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Technology Stocks : Nortel Networks (NT) -- Ignore unavailable to you. Want to Upgrade?

To: Don Beals who wrote (2025)	2/15/1999 6:47:00 PM
From: Stocker	Read Replies (2) \| Respond to of 14638

Re - What about converting RRSP money into Tbills and using margin to buy more foreign stocks on the outside? The problem there is that you set yourself up for a large capital gains bill down the road. Plus, you'll pay taxes on dividends and interest along the way. The money you pay in taxes won't be there to compound tax free in your RSP. Plus, what if interest rates go up in the future? You'd have falling stocks plus higher margin costs do deal with. What you guys could consider is US index funds that are 100% RSP eligible. Problem though is that you can't play specifically tech stocks etc. To me paying the 1% foreign content penalty isn't worth it over time. You'd be assuming that Canadian stocks will underperform the US by about 12% per year over the long term. Historically that hasn't happened and although I think the US will do better in the future, I don't think it will be by 12%. One thing you should look at doing is buying Canadian companies that do a lot of their business abroad. NT is a good example. Bombardier and ATI Tech are too. There are also lots of small companies that are focused on the US if you look around. I agree that the 20% limit is too low and I too have been searching for ways to get more foreign exposure in my RSP. I think that the growth in the US has been and will continue to be much more dynamic. The conditions are just much more favorable there (ie - lower taxes, less red tape, more high tech, access to capital etc.) Anyone else got any ideas???