Live Smith Manoeuvre Example, July update
So far, I paid $15,32 in interest. As of this morning, I’m down by 1,25% in my investment account. This means I’m presently losing $51,91 ($15,32 in interest plus the loss on my mutual funds). There is nothing much to worry about as I am looking over a long term strategy and that 50 bucks won’t make much in my pockets right now!
Speaking of which, I am planning to make a little change in my portfolio in the next few months. I would like to purchase shares of Sprott Canadian Equity Fund but they start at $5,000 for the first dip. I’ll have to wait until November so I can have sufficient fund in my investment account. In the meantime, my investment strategy remains the same. $600 in the National Bank Dividend funds; low management fees and no load at all.
Keep you posted next month!
July 6th, 2007 at 4:49 am
You might want to consider just using the net amount of the interest in your calculation - ie subtract the tax rebate you will get next year.
Why don’t you put all the money in uranium stocks??
Mike
July 6th, 2007 at 8:16 am
Hi FP,
I’ll definitely consider the tax rebate at the end of the year. In the mean time, as I do not receive any cheques until the end of the year, I prefer to use the real cost of interest that affects my cash flow.
Funny remarks on uranium stock :-P. I already have Paladin (PDN.TO) in my regular portfolio. I tend to be more conservative when I leverage.
July 10th, 2007 at 10:56 pm
Hello FP,
Are you using capital structure funds, so you don’t have to pay capital gains taxes, when you switch funds?:wink:
July 11th, 2007 at 2:36 pm
Hi Brian,
Honestly, I do not know about capital structure funds. Would you mind elaborating on this?
It seems pretty interesting (any time I can save taxes, I’m in!).
Thx!
July 11th, 2007 at 3:58 pm
FB - capital structure or capital class funds have a slightly higher MER but they allow you to switch between different funds in the same structure without incurring a taxable event. I think most, if not all of the big mutual fund companies have them. Generally the class funds are the same funds as their regular products.
Mike
July 12th, 2007 at 2:48 am
FP, thx for the info!
So if I understand correctly, I pay more in MER to pay less taxes… seems like there is a cost of opportunity to consider!
Cheers,
FB.