Tag: trading

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Investing

Questrade Mutual Fund Fee Rebate And Free Transfer Offer

Questrade discount brokerage has just come out with a great way for retail mutual  fund owners to save on high management fees by offering to rebate up to 1% of those  fees.

What’s the deal with the Questrade mutual fund rebate?

Questrade will rebate up to 1% of the management fee for any mutual funds  held at Questrade.  This amount has to exceed $29.95 per month for the  investor to get any rebate.  This means that you need to have more than $36,000 in mutual funds before the rebate kicks in.

How is this possible?

When an investor buys a mutual fund from an advisor then the advisor is paid  a “trailer” each year which is based on the amount of the investment.   Typical trailers for equity mutual funds are 1%.  Bond and money market funds  will be lower.  The amount Questrade will rebate will be equal to the trailer  paid on the funds you owned.

The problem is for a do-it-yourself investor who wants to buy retail mutual  funds is that they can only buy them through an advisor or a discount  brokerage and they are charged for the trailer even if they don’t have an  advisor.  With this new program the investor will be able to save most of the trailer amount.

How much will it cost to transfer my mutual funds to Questrade?

If you transfer before March 2, 2009 from a different financial institution and transfer at least $25,000 then it will be  free of charge.

How much are mutual fund trading fees?

Questrade charges $9.95 per mutual fund trade.

I don’t have $36,000 – is it still worthwhile?

Depends on the situation – if you are close enough to $36k (ie $30k or more)  and will be buying more mutual funds then it might be worth doing even though  you won’t get the rebate for a while.  At the very least it won’t cost you  anything.

Another situation might be if you have some back-end funds that you don’t want to pay commissions on.  If you are planning to just buy low cost ETFs then you might consider moving the mutual funds to the same institution.

Where do I sign up?

Click on the banner below or on any of the links you see in the article.

I demand more information!

Check out my Questrade discount brokerage review and my Questrade referral promotion articles for more information.

Is it really cheaper to pay $10 per trade rather than get my advisor to do it for me?

Let’s look at an example – say you have $100k in mutual funds with an average mer of 2.5% and the only service you get from your “advisor” is he completes 12 trades per year for you “free of charge”.

With the advisor you will pay a total of $2,500 per year for the fund management, the advisor’s services and the 12 trades.

With Questrade you will get a rebate of $1,000 (approx) and you will pay $120 for the trading fees for a grand total of $1620 for the fund management and the 12 trades.

$2,500 (current fees) – $1620 (Questrade fees) = a savings of $880 per year.

Personally, I’d rather invest in passive index funds and ETFs which are way cheaper (also available at Questrade) but for anyone who wants to own retail mutual funds – this is a great deal.

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
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
Investing

Best Questrade Review 2020 – Plus $50 Free Promo Code

Who is Questrade?

Questrade discount brokerage is an independent (not owned by a bank) brokerage which has been in business since 1999.  Their office is in Toronto, but anyone who is a resident of Canada can trade with them.

Good things about Questrade

  • Cheap, cheap trades.  $4.95 trading fees for trades with 495 shares or less – maximum $9.95 fees for trades with more shares.  ETFs can be bought for free!
  • Ability to hold US$ in rrsp account.  If you sell a US$ security in a rrsp – almost every other broker charges 1% ore more to switch it to CDN$ and then another 1%+ to go back to US$.
  • Good trading platform.  I only used the free platform (Webtrader) and I really liked it.  It is very simple and doesn’t have all the bells and whistles that other platforms have.  Real time quotes is the only feature I need.
  • Excellent service.  I had no problems setting up accounts and doing trades, moving money etc.  They have an online chat function which I never used but apparently is pretty good.  I either phoned (very quick response) or sent email.  Both methods worked fine for me.
  • No account fees whatsoever.
  • Low balances. Minimum account balance to open an account is $1000 and you only need $250 to keep an account open.
  • All account types available.  Open, RRSP, RESP, RRIF – you name it, they have it.
  • Mutual funds – they will rebate up to 1% of the management fee back to the investor.  Read more about the Questrade mutual fund rebate.

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

Promo code to get $50

Get $50 in trading fees when you sign up with Questrade.  Click on the banner below to get started or use the code “dc988dd9” to get the free trading commissions.

More Questrade Info

How to buy an ETF or stock at Questrade

How to sell an ETF or stock at Questrade

Categories
Investing

Free Educational Stock Trading Videos

I recently found out about a company (INO) that offers free stock trading videos online.  While I’m not into active trading anymore (at one time I had a big interest in it), there are plenty of investors out there who love to trade stocks.

INO offers free online videos which are basically educational trading strategy lessons for someone who wants to trade stocks.  This particular link leads to four different videos by trading experts who give up some of their secrets.

First you go to an intro page where you must register to watch the videos – this involves a basic registration – no banking info or credit info is required.

The four videos available:

Market Wizard Insights – Jack Schwager explains the traits and behaviour patterns that supertraders have in common.

Applying Technical – 90 minute video – verteran market analyst John Murphy explains how he looks at the markets.

Five New Tools for Winners – Jake Bernstein is probably the most prolific writer and researcher of material for today’s individual trader.

The Art of Morphing – Every position is the right position when things go exactly as planned.  If not??

INO TV
Categories
Investing

Will A Big Canadian Bank Fail?

I have to admit that while I haven’t been bothered by the falling markets, today I found it a bit tough for some reason.  It seems like every day the market falls and if it’s only 1 or 2% then that is ok.  Well today the Canadian market fell 9%.  9%!!! That would be a bad year by itself and it was only one crappy trading day of many crappy trading days.  The worst part was the banks – they have been pummelled this year and today the big 5 went down by an average of almost 13%.  13%!!! Very depressing I thinks.

Now, I haven’t gone all anti-Bernstein or anything – I have no plans to sell any equities under any circumstance.  What my concern is now is will one of the big Canadian banks fail? Here are some things I’m worried about:

Canadian banks own bad US mortgages as well

Our banking system was recently named as the best in the world.  Our lending standards were much stricter than the US banks so everything should be ok?  The only problem is that from what I understand, the US banks got in trouble buying investments containing bad mortgages – it wasn’t necessarily all just from writing bad mortgages themselves.

The problem is that the Canadian banks also bought these same investments and have been slowly taking related writedowns all the while not talking about what their real exposure is.  These investments were enough to bring down some big US banks so why can’t they bring down a Canadian bank?  Yes, the Canadian banks have good business models so did Washington Mutual and Wachovia.  They had customers, lots of assets – a normal bank in other words – but they lost it all on the investment side.

A bad dividend trend

The thing that concerns me is that the US banks I mentioned all paid a dividend at one time.  When the stock went down the dividend yield went up…and up and up and up.  First there was a dividend cut and then the bank went out of business.

The dividend yields for the Canadian banks in order are:

  • BMO 8.4%
  • CIBC 7.3%
  • BNS 5.9%
  • Royal 5.6%
  • TD 5.4%

The ones that really stand out for me are BMO and CIBC – 7 or 8% dividends that don’t pay return of capital are too high.  Either they are mispriced or investors are expecting a dividend cut.  Now we haven’t seen the double digit dividend yields enjoyed by the US banks before they went belly up but the yield on BMO and CIBC has roughly doubled over the last year or so.

Summary

I really hope that none of the banks go under but I am concerned about it.  Can anyone please tell me that I’m wrong??

Categories
Investing

RBC Direct vs Questrade Discount Broker

As I mentioned last week, RBC Direct has a promotion going on where they will pay anyone 1% of assets moved to RBC Direct from another broker.  Since I am a huge fan of low-cost investing (and getting paid a rebate certainly lowers the costs!) I was pretty excited about this deal since it appears to be free money.

Will I save money by moving to RBC Direct?

At first, it seems obvious that getting a 1% rebate for moving to RBC should be quite profitable for anyone but the problem is that the trading fees are more expensive at RBC than at Questrade.  Questrade charges $4.95 for all trades whereas RBC charges $28.95 per trade for investors with less than $100,000 in assets (calculated by household) and $9.95 per trade if the household assets are more than $100,000.  Regardless of how much you have in assets, the difference from higher trading fees at RBC will reduce the benefit from the 1% rebate.

The factors to consider when thinking about this move are as follows:

  • How much moola do you have?  There is a huge difference in the trading costs at RBC if you have more or less than $100k.
  • How long will you stay at RBC – if you have $100k and receive a rebate of $1,000 but you stay with RBC for the next 40 years then you have probably paid a lot more in trading costs.
  • How active a trader are you?  If you don’t trade much then the different trading fees are not as relevant.

My analysis

I did some playing around on a spreadsheet to try to determine how much money you need to have to make the move to RBC worthwhile.   Since most readers never look at the spreadsheets (I don’t blame you), I decided to put the detailed commentary in the spreadsheet itself and keep the general conclusions in the post.

My recommendations

I would recommend that you don’t move to RBC unless you have the $100k (or very close to it) necessary to qualify for the lower trade costs.  As I’ve shown in the spreadsheet, it is very possible for someone with less than $100k to move to RBC, collect the rebate and then move to Questrade but the problem is that if you don’t move the account from RBC within a reasonable amount of time then the whole procedure will end up costing you money.   If you are an active trader then even $100k won’t be enough – plug in your own number in my spreadsheet (or your own) to see if it is worthwhile.

My second recommendation is that if you do the move – once the rebate is paid then you should take a new look at your investing costs and act appropriately.  If you are really happy with RBC then you might choose to stay there but if low costs are your primary concern (like me!) then you should consider moving to Questrade as soon as possible to get the lowest commissions.

And one more thing

Another thing to keep in mind is that RBC ran this promotion before in 2006.  I can’t guarantee that they will do it again in a few years but it might be an idea to move the money from RBC after the rebate is paid in order to be eligible in case the 1% deal is offered again.

If you are planning to move back to Questrade then read about the Returning to Questrade deal on transfer fees.