A few questions about investing...

[Jim Rome99]

I had all my money in a RBC money market fund but I didn't even get 1% return on it for 2009. Last week I opened a RBC Direct Investing account but I have a few questions before I start making trades.

All my money is in a RSP account - can I only buy Canadian stocks?

I'd like to buy COS.UN, which is the Canadian Oil Sands Trust. Is this an income trust? Is it eligible for use with an RSP account?

[Konj]

Most likely it is not a trust company it just contains "trust" in its name (its most likely a corporation).

To my knowledge, majority of companies that were established as "trusts" were reclassified as corporations (sometime after year 2000) because they were used for avoiding taxes. Some companies still keep "trust" in their name.

[Jim Rome99]

So what, investing in corporations is not allowed with a RSP account? I can't buy stock in say, Suncor?

[Konj]

I believe by RSP you are referring to RRSP? If you have funds accumulated in RRSP then yes you can buy stocks and the capital gains are accumulated tax free. However, once you start withdrawing money out of the RRSP (when you retire for example) then that amount is considered as "income" and you are taxed on that amount based on what tax bracket you are in.

[Konj]

I should also tell you that RRSP contributions are tax deductible and there is a set limit of RRSP deductions that you can make each year.

[broken_legs]

Originally posted by Jim Rome99
I had all my money in a RBC money market fund but I didn't even get 1% return on it for 2009. Last week I opened a RBC Direct Investing account but I have a few questions before I start making trades.

All my money is in a RSP account - can I only buy Canadian stocks?

I'd like to buy COS.UN, which is the Canadian Oil Sands Trust. Is this an income trust? Is it eligible for use with an RSP account?

MM funds will do that. They are like a cash equivalent. A short term, ultra low risk investment that you can cash in anytime. For that ultra low risk, you get zilch for return.

From your RRSP you should be able to invest in:
Canadian & US Stocks
Can & US Bonds
Can & US mutual funds.
ETFs

Basically everything. If the only options you seem to have are RBC brand funds, you need a real trading account and you can buy any mutual find there is. Most bank funds suck and they try to get your money that way.

Also, you wont be able to open a margin account which means you cant short or trade options in your RRSP.


Edit: Don't invest in US MM funds.
1.) Currency risk > appreciation potential
2.) They recently changed the regulations in the US to suspend MM redemptions in case of "Unusual market circumstances"

The whole point of an MM is that its a cash equivalent, if you cant cash it in on a moments notice, there is no point.