De-Cluttering Financially
Time to get your collective brooms out and sweep out your investments.
As a start of year/end of year task I went through my many investment accounts (boy I really do have a lot of those, holy cow), I noticed that I had a lot of investment vehicles that I should really just eject from my portfolio. Why was I keeping them around? Some of the odd reasons I think were in my mind were:
- They might actually rebound sorry Charlie, that boat has sailed for these stale leftover investments (some from the tech boom), so that is not a good reason.
- They seem to be paying OK dividends might not be a bad reason, but then again, if I looked at the MER on these Mutual funds, I was paying other people a lot of money to get these dividends.
- I’m a lazy sod who just won’t admit when he is wrong I believe we have a winner!
What were the nature of this financial clutter?
- Two AGF Mutual funds that plodded along but had absurd MERs on them
- Some left over Cisco stock that used to pay out, but still has not got back to where I bought it some 10 years ago
- A crappy TD bond mutual fund that was useless as well
Took all the proceeds from those sales and bought a Dividend ETF, unfortunately the losses cannot be taken advantage of, since they were in an RRSP. Should I be buying Dividend devices in an RRSP? Some say no, I like dividends, so that is what I did.
Still have a few Nortel shares hanging around, not sure what the heck I can do with those, guess I have to “sell” them to incur the loss which I can then use next year. Is this right? Any comments on this appreciated.
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January 19th, 2010 at 1:32 AM
You’re not so lazy. At least you got around to cleaning out your investment portfolio and getting rid of the stuff that wasn’t working for you. Great job.
January 19th, 2010 at 10:03 AM
The end of the following Canadian Tax Resource post implies that you can declare a deemed disposition of your Nortel shares in 2009 due to the bankruptcy
http://blog.taxresource.ca/what-is-the-fmv-of-nortel/
If true, this would allow you to take a capital loss on your 2009 taxes.
January 19th, 2010 at 12:07 PM
Foreign dividends are regular income, so keep them in your RRSP. But Canadian dividends pay very, very little tax in your hands, so keeping them in an RRSP is basically just giving your money to the government. There’s a small benefit to keeping them in a TFSA, but really, the dividend credit is so nice that you really should consider keeping things that you own primarily for the dividend in an unsheltered account.