How does one do so, i've already set up a TFSA with ING, how to i go about investing within it, or do i have to set up a specific account for investing? If so who offers one, Google doesn't seem to be of any assistance.
you can open multiple TFSA accounts if you want, in case anyone was wondering. So long as you don't go over your max limit obviously.
I'll stress it again. Generally, any product that can be held in an RRSP can be held in a TFSA. TFSA's are not limited to bank accounts.
If it safe/fair to think that bonds and solid mutual funds are probably best bets within one, since any losses withing a TFSA aren't able to be claimed? I'd love to shelter some of my dividend income, but should I take a hit on stock prices, I would think it'd be beneficial to have the ability to claim the losses, no?
It depends what you are using it for, for me my TFSA is something i want to use to do some day trading on days off, maybe making big purchases etc. I also would like to have access to it now, instead of when i'm 65. Although you lose the tax benefits of your losses, to me the ability to access the funds whenever i want to, far outweigh those benefits.
There are two ways to look at this. First would be that riskier assets should be held in a non-reg account so that you are able to claim capital losses, and that safer assets should be held in a TFSA. Also, since interest income is the least tax efficient, we should hold interest bearing products in a TFSA. At the same time, you can make the other argument that over the long term, riskier assets should provide a greater return, and the benefit of not being taxed on those bigger gains more than offsets the ability claim losses in bad years, or pay taxes on interest income in a non-reg account. Really it depends on your personal situation including time horizon, goals, risk tolerance and overall asset allocation. I know, cop out answer, but it's true.
Fuck you Ian. I've gotta fund mine next week, just got to figure out with what at this point... Maybe a bit of each...
yeh, I'm thinking ahead here, I'm in no position to start one now.. but I mean a percentage of each, maybe 50/50 would seem suitable.. Especially as your maximum increases each year.
I'd say it also depends if you are talking about individual stocks vs. mutual funds. With stocks, you decide when to sell and trigger your loss. With a mutual fund, you decide when to sell the fund and trigger a loss, but you need to remember the fund manager is the one who decides if/when to sell individual securities to trigger a loss. Losses on individual securities within a mutual fund aren't passed on to the investor. They are retained in the fund to be applied against capital gains in that or later years. Basically stocks give you more flexibility in tax planning as you are the one calling all the shots, but it's kind of tough to hold a diversified portfolio if you're only playing with 5k.
