I read a bit on couch potato investing. Sounds like a stress free way that should outperform most actively managed funds.
I have a few questions.
1. Dividends... obviously indexes have dividend paying stocks in them. How does that work? Are dividends simply reinvested in new units of the fund as they are received?
2. Witholding taxes. In a TFSA I know canadian dividends are fine. Us dividends will be witheld at 30%, and "foreign" witheld at whatever rate the hosting country determines.
Personally I have an existing TFSA with 2 stocks, BMO and PWF, purchased luckily in march. Yield on cost is 10.2% along with a handsome capital gain. No reason to change that as I enjoy a market beating return on dividends alone , and hopefully a capital gain that moves in tandem long term with the dividend increases. I also enjoy a huge margin of safety.
I was thinking of opening a TD e series TFSA for next year, split 3 ways: CDN equity, US equity, and MSCI EAFA equity, all currency neutral. Skip the bond component.
Auto pilot bi weekly contributions, split 3 ways year after year, taking advantage of DCA.
Current RSP, LIRA are 100% stocks with a long history of dividend increases.
I will be implementing the smith maneuver soon and will try the monthly DCA method via "actively" managed funds.
All methods of investing have pros/cons and all can provide statistics supporting their own superiority while "bashing" other styles.
Personally I think everything works, but not everything works all the time. The main thing is to pick something and stick with it. Value works but not in "good times". If you are value and jump ship when "its different this time" you will miss the value train.
I know what i want to do kind of runs contrary to that, but I read the Dick Davis Dividend and everything seems to work, even actively managed funds so long as you focus more on the actual manager rather than the fund.
Basically I will have 3 styles.
1. Buy and hold dividend growers in my RSP/LIRA existing TFSA
2. Buy and hold DCA indexing in new TFSA
3. Buy and hold DCA active management in the SM.
I will not jump ship and will keep the course with each account.
In 20 years I will post back and let you all know what REALLY works!
Not sure why I posted this but I would encourage any comments, input, etc.
I have a few questions.
1. Dividends... obviously indexes have dividend paying stocks in them. How does that work? Are dividends simply reinvested in new units of the fund as they are received?
2. Witholding taxes. In a TFSA I know canadian dividends are fine. Us dividends will be witheld at 30%, and "foreign" witheld at whatever rate the hosting country determines.
Personally I have an existing TFSA with 2 stocks, BMO and PWF, purchased luckily in march. Yield on cost is 10.2% along with a handsome capital gain. No reason to change that as I enjoy a market beating return on dividends alone , and hopefully a capital gain that moves in tandem long term with the dividend increases. I also enjoy a huge margin of safety.
I was thinking of opening a TD e series TFSA for next year, split 3 ways: CDN equity, US equity, and MSCI EAFA equity, all currency neutral. Skip the bond component.
Auto pilot bi weekly contributions, split 3 ways year after year, taking advantage of DCA.
Current RSP, LIRA are 100% stocks with a long history of dividend increases.
I will be implementing the smith maneuver soon and will try the monthly DCA method via "actively" managed funds.
All methods of investing have pros/cons and all can provide statistics supporting their own superiority while "bashing" other styles.
Personally I think everything works, but not everything works all the time. The main thing is to pick something and stick with it. Value works but not in "good times". If you are value and jump ship when "its different this time" you will miss the value train.
I know what i want to do kind of runs contrary to that, but I read the Dick Davis Dividend and everything seems to work, even actively managed funds so long as you focus more on the actual manager rather than the fund.
Basically I will have 3 styles.
1. Buy and hold dividend growers in my RSP/LIRA existing TFSA
2. Buy and hold DCA indexing in new TFSA
3. Buy and hold DCA active management in the SM.
I will not jump ship and will keep the course with each account.
In 20 years I will post back and let you all know what REALLY works!
Not sure why I posted this but I would encourage any comments, input, etc.