# Results from conservative TFSA strategies



## Eclectic12 (Oct 20, 2010)

I've seen the successful TFSA risk takers post about being able to turn their $20K TFSA room into $40K or more but I don't have skills or time for this. So I thought I'd post the results of a more conservative strategy as I don't believe everyone falls into the risk taker category.

I started with two TFSAs, one a HISA and one an investment account. The HISA holds a couple of grand for emergency purposes. The investment account was setup so that $2k in a leveraged to banks split share bought around Mar 2010 and the rest in stable trusts such as Rio-Can.

If I was short of cash due to maxing out my mortgage payments, I looked for existing investments with a small capital gain and transferred them into the TFSA as an "in-kind" transfer (ex. transferred Triax High Yield Trust units in May 2009 for a $200 capital gain)

So after selling the split share for a 180% capital gain to make the final mortgage pre-payment (the mortgage is done in a couple of months) and another "in-kind" transfer of XIC, here is the status based on my August Statement:

HISA TFSA: $6K
Investment TFSA: Four stocks trading at $17.8K with $300 in cash


So for the originally granted TFSA room of $20K, I'm currently at total of $24.1K or so.


Note that the XIC transfer has the side-benefit of being able to file my 2013 taxes about two weeks earlier as iShares is really slow to produce the tax forms (mid-April where the rest of the tax forms are typically available towards the end of March).


Feel free to post updates or comment if you wish.


Cheers


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## Argonaut (Dec 7, 2010)

My calculation is quite simple because my balance is sitting at exactly $25k today. I opened my TFSA on March 1, 2011 with $15k and contributed $5k at the start of this year. Total return of 25%, and a quick XIRR calculation gives an annualized return of 18.2%. Since that date in March of last year, the TSX has returned a whopping -13%. Beating the index by 38% on the conservative part of my portfolio is alright by me. Selection is a set of 5 Canadian dividend stocks. Biggest winner is Inter Pipeline at 40% plus its dividends since I put it in TFSA.


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## Sampson (Apr 3, 2009)

I suspect most people's TFSAs have done better than 'average' simply because the program was initiated when markets were low.

Any strategy can be 'justified' in a roaring bull market.


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## Eder (Feb 16, 2011)

I've got mine up to $29,974 largely because I bought a bunch of BRASCAN CORPORATION SENIOR DEBS Maturity Jun 14 2035 Coupon 5.9500-CAD...a seemingly conservative investment for my TSFA. I wish I had put my investment account all into long term corporates.


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## Eclectic12 (Oct 20, 2010)

Sampson said:


> I suspect most people's TFSAs have done better than 'average' simply because the program was initiated when markets were low...


I'm not so sure ... most posts and surveys I've read show a lot of people putting TFSA money into a HISA type account. This Aug survey says 44% of the TFSAs out there are HISA only. For the 21% that have both, there will also be another chunk of money in HISA.
http://www.hrreporter.com/articleview/13735-nearly-one-half-of-canadians-have-a-tfsa-survey

These HISA TFSAs are independent of the equity markets.

Even more interesting to me - it is year four for the TFSA and yet only 47% have opened a TFSA.


As for the "markets are low when the program was implemented" - that may work for the the first $5K in 2009 but does not look like it is broadly available for the following years (i.e. 2010, 2011, 2012).

Even where one recognised early 2009 bargains, bought alot of shares and tried to transfer "in-kind" in the following years as TFSA contribution room is granted - there's still limits in place.

To illustrate - putting the 2009 $5K into XIC Jan to July 2009 works well (especially around $12.08) but as early as August 2009, it's at $17, where $19.36 was today's close. Or for BNS, the spread is from around a low of $24.25 where are early as June 2009 it is at $40 and by Dec it's at $49, where $53 is today's close.


Cheers


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## Argonaut (Dec 7, 2010)

Agreed, not everyone bought at the low. And by definition of a bottom the buying interest was at its lowest. Myself, I was saving for a trip to Europe at the time.


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## Toronto.gal (Jan 8, 2010)

I agree with most of your comments Eclectic.

The TFSA was first announced in the 2008 budget, but by the time it was in place in 09, it was not exactly a top priority for many people to part with their cash, so how many would have invested at the lows of March/09? 

I believe the survey figures, and indeed know many people, who do not have an account and/or don't fully understand how it works; hmmmm, even some bank reps. still don't know the rules in full.

Myself, I did not buy at the lows of 09, but managed to get in towards the end of that year & have done well because given the volatility, I decided to use the account mostly as a trading vehicle until I reached a desired amount, and opting to use other accounts for long-term investments.

I somewhat disagree with your last point however, as there have been plenty of roller-coasters between 2010 to 2012 as well [for those that may have started later]. The comparison you made could also be made with the periods between 2011 and 2012. For example RY in the low $40's in late 2011 compared to today's close of $55.41, etc.; the list is pretty long!

It hasn't exactly been a roaring bull market.


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## Eclectic12 (Oct 20, 2010)

Toronto.gal said:


> I agree with most of your comments Eclectic....
> 
> I somewhat disagree with your last point however, as there have been plenty of roller-coasters between 2010 to 2012 as well [for those that may have started later]. The comparison you made could also be made with the periods between 2011 and 2012. For example RY in the low $40's in late 2011 compared to today's close of $55.41, etc.; the list is pretty long!
> 
> It hasn't exactly been a roaring bull market.


I didn't get in on the 2009 lows either as I didn't have my investment TFSA setup until early April.


As for the years after 2009, perhaps the stock details are leading away from my point. The idea that the market was low when the TFSA was started is the cause of good TFSA values implies to me that just about any stock can be picked as "everything is going up".

Looking at the XIU, this seems true for 2009 until about early Sept, where daily close are running between about $12 to $15. After that, it is pretty steady in a range of about $16 to $19, with $17.64 being yesterday's close. 

So my point is that positive TFSA results are from more that just "it was a low market followed by a roaring bull market". 


IAC - this is all an interesting sidebar. I was looking for people who were taking a conservative approach to indicate how their TFSA was doing (i.e. people with a similar investing style to what I've done). 


Cheers


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## humble_pie (Jun 7, 2009)

i injected 20k, 5k dutifully every january 2nd since 2009. It's worth maybe 35,800. The 1st 2 years helped, i bought crazy stuff that went up like fireworks because the early amounts were so small (5k, then 10k) that the tfsa seemed unreal, like growing a bonsai tree.

africa oil was good too. Right now for hi risk & possible gains i have 2 small oil explorers in kurdistan. One of them (shamaran) jumped 20% on hi volume yesterday on zero news while the other (w. zagros) fell the same, although it did have setback news ...

for "safety & securitiy" this account has crescent point, with its good old dividends & its good old options to be sold.

think i've said this before, the best tfsa strategy is to drive the account towards maximum capital gains as fast as possible. Second-best is a nice but humdrum 5-pack like argo's classic.

using tfsa for a HISA is tossing one of the best investment opportunities in canada to the wind imho. Nothing ventured nothing gained.


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## Toronto.gal (Jan 8, 2010)

Eclectic12 said:


> So my point is that positive TFSA results are from more that just "it was a low market followed by a roaring bull market".


Yes, I agree. 

My approach is/was conservative as well, the only difference was that I was taking advantage of many of the low markets followed by the roaring ones as often as I could. I remember I first started with energy stocks in that account with the intention to hold, so if I had held, I would be in the red now, but I'm in fact, in a very positive territory, but I rather not disclose my balance.


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## Toronto.gal (Jan 8, 2010)

humble_pie said:


> think i've said this before, the best tfsa strategy is to drive the account towards maximum capital gains as fast as possible. Second-best is a nice but humdrum 5-pack like argo's classic.
> 
> using tfsa for a HISA is tossing one of the best investment opportunities in canada to the wind imho. Nothing ventured nothing gained.


+++++++++++++++++1. 

Volatility has been a great friend to make the accounts grow! :encouragement:


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## jamesbe (May 8, 2010)

I put 20k in jan 2011 and I'm up to 25k. Mostly conservative dividend stocks.


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## Spudd (Oct 11, 2011)

I had mine in a HISA until November 2011, when I transferred it to Waterhouse and started investing. With 5k per year added, I'm now up around 24k, with a strategy of buying the highest yielding stocks on the TD "Action List" for this account. Once the stocks are removed from the action list I set a trailing stop (so far this has only happened to one stock - InnVest). I don't know if this would be considered an aggressive or conservative strategy.


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## Sampson (Apr 3, 2009)

My TFSA is 'conservative'.

Like Pie, I've been faithfully putting in the $5000 every year, often as in-kind contributions, but some years like this year, cold hard cash, waiting for opportunities for long-term holdings. $20k to become $30k.

I've got REITS (lucky to buy in the first quarter of 2009), bonds, and some stalwarts like CNQ and AGU that I picked up during dips. All these holdings would be in my portfolio anyway, and I use it primarily to minimize taxes paid. I also see it as simply an extension of my retirement account.

I'm too chicken to look for home runs, whether in my TFSA or any other account.


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## CanadianCapitalist (Mar 31, 2009)

If an investor had put $5,000 in XIU on the first day of Jan. every year since 2009, his current balance would roughly be $22,000 with dividends reinvested. Assuming investors put Canadian stocks in their TFSA that would be the average experience.


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## Toronto.gal (Jan 8, 2010)

Sampson said:


> I'm too chicken to look for home runs...


I didn't think so. :biggrin::biggrin:

I have made home runs in the most conservative way, with some of the best known little Canadian stocks. By home runs, I mean returns in the 3 digits, not 4 [yet].


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## DavidJD (Sep 27, 2009)

I am at $36,000 after I pulled out $5,000 to put towards a cabin. I am getting about $225/month in dividends. My wife's is around $26,000 (removed $10,000 for cabin) and she is getting $240/month in dividends. Will be putting $10K and $15k respectively, back in January. I am expecting the limit to be raised to $5,500 in 2013. Anyone else?


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## Argonaut (Dec 7, 2010)

$240/month in dividends on $26k is an 11% yield. Yours is 7.5%. Is this accurate?


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## DavidJD (Sep 27, 2009)

Just rechecked mine and it is at $237.45/month and will have $19.60 more starting this month for a total of $257.05.


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## humble_pie (Jun 7, 2009)

CanadianCapitalist said:


> If an investor had put $5,000 in XIU on the first day of Jan. every year since 2009, his current balance would roughly be $22,000 with dividends reinvested. Assuming investors put Canadian stocks in their TFSA that would be the average experience.



XIU is not so much of an average experience, it's the top 60 tmx stocks only.

argo's 5-pack would have done better.

the thing is, investors with far better than average returns in their tfsas also have good trading skills. They're not doing xiu or xic or even argo's 5-pack in tfsa.

i just sold enuf shamaran petroleum in tfsa to collect my invested dollars of one week ago plus 10%. I'm keeping the rest. SNM has risen 46.7% in a week. Atrush has turned out to be a monster well.

was it luck ? certainly not. 40% of all the known & inferred oil in iraq is in kurdistan region, in the north. I knew about shamaran for quite some time, i chose it carefully, there is complex risk to be weighed up against appealing features.

i'm glad to see there are folks in cmf forum who are learning good trading skills in spite of the dyed-in-the-wool knitters who unfortunately keep trying to discourage them. The interesting thing about the forum is that there are traders here who are willing to explain to others, not just boast. It would be so nice if the knitters were a little more hospitable ...


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## DavidJD (Sep 27, 2009)

Checked the missus' and she has $244.26 (one div. was $81 last month and this month is $59.11 for some reason, that is taken into account for the new monthly total.

His $3,084.60 in dividends ($257/m) 
Hers $2,931.12 in dividends/year tax free! 

In January I intend to return the withdrawn amounts in 2012 with the 2013 allowable contribution ($5,500?) so I can reach $5k/year, each in dividends.


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## jamesbe (May 8, 2010)

Yeah I"m doing good on dividends, I got a couple of high yields and some lower and average ones I average about 6-7% I'd have to do the math, I get about $150 a month, it's great both our TFSAs are about the same (25k) so after 2 or 3 months I am pulling the dividend cash out and paying down the mortgage for an extra "return".


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## Quotealex (Aug 1, 2010)

@jamesbe. If your mortgage rate is significantly less than the 6-7% you are getting, why not increase your mortgage instead and buy more of these dividends stocks?


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## CanadianCapitalist (Mar 31, 2009)

humble_pie said:


> XIU is not so much of an average experience, it's the top 60 tmx stocks only.
> 
> i'm glad to see there are folks in cmf forum who are learning good trading skills in spite of the dyed-in-the-wool knitters who unfortunately keep trying to discourage them. The interesting thing about the forum is that there are traders here who are willing to explain to others, not just boast. It would be so nice if the knitters were a little more hospitable ...


TSX 60 is designed to reflect the composition of the broader Canadian market. It is not simply an index of the top 60 stocks.

My point is that traders in aggregate cannot earn alpha. If you earn extra returns, it comes at the expense of another trader. It simply cannot be any other way. That's why it is curious that everyone who posted here seems to have done above average.


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## Argonaut (Dec 7, 2010)

This forum helps, I've become a better investor because of it. 

Not too surprised at most results but don't really believe 11% dividend yields. Unless it's all mortgage REITs.

@humble: It seems I've become more of a tortoise to your hare this year??


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## humble_pie (Jun 7, 2009)

but CC you commenced by mentioning xiu. AFAIK xiu is the top tsx 60. The broad tsx market index etf is xic.




CanadianCapitalist said:


> If an investor had put $5,000 in XIU on the first day of Jan. every year since 2009, his current balance would roughly be $22,000 with dividends reinvested. Assuming investors put Canadian stocks in their TFSA that would be the average experience.


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## humble_pie (Jun 7, 2009)

Argonaut said:


> ... It seems I've become more of a tortoise to your hare this year??


i've always kept volatile small caps in the tfsa. Gold mines, oil wells, a diamond miner. Even when i had a reit, it was a hi-risk penny stock reit called BTB.UN. But i researched it carefully, i knew some of its buildings, i believed it was better than the market's worst fears. It went from .66-.72 to the 90 pennies, plus yielding 8-9% the whole time. Sold it a while ago.


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## HaroldCrump (Jun 10, 2009)

Argonaut said:


> Not too surprised at most results but don't really believe 11% dividend yields. Unless it's all mortgage REITs.


I believe those posters are calculating yield on their cost, not current yield.
Yields above 11% do not last too long - either stock price rises or the distribution is cut.
There are very few mortgage REITs in the Canadian market and I don't believe any of the them yield 11% currently.


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## marina628 (Dec 14, 2010)

MY $20000 IS at $24002 today , just happy to see a positive return. Some of you guys have done fantastic!


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## humble_pie (Jun 7, 2009)

CanadianCapitalist said:


> ... it is curious that everyone who posted here seems to have done above average.



i remember most of the folks posting in this thread & i remember most of the bits, pieces, instalments & chapters of their tfsa stories as they worked them here over the past 3 years. Yes their stories hold up. These cmf members did imho achieve the results they are mentioning here & there is nothing "curious" about their statements.

the most successful cmf member in tfsa of all time is missing from this thread. As i recall his tax-free soared above $100,000 within the first 2 years. It was all genuine gain, not one of those engineered sitcoms which the revenue departments are going after now. This alltime champion invested his entire tfsa in one single vancouver silver miner & it happened to hit the jackpot.

one should keep in mind there are only a few persons claiming above-average tfsa success in this thread. This is not a statistical sample, it's only anecdotal say-so. One assumes that many are never going to post up O Yea my tfsa HISA account has returned 2.38% per annum compounded since inception Woo-Hoo.

if half will lose, then the other half will gain. Gainers are a large percentage. I am left wondering why only the losing half of statistics should be utilized in order to destroy hope & persuade all investors from the getgo that their destiny is mediocrity, therefore it is self-defeating & a waste of time for them to think about anything else.

this am, after the shamaran manoeuvre which lasted one week & netted a gain of roughly 1,350, my tfsa has a total positive balance of 37,023.97. My other accounts don't perform as well since they were designed to be more stable. The tfsa is still my frisky little pony.


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## Eclectic12 (Oct 20, 2010)

CanadianCapitalist said:


> TSX 60 is designed to reflect the composition of the broader Canadian market. It is not simply an index of the top 60 stocks.
> 
> My point is that traders in aggregate cannot earn alpha. If you earn extra returns, it comes at the expense of another trader. It simply cannot be any other way. That's why it is curious that everyone who posted here seems to have done above average.


Agreed ... plus it is considered a benchmark.

Looking at XIC, the share price at least seems to follow the same pattern so I suspect applying the same method will have similar results.


As for the TFSA results being better than average - I'm not surprised at all. How many will take the time to post that $20K has been growing by 2% or a loss? I expect the reports of losses are more likely to show up in the taxation section where people are trying to make sure there is no use for the loss.

Though now that I think about it - I'm not so sure the TFSA results have to be at the expense of a TFSA trader. How do we know that the losing trader is using a TFSA instead of an RRSP or taxable account? The balance has to be in the market - not the type of trading account, n'est pas?


Cheers


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## humble_pie (Jun 7, 2009)

Eclectic12 said:


> ... I'm not so sure the TFSA results have to be at the expense of a TFSA trader. How do we know that the losing trader is using a TFSA instead of an RRSP or taxable account? The balance has to be in the market - not the type of trading account, n'est pas?


there's also a moralistic tone to the original statement, which the author probably didn't intend. The nuance is that we're supposed to feel guilty about winning since it means directly robbing the pockets of those who are close to us. Along the lines of innocent babes & children being starved to death because of our greed.

this is a specious argument imho. If parties are so concerned that babes & children might starve because stock markets exist & keep on functioning, they should not be investing at all. There are other callings that offer a life of charity & self-sacrifice for the good of others.

stock markets are not even true zero-sum games, because the total picture is continually tweaked by the printing of new money & the issuance of new treasury shares. There's no reason imho to single out TFSA accounts as pernicious & virulent examples of greed.

the way i see it, markets are fun & challenging marshalling grounds on which to play. There are unlimited kinds of winners. Players with consistent HISA or GIC strategies who are happy with their lives are winners just as much as the cmf forum member who bingo'd $100,000 in his first TFSA year. The important thing is that, as with any sport, it's possible to improve with training & practice. Naiive who venture out without proper training or equipment are the players who are more likely to be harmed.


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## CanadianCapitalist (Mar 31, 2009)

humble_pie said:


> AFAIK xiu is the top tsx 60. The broad tsx market index etf is xic.


It's not. TSX 60 is a subset of the Composite designed in such a way that sector weights are the same. That's why the TSX 60 tracks the Composite fairly closely. I like XIU because it is cheaper to own. XIC is also a fine choice.

Comparing XIU with the TSX Composite


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## DavidJD (Sep 27, 2009)

jamesbe said:


> Yeah I"m doing good on dividends, I got a couple of high yields and some lower and average ones I average about 6-7% I'd have to do the math, I get about $150 a month, it's great both our TFSAs are about the same (25k) *so after 2 or 3 months I am pulling the dividend cash out and paying down the mortgage* for an extra "return".


My plan was to withdraw to buy RRSPs and then place the refund back in. Since i bought a cabin and increased my HELOC, I will probably pay that down a bit too. At TDW there is a $25 withdraw fee from a TFSA. You are allowed one free withdrawal per year so it 'forces me' (because I am cheap) to delay moving small amounts around. I find that with cash accumulated or if I sell something, the extra cash gets reinvested. Probably a blessing. TFSA. Best. Thing. Ever.


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## CanadianCapitalist (Mar 31, 2009)

humble_pie said:


> if half will lose, then the other half will gain. Gainers are a large percentage. I am left wondering why only the losing half of statistics should be utilized in order to destroy hope & persuade all investors from the getgo that their destiny is mediocrity, therefore it is self-defeating & a waste of time for them to think about anything else.


It depends on how you define "mediocrity". Mediocrity to me is earning very poor returns -- much less than what one could have obtained by simply investing in a broad basket of stocks. That's the reality for most investors, even investors in this forum. Their returns are quite poor due to expenses and poor timing. I have no problems with successful traders -- good for them! I'm simply pointing out that the experience of successful traders with excellent returns should not be inferred as typical.


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## Toronto.gal (Jan 8, 2010)

humble_pie said:


> One assumes that many are never going to post up O Yea my tfsa HISA account has returned 2.38% per annum compounded since inception Woo-Hoo......The tfsa is still my frisky little pony.


LOL, you kill me with laughter; almost choked on my coffee. :highly_amused: This thread has gotten very interesting.

I'll share a sleepy, albeit not totally obscure little Canadian stocks that has given me 3 digit returns this year: ANS. 

Another little jr. oil company that doubled for me in the past [and not only under TFSA account], was Compass Petroleum, acquired later by Whitecap Resources, and then there were other jrs that didn't double, but still gave me much better returns than a GIC or ETF would have.

And not just oil, I also had other small, but well-known names in gold, financials, etc. that were beaten down, hence affordable to buy in higher volume, and a dream to trade thanks to all the active bears and bulls. A $2K investment soon became $4K; a $4K investment soon became $5K, and so on [because of the trading volume]. The higher the account got, the bigger the possibilities with medium size stocks.

The strategy was the most basic of all: buy very cheap/sell higher. As well, rather than depositing cash, what I did the last couple of years, was transfer stocks that were not doing well under my non-registered accounts, ie: substantially lower than when I had purchased as I figured that that way, I would be able to claim capital losses as well as tax-free capital gains shortly thereafter. Then, when the roller coaster came down again, I was able to return the stocks that I had transferred out of the non-reg. account for around the same price.

Remember how bad it was on Dec./2011, ie: ELD: $13+/MFC: $10+/SU: $27/UUU: $2, and all of which recovered big time just 2 months later. And the list goes on and on.

Though in 2012 I could afford bigger stocks given the increase of the account, I have, for the most part, concentrated on small [not obscure though] decimated stocks for obvious reasons.

I'm not saying everyone should trade, I'm merely sharing what has worked for me, and yes, of course some of it was luck, but most of it was common-sense, good timing [as in volatility], and good/fearless picks! My goal is a specific $ amount before stocks get too expensive and volatility lessens, and once I reach that, and I'm not too far from that goal, then I'll let the dividends do 1/2 the work [with the so called stable stocks], and yes, with the other 1/2 I'll continue to trade the volatile ones, it's what I'm best at and what I like!


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## Eclectic12 (Oct 20, 2010)

Toronto.gal said:


> ... what I did the last couple of years, was transfer stocks that were not doing well under my non-registered accounts, ie: substantially lower than when I had purchased as I figured that that way, I would be able to claim capital losses ....


How were you able to claim the capital losses for an "in-kind" transfer to a TFSA? 
Everything I've read (and the broker rep when I call to request an "in-kind" transfer) has said that losses for a transfer 
to a TFSA are not allowed by CRA.

http://www.taxtips.ca/personaltax/investing/transfersharestorrsp.htm


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## Toronto.gal (Jan 8, 2010)

humble_pie said:


> 1. The important thing is that, as with any sport, *it's possible to improve with training & practice.*
> 2. Naiive who venture out without proper training or equipment are the players who are more likely to be harmed.


1. That's just it, not everyone has the desire or time to improve, and as you said, this applies in general. 
2. It's the reason why the most important advice of all, is to learn before you invest, even if one is not a DIY investor. Those that take short-cuts are the ones that get burned.

There are many who invest without knowing the basics even.


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## HaroldCrump (Jun 10, 2009)

Eclectic12 is correct.
In kind transfers to TFSA are not eligible for capital loss claims, but are subject to capital gains :rolleyes2:
Go figure.


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## Homerhomer (Oct 18, 2010)

Eclectic12 said:


> How were you able to claim the capital losses for an "in-kind" transfer to a TFSA?
> Everything I've read (and the broker rep when I call to request an "in-kind" transfer) has said that* losses for a transfer
> to a TFSA are not allowed by CRA.*http://www.taxtips.ca/personaltax/investing/transfersharestorrsp.htm


Another of many examples where tax and common sense don't go well together.


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## Toronto.gal (Jan 8, 2010)

Eclectic12 said:


> How were you able to claim the capital losses for an "in-kind" transfer to a TFSA?


It was not an 'in-kind transfer' per se, what I meant by 'transfer' is that I did not sell the stocks, I just asked the rep. to transfer stocks in the amount of $5K. I was told it could not be done, then I called CRA and was told that it didn't matter if I deposited cash or stocks. Then I called the bank again, and they did the transfer.

Maybe CRA was wrong? :rolleyes2:

At any rate, it does not matter because even if I had sold to get the cash, the outcome would have been the same: 1) sell triggers capital losses. 2) take profits under tfsa upon stock recovery.

I'll attempt to transfer stock again next January and I'll let you know what happens.


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## Homerhomer (Oct 18, 2010)

T.Gal, you can transfers stocks at will, however if you want to follow CRA rules you are not allowed to claim capital losses on securites transferred to registered account, and if you did that than you previous year income tax filings are not correct.


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## Toronto.gal (Jan 8, 2010)

Homerhomer said:


> T.Gal, you can transfers stocks at will, however if you want to follow CRA rules you are not allowed to claim capital losses on securites transferred to registered account, and if you did that than you previous year income tax filings are not correct.


As hp said, there is always something to learn, I never said I was perfect & learned something 2day.  

I understand now. It goes to show u that mediocrisy is everywhere, at banks, cra, etc. 

I'll adjust my income-tax accordingly in 2013; need to reverse $2K in c.losses.


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## HaroldCrump (Jun 10, 2009)

Toronto.gal said:


> Maybe CRA was wrong?


Technically, CRA was right.
It does not matter whether you deposit cash or stock.
What they didn't say is that there is an implication in the account from where you are transfering in kind.
I guess the issue with the CRA response is that they told you exactly what you asked, no more and more less.



> At any rate, it does not matter because even if I had sold to get the cash, the outcome would have been the same: 1) sell triggers capital losses. 2) take profits under tfsa upon stock recovery.


The loss cannot be claimed even in this case because it is superficial loss.

The root of the issue is that the bank sent you on a wild goose chase (through the tunnels or CRA, etc.)
They ought to have known better.
Transfer of stock from non reg. to TFSA has always been allowed.


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## CanadianCapitalist (Mar 31, 2009)

Toronto.gal said:


> At any rate, it does not matter because even if I had sold to get the cash, the outcome would have been the same: 1) sell triggers capital losses. 2) take profits under tfsa upon stock recovery.


You cannot sell a stock in a taxable account at a loss and purchase the same stock in a TFSA/RRSP and claim capital losses. It is considered a superficial loss.


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## DavidJD (Sep 27, 2009)

One more small point about transfering in stocks to an RRSP, RESP, TFSA...you can select the value it traded at that day and have the stock registered at that value. So if you have 100 shares of ABC that usually trades @ $15 and one day you notice it dropped to $14.25 then went back north of $15 that day, you can direct the trader to register it as $14.25 transfer-in value. So you have a bit more room to deposit ($0.75 X number of shares) and you have a 5% gain simply by transfering it. Timing your deposits this way can make your gains much quicker.


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## Toronto.gal (Jan 8, 2010)

HaroldCrump said:


> The loss cannot be claimed even in this case because it is superficial loss.


My own stupidity as well because I have read about superficial losses here & there, but always seemed to be about RRSP accounts and since I never transfer anything out of there, I guess I did not stop to think that the concept would be same in another registered account. Though TFSA is registered, I never think of it as such since it's really registered only because of the contribution limit.

I'll have to adjust 2010 and 2011 returns; should I do it now, or just adjust the 2012 return next year?


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## Eclectic12 (Oct 20, 2010)

Toronto.gal said:


> It was not an 'in-kind transfer' per se, what I meant by 'transfer' is that I did not sell the stocks, I just asked the rep. to transfer stocks in the amount of $5K. I was told it could not be done, then I called CRA and was told that it didn't matter if I deposited cash or stocks. Then I called the bank again, and they did the transfer.
> 
> Maybe CRA was wrong? :rolleyes2:
> 
> ...


You say you transferred stock into the TFSA instead of cash. This is what an "in-kind" contribution is - a non-cash contribution to the TFSA.

CRA allows non-cash contributions, with the restriction that a capital gain has to be claimed and that a *capital loss is not allowed*.


Here's a summary of the contribution types and restrictions:

1) cash contributed to TFSA - no restrictions with no capital gain or loss.

2) stock sold for cash for a capital loss where the cash is contributed to a TFSA - as long as the same stock is bought 31+ days after the sale (see the superficial loss rules for detiails), the capital loss can be claimed.

3) stock transferred to TFSA in a capital loss position - the capital loss can not be claimed.


So yes - selling then contributing cash *does* matter. This is why in a capital loss situation, the advice is to sell the investment for cash and contribute the cash instead.
http://www.milliondollarjourney.com/in-kind-transfers-non-registered-stocks-to-an-rrsp-tfsa.htm



As for "waiting until next year" - that can turn out to have expensive penalties.

If you call CRA to sort this out and they confirm it is a mistake, they has discretion to waive the penalties plus interest penalties. 

If CRA figures it out, the penalties are usually much higher and have interest added.


As an example, CRA made a data keying error for my RRSP contribution room. I have no way to know this had happened so they reported the issue to me. In their letter, they assessed something like $6K in extra penalties, which included three years of interest penalties, right back to the day their mistake supposedly put me over the RRSP contribution limit.


Cheers


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## Eclectic12 (Oct 20, 2010)

Toronto.gal said:


> ... I'll have to adjust 2010 and 2011 returns; should I do it now, or just adjust the 2012 return next year?


I'd use the T1-ADJ to change them now. 

That way if CRA's computers or some worker flags the issue - you can prove that you dealt with it asap and request they waive any penalties.

http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/chngrtrn-eng.html


Cheers


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## Toronto.gal (Jan 8, 2010)

Eclectic12 said:


> As an example, CRA made a data keying error for my RRSP contribution room. I have no way to know this had happened so they reported the issue to me. In their letter, they assessed something like $6K in extra penalties, which included three years of interest penalties, right back to the day their mistake supposedly put me over the RRSP contribution limit.


Yikes.

I always record everything, who I spoke to [sometimes they don't give names], when [as in day & time, etc.], so I'll handle the adjustments asap with letter of explanation. Pray for me. :biggrin: 

I'm glad I wrote such a long post today, LOL.

Thanks to all for the explanations.


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## Eclectic12 (Oct 20, 2010)

Toronto.gal said:


> ... I always record everything, who I spoke to [sometimes they don't give names], when [as in day & time, etc.], so I'll handle the adjustments asap with letter of explanation. Pray for me. :biggrin:
> 
> I'm glad I wrote such a long post today, LOL.
> 
> Thanks to all for the explanations.


It's always good to have details ... usually it helps focus the CRA rep, bank teller, boss, etc.

It should be not too bad, if tedious.

For my RRSP issue, it took about an hour or so to confirm there was something funky and line up my arguements/proof to get CRA to look at it. When I called, it was about twenty minutes to get the clerk to look at the numbers then five minutes for the fix to be applied.

The tedious part was that once the error was fixed, I then had to file something like three tax return adjustments as the error affected three tax return years. When I asked why they could not revert to my originally filed return, the answer was that ( ... wait for it ...) I might chose to leave things as-is. 

Let's see - "as-is" means I pay thousands extra in taxes I don't owe!


Cheers


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## Argonaut (Dec 7, 2010)

In hindsight, I should have put Argonaut Gold (118% in a year and a half) and Silver Wheaton (42% in a month and a half) in my TFSA. But something about the status as a registered account keeps me on the conservative side. Keeping the five white horses in the TFSA and the frisky gold&silver ponies in non-registered, as it were.

As an aside, I want to find myself a nice junior oil. The equivalent of AR in the oil business. I'll begin the hunt today and hope to find something before I go back to working long hours next week.


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## Young&Ambitious (Aug 11, 2010)

humble_pie said:


> one should keep in mind there are only a few persons claiming above-average tfsa success in this thread. This is not a statistical sample, it's only anecdotal say-so. One assumes that many are never going to post up O Yea my tfsa HISA account has returned 2.38% per annum compounded since inception Woo-Hoo.


Well I guess I'll be that person :02.47-tranquillity: I only transferred in my TFSA to being directly managed by moi in June of this year. My realized ROC is 4.35% but right now the FMV is almost on par with BV due to Longview Oil. Longer term, I expect the return in this account to be better. Still better than a GIC :encouragement:


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## Toronto.gal (Jan 8, 2010)

Argonaut said:


> 1. But something about the status as a registered account keeps me on the conservative side.
> 2. As an aside, I want to find myself a nice junior oil.


1. Given your age, it should be the reverse as you can afford to be a little less conservative. I never thought of it as a registered account per se, and now I may have to pay for that mistake [with my NOK profits, LOL].
2. You do that, but doesn't have to be juniors necessarily, look at TLM for example, below $9 just this past May [or 2004 prices]. Many forgot the company was only 50% gas and that there would be a huge upside.


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## Argonaut (Dec 7, 2010)

Spartan Oil (STO) is the current leader. Has a Greek name and is around the same price I bought AR. Oh yeah, and fundamentals and technicals look good too but that doesn't matter as much as the name. Would love a pullback.


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## mrPPincer (Nov 21, 2011)

CanadianCapitalist said:


> If an investor had put $5,000 in XIU on the first day of Jan. every year since 2009, his current balance would roughly be $22,000 with dividends reinvested. Assuming investors put Canadian stocks in their TFSA that would be the average experience.


This thread got me curious. Just checked and I'm at $21850 today, not far off from CC's estimate for an index investor
I had a more or less random mishmash of td's efunds in there until earlier this year, when I went 100% VCE in the TFSA.
Total return is 9.25% on the 20K since inception, which would be about 4% annually when I account for compounding.
Pretty lame so far but still better than GICs would have paid I guess.


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## Eclectic12 (Oct 20, 2010)

humble_pie said:


> ... one should keep in mind there are only a few persons claiming above-average tfsa success in this thread. This is not a statistical sample, it's only anecdotal say-so. One assumes that many are never going to post up O Yea my tfsa HISA account has returned 2.38% per annum compounded since inception Woo-Hoo.
> 
> if half will lose, then the other half will gain ...


That's why I was interested in what people had to say and their ideas but am not drawing any conclusions. 

IMO, the bias is for more of those who are positive or thinking through a process to post and almost none in the negative position to do the same. The same can be seen in the "I used my HELOC in 2009 for leveraged investing" threads - lots of winners posting, lots of "picking stocks is a zero sum game" and few with any losses.


Then too - how does one know that it is a "half & half" proposition? 

The survey linked to up-thread indicates that not all Canadians have an investment TFSA so some of the losing half of the market will have their losses in an RRSP and/or taxable account. To use an analogy, the TFSA is one un-even slice of the bigger pie, where it is the pie that has "half winners & half losers".


... just my thoughts.


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## humble_pie (Jun 7, 2009)

CanadianCapitalist said:


> It depends on how you define "mediocrity".


yes i agree




> Mediocrity to me is earning very poor returns


mediocrity is not "very poor" imho. Mediocrity is mediocrity. The root of the word is "med" meaning a mid-point in a range.




> Mediocrity to me is earning very poor returns -- much less than what one could have obtained by simply investing in a broad basket of stocks.


mediocrity to me is earning returns that one could have obtained by investing in a broad basket of stocks. The way i see it, it's the broad basket or index that will inevitably produce the mid-point result, aka the mediocre result.




> That's the reality for most investors, even investors in this forum. Their returns are quite poor due to expenses and poor timing.


but how could you possibly know this. Do investors in this forum all report to you ? My goodness, who knew. If not, how could you be sure that "most investors, even investors in this forum" have returns that are "quite poor due to expenses and poor timing."

i certainly believe wholeheartedly that investors who have no ability or time to learn any skills or who are out of the country or enfeebled for any reason are best off with a mediocre group of index etfs. The security they gain will compensate for the mediocrity.

but many others can, with elbow grease & study, acquire enough skill sets to rumble along at least somewhat above the mediocre, mediocre being defined as the index basket. Plus at all time they have a chance of hitting better results. I agree that there has to be a loser class in order for even a slightly-winning class to emerge. May i suggest that the non-cmf forum crowd is more susceptible to fear & greed, has less chance of decent guidance & is therefore more likely to constitute this losing underbelly each: 

lastly, why would anyone want to gear a forum to low, poor, sub-mediocre or even slovenly investing results ? We're not a forum of social workers, i for one don't believe members come here to read primarily about rescuing hardship cases or saving lives by investing in a bowlful of indexed alphabet soup.

don't believe ? please look at the viewer statistics for gob's fireworks thread on AAPL options & compare these to any dreary thread on classic etf selection ...


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## CanadianCapitalist (Mar 31, 2009)

humble_pie said:


> mediocrity is not "very poor" imho. Mediocrity is mediocrity. The root of the word is "med" meaning a mid-point in a range.


The index is a mid-point only on a gross basis. All active investors have to make up their extra costs first just to break even. The percentage by which investors in aggregate trail indexes on a net basis is not constant. 




humble_pie said:


> but many others can, with elbow grease & study, acquire enough skill sets to rumble along at least somewhat above the mediocre, mediocre being defined as the index basket. Plus at all time they have a chance of hitting better results. I agree that there has to be a loser class in order for even a slightly-winning class to emerge. May i suggest that the non-cmf forum crowd is more susceptible to fear & greed, has less chance of decent guidance & is therefore more likely to constitute this losing underbelly each:


How could you possibly know this? Can you cite a study of traders who have put in enough "elbow grease and study" and are able to earn "at least somewhat above mediocre" returns? Yes, of course, if you trade you have a chance of hitting better results. You also have a chance of hitting the jackpot if you buy a lottery ticket. The question is what are your chances?



humble_pie said:


> lastly, why would anyone want to gear a forum to low, poor, sub-mediocre or even slovenly investing results ? We're not a forum of social workers, i for one don't believe members come here to read primarily about rescuing hardship cases or saving lives by investing in a bowlful of indexed alphabet soup.
> 
> don't believe ? please look at the viewer statistics for gob's fireworks thread on AAPL options & compare these to any dreary thread on classic etf selection ...


There are all kinds of investors who read and post here. There are value investors, dividend investors, even mutual fund investors. What's your point?


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## Sampson (Apr 3, 2009)

CanadianCapitalist said:


> The index is a mid-point only on a gross basis. All active investors have to make up their extra costs first just to break even. The percentage by which investors in aggregate trail indexes on a net basis is not constant.


I suppose this depends on how you define an 'active investor'. I don't exactly consider myself an active investor (i.e. I tend not to turnover my portfolio, have a handpicked selection of stocks and rebalance into those as needed and as opportunity arises).

Do I sometimes try to time the market? Yes, but I do this with both my ETF and individual stock holdings.

So the extra fees I incur from being a semi-active investor are no different from those incurred by my wife who uses a strictly passive approach, both in holding selection and timing of purchases. The fees are greater, but not even proportionately to the number of increased holdings I have since I don't fully rebalance as often.

I think the key here is the sampling bias. I have yet read any comprehensive thread or post (well except JustAGuy's recent enlightenmient) where posters have talked about their losses. People don't want to post about their embarrassing losses, myself included).

Maybe we should start a new thread to this point, a pseudo investors help group.

Hi, my name is Sampson, and I lost lots of monies investing in....
Nortel,
JDSU,
RIM
and 1 junior oil I can't even remember the name of now. wait, I remember, Oilexco.

I see a pattern - keep tech out of my books.

Wow, that is liberating


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## jamesbe (May 8, 2010)

Quotealex said:


> @jamesbe. If your mortgage rate is significantly less than the 6-7% you are getting, why not increase your mortgage instead and buy more of these dividends stocks?


I am not comfortable investing debt. And plus my tfsa and rrsp are maxed, so my next place at the moment is to pay off the mortgage. I would sleep better if it was gone.


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