With the exception of Questrade, most brokerages in Canada don’t permit investors to hold U.S. dollars in their RRSP accounts. This may not seem like a big deal until you check out the currency conversion costs when trading U.S. securities. A solution to this problem is called “washing” the trades. I recently did this and thought it might be useful to describe exactly how it is done at my discount brokerage. Before going any further, it’s important to know that “washing trades” means something completely different from “wash trading”. Wash trading is an illegal activity where someone simultaneously buys and sells a stock to drive up trading volume and give the appearance of something big about to happen. Washing trades is a brokerage service that means eliminating currency conversion costs. I got my trades washed recently as I continued my transition from owning individual stocks to owning index ETFs. I wanted to sell several U.S. stocks and buy a U.S. index ETF in my RRSP. ...

My wife observed that our most recent natural gas charge was $48.11 compared to $255.94 a year ago. That’s huge difference. I started thinking about the causes of this drop, but it wasn’t until I investigated further that I discovered the dominant reasons. The cause I was hoping for was the new furnace I had put in . No doubt this high-efficiency furnace helped, but not that much. The other obvious cause was the mild weather we’ve been having. Again, this helped, but isn’t enough to account for the big drop. The first thing I noticed when comparing the details in the bills was that the charges are based on “estimated readings”. Over the years I’ve often found these estimates to be wildly inaccurate. I almost stopped comparing the most recent bill to the year-old bill at this point when I saw the per-cubic-meter charge on the most recent bill was 12.9 cents. This seemed low compared to the last time I noted this figure. Sure enough, a year ago natural gas cost me 29.2 cent...

I recently started a new job with a smallish company. After taking the job, one of the questions I asked the human resources person who showed me around on the first day was whether I could split my pay between two different banks accounts. I thought that maybe a small company might not be set up to handle this, but they can. I noticed I felt relieved. Such a small thing makes a difference in my marriage. My wife and I have had various periods of time when both of us earned an income, only one of us did, and times when neither of us earned income. One constant we maintained through all this is that all money belongs to both of us. Just because at a given time only one of us had an income didn’t mean that spouse controlled the money. We prefer to maintain separate bank accounts. Neither one of us wants misunderstandings or mistakes to lead to bounced cheques and other headaches. This means that I need to send some of my pay over to my wife’s bank account. One solution to t...

1. Preet lists some reasons you may not have thought of why your index fund may not exactly track its index . 2. Frugal Trader lays out his RESP asset allocation strategy . The interesting thing to me is the transition points. When the date comes to shift money from stocks to bonds, will he do it mechanically on the exact date specified, or will he try to time the trades? These choices are always more complicated in real life than on a chart. 3. Big Cajun Man has found a sign of a very bad day for an investor . 4. Tom Bradley wonders who is buying Kevin O’Leary’s new mutual funds? This is one case where it doesn’t pay to get in early.

I saw an interview on the Daily Show recently where the guest claimed that leading up to the recent credit crisis, people on Wall Street “fooled themselves”. While this may be true, I think the dominant driver was the self-interest of people at the expense of their companies. To illustrate what I mean, imagine that you play a game each day on your company’s behalf where you toss 4 dice and your company collects a million dollars if they don’t come up all 1s. If they do come up all 1s, your company must pay $5 billion. The expected payoff of each roll is a $2.86 million loss, a terrible deal for the company. But, what happens if you play anyway? For a few years you make a million dollars for your company each day. All this apparent profit seems wonderful. The company pays you, your colleagues, and management big fat bonuses for generating so much “profit”. This continues until the fateful day when the worst happens and the company goes bust having to come up with $5 billion...

A reader I’ll call Jim is looking for feedback on his portfolio. Jim is 50 years old and has no company pension plan. Here is the breakdown Jim sent: RRSPs $10,000 S&P/TSX 60 (purchased this year, due 2015) at BMO $7000 term deposit 1.75% at BMO $81,000 mutual funds at National Bank Financial, including – Fidelity Northstar Class B (FID210) – Vengrowth Investment D (VEN662) – BMOG Asian Growth and Income M FL (GGF620) – Sentry Select Canadian Income Class FL (NCE517) – Vengrowth II Investment D (VEN679) – MacKenzie Cundill Recovery FL (MFC742) – Manulife Growth Opportunities FL (EPL588) – Vengrowth I Investment D (VEN669) – Sprott Canadian Equity Fund SR A FL (SPR001) – Synergy Canadian CC FL (CIG6103) $2000 GIC at 4.5% due 2011 at Bank of N.S. $13,000 Bonds averaging 4.9% at Great West Life (60% company match) $18,000 stocks at National Bank Financial $28,000 term deposits (mutual funds) due 2013 (4000) and 2024 (24000) bonds at National Bank Financial TFSA...

According to economist Arun Motianey, author of SuperCycles , a SuperCycle is a wave of boom and bust spread over an extended period of time. He argues that the attempts by government policy-makers to stabilize prices are actually the cause of these boom and bust cycles. Although this book may be intended for a general audience, it was a difficult read for a non-economist like me. It is always hard to tell in these situations if the problem is with the reader or writer, but many parts were lost on me. However, I did come away with some understanding. Motianey looks through financial history and finds repeated patterns of a cycle. They begin with governments achieving price stability through policies such as the Gold Exchange Standard. This is followed by a collapse in commodity prices which causes a mismatch between prices of inputs (commodities) and outputs (finished goods). This leads to excess investment chasing the available profits, excess credit satisfying the demand fr...