Cameron Passmore CIM, FMA, FCSI

Portfolio Manager

Benjamin Felix MBA, CFA, CFP

Associate Portfolio Manager
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The TFSA Is a Give-away, But It’s Not a Toy

How often does anyone, especially the government, give you something for nothing? Canada’s Tax-Free Savings Account, or TFSA, is the rare exception. Introduced in 2009, your TFSA lets you save and invest after-tax assets that then grow tax-free. Both the principal and earnings also remain tax-free upon withdrawal. The government even throws in more “room” each year for you to add more – currently up to $5,500/year.  

It’s a sweet deal, for sure. But too often, I see people using their TFSA like it’s a toy instead of as the incredibly powerful financial tool it can be.


The wishful thinking goes something like this: “If I use my TFSA to ‘play the market’ and I happen to win big, it’ll all be tax-free. Yippee!” But as I explain in today’s video, there are important reasons you are far more likely to lose out on important tax savings than you are to hit pay dirt by turning your TFSA into a fanciful playground.

Bottom line, the essential laws of Common Sense Investing still apply in your TFSA, just as they do in any other financial account you may hold. Would you like to keep those essentials coming your way? Be sure to subscribe here and click on the bell.

By: Ben Felix | 0 comments

Bond Index Funds in Rising-Rate Environments

In past videos, I’ve been covering the benefits of using passively managed index funds for your stock/equity investing. But what about bonds/fixed income? Since interest rates essentially have nowhere to go but up, could an active manager protect you from eventually falling prices?

Here’s the short answer: For stocks and bonds alike, we recommend a low-cost index approach over active attempts to react to an unknowable future. As a Common Sense Investing fan, though, you might want to know more about why this is so.


Think of it this way: If the markets were a three-ring circus (which they sometimes are!), stocks are your high wire acts of daring. Bonds are more like your wise old elephants. When you hear scare-stories about rising rates leading to plummeting yields, first, remember, a sturdy bond portfolio shouldn’t have that far to move to begin with. Second, despite the label “passive,” bond index funds don’t just sit there when rates change. They’ve got a balancing act of their own, but it’s based on patient persistence instead of a bunch of clowning around.

Want to keep your Common Sense Investing act in the center ring? Subscribe here, click on the bell, and the show will go on.

By: Ben Felix | 0 comments