Another 3 months have gone by, so it’s time to report on our DIY Portfolio progress. As usual, expect our next update in about 12 weeks.
You can have a look at previous portfolio updates here:
All Portfolio Updates
Portfolio Update August 2018
Portfolio Update November 2018
Portfolio Update February 2019
Portfolio Update May 2019
Portfolio Update August 2019
Portfolio Update November 2019
Portfolio Update February 2020
Portfolio Update May 2020
Portfolio Update August 2020
Portfolio Update November 2020
On the human scope of things, those last few months have been rocky to say the least. Yet we all were lucky because events could have been even harsher, disasters were and are still just at our corner. Let’s hope for all our sake that things will get better now that the wolf is out of the sheepfold.
The air already feels fresher as common sense, cooperation and decency are getting back to the forefronts. Let’s hope most conservative Americans can wake up and really see the benefits of being kind to each other and sticking together.
Investing-wise, it has been smooth sailing, at least for us. We’ll briefly report on it next. Our main topic today will be to talk about our adventures withdrawing from our big banks RESPs. We’ll conclude with another quick review of our latest DIY Portfolio transactions.
Once more, I’ll remind you that I am not an investment or tax professional of any kind. The intent of this blog is not to give specific investing advice. Before investing yourself, we suggest you do all necessary research and consult a licensed financial professional if need be.
Still Going Strong
As always, we manage to stay patient thru all this. Markets and our morale were up and down (or maybe down and up) all last year. Our DIY Portfolio finally did quite well in 2020 with an overall return just under 15%, so our long-term average climbed a little to about 13%.
DIY Portfolio for that matter. We can’t predict what exactly will happen next but are confident our good average will persist in the long run.
We never truly know but things should get even better as the pandemic gradually gets out of our way. We are also eager to resume out visits south of the border and, after many of our family members that we dearly miss, to give Mickey a big hug.
Big Banks RESP Woes
A couple months back, with our daughter entering college, it was time for RESP withdrawals. We had two old remaining RESP accounts with the big banks. Because of their somewhat small balance, we decided to get them out of the way and liquidated them first. We taught the process would be quite straightforward. Boy, were we wrong!
To preserve some of our privacy, we will not mention the real banks name here and call then Bank A et Bank B.
Bank A was the worst and an overall very bad customer service experience. It started with one hour on the phone just to book an appointment. After we finally got things going virtually, the Education Assistance Payment (EAP) was OK and transferred to our account within a couple days.
Getting our initial contributions reimbursed was another story. Because she had messed it up the first time around, the bank A lady called us back and we had to do the paperwork all over again. Almost 2 weeks after that, still no payment! It took a couple additional phone calls and a dozen emails to finally get in done. Someone else from the bank called us back and thanks to her, things got resolved. Luckily, we were not in a hurry to get our hands on that money because it took almost a month for a simple transaction that would normally be settled within a week. We know it was clearly written in the small prints of our original contract, but the 50$ plus tax withdrawal fee was also tough to swallow. Paying for bad service in never a good thing. No wonder we don’t have anything left with them. The even sadder truth is probably that other big banks are not much better and bad service is probably not that rare.
Booking an appointment with Bank B was much faster but they finally asked us to do the first transaction in person. Not the best idea in the middle of a pandemic. Especially with the young bank rep wearing no mask and no safety measure implemented in his office. On top of it, everything was finally settled by email and could have been done that way from the get-go. We also had to argue about the initial amounts possible to withdraw dealing with that unexperienced advisor. Their policy seems to always advise clients to only withdraw 5K$ per semester.
The correct advice should be to maximize Education Assistance Payments (EAP) while keeping the tax bill for the student as close as possible to zero. For fulltime students, there is a 5K$ EAP limit within the first 13 consecutive weeks of a qualifying program. Many so-called financial advisers seem to be misled by that rule and blindly apply it to limit EAP to 5K$ forever. They dismiss the fact there is no limit after the initial 13 weeks. It’s probably partially because it’s in their interest that you leave your money invested with them as long as possible.
In January 2021, she got another EAP that will be taxed in her hands but only on her 2021 tax report. Near the end of the year, we will adjust her last 2021 EAP according to how much she will have earned working, mostly during the summer.
Things still went much smoother with Bank B with everything being handled digitally after a rocky start.
We are glad those two RESP accounts are now liquidated. With retrospect, we should have transferred those two big banks RESP a while back. We initially opened Bank B RESP because Bank A took a very long getting RESP grant money to our account. We were still worried after we took the DIY route and kept those two accounts as a safety measure. It’s clear you often take bad decisions went you are afraid.
We know experiences can be very variable with big banks and hope yours remain much more pleasant and productive.
Limited Portfolio Transactions
Getting back to our DIY Portfolio management, as usual, transactions were somewhat limited in the last three months.
Taking advantage of market noise regarding a possible acquisition, we added to our position in Alimentation Couche-Tard (ATD.B) after it instantly went down by about 10%. We like long-term perspectives about Couche-Tard and are willing to be patient with it. But funny enough, it already turned out right as its price went back up in the following days.
The lone newcomer to our DIY Portfolio is Mastercard (MA). We also added more of Visa (V). By their nature, MA and V are kind of a mix between financial and technology stocks. They thrive with business now more and more digital. The pandemic accentuated that trend.
We continued to add to our position in Bell Canada (BCE). Similarly, we boosted our participation in Procter & Gamble (PG).
Metro (MRU) and Canadian National Railway (CNR) are next on our list for some more enhancement.