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TFSA vs. RRSP Duel: Who Wins?
The inability to make a decision has often been passed off as patience.
~ Author Unknown

At this time of year, many Canadians are trying to figure out where to put their savings in order to reap the greatest tax and long term investment advantage. With the introduction of TFSAs, that decision has been complicated a bit. There has been great debate over which are the best investment vehicles to choose for your TFSA and whether RRSPs are a better retirement savings option.

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RRSPs: Taking Money Out
Life is not long, and too much of it must not pass in idle deliberation how it shall be spent.~ Samuel Johnson

Our series on RRSP Basics continues today with some information on how and when to take money out of your RRSP.
Withdrawing Money Before You Retire
The idea behind RRSPs is that you won't be taking any money out until you retire. But as we all know, life happens. Here's how it works if you encounter an emergency where you absolutely need to take some of your money out:
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TFSA: Investment Gains, Withdrawals and Contribution Room
Money often costs too much.
~Ralph Waldo Emerson
Last year I wrote about TFSA Withdrawals, giving some examples of how they work. In the last couple of weeks, however, I've received a lot of questions from readers on how capital growth affects your TFSA contribution room.
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TFSA Contribution Limit for 2012
Simplicity is the ultimate sophistication.
~Leonardo DaVinci

Most people have calculated that if the CPI (Consumer Price Index) runs around 2%, that would mean we should exceed the threshold as of 2012. While that looks likely to happen, the CRA hasn't officially announced the 2012 TFSA limit yet. I spoke to someone at CRA last week and they said that the official announcement hasn't come yet, but that it will (obviously) be out by the end of 2011. He advised us to keep watching the CRA website for TFSA updates.
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RRSP vs. Paying Down Debt
Today, there are three kinds of people: the haves, the have-nots, and the have-not-paid- for-what-they-haves.
~ Earl Wilson
RRSPs work best for the haves. The have-nots might be better off starting with TFSAs, and the have-not-paid-for-what-they-haves should pay down debt first. That would pretty much sum up my general view of using RRSPs.
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Financial Outlook for 2012
We are rapidly coming to the point where we can no longer stuff the dirty clothes and toys under the bed. There is no more room. We are going to be forced to actually deal with the mess.
~ John Mauldin, 2012: A Year of Choices

Just a few weeks into 2012, markets have been mostly positive - until Friday's rumours of European downgrades and JP Morgan's disappointing earnings results derailed the enthusiasm. The warm holiday glow of optimism seems to be fading and 2012 is already starting to feel a lot like 2011, with all of ...
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Yes, You Can Live Without Bonds
The conventional view serves to protect us from the painful job of thinking.
~J.K. Galbraith

A recent article in the Globe and Mail delivered the following advice to investors: Don’t Let a Fear of Bonds Infect Your Healthy Portfolio. The implications are clear:

Recent concerns about ultra-low interest rates eventually turning higher are overblown.
If you succumb to the paranoid people who think interest rates can actually rise above 0% - 3%, your portfolio will be unhealthy, damaged, infected. (The image with the article showed people in protective masks.)
And my personal favourite: Long term investors ...
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6 Remedies For a Debt Hangover
Cheers to a New Year and another chance for us to get it right.
~ Oprah Winfrey
OK, so you overindulged. You read all of those articles warning about moderation or complete avoidance. You intended to follow that prudent advice. But you didn't. I could easily be talking about alcohol consumption or debt consumption. Either way, over-consumption will put you in a precarious position.

If you're not in that position on either front, congratulations. If you are, you're not alone. Debt has been in the news a lot lately and if you read my post on 2010 ...
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The Gene Mauch Rule for Investing Success
The following is a guest post by Rob Bennett. I'm pleased to announce that Rob will be sharing his thoughts with us here in a monthly column. Thanks Rob! :)

Gene Mauch was the manager of the Phillies baseball team when I was a boy growing up in Philadelphia. He once said something in an interview that has stuck with me ever since.

Mauch said that, when his team was on a winning streak, his job was to pop holes in the inflated egos of his players. When players are winning, they start thinking that they are so ...
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The Real January Effect
We spend January 1 walking through our lives, room by room, drawing up a list of work to be done, cracks to be patched. Maybe this year, to balance the list, we ought to walk through the rooms of our lives... not looking for flaws, but for potential.
~Ellen Goodman
Have you ever heard of The January Effect? It's basically a piece of market folklore that gets mentioned each New Year, with updated performance statistics. It usually comes with an endless debate about whether it's an actionable piece of information or something more ...
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20 Cents from November and December 2011

By 2 Cents on January 1st, 2012 | Category: 20 Cents | One comment

I missed posting the November 2011 edition of 20 Cents due to my short blogging sabbatical, so I’m combining some highlights from November and December here. There are a few bonus links in there too. Enjoy!

1. Let’s get things started with 3 great articles courtesy of Barry Ritholtz at The Big Picture. Barry calls out Cognitive Dissidents, says the U.S. Is a Corporate Monarchy, and highlights 29 Systemically Dangerous Global Banks. All are well worth your time.

2. Million Dollar Journey posted an excellent article on Why Cash Is King. In a volatile marketplace, cash provides a much-needed, if low-yielding, margin of safety.

3. Global investors watched Eurozone leaders make unequivocal statements followed by very equivocal retractions for most of 2011. John Hussman did his best to sort out this economic Hokey [...]

Read on and enjoy … 20 Cents from November and December 2011

20 Cents from October 2011

By 2 Cents on November 1st, 2011 | Category: 20 Cents | 12 comments

It’s hard to believe 2011 is already winding down. Soon we’ll be busy with holiday preparations, year end reviews and goals for 2012. It’s been a beautiful fall in our new city and I look forward to experiencing Christmas here for the first time. Now ~ 1. Where to find a tree? & 2. Where to put it in the new house? Hmmm . . .

While I wrestle with these profound questions, I’ll leave you with a selection of 2 cents from 10 different places. Enjoy!

1. Jonathan Burton of Market Watch wrote an interesting article on Why Geezers Give the Best Investment Advice. ‘Based on the evidence found in the research, anyone between 43 and 63 “is really in their cognitive sweet spot.”’ Woo hoo! I’m almost in my cognitive sweet spot! Wait . . . does that mean I’m almost [...]

Read on and enjoy … 20 Cents from October 2011

What Is a Balanced Portfolio?

By 2 Cents on November 3rd, 2010 | Category: Investing | 45 comments

Everybody is a genius. But, if you judge a fish by its ability to climb a tree, it will spend its whole life believing that it is stupid.

~Albert Einstein

Update: This article was included in the Canadian Personal Finance & Investing Carnival #9 at Investing Thesis. Thanks!

Last week I wrote about what it would take to get me to invest in the markets again. My friend Jim Yih challenged me with a really great question in the comments section and I promised to answer it in full this week. I’ve heard the same question on occasion from others as well, so I’ll do my best to address it today.

I’m not currently invested in any stocks or bonds except for a small position in an inverse ETF. I won’t go over my rationale again, as I’ve covered it [...]

Read on and enjoy … What Is a Balanced Portfolio?

Are Money Market Funds a Good Place to Park Your Cash?

By 2 Cents on June 7th, 2010 | Category: Investing | 7 comments

In the old days a man who saved money was a miser; nowadays he’s a wonder.

~ Author Unknown

Update: This article is featured in the Carnival of Personal Finance #261 posted at Pop Economics. Thank you Pop!

Apparently the May stock market swoon spooked Canadian investors as they withdrew more than $1 billion from mutual funds in May. Investors seeking the safety of cash might normally move money from equity funds into money market funds. That’s not necessarily the case anymore, and for good reason.

If you have your money with an advisor who sells mutual funds, chances are moving your money into money market mutual funds is the fastest and easiest way to reduce your market exposure. But is it the best way? What are the alternatives?

TFSA vs. RRSP Duel: Who Wins?

RRSPs: Taking Money Out

TFSA: Investment Gains, Withdrawals and Contribution Room

TFSA Contribution Limit for 2012

RRSP vs. Paying Down Debt

Financial Outlook for 2012

Yes, You Can Live Without Bonds

6 Remedies For a Debt Hangover

The Gene Mauch Rule for Investing Success

The Real January Effect

20 Cents from November and December 2011

20 Cents from October 2011

What Is a Balanced Portfolio?

Are Money Market Funds a Good Place to Park Your Cash?

Are Money Market Funds a [...]
Read on and enjoy … Are Money Market Funds a Good Place to Park Your Cash?

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Are Money Market Funds a [...] Read on and enjoy … Are Money Market Funds a Good Place to Park Your Cash?