TFSA Strategy

[flayto]

Wondering what peoples' overall investment strategy is when it comes to investing in a TFSA.

I opened up a trading account through Questrade at the beginning of January and deposited the full $5000. My original intention was to invest conservatively (like buying periodically into an Index ETF), but the last few weeks I have thrown caution to the wind and used it as a sort of "play" account where I make somewhat calculated, speculative gambles on individual companies. Since nothing is ever taxed and commissions are 4.95 per trade, in my opinion the potential upside far outweighs the downside. I don't think I would ever invest the full $5000 in one stock, but maybe purchase in $1000 increments and sell on any up days, and buy on down days. Essentially use it as a day-trading account.

I started this strategy a few weeks ago with a small amount of shares in Tata Motors and ended up selling on Thursday for a nice $400 profit.

Just curious what others here are doing and your successes/failures with your strategy so far?

[seven3]

Everyone will obviously have their own preference. However, I think its important to remember that capital losses cannot be claimed in a TFSA.

Also, if you have "another $5k somewhere" earning interest, it's more tax efficient to flip things around and earn interest inside the TFSA. I recommend taking a holistic view of your assets/portfolio.

I do admit that trying to hit a home run in the TFSA is really tempting!

For me personally, I prefer to have my emergency cash in the TFSA, since that would have earned interest anyways...and just trade in a regular non-registered account.

[FrugalTrader]

Here are 4 potential TSFA strategies that I wrote about before, my favorite being creating an income fund as proceeds can be withdrawn tax free. Build the fund large enough, and you can potentially have a signifcant cash free income source during retirement.

[CheckingIn]

I locked my full contribution room into a GIC during the first week of January with BMO. I cannot wait for more contribution room as well! I'm a DRIPper, and I would like to put some of my Income Trusts that pays distributions into my TFSA.

[The_Number]

All of mine is in XSP.TO.

[Sampson]

My strategy is like MDJ's - I've got my highest yielding and most heavily taxed investments in there (2 CAD income trusts and a REIT).

My wife's will hold a bond ETF.

Eventually, I'd like to use it as a small cap trading account.

[Financial Highway]

I wrote about TFSA Strategies a while ago, I agree with MJD building a large enough tax free income vehicle with it. I mainly try to hold (interest paying and non-Canadian dividend payers)

[fephoo]

I am planning in using the TFSA for income generation also.

Unfortunately, I didn't really know what to do for this year and in november I put my $5000 tfsa money and my wife's $5000 into ING basic saving account TFSAs. I kind of regret...

Do you think it make sense to open a non-registered portfolio now (probably at questrade) using my current TFSA money from ING ? In this non-reg., I would buy income generating investments. Then next year, I would have a $10000 tfsa room and could use the non-reg. amount (is it possible to switch directly to TFSA or would I need to re-buy) + the rest in $ to hopefully fill the $10000 TFSA ?

[mfd]

Right now my TFSA's accounts are holding cash. Going foward I plan on using it for aggressive growth investing and as I near retirement I'll convert it all to some sort of 5 year bond/gic ladder.

[Preet]

I'm using my TFSA account as a pure gambling account. My RRSP represents the bulk of my long term savings and is mostly indexed with a comprehensive Investment Policy Statement - no thought involved there.

In the TFSA I've been very speculative using 200% and 300% leveraged ETFs for very short runs in and out of the market. So far that has consisted of putting in stink bids and once they fill, I put in a sell order for a 5-10% gain. So far they have worked out well this year. But the account has been cash for 75% of the time - only making those hail Mary's when the underlyings look really oversold/bought.