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4,044 Posts
1 CNR
1 MFC
1 XEQT

All for the long term buy and hope account.
 

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1,488 Posts
Bought RPI-UN.TO, FOOD.TO, DXG.TO and PHA.V.
 

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CVE, AQN.

Looking at Kinross but haven't pulled the trigger yet.
Almost bought more AQN today, too.
Some good prices on that one.
It's kind of high in my allocation, though. It's about 3% of my portfolio so I decided against adding more at this time.
 

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Started to buy some DLR yesterday. Will gradually add more if CAD continue to strengthening against USD.

Bought more GOAT too.
 

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More CNR for me, also. @ 128.69
 

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I bought some CMHC bonds, which are AAA federally backed government bonds, maturing in 2031 with a coupon of 1.10 and yield of 1.82%

These are great in a taxable account because they are discount bonds, paying a low coupon. Much of the return will come in the form of capital gains. So the after tax yield is far better than a GIC.

I routinely buy government bonds with low coupons in my non-registered account, and I think this is a juicy one.
 

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I bought some CMHC bonds, which are AAA federally backed government bonds, maturing in 2031 with a coupon of 1.10 and yield of 1.82%

These are great in a taxable account because they are discount bonds, paying a low coupon. Much of the return will come in the form of capital gains. So the after tax yield is far better than a GIC.

I routinely buy government bonds with low coupons in my non-registered account, and I think this is a juicy one.
James, please correct me if my understanding is wrong.

In your scenario, my marginal tax rate would be applicable on 1.10% and the balance of 0.72% would be treated as a taxable gain.

$1,000 investment
$11 interest: after tax $5.11 (53.53% tax rate)
$7.20 capital gain: after tax 5.27 (26.76% tax rate)
$10.38 total after tax (1.038%)


HISA (1.25%)
$1,000 investment
$12.50 interest: after tax $5.81 (53.53% tax rate)
$5.81 after tax (0.581%)
 

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In your scenario, my marginal tax rate would be applicable on 1.10% and the balance of 0.72% would be treated as a taxable gain.
I think what you said here is right. The 1.10% annual coupon is the only part which is taxable interest income (the highly taxed part). Of that overall yield, the other 0.7% is a capital gain. This is on an annual basis, anyway. There's also the small effect of what to do with the coupon payments over the following years.

But I know for certain that this 1.10% coupon is the only part that gets the big tax bill; it shows up on the T5 slips.

I've heard many people say that this effect is quite minor and doesn't add up to a lot of savings, but if someone already holds individual bonds in a portfolio, I don't see any harm in going for these discount bonds, with the low coupons. The ZDB fund uses this strategy as well.
 
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