But eventually, unless oil prices recover, they will bump up against the limits of these efforts, and they will have to cut their dividends. Wenn du deines Geldes zu Kapitalverlusten verlierst, kannst du nichts dagegen tun, ich kann es nicht gegen andere Gewinne beanspruchen. Banks judge an oil and gas company's health on the cash flow to debt ratio.
RSP Account Details
The tax will be withheld by IB at the time of the withdrawal. Gross amount of the RSP withdrawal will be included in the T4RSP slip, and will be counted towards the general income that one receives for the calendar year.
The beneficiary information is not applicable to customers who are residents of Quebec where such a designation can only be made by the deceased's last will and testament. For other provinces, beneficiaries could be either an individual or an entity. If applicant wants multiple beneficiaries, only individuals would be allowed.
No trading on margin - all purchases must be paid in full in respective currencies; No account debit allowed. For example, if a customer opens an RSP account on , the fees will be: Age restriction for the RSP account. Regular RSP — A customer can contribute cash and transfer qualified investments "in kind" from another registered plan account. The contributing spouse will get the tax deduction for the tax year while the owner will get the benefit of withdrawing at a potentially lower tax rate when they retire.
Maturity of Plans RSPs have a maturity no later than the end of the year in which the annuitant reaches 71 years of age. Annual Contribution Deadline Contributions can be made into the RSP account at any time during the calendar year or no later than 60 days after the end of the calendar year. Over-contribution to the plan Any contribution above the limit will be counted as excess contribution.
Withholding Taxes A withdrawal of funds from an RSP constitute a de-registration of the plan and is subject to withholding tax. Beneficiary Designation The beneficiary information is not applicable to customers who are residents of Quebec where such a designation can only be made by the deceased's last will and testament. Given that my portfolio has roughly 3 times as many U.
Therefore, I outperformed the benchmark in September. Each Premium Portfolio consist of about a dozen individual stocks. This is different from regular portfolios where the vast majority consist of ETFs. I still have a couple of thousand dollars worth of a penny stock in my TFSA, and the rest is invested in put options. I no longer hold XSB. Because of my penny stocks and put options, my TFSA's performance doesn't perfectly track Premium Portfolio 2, which went down by 2.
I will continue to hold penny stocks and options, but I'll hold them in my other accounts. Premium Portfolio 2 went down primarily because of its oil and gas stocks. That said, the oil and gas stocks in the premium portfolios have been hit harder than others for various reasons, which I don't want to get into right now. But for now, let me just say that I know those reasons and I have good reasons of my own for continuing to hold them. As an aside, Premium Portfolio 3 fared even worse and went down by 4.
As the riskiest model portfolio on this site, we should continue to expect the portfolio to move up and down by greater degree than the overall market. As a value investor, I normally like to buy stocks when they go down in price. However, in the past month, I bought some more put options on oil and gas companies, which basically amounted to betting against them.
For an easy explanation on put options, you can see my article on this here. In this article, I will explain why I've been making such a bet that seems contrary to my principles.
First, let me explain why I generally like to buy stocks that had fallen in value. This is why if you're a stock investor, you should pray for hail and locusts on the stock market, not sunshine and rainbows. Or on a more extreme case, let's imagine that this company begins to lose money every single year. In this case, you should avoid the stock no matter the price. To understand the health of Canadian oil and gas companies, we should first understand what their break-even costs are.
When I used to work as an oil and gas analyst, I found that some companies had very high break-even prices. Normally, investors give low valuations for such highly risky companies. But low stock prices wouldn't sit well with the management of such companies, since a huge portion of their pay is tied to the share price. So in order to legally inflate their share prices, many of them started paying dividends. These companies continued to pay dividends even through unprofitable periods by borrowing or by issuing more stocks.
By maintaining a consistent dividend, they attracted dividend investors who bid up their share prices. However, this strategy of inflating their share prices only work if their share prices hold up, since it gets much harder to issue new shares when share prices go down.
That's because when a stock price falls, it generally means that there are more sellers of the stock than buyers. If they issue more shares, they would add to the list of sellers, which would make share prices go down even more. Alternatively, these companies can borrow more money to pay their dividends, but that won't work for long in a low oil price environment either.
Banks judge an oil and gas company's health on the cash flow to debt ratio. In a low oil price environment, the cash flow would go down, pressuring that ratio. If they were to borrow to pay dividends, it would pressure that ratio even more.
Eventually, these companies would bump up against their debt limit and banks would refuse to lend them more.