Oct 31, 2019
On today’s episode, we cover a variety of topics, such as some
tips for DIY investors, highlights from a conference Cameron
recently attended, home country investment bias and whether it’s
possible to have too much money in your RRSP. We begin first by
talking about what DIY investors can do to ensure that they are
investing to the best of their abilities. As people who work in
investment daily, we often forget how tricky a terrain it can be to
navigate if you are not armed with all of the knowledge, so we hope
to pass some of it on to you. After that, we move onto the lessons
Cameron learned from the Dimensional Advisors conference. We unpack
ideas such as why he believes the world is ‘running towards
factors,’ how Dimensional is leveraging academic research to inform
their work along with some other highlights. Following on from that
and picking up on what was spoken about at the conference, we delve
into the pros and cons of home country investment bias. In some
instances, this bias makes perfect sense, both from a returns and
tax perspective and in other instances less so. We take you through
some of these scenarios and what they mean for an investor looking
to diversify. And finally, in the planning portion of our
show, we tackle RRSPs, whether it is possible to overinvest in
them, how they compare to other investments and much more. To learn
more, join us today!
Key Points From This Episode:
- Our team is growing and we are looking to add some extra
positions at PWL. [0:01:32.0]
- There are many challenges that DIY investors face not having
access to professional advice. [0:05:00.0]
- How to overcome asymmetries of financial knowledge between
spouses and within families. [0:07:30.0]
- Some of the fee-only planners available in Canada that we
- Robb Engen’s services and his discount for Rational Reminder
- What factors are and why the world is ‘running towards’ using
- Dimensional provides a framework for investing but does not
guarantee answers. [0:14:09.0]
- Has the value-add factor become obsolete?
- Highlights from Robert Novy-Marx's presentation at the
- Insights into and trends in the fixed income market.
- What peer to peer bond trading is and why it has seen such huge
- All countries in the world, except for one, have a home country
investment bias. [0:22:36.0]
- Factors to consider when deciding how much to allocate to home
country investments. [0:23:58.0]
- Buying and trading costs and taxes are drivers to own more
home-country stocks. [0:26:19.0]
- The difference between tax payable on international versus
Canadian stocks. [0:27:50.0]
- An explanation of unrecoverable foreign withholding tax related
to non-taxable accounts. [0:31:50.0]
- Some of the ways to get around the foreign withholding tax.
- How the S&P 500 has been performing in Canada over the last
ten years. [0:35:29.0]
- Why we are comfortable having a third of investments in Canada.
- Is it possible to have too much in an RRSP?
- Understanding the differences between an RRSP and a taxable
- Which tax conditions make it better to use an RRSP.
- The conditions under which your OAS will be clawed back.
- The one exception where you may not want to contribute to your
RRSP at all. [0:51:40]
- This week’s piece of ‘bad advice.’