RBC Asset Management Inc. - nearly $2 billion

CIBC Asset Management - nearly $1.4 billion

TD Asset Management - $1.1 billion

IGM Financial (includes Investors Group and Mackenzie Financial) - $489 million

CI Financial Income Fund - $340 million

AGF Management - $232 million

DundeeWealth Management - $171 million

This is definitely a record month of fear. Personally, I am still hanging on to my own investment strategy, well diversified and invest in ETFs.

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When it comes to investment, it is important to have a realistic expectation on the return rate of your money. If not, the result will be either 1. you give up and back out totally 2. you could be the victim of the kind of fraud mentioned in this post.  So, please do not give up investing, stay the course and invest long term. Most importantly, do not be a fraud victim.

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The simplest way for individual investors to invest in the emerging market is to buy the mutual funds or ETFs that are invested in those markets.  Among all the mutual funds and ETFs, the one I like is VWO from Vanguard. VWO invests in more than 23 emerging markets, with about 45% in BRIC countries (BRAZIL, RUSSIA,INDIA,and CHINA). The MER for VWO is also very low and attractive, merely 0.25%.

When investing in emerging market, besides the MER, you should pay attention to the number of markets the fund invests in. You do not want the fund which focuses too much on small number of markets. With the huge market volatility, a sharp drop on any one of the markets will trigger considerable loss in your portfolio.  You want a fund that is as diversified as possible, but yet with a certain degree of concentration in BRIC countries. VWO seems to be a great candidate for that.

I have not added VWO to my portfolio, but plan to add it within a year. I am looking to have about 5%-10% of emerging market in my overall portfolio.

If you have questions regarding investing in emerging markets, please leave me a comment.

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• Have you bought your RRSP for this year? You might have heard about this statement from time to time. A lot of people do not understand that RRSP is NOT a product but rather an account type. You cannnot simply buy RRSP. You buy investment instruments inside your RRSP account. To easily understand this, just think about going to a farm to pick up some berries. At the entrance of the farm, you were given a basket(your RRSP account). Then you are off to the field (the investment market) to pick up some berries(the different types of investments). Whether you are going to pick up strawberry(GICs), blueberry(stocks), or raspberry(mutual fund) or others(other investment types such as ETF, High Interest Savings, etc) is merely your choice.
• RRSP is a tax FREE accout. All money and potential growth of your money are tax FREE. This is NOT correct either. RRSP is a tax DEFERRED account, not tax FREE. Tax deferred simply means that you pay tax later than sooner. When you contribute to your RRSP, the government promises you to tax you later on your contribution. Therefore you receive the tax refund if you have prepaid the tax on your contribution. Let’s say that in 30 years, you need to withdraw your money and any growth of your contribution. At this time, all your withdraw will be taxed at your marginal tax rate at the time of withdraw. So, RRSP is a tax DEFERRED account not tax FREE account.
• You can only take out your money after you turn 69 years old. A lot of my friends do not want to contribute to RRSP because they think they can only take out the money from their RRSP after they turn 69. This is wrong! You can take out your money from your RRSP at ANY time. All the withdraw will be taxed at your marginal tax rate. That is it!
• The contributions have to be deducted at the same year when you make it. Contribution and deduction are different. You do not have to deduct your contribution at the same year when you make it. For example, when you contribute $1000 into your RRSP this year, you can deduct your contribution in 5 years or 10 years or 20 years. The choice is yours.

The above are some common misunderstandings about RRSP. Do you have more to share? Do not hesitate to leave me an comment. Have a great day!

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After all information have been filled, you need to provide two pieces of valid identification including the proof of your current address. Some commonly used are copy of your driver’s license and the bill from you utility company.

Once you have the form filled out and all necessary supporting documentation ready, you can mail them all together to the following address:

National Consumer Relations
P.O. Box 190, Station Jean-Talon,
Montreal, Quebec H1S 2Z2
Facsimile: (514) 355-8502
Tel:1-877-323-2598 (514-493-2598)
Email: consumer.relations@equifax.com

Depends on where you live, you should receive the acknowledge from the credit bureaus about receiving your request within 1-3 weeks. The total investigation process will take about 2-4 weeks. After the investigation, Equifax/Transunion will send you an update copy of your current credit report. You should check it over and make sure there is no more errors.

If you have any questions, please feel free to leave me a comment. If you like this post, please share it by clicking on “Share This” button below.

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“A corporate action in which a company’s existing shares are divided into multiple shares. Although the number of shares outstanding increases by a specific multiple, the total dollar value of the shares remains the same compared to pre-split amounts, because no real value has been added as a result of the split.”

Using the XIU split as an example, there is a 4-to-1 split yesterday. 50 shares at the price of $80 per share prior to the split will end up with 200 shares at $20 per share. As you can see, the total amount of assets before and after the split actually remain the same at $4000. Then you might ask why the companies want to split the unit at the first place?
One of the major reasons for a company to split the stock is that the price for each share of the stock has been so high that it is very expensive to buy the stocks in round lots. For example, if a stock is priced at $80 per share, it will required $8000 to buy 100 shares. On the other hand, if it is only $20 per share, one will need only $2000 to buy 100 shares. Without stock splits, the stock becomes unattractive to small investors as it requires large sum of amount to invest in it and the risk of losing large amount of money might be too high for small investors.

Besides that, I think there is also a good side effect of unit split for all investors. It actually allows you to buy fractional shares of the original shares through the DRIP (Dividend Reinvest Investment Plan) if your broker does not permit that. Let me explain this using some numbers.

Let’s say I have 100 shares of XIU originally at the share price of $80. At the first quarter, XIU gives out $0.3/share dividend. Therefore, I am receiving $30 in total for dividend. I choose to reinvest all of them. But since my broker does not allow purchasing fractional shares using DRIP, with the current price of $80/share, there is not enough money to buy even one share. As a result, I will receive the $30 all in cash.

Now, the unit has been split at 4:1 ratio. XIU gives out $0.075/share for dividends. I am having 400 shares after the split. The total amount of dividends I will get is still $30(400*$0.0075). Again, I choose to reinvest all of them. With the current price of $20/share, I am able to get 1 share plus $10 cash. The 1 share after the split actually equals to 0.25 share prior to the split. Therefore, allowing fractional share purchase of the original shares through DRIP is a side effect of the stock split. And I think it is a good one.

If you have any questions about this, feel free to drop me a comment. If you like this post, please share it by clicking on “Share This” button below.

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There is a common misunderstanding that you need to pay for your credit report. This is not correct. Credit report is always FREE for you to request by mail(If you would like to get it online, you need to pay for that). Only if you want to know your credit score, then you have to pay. TransUnion and Equifax are two major credit bureaus in Canada. The process to request the credit report is very similar between these two. I would pay special attention to the report from Equifax since I believe most of the creditors in Canada use the copy from Equifax.

To obtain the credit report from Equifax, you need to download the Credit Report Request Form. In the request form, you need to fill out information such as your name, current address, your previous addresses within last five years, your date of birth, social insurance number(optional), the name and last 4 digits of a major credit card you have, have you ever been denied credit before. After you fill out those information, you need to mail the request form along with two pieces of your personal identification like driver’s license and health card to get your request processed.

After you have all the required documents mailed to Equifax, you should expect to receive the copy of your personal credit report via regular mail within 5 to 10 days.

For process to obtain your credit report from TransUnion, please follow this link.

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• Reduce number of credit cards you have: I used to have around seven credit cards in total until one day I realized that I was crazy to carry so many credit cards at the same time. I called my credit card company to cancel four of my credit cards and keep the other three( one VISA, one MasterCard, and one AmericanExpress). With less number of credit cards, it is much easier for me to make sure none of them has been lost, misused and so on. Also, it reduces my chance of being a victim of potential identity theft. I think most of the time people will need only one credit card. But just in case some places will only accept one or the other, you can try to keep one of each of the major cards just like I do. There is one thing you need to pay attention to when you cancel your credit cards. You do not want to cancel the one with the longest credit history,in other words, the oldest card you have since it might hurt your credit score.
• Check your credit card statement more frequently and online: most of the credit card companies allow their users to check their credit card statements and recent activities online. Checking your statements and recent activities more frequently allows you to identify any unauthorized purchase much earlier to achieve a solution that is much favorable to you if it did happen!
• Get your credit report: credit report is free for you to require. There are two major credit bureaus in Canada, Equifax and TransUnion. Get your credit report and check it at least once every year to see if there is anything wrong.
• Consider using paypal or low limit credit card for your online purchase: Internet is probably the most possible place where credit card fraud will happen. If you need to do a purchase online, maybe you should consider using paypal to pay for it. If the website does not support paypal payment, try to keep a credit card with low credit limit and use that exclusively for online payments. This will greatly reduce the possibility of credit card fraud and limit the damage to the minimum.

Do you have any tips to protect yourself from credit card fraud? If you have any questions, feel free to leave me a comment. If you like this article, please share it by clicking on “Share This” link below.

Have a nice weekend everyone!

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