My first foray in investing happened six years ago with the purchase of three mutual funds (global equity, Canadian small/mid cap, and Canadian balanced) which were recommended by a financial advisor for my RRSP. I bought them with no reservations even though they had high management expense ratios (MERs) and carried a deferred load. These words were not part of my vocabulary at the time.

So far, they have performed below expectations with annualized returns of 1.6%, 4.9% and 7.1% respectively. I’m not impressed. I think I’ve only seen my advisor a couple of times over the years but she still sends me lovely birthday cards each year as a subtle reminder that time is ticking and I need to invest. Dissatisfied with the performance and service, I went and bought no-load mutual funds at various banks the following years. Finally, through reading other blogs and web forums, I discovered the TD e-funds which track various indices at low MERs. I experienced first hand that indexing outperformed my actively managed funds. Due to the fact that my first funds carry a deferred load, I am reluctant to sell/switch resulting in a penalty of early redemption within seven years.

One of my first tasks in doing-it-myself is to transfer in kind all my RRSP assets into a self-directed RRSP account with TD Waterhouse. Afterwards, I will decide whether it’s worth the penalty of selling these funds to reinvest elsewhere.

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