# TFSA into Mutual Funds - 3 Questions



## stockman (Nov 3, 2012)

I just invested all of my TFSA money from one bank to my TDWH bank account into mutual funds. 
I met with a TD adviser and she recommended moving the full amount into mutual funds, so first question is: Is it a good idea to invest all at one time into the mutual funds or should I have done dollar-cost averaging?

Second question, because I am in my early 20's I wanted to put my TFSA in an globel aggressive growth portfolio is what its called at TD and I wanted to put it in all stocks (Equity) which could reach a 7.5% but the MER for this was 2.2 %, does anybody think that is high or not?

Third question is: When I look at the e-series it all says MER's are like 0.3 or 0.6 etc and so what are E-series and why are MER's so cheap?


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## Compounding1 (May 13, 2012)

You just made a thread about wanting to leave your Edward Jones account and you're opening a TDWH Mutual fund account? I honestly think you need to read a lot more about what you're doing before you go any further. Yes 2.2% is high and you should avoid mutual funds alltogether.

Also, of course the TD rep is going to say you should put it all into mutual funds, they're sales people! 

Do some reading on index investing which is what the E-series are. The reason they're much cheaper is because they mirror the stock indices and minimal interaction is needed from the fund manager whereas the mutual funds are constantly being shuffled around.

Even before this think about what this money is for? Are you saving for a house? Retirement? etc. Need to know your time horizon before you go any further as well.


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## stockman (Nov 3, 2012)

I appreciate your advice compounding1, I will explain my situation and hope for any positive or negative feedback from my action I am about to explain: I currently am holding $20,000 in my CIBC TFSA bank account, $30,000 with Edward Jones in all mutual funds under a RRSP, and $8,000 in TDWH web broker account. 

My goal is to get $50,000 in my TDWH web broker account so I can start trading at $9.99 instead of $29, so I met with a rep at TD and yes I agree I let her sell me on mutual funds but she said that if I can get the $30,000 from Edward Jones I will then have just over $50,000 in my account with TD and will be able to trade cheaper, so that explains my situation and reason for action. 

To answer your question, the $20,000 from the TFSA into mutual funds will all be in there for the next 10-20 years as I dont plan on touching it til maybe retirement, whats your thoughts?

Again I appreciate any feedback from Compouding1 or anybody,

cheers


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## Nemo2 (Mar 1, 2012)

I am far, (FAR), from being an 'expert', but let me bounce this off you, (and I'm sure others can address deficiencies in my post)....do you have/intend to have a fixed income component in your asset mix? If so, have you considered putting a GIC/Bond ladder in your TFSA and leaving _it_ there long term?

(Fixed income is taxed at a higher rate than dividends or capital gains, so there is that factor to consider within a tax free account; also capital losses within a TFSA cannot be used to offset capital gains outside a TFSA, so while you keep whatever gains you make you cannot utilize/tax harvest your losses.)

Your equities, whether inside or outside of mutual funds, could be held in your TDWH trading account.

(Others will have other ideas, but this is our basic approach.)


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## Compounding1 (May 13, 2012)

Personally if you don't plan on touching it for 10+ years you should be looking at e-series Index funds or Exchange traded funds (ETF) of certain indexes. The MER's on mutual funds are going to kill your gains. You can set up an E-series account with TD and simply have them convert your existing accounting into E-series. The form is on their website (might have to search a bit). I have an e-series setup with a RRSP.

I'm confused about the fee part though... Are you planning on doing a lot of stock trading or are you staying with the indexes/mutual funds? It doesn't make sense for her to tell you 50k in mutual funds account because they don't charge to trade mutual funds (to my knowledge at least and aside from the MER). Now if you plan on buying individual stocks then the 50k will make sense but for index investing (or mutual funds =/) you can add money to your accounts free just by transfering the cash into them online.


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## GoldStone (Mar 6, 2011)

2.2% MER is going to kill your returns. Nuff said.


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## Eclectic12 (Oct 20, 2010)

Compounding1 said:


> ...I'm confused about the fee part though... Are you planning on doing a lot of stock trading or are you staying with the indexes/mutual funds? It doesn't make sense for her to tell you 50k in mutual funds account because they don't charge to trade mutual funds (to my knowledge at least and aside from the MER). Now if you plan on buying individual stocks then the 50k will make sense but for index investing (or mutual funds =/) you can add money to your accounts free just by transfering the cash into them online.


I believe the OP already has a TDWH brokerage account. The moves from CIBC and Edward Jones are to consolidate to have the $50K for cheaper commissions.

It is a good question as to whether the OP wants to trade stocks as if the OP like the e-series, the option to use TD Bank to buy only the e-series is also another good option, if the OP is no longer concered about consolidating achieve the $50K across taxable/registered (i.e. RRSP & TFSA) for cheaper commissions.


Cheers


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## Cal (Jun 17, 2009)

I would recommend e funds through TD or ETF's until you get a greater grasp of your investing goals, personality and while you soak up more investing knowledge.


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## stockman (Nov 3, 2012)

thats great advice, I will look into the E-series for sure. 
I am planning on doing a lot of stock trading and so with the $20,000 from the Mutual funds and the $30,000 from Edwards Jones being converted over it adds to 50K which then entitles me to trade at a lower price ($9.99)


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## stockman (Nov 3, 2012)

Eclectic12 said:


> I believe the OP already has a TDWH brokerage account. The moves from CIBC and Edward Jones are to consolidate to have the $50K for cheaper commissions.
> 
> It is a good question as to whether the OP wants to trade stocks as if the OP like the e-series, the option to use TD Bank to buy only the e-series is also another good option, if the OP is no longer concered about consolidating achieve the $50K across taxable/registered (i.e. RRSP & TFSA) for cheaper commissions.
> 
> ...


sorry what does OP stand for?


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## stockman (Nov 3, 2012)

GoldStone said:


> 2.2% MER is going to kill your returns. Nuff said.


hmmmm thanks will look into it


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## Spudd (Oct 11, 2011)

stockman said:


> sorry what does OP stand for?


Original Poster.


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## Nemo2 (Mar 1, 2012)

Duplicate


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## eulogy (Oct 29, 2011)

I also suggest going with e-Series. They don't have a ton of funds with special markets and sectors, but you don't need that stuff. Canada, US, Bonds and International is all you need.


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## Sherlock (Apr 18, 2010)

CIBC Investor's Edge also has $10 trades if you have 50k.


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## Sampson (Apr 3, 2009)

All this time, I thought OP stood for Optimus Prime.


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## Xoron (Jun 22, 2010)

stockman said:


> ..... so I met with a rep at TD and yes I agree I let her sell me on mutual funds but she said that if I can get the $30,000 from Edward Jones I will then have just over $50,000 in my account with TD and will be able to trade cheaper, so that explains my situation and reason for action...


Buying MF has nothing to do with getting $50,000 of invest-able assets into TD to get cheaper trades. 

Just transfer the existing mutual funds (or sell and transfer the cash) over to a TD Waterhouse Discount Brokerage Account. Then you can buy / sell whatever you want. Including E-Series (Cheaper MER TD Mutual Funds), ETFS, or even the high prices TD Mutual Funds currently being recommended. You can do whatever you want, no need to even get a TD adviser (Sales person) involved at all. 

In fact, the TD Advisers can't even sell you ETFs or E-Series Mutual Funds (been there, done that with my wife's account. Transferred it all over to TDWaterhouse, and now we manage it together) 
http://canadianmoneyforum.com/showthread.php/9546-How-to-Convince-My-Wife-to-Dump-Her-Mutual-Fund(s)


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## cardhu (May 26, 2009)

stockman said:


> Is it a good idea to invest all at one time into the mutual funds or should I have done dollar-cost averaging?


Dollar cost averaging is what you do when you DON’T have a lump sum available for investing … for example, if you were to set yourself up to invest $500 every paycheque … if you have the money sitting idle right now, you certainly could dole it out slowly, but there is no assurance that you’d be better off by doing so. 



Compounding1 said:


> ... you should avoid mutual funds alltogether.
> ... you should be looking at e-series


e-series are mutual funds.


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## realist (Apr 8, 2011)

Sampson said:


> All this time, I thought OP stood for Optimus Prime.



I recently invested in Optimus Prime. The results so far have been transformational. Both delightful and frustrating at times


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