***OT***
Further to this RRSP content discussion:
1. My 20% book value investment has more the doubled over the last 3 years to become 45+% of my 'market value'. My broker told me that present value has nothing to do with foreign content value.
Result: With the much stronger growth of my foreign content stocks, I would not be surprised to end up 10 years from now having my foreign content be 90% of my 'market value' while being only 20% of the book value.
2. When I changed brokers my foreign content was evaluated based on market value. This put me over my foreign content 20% figure. I had the new broker re-establish the original book value by having them contact my previous broker. No problem.
3. I personally believe that the US stocks are going to outdo the Canadian so recently I have gone beyond by 20% limit and I am ready to pay the 1% per month penalty on excess foreign content betting on the notion that my returns will be much greater. If this works out I may go 100% foreign in the future.
Note that if I contribute 100,000 totally into US stocks then the penalty = .01 x 80,000 = 800 per month or 9,600 per year.
If the return on the 80,000 is 25% (80,000 x .25 = 20,000. Net income = 20,000 - 9,600 = 10,400. A 10,400 return on 80,000 works out to be 13%.
If the the 80,000 continued to grow to 1mil, you would still only pay on the book value of 80,000 = 9,600.
The question than becomes will the Dow/Naz give you twice the results of TSE. My Dell stocks have gone up 500+% in 19 months. Will it continue????????? Where is the best place to put my money to get the greatest return. That is the question. This is not a recommendation in any way, but simply a description of an approach I am starting to take.
Any thoughts would be welcome.
JimB |
