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Question re investing via bank manager vs Questrade

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Deal Addict
May 7, 2006
2373 posts
149 upvotes
Toronto

Question re investing via bank manager vs Questrade

I recently started wondering whether it's better for me to deal with Questrade vs a bank manager.

Reason is:

I deal with an RBC bank manager who seemed to only have a general knowledge of the funds being offered and she and I each chose a fund, but the one I bought ended up having 31% gains vs her measly 5-6% gains. Also, once they're bought it seems like nothing is being done about them, no movement of the funds. Some are RRSPs and others are investment funds. And sometimes people go and you get new investment managers.

A TD manager said he would look out for my account if I bought precious metals funds.

I'm wondering whether it's better for me to deal with my own funds since I would have more of a vested interest in them. Also, I would be watching out for them.

I was thinking Questrade. What do you guys with experience recommend?
10 replies
Banned
Feb 17, 2007
3190 posts
203 upvotes
You can buy funds in the form of ETF's using Questrade.
You may also buy Mutual Funds; however, Questrade charges a fee of $9.99 per trade for Mutual Funds whereas other big brokers offer them for free.
So, if you were to go with Questrade, you should only focus on ETF's.

You can pick your own companies using Questrade. Bank investment accounts only allow you to hold mutual funds, and limited other securities.
A brokerage account such as Questrade can hold almost anything.
Deal Addict
May 7, 2006
2373 posts
149 upvotes
Toronto
ACC-Major wrote: You can buy funds in the form of ETF's using Questrade.
You may also buy Mutual Funds; however, Questrade charges a fee of $9.99 per trade for Mutual Funds whereas other big brokers offer them for free.
So, if you were to go with Questrade, you should only focus on ETF's.

You can pick your own companies using Questrade. Bank investment accounts only allow you to hold mutual funds, and limited other securities.
A brokerage account such as Questrade can hold almost anything.

How about RRSP and TFSA, does it matter who I use?
Banned
Feb 17, 2007
3190 posts
203 upvotes
aokec wrote: How about RRSP and TFSA, does it matter who I use?

Should be the same. If you want to take control of your finance, then fire your banker lol.
They are a horrible bunch. The funds they pick are usually those high fee low volatility funds which generates stable income for them.

However, I do agree with your banker that you might need to watch out for your aggressiveness in focusing on one field (gold mining fund?).
Deal Fanatic
Jul 1, 2007
8569 posts
1763 upvotes
I guess asinine questions get asinine responses.

First, you DO NOT time mutual funds. Neither you nor an advisor needs to "look out" for them and move money around for you. When you invest in one, you stick with it, unless something material happens to the fund, or the fund company. Maybe this bank manager isn't best advisor for you, if she has led you to believe otherwise. I guarantee you the TD manager isn't if he's suggesting you buy a precious metals fund and that he'll "look out for you". You should not be investing at all unless you at least have a basic financial plan and an investment strategy. You implement your plan via fund selection and a regular savings strategy. Then, don't f'n touch it! The more you tinker with it, the worse your long-term return will be, I guarantee this.

Second, fund selection has nothing to do with picking "good" funds and "bad" funds. You pick the funds that are appropriate for your risk tolerance, first off, and you choose the mixture that gives you proper diversification. That bank manager may have chosen a fund for you that offered you the diversification you needed and it was just happenstance that a fund you selected performed better. Maybe it was a boring bond fund. Maybe it was a global equity fund, because your fund picks were all high performing Canadian equity funds. This does not make her decisions wrong for you; she protected your portfolio from losing money, had other circumstances occurred (ie: what if resources all of a sudden got very cheap and the world started demanding a lot of high tech and finished goods?).

Lastly, don't become the "average" self directed investor, like ACC Major. Through over-tinkering and emotional investing you will guarantee yourself a long term average return no more than the average T-bill rate. Just buy, hold, buy more.
Money Smarts Blog wrote: I agree with the previous posters, especially Thalo. {And} Thalo's advice is spot on.
Banned
Feb 17, 2007
3190 posts
203 upvotes
Thalo wrote: Lastly, don't become the "average" self directed investor, like ACC Major. Through over-tinkering and emotional investing you will guarantee yourself a long term average return no more than the average T-bill rate.
I have to agree on this part. Friends asked me about Self Directed Investing and which broker to use, my responses are usually telling them not to get started. They will turn themselves into speculators or worse, gamblers. I have seem it happen numerous times. I always recommend traditional index funds, but I don't use them, because my track record beat indices by a large margin. I don't know if it will continue, but I will stick to what I love.
Thalo wrote: Just buy, hold, buy more.

Dangerous move my friend.
You buy good companies at reasonable prices (sometimes I am willing to pay a little premium) and hold them unless their underlining fundamentals start deteriorating. And yes, you buy more of the good companies.

Average self directed investors do under perform the indices, or worse T-bills, or worst under water for prolonged period of time. I know a couple of them who gambled and significantly underwater thanks to the tech bubble and recession.
Deal Addict
Mar 10, 2010
1595 posts
589 upvotes
Perhaps Thalo was referring to a broader market funds like a typical balanced mutual fund or an index fund. In which case buy, hold, and then buy more does work as the fund/index itself will get rid of the poor-performers. For single stock picks though, I wouldn't follow that.
Deal Fanatic
Jul 1, 2007
8569 posts
1763 upvotes
ACC-Major wrote: I have to agree on this part. Friends asked me about Self Directed Investing and which broker to use, my responses are usually telling them not to get started. They will turn themselves into speculators or worse, gamblers. I have seem it happen numerous times. I always recommend traditional index funds, but I don't use them, because my track record beat indices by a large margin. I don't know if it will continue, but I will stick to what I love.



Dangerous move my friend.
You buy good companies at reasonable prices (sometimes I am willing to pay a little premium) and hold them unless their underlining fundamentals start deteriorating. And yes, you buy more of the good companies.

Average self directed investors do under perform the indices, or worse T-bills, or worst under water for prolonged period of time. I know a couple of them who gambled and significantly underwater thanks to the tech bubble and recession.

Individual stocks are another thing entirely, that inexperienced investors shouldn't touch with a ten foot pole. This is why mutual funds (and by extension index funds, ETFs, etc) were invented. There are a lot of good companies out there that you can buy and hold long term, but do you have sufficient money that you can diversify enough to avoid being overly exposed such great stalwarts as Eastman Kodak, Polaroid, GM, Pan-Am, etc? Most individual investors do not and should stick to mutual funds.

Maybe I unfairly classify you as the "average investor", ACC, as I have no idea what your track record and specific strategies are, but I'll leave it up to you to prove me wrong.
Money Smarts Blog wrote: I agree with the previous posters, especially Thalo. {And} Thalo's advice is spot on.
Deal Addict
May 7, 2006
2373 posts
149 upvotes
Toronto
I got a call from my RBC bank manager about buying RRSP's, and she seemed aggressive in wanting me to book a date for an appointment. But she never calls me for anything else, and never updates me on anything or even touches the fund once it gets purchased.

Should I just buy my own Questrade RRSP's seeing that I don't get much advice from her anyways regarding funds?

Might be better for me to buy a couple stocks that are relatively stable long term, don't you think? (that ends up being a mutual fund in itself)
Deal Fanatic
Jul 1, 2007
8569 posts
1763 upvotes
aokec wrote: I got a call from my RBC bank manager about buying RRSP's, and she seemed aggressive in wanting me to book a date for an appointment. But she never calls me for anything else, and never updates me on anything or even touches the fund once it gets purchased.

Should I just buy my own Questrade RRSP's seeing that I don't get much advice from her anyways regarding funds?

Might be better for me to buy a couple stocks that are relatively stable long term, don't you think? (that ends up being a mutual fund in itself)

Why should the fund be "touched" after it's purchased? Apart from investing money regularly, which is precisely what you should be doing during the wealth accumulation stage of your life, what other advice or "updates" do you need?
Money Smarts Blog wrote: I agree with the previous posters, especially Thalo. {And} Thalo's advice is spot on.
Deal Addict
May 7, 2006
2373 posts
149 upvotes
Toronto
Thalo wrote: Why should the fund be "touched" after it's purchased? Apart from investing money regularly, which is precisely what you should be doing during the wealth accumulation stage of your life, what other advice or "updates" do you need?

The bank manager skims off a good cut of the sale. Versus Questrade which charges $5. My bank manager doesn't provide much advice other than general advice. I could buy mutual funds off Questrade.

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