Author: Mike Holman

Categories
Investing

RBC Direct Discount Brokerage Review

I recently moved my investment accounts from Questrade to RBC Direct in order to take advantage of the RBC 1% rebate deal so I thought it would only be fitting to do a review of their services.

Who are they?

RBC Direct is the discount brokerage arm of the Royal Bank of Canada which is the biggest Canadian bank.

Good things about RBC Direct

I like the trading platform – it looks nice, easy to use and is well designed.  There is also access to analysts reports etc.  It does the job.

If you would like to compare all the different Canadian discount brokerages, check out the Canadian discount brokerage comparison.

Bad things about RBC Direct

Everything else.  🙂

Fees – ridiculous fees in my opinion.  $10/trade is not bad for a passive investor but why anyone would pay $29 a trade is beyond my comprehension.  I’ve outlined the fees at the bottom of the post.

No electronic money movement unless you have a RBC bank account.  This is the stupidest thing about RBC – yes, I understand they want to ‘bundle’ all their services but forcing investors to open up new accounts to use their discount brokerage when most of the other discount brokerages offer excellent electronic money movement options is just bad business.  Get out of the stone age RBC!

In order for me to put money into the account, I have to write a cheque and mail it to them.  If I want to remove any money – I have to pay $10 for a cheque to be written.  My plan is to keep all cash in the account until next year when I can move back to Questrade and then withdraw it electronically.  The most annoying part of this is that when I looked into the 1% deal – a customer service rep told me on the phone that I could do electronic money movement which turned out to be false.  Speaking of customer service….

Bad Customer service

I won’t bore you will the multitude of issues I’ve encountered with RBC but suffice to say that I think their computer system was probably build sometime in the 20’s which makes it very hard for the customer service reps to do their job.

Most of the reps are pretty good although one time I called without an account number and the rep told me it was “very hard to look up an account without the account number”.  I challenged him on it and he somehow was able to find the account immediately just using my name.  Kudos jackass…kudos.

Conclusion

I can’t really recommend RBC Direct since I really don’t like them and can’t wait to collect my 1% and go back to Questrade.  However, if you already do your banking with RBC and have a $100,000 in assets then they are not a bad choice.  If you don’t meet those criteria then look elsewhere.

Trading Fees

  • $28.95 per trade unless you have $100,000 in household assets at RBC Direct or complete more than 30 trades per quarter.
  • $9.95 if you have $100,000 in household assets at RBC Direct.
  • $9.95 if you make between 30 and 149 trades per quarter.
  • $6.95 for those super-active traders who do at least 150 trades per quarter.

Annual account fees

  • No fees if total client assets are $15,000 or more.
  • If assets are less than $15,000, a $25 quarterly fee will be charged regardless of the number of accounts.  Can be avoided by making three or more trades in all accounts

Other discount brokerages reviews

Questrade discount brokerage review.

Categories
Announcements

Top Posts From 2008

Just thought I would list the top posts for 4P from 2008.

Most views

Why you can’t trust real estate agents when buying a house.  I’m not suggesting you shouldn’t use a real estate agent but keep in mind who’s side they are on (hint: it’s not yours!).

How to increase the odds of getting anything you want.  A very interesting and inspirational post from Mr. Cheap.

Why the sub-prime crisis hasn’t hit Canada yet.  Still hasn’t arrived although we’ve certainly felt the effects.

Your money and your brain book review.  A look at a great book.

Traveling Cheap – some methods for cheap travel from Mr. Cheap.

Most comments

110 comments – Why you can’t trust real estate agents when buying a house.

68 comments – Energy sales scams.

66 comments – Why the sub-prime crisis hasn’t hit Canada yet.

52 comments – Safe withdrawal rule for retirement funds.

48 comments – Christian owner.

43 comments – Reasons why your HELOC can be your emergency fund.

42 comments – Why are some parents morons?

Categories
Personal Finance

Happy New Year and Stock Picks For 2009

Happy New Year to all our readers – last year was a tough one in the markets but I can’t complain.  My financial situation is better now than it was last year thanks to some aggressive mortgage paydown.  In other areas of my life – our son is a year older and is healthy, happy (most of the time) and doing very well.  We also celebrated the birth of our daughter in March who is also healthy, happy (most of the time) and progressing quite well.

I also started a new site called ABCs of Investing which deals with very basic investment terms and concepts using 2 short posts per week.  A sample post explains exactly what the top down investing method is.  Alternatively, a bottoms up investing style might be more to your liking.

A special thanks goes out to Mr. Cheap who bought both my son and daughter a share of BMO each and created a DRIP.  A very generous gift and very time consuming as well to set the DRIP up.

So even with the crappy markets – 2008 was a great year!

Stock picks

I entered into a stock picking contest with some other bloggers – who shall rue the day they decided to do battle with Four Pillars!  🙂

Traditionally, the only way to do well with stock picking contests is to swing for the fences and hope for the best.  With that in mind I picked 4 small Canadian oil stocks which have been beaten down quite a bit.  If oil rebounds next year then these stocks should perform quite well.  There are probably better plays on the price of oil but this is the best I could do on 3 minutes of research.  Keep in mind these are pretty much random selections – do not consider this a recommendation or any kind of advice!

BCF.to – Bronco Energy $1.27.  I started watching this stock a few months ago when it was trading at $10 (it’s now less than $1.50).  My Dad saw some analyst recommending it on BNN – great call – down 85%!

HOC.to – Holly Corp  $3.65

TOG.to – TriStar Oil and Gas  $11.41

CLL.to – Connacher Oil Gas  $0.74





The other competitors (click to see their picks)

The Wild Investor stock picks

Zack Stocks stock picks

Dividend Growth Investor stock picks

My Traders Journal stock picks

Where Does All My Money Go stock picks

Intelligent Speculator stock picks

The Financial Blogger stock picks

Million Dollar Journey stock picks


Categories
Personal Finance

First Margin Call

This post was originally published on Mr. Cheap’s original blog.  When he brought over all his posts – some of them didn’t make it so I’m planning to publish a few of them over time.

I recently got my first margin call from E*Trade for about $3K. It scared the hell out of me, not because I could pay (I had the money sitting in a cash account and just transferred it over), but the call was unexpected and I was worried that I misunderstood the system to the degree that I had triggered it.

The day after the call, I got on the phone to E*Trade and admitted that I’d had a margin call, told them that it was no problem paying it (and I’d already transferred the funds), but that I didn’t understand what had put me into a margin call situation. The man on the phone didn’t apologise, but it turns out that the problem was on E*Trades end and they considered a bunch of “safe” stocks (which they’ll loan 70% of the stock value on) as “riskier” stocks (which they’ll loan 50% on). He told me the call wouldn’t be enforced, and after checking my account assured me I was fine (even if I hadn’t transferred the cash in).

I used the situation to get more details about margin calls and what would have happened if it had been a real call. Apparently the speed on which they’ll sell your stocks depends how far over the line you are (he said they’ll give you 3 or 4 days if you’re just a little over, bit will sell immediately if you’re significantly past your limit). I asked him for good customers with a conservative portfolio if they ever will waive a margin call or increase their loaned %, and it turns out that its actually a law how much they can allow people to buy on credit (so short answer, no).

In the end I was happy to have my understanding of the margin account challenged (and happy that it was a problem on their end and not in my understanding). I learned some new things about my account, which is always a good thing.

Categories
Money

Will There Be A Second Stimulus Check In 2009?

The question all Americans want to know is whether they will receive a late Christmas present this year in the form of a 2nd economic stimulus check.

In 2008 the government sent out economic stimulus checks to 130 million Americans with the idea that this money would be spent on consumer goods and services thereby stimulating the economy. While the program was considered a success by some – it didn’t prevent the economy from slowing down into a recession with the possibility of a depression.

President-elect Obama has proposed an economic stimulus package for 2009 which will total almost 1 trillion dollars – or about $3300 for every single American.

Second economic stimulus check

So far there has been no mention of any stimulus checks (like in 2008) however that doesn’t mean it won’t happen. Nothing has been approved or finalized so it is still possible. If a second economic stimulus check is going to happen in 2009 it would be more likely to appear later in the year if it looks like the initial stimulus efforts are not doing enough to get the economy going.

Stimulus tax cuts

Obama has proposed stimulus tax cuts of $1,000 for couples and $500 for individuals. If this passes, it might be the closest thing to an actual stimulus check that most Americans will receive in 2009. This kind of stimulus is not as much fun as getting a large check all at once since it would take the form of reduced withholding taxes on regular paychecks. However, in the end – extra money is extra money.

Emergency Energy rebate

One of the more controversial initiatives is an energy relief plan to help Americans pay their energy bills this winter. The $1,000 emergency energy rebate would be given directly to Americans and would be paid for by windfall profit taxes on the large oil companies.
This particular initiative might not have much of a chance given that with the rapidly dropping price of oil, home heating costs are going to be a lot lower than initially predicted as recently as a couple of months ago.

Infrastructure stimulus spending

The Obama stimulus plan is calling for a huge investment in roads and bridges and mass transit improvements. This will total $850 billion over 2 years. This portion of the plan is the main driver behind the goal to create 2.5 million jobs over 2 years.

$250 stimulus check for select groups

There will be a $250 stimulus check for select groups.

Categories
Announcements

Couple O’Links

Green Panda Treehouse financial blog put together a pretty good list of “best of” posts from 2008. I submitted Mr. Cheap’s post “How to increase the odds of getting anything you want” and it was selected as an editor’s pick. This post was one of the most popular posts on this blog ever.

Saving to Invest put together a “Down Under” version of the Carnival of Personal Finance.  This blog is pretty good and worth checking out.

Categories
Personal Finance

Merry Christmas and Happy Holidays from Mike and Mr. Cheap!

We hope everyone out there has a great holiday and a Happy New Year.

Just to let you know, the posting will be somewhere between non-existent to sporadic until Jan 5.   A few items will be up but they might be old posts.

If you didn’t check out Mr. Cheap’s very funny Last Minute Cheap Gift Guide then please do so. I suspect that some of you probably thought they were real suggestions (from the title). It’s worth a read.

Another great post of Mr. Cheap’s called Christian Owner has seen a lot of good comments – feel free to check out or join the conversation.

Categories
Announcements

LinkStuff for Dec 22 week

Weight

180.0 – holding steady.  Ran 3 times last week which I was pretty pleased with.

Rest of the links

Mr. Cheap’s excellent post called “Christian Owner” got an editor’s pick over at the latest carnival of personal finance which was held at Saving to Invest.  The carnival has an Australian theme which I rather liked having spent a bit of time in Oz.

Million Dollar Journey has 150 ways to save money over the holidays.  (The best suggestion was mine)  🙂

Preet gives an example of how chasing returns damages wealth.

Financial Blogger actually found something positive about Manulife Income Plus.

Cash Money Life wrote about the SEP IRA – Simplified employee pension plan.  This is sort of the American equivalent to the Canadian RPP.

Money Ning wants you to read this before buying yourself a Christmas gift.

Squawkfox explains how to write a killer resume.

Blunt Money has a quiz to find out how frugal you are.

Canadian Capitalist reports on the smartest guys in the room.

The Intelligent Speculator gives a hedge fund report.

Clever Dude says you should get renter’s insurance.

Investing School has 9 terrific investing websites that are sure to suck up your time.

ABCs of Investing wrote about MERs and Index funds vs ETFs.

Carnivals

The Frugal Duchess hosted the Carnival of Personal Finance.

Carnival of Financial Planning was held at the Skilled Investor.