is limited to the one month 1% over-contribution penalty. It will depend on how much the over-contribution is and if/when a 2015 contribution puts the OP back over their TFSA contribution limit.

I will have to research this "capital gains" penalty ... so far I've read of the 1% per month penalty for the usual situations and where CRA determines the over-contribution is deliberate - the penalty can be increased to 100% of all gains. 


This sounds like a run of the mill misunderstanding of the rules so I suspect it would be the 1% per month.

Cheers


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## 0xCC (Jan 5, 2012)

I was thinking of the "tax payable on advantage" as listed on this page:
http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/tfsa-celi/txtn/menu-eng.html 

But my memory of it was slightly fuzzy and it looks like it is actually a bigger penalty than I had thought (100% of fair market value vs. just the capital gains).

There are also the "Tax Payable on Non-qualified Investments" and "Tax Payable on Prohibited Investments" which are closer to the capital gains penalty but not quite. I was just remembering that there were rules put in place after the original introduction of the TSFA that basically removed any advantage to "creative use" of the TFSA for a tax advantage. Since I personally am not interested in stepping into the grey areas of the TFSA rules I didn't pay much attention to the details of those added rules.


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## Eclectic12 (Oct 20, 2010)

^^^^

Yes ... on an advantage, it is higher. It was changed to deal with those who intentionally over-contributed or swapped thinly traded shares for an advantage.


However, it sounds more like the "Tax Payable on excess TFSA Amount" is the more likely link to apply in this case, which mentions the 1% on the highest excess per month penalty would apply in the OP's case as it seems more run of the mill type mistake.


Cheers


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## My Own Advisor (Sep 24, 2012)

Great responses.

So, Eclectic12, what you are buying inside the TFSA in 2015? The contribution room is now open for business!


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## 0xCC (Jan 5, 2012)

Eclectic12 said:


> ^^^^
> 
> However, it sounds more like the "Tax Payable on excess TFSA Amount" is the more likely link to apply in this case, which mentions the 1% on the highest excess per month penalty would apply in the OP's case as it seems more run of the mill type mistake.
> 
> Cheers


Agreed. If daddybigbuck's December contribution did not exceed their 2015 contribution limit (which should be $5,500 + whatever they withdrew in 2014) the penalty should be limited to 1% of the over-contribution since it sounds like the only excess was contributed in December. I don't expect they will slip under the radar and they should expect to receive a letter from the CRA in 2015 asking them for more information on their 2014 TFSA contributions.

My TFSA contribution has been made, sitting in cash right now waiting to see what the market does. My preference is to put it into REITs (currently have REI.UN. CWT.UN and HR.UN in both RSP and TFSA accounts) but they are a little more expensive than I would like right now. HR.UN is the most interesting to me at current levels but it is still a touch high. If some other good dividend paying Canadian stocks go on sale I won't have a problem scooping those up...


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## donald (Apr 18, 2011)

I have had this penalty.
In my case this didn't inform me until 14 mths later,I figured they let the rope out a bit collect maximum.
In my case it was a misunderstanding between myself and my accountant but cra wasn't in a rush and prob for good reason.


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## Eclectic12 (Oct 20, 2010)

^^^^

I suspect that the delay is more of a combination of thinking few people would misunderstand or intentionally over-contribute and trying to keep it simple (ex. what's one more data set when all the T3/T5 info has to be sent anyway?). The result is that depending on the timing plus workload (data appears to be transferred during CRA's busy season) stretches out the time.

IAC, returning to topic so that I can answer MOA's question - I am debating between going short term (HISA MF or something like Noranda Income Fund) or more longer term (lumber or utility).

I was set to transfer a long term hold oil company but I'm not clear enough on their hedging program or where I think oil is going.


I'll probably have to factor in how closely I can monitor a short term buy ... decisions, decisions ...


Cheers


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## gibor365 (Apr 1, 2011)

donald said:


> I have had this penalty.
> In my case this didn't inform me until 14 mths later,I figured they let the rope out a bit collect maximum.
> In my case it was a misunderstanding between myself and my accountant but cra wasn't in a rush and prob for good reason.


This is probably because CRA is not updating their records for more than 1 year.... Just checked my TFSA room on CRA website and I see that they didn't include yet my 2014 contributions even though I did it on Jan 2, 2014, it's very misleading as they already added new 2015 room, so my room appears as 11,000 even though I can contribute only 5500


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## Davis (Nov 11, 2014)

I'm buying some Dream REIT D.UN (despite the silly name). I can't figure out why it's been sold off to the point that it has an 8.8% distribution rate. I understand that interest rates may rise (since everyone has been saying this for about two years now, it must be possible), but an 8.8% distribution is pretty amazing.


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## maxandrelax (Jul 11, 2012)

daddybigbucks said:


> I usually find in January the markets go on a bit of a tear with all the small investors buying with the new TFSA money. I thought id jump in early to grab an extra 5%.


Can someone comment on this? I have often wondered about this phenomena. I believe it is just correlated and not necessarily caused by small investors jumping in. I would like to know really how much influence the tfsa bucks have. I'd say very limited, considering half Canadians use the TFSA and very small amount actually buy equities =10%?

I have a list of things I want to buy, but many are very expensive like SAP.to CSU.to


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## Synergy (Mar 18, 2013)

Davis said:


> I'm buying some Dream REIT D.UN (despite the silly name). I can't figure out why it's been sold off to the point that it has an 8.8% distribution rate. I understand that interest rates may rise (since everyone has been saying this for about two years now, it must be possible), but an 8.8% distribution is pretty amazing.


Supply and Demand. There's too much supply / competition (office buildings) putting pressure on rents and occupancy. I sold out of these guys a while back. The yield is nice, but they have been destropying capital - 1 year return of -12% (without dividends). If interest rates start to creep up slowly and if the oversupply doesn't correct itself in the near term D.UN could potentially continue to fall further in 2015. Long term, 8-10 years down this could however turn out to be a decent entry point.


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## Synergy (Mar 18, 2013)

maxandrelax said:


> Can someone comment on this? I have often wondered about this phenomena. I believe it is just correlated and not necessarily caused by small investors jumping in. I would like to know really how much influence the tfsa bucks have. I'd say very limited, considering half Canadians use the TFSA and very small amount actually buy equities =10%?
> 
> I have a list of things I want to buy, but many are very expensive like SAP.to CSU.to


I don't don't think the TFSA's have much of an impact. If you look at the stats, people aren't even using their TFSA's all that much. FWIW - Don Vialoux and the Canadian Market (Dec 31, 2014)



> The best time to own Canadian stocks relative to US stocks is right around the middle of December through until the middle of March each year. This year in particular looks interesting, because we have seen the TSE Composite slightly outperform the S&P during the last couple of weeks. Of greater importance is the earnings reports coming out during the 4th quarter, where results from the major US companies are not going to be that great.





> This year the big impact is caused by the US$. On average the US$ makes up over 10% on a year-over-year basis. This crunches earnings by the big cap companies that have international operations and means 4th quarter results on a year-over-year basis is not so good for the big companies in the US. However, what is bad for the US is good for Canada. The Cdn$ has been coming down, so we have actually benefited from the currency. The average gain for the TSX 60 companies is about 7% on a year-over-year basis. Historically in a pre-election year in a US residential cycle, we have a huge run from the beginning of January right through until the middle of July with an average gain of about 12% over the last 85 years.


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## donald (Apr 18, 2011)

My own advisor
What's your thoughts on Cwb.to?
Dividend growth rate on this stock is amazing.
It is beaten down down a bit.
I know canadian western was talked about not to long ago here,yeah they are tied to oil but maybe a fair entry?


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## Eclectic12 (Oct 20, 2010)

Synergy said:


> I don't don't think the TFSA's have much of an impact.
> If you look at the stats, people aren't even using their TFSA's all that much...


Last survey I saw was generally indicating most TFSA accounts didn't have a lot of equities, with emphasis on the 57% that have cash. 
Trouble is when I added up the % assigned to each category - somehow across the categories there is supposedly 124% invested. :biggrin:

Consider also that before the TFSA existed, I recall similar comments as I suspect the larger numbers selling for tax loss purposes towards the end of the year are far more likely to be having an impact.


Cheers


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## Synergy (Mar 18, 2013)

Eclectic12 said:


> Last survey I saw was generally indicating most TFSA accounts didn't have a lot of equities, with emphasis on the 57% that have cash.


That makes sense. From what I've seen it appears that the masses view their TFSA as a short term savings vehicle or as an emergency fund.



Eclectic12 said:


> Trouble is when I added up the % assigned to each category - somehow across the categories there is supposedly 124% invested.


Indeed, I believe that was from the 2013 BMO report: http://newsroom.bmo.com/press-relea...ption-among-canadi-tsx-bmo-201312190918655001



> Cash is the most common instrument being held in TFSAs (57 per cent), followed by mutual funds (25 per cent), Guaranteed Investment Certificates (GICs) (23 per cent), stocks (14 per cent) and Exchange Traded Funds (ETFs) (5 per cent)


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## My Own Advisor (Sep 24, 2012)

I have considered CWB Donald but don't own it yet. I own all other banks and will likely own it at some point but I want more diversification out of financials, looking at some indexed products for my wife's TFSA in 2015 and some O&G stocks for me. I'm liking CNQ right now and might get some next week.


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## CPA Candidate (Dec 15, 2013)

Bought 300 shares of True North Apartment REIT @ $7.78 producing an annual yield of 8.99%. This is part of my new years resolution to focus on business with very steady cashflows and little chance of negative surprises.


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## gibor365 (Apr 1, 2011)

> I'm liking CNQ right now and might get some next week.


 now, when I have new TFSA $, I also considering to add to my existing CNQ position within TFSA


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## Eclectic12 (Oct 20, 2010)

Synergy said:


> That makes sense. From what I've seen it appears that the masses view their TFSA as a short term savings vehicle or as an emergency fund.


 ... that seems to be the case but this latest survey is far less clear than some of the previous ones. 

Case in point ... using what's reported, had I been surveyed - I'd show up under three categories regardless of whether the allocation is small, medium or large. So I'm thinking that the trend is okay but the numbers could well be saying something completely different than the survey suggests.




My Own Advisor said:


> I have considered CWB Donald but don't own it yet. I own all other banks and will likely own it at some point but I want more diversification out of financials, looking at some indexed products for my wife's TFSA in 2015 and some O&G stocks for me. I'm liking CNQ right now and might get some next week.


I've looked at CWB a couple of times but usually have found a bank or insurance company with a broader business at usually a better price.

The more I look at my time ... the more I'm liking adding to my XIC.


Cheers


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## gibor365 (Apr 1, 2011)

also planning to add to my GH position


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## Beaver101 (Nov 14, 2011)

For the coffee-lover-in-me, TPK - Ten Peaks Coffee. Buy, hold and prosper!


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