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When I first started investing, it was just about getting into the “game”. Sure, my first mutual funds were not the highest rated or had the lowest MERs but at the very least, they got me curious enough to track their performance. I guess it’s like the NHL playoffs, I’m only interested if my team is still in it.

Now that I know more, I am looking into maximizing my returns by first lowering the cost of owning mutual funds. I discussed the idea of moving my index funds to equivalent ETF versions before. Let’s see if it’s worth it. Excuse me while I talk myself through this… Tables are always good

By my questionable calculations, a proposed 100k portfolio with an even 4-way allocation split would generate $77.5 in savings. Yearly rebalancing with new investment dollars saved up would cost $39.99 at the most with $9.99 per transaction.

I know I can get a cheaper and broader selection of ETFs with America’s Vanguard for my foreign component and also add emerging market into the mix as a replacement to my TD Latin American fund. However, this would require US currency conversion and dealing with foreign income. I guess that’s my next step in my learning process - tackling foreign equities in a cost effective way.

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And the story continues… To recap: bought stuff, put in baskets.

Eventually, I also opened up a discount brokerage account with TD Waterhouse for my “mad money” to include stocks and exchange traded funds (ETFs). My brother is an active trader and we share the same abode, so I qualify for a flat rate of $9.99 per transaction with TDW for either Canadian or American equities. Whoohoo!

Similar to my RRSP portfolio, I’m about to transfer my non-sheltered assets to the TDW account and eventually sell the holdings for ETF equivalents with an even lower MER. I learned about them the same time as the e-funds but I didn’t feel that I had enough seed money to make it worthwhile to offset my transaction costs which were higher at the time. So, I decided on e-funds with which I contribute biweekly in a pre-authorized purchase plan. I’ve been pretty happy with the strategy of buying and switching within the family of TD funds without triggering any penalty as long as I held the asset for the requisite amount of time. Now that I’ve accumulated enough capital, I’m having a hard time letting go, given these considerations… Even with a low transaction cost, it still doesn’t make sense to dollar cost average in small amounts. I also have the dilemma of triggering a good amount of capital gains if I sold the mutual funds. I am trying to come up with the best scenario to offset capital gains with the tax loss harvesting of some putrid stocks in conjunction with RRSP deductions of taxable income.

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The last post was about my RRSP portfolio so this time, I’ll blab blog about the holdings of my unsheltered mutual funds portfolio. Basically, it’s a repeat of the TD e-funds I already hold in my RRSP. It’s probably not a good idea to buy the same things, but oh well. I’d already maxed out my RRSP contributions and I wanted to park my money somewhere. Running out of e-fund options, I added TD Latin American Growth and TD Entertainment & Communications into my fund basket. I know I railed against actively managed funds in my previous post but I am not against the no-load variety that allows for some flexibility in selling/switching without locking you in for a number of years. Obviously, they have to justify the higher MERs with good returns.

In any case, the Latin American fund has been my best performer giving me an annualized return of 44% in roughly 2 years. The Communications fund has performed well also. I know that these are “funds du jour”, which along with the high flying TD Canadian Index e-fund that I also own, are recipes for trouble in a correction. But what’s wrong with letting the good times roll and riding the wave? Conventional wisdom tells me I should take the profits and redirect the proceeds to lagging funds but that’s easier said than done. I did not start my investment journey until after the tech bubble so I don’t have that painful memory emblazoned in my brain. Rest assured though, I’m putting a GPS in my basket.

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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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Sorry for being a few years late to the party. Everyone has a blog these days and I admit I was sceptical at first. With the glut of information on the Internet, who wants to waste time reading the ramblings of complete strangers? The answer seems to be a lot — myself included. So, I decided to join the masses to blog about investments and finances. What makes me qualified other than the fact I have a computer and an Internet connection? Absolutely nothing. I do not possess a financial background nor am I a brainiac we normally equate with do-it-yourselfers. That being said, I’m a Gen-Xer, single, female, and debt free with a chunk of change to invest. What to do, what to do… This is one woman’s journey into the world of investing after reading “Investing for Canadians for Dummies”. I guess it’s a good thing I’m Canadian then.

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