The Canadian Investor - Mailbag - Two TSX Venture stocks, niche ETFs, savings accounts and more!

Episode Date: October 4, 2021

In this episode of the Canadian Investor Podcast we do another installment of our mailbag episodes.  The topics discussed are: Difference between owning individual stocks or index funds Why topicus is listed on the TSX Venture and not the main exchange Difference between the different only brokers in Canada Just Kitchen and FLT Drove Delivery The difference between RRSP and TFSA Owning a niche ETF vs. a similar basket of stocks The best current rates on canadian High Interest Savings Accounts We ranked them based on how likely we would own them in our portfolios.  Tickets of stocks discussed: XIT.TO, FLT.V, JK.V, TOI.V https://thecanadianinvestorpodcast.com/ Canadian Investor Podcast Twitter: @cdn_investing Simon’s twitter: @Fiat_Iceberg Braden’s twitter: @BradoCapital See omnystudio.com/listener for privacy information.

Welcome back into the show. This is the Canadian Investor Podcast, made possible by our friends and show sponsor, EQ Bank, which helps Canadians make bank with high interest and no fees on everyday banking. We also love their savings and investment products like GICs, which offer some of the best rates on the market. I personally, and I know Simone as well, is using the GICs, which offer some of the best rates on the market. I personally, and I know Simone as well, is using the GICs on a regular basis to set money aside for personal income taxes in April of every year. Their GICs are perfect because the interest rate is guaranteed, and I know I won't be able to touch that money until I need it for tax time. Whether you're looking to set some money aside for a rainy day or a big purchase is

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Today, we are answering your questions. So thank you for those who have left questions on our new website, thecanadianinvestorpodcast.com. My name is Brayden Dennis out of Toronto, Simon Belanger out of Ottawa. Simon, let's get right into it. We have so many questions to answer today. Do you want to kick it off with our first one of the day? Yeah, sure do. So the first question we have is from Eric. Hey guys, love the show. Question for you too. if you wanted to add a canadian technology plate but didn't have enough budget to buy constellation would you buy an exchange traded fund like xit or basket

the stocks it holds like shopify open text topicus jib.a which one is that cgi that's cgi it trips me up too i get that that. Yeah, yeah. I'll take this one. So we've discussed this a couple of times now and it's a reasonable question. So, and it's a popular one. So let's chat about it again. XIT by iShares, the ETF provider, who by the way, that provider is owned by BlackRock. So BlackRock and iShares, I say them interchangeably, they're the same thing. BlackRock, which is actually listed on the New York Stock Exchange as well, ticker BLK. Okay, so this exchange traded fund, XIT, it covers the Canadian Tech, like Information Technology Capped ETF, I think is what it's called. Regardless, it has a very high concentration in the following names.

So these are the top 10, which makes up 97% of the portfolio. These are the top 10 names. Shopify, Constellation Software, CGI, or Gibb, OpenText, Lightspeed, Descartes, BlackRock, BlackBerry, not BlackRock, Kinaxis, Enchouse, and Die and Durham. Okay, so those are the top 10 names. Now, since its market cap weighted, this means that the largest companies in this ETF make up a very high percentage of this exchange traded fund. And what this makes up is that 50%, a whopping 50% of this ETF is held just in Shopify and Constellation at basically 25% each. If you include the next two, you're at 83% of the ETF in four names, Shopify, Constellation, CGI, OpenText, and Lightspeed. So five names, my apologies. 83% is in five names. So the short answer is if you want exposure to

these five stocks with a few others sprinkled in there in small amounts, like 2% here, 2% there, then go for it. But personally, from my perspective, I would prefer to own them individually, given that it's not really a diversified ETF. It's basically five companies in the whole and making up most of the index here. I would prefer to own it even if it's just like one share each. I'd prefer to own them on their own. I get it. A share of Shopify is a few thousand bucks. A share of Constellation is a few thousand bucks. I would rather save up for those one share and, you know, kind of build the basket of the ones that I want and not pay this 0.61% management fee that the ETF provider charges. What do you think on this one, Simon? Yeah, I think it's probably best to own the companies if you can afford it. And I'm

gonna just contradict you a little bit just because I know we have people listening that can only save a couple hundred dollars a month or even less. And for those people, you know, just owning one share of Shopify or Consolation could like take just a year to buy one share. So for someone like that, I'd probably say the ETF makes a bit more sense. On the other hand, there's a couple of providers in Canada for direct brokerages that do fractional shares. And I'll be talking about that a bit later on in the questions that we have, because we have a question regarding web brokers. So if you want to be able to buy fractional shares, one of those providers, one of them is Wealthsimple and the other one, I'll talk a bit later. So that's another option,

which would allow you to not get the ETF, do what like Brayden is saying without having that much money to invest in them. Yeah, this is a useful discussion actually, because you bring up a good point, right? Is it is difficult for many to save up for just one share of something that trades for a few thousand dollars? What does a share of Amazon trade for like 3,500 US dollars? I get that. That's difficult. So then if I say, okay, I hear what you're saying there, but why would I own this XIT over like the NASDAQ 100 QQQ? like the NASDAQ 100 QQQ. And I wouldn't be able to really justify that. And my counter answer to that is, if you want to own these Canadian ones, try to save up and own them individually. If you want to own a broad basket of technology stocks, just buy QQQ, which is the NASDAQ 100. It is very heavily weighted in technology. You're

going to get some other nice companies like Starbucks in there as well too, but I would prefer to just own the NASDAQ 100 and hold on to that instead of being exposed very heavily to just a few names in this ETF. It just doesn't really make sense to me to own this thing from really any perspective when I can just own the NASDAQ 100 for like 0.05%. Yeah, no, that's a really good point. And just to add to what you were saying, it's actually probably even more heavily weighted now in those top five names because Lightspeed has been on a tear since because the top 10 investment is as of april 30th 2021 so um like just reinforcing what you were

saying so it's probably even more uh concentrated in those five names but anyways a great question i know it's a question we get a lot and i'm like you, I probably would prefer the QQQ index ETF just because it just makes a little bit more sense. Yeah. Next question here from Seth. Hi guys. First off, just want to say how much I love the podcast. It's very helpful and informative to a beginner investor like myself. Thank you so much, Seth. We appreciate it. I've done a lot of research in the past six months into the stock market and how everything works. I came across something interesting I'd like to ask you guys about. If I want to start a portfolio for only dividend investing to compound my dividends and reinvest them, would it be best to do it in a TFSA or an RRSP. This is for long-term growth. No intentions to take it out

over the next 20 to 40 years. That's great. Unless maybe for a down payment on a house, just in case, he says. So what am I thinking here? Should I do an RRSP or a TFSA? Just curious on your thoughts. Thanks. Okay. Well, before I hand this one off to Simon, I just want to add a quick note before he talks about the specifics of RRSP and TFSA. Again, guys, this is not investment advice. We don't know the exact situation for you, but this is the way we're thinking about these accounts. So before I even get to that, about these accounts. So before I even get to that, let's discuss some hypotheticals. But you did mention here, quote, you have no intentions for touching it for 40 years.

Now, that's a nice long time horizon for an investment portfolio. Clearly, you're young enough that you have lots of years ahead of you. So good for you. That's wonderful. But I see here that you wrote only dividend investing. Only was one of the words that you mentioned. And let's just discuss this for a second, because you said 20 to 40 years, this long horizon and only dividend investing. Dividends are cool. Don't get me wrong. They're a great way for companies to reward shareholders, but let's take a step back and put yourself in the shoes of a CEO, or perhaps you are, you know, put yourself in the shoes as a company founder. You're running this big public company and you have capital allocation decisions. For a public company, you have basically five options with capital. You can invest in organic growth. That's the first option. And there are infinite

subsets of options within that to invest in organic growth. But we'll leave it there. Two, you can do mergers and acquisitions so you can buy new companies. So you could do that with your capital. Number three, you could pay down debt and show up the balance sheet. Number four, you could pay dividends as you discussed here. And number five, you can buy back your own stock. Those are basically the five capital allocation decisions from a high level that you have as a capital allocator of a company. number five, you can buy back your own stock. Those are basically the five capital allocation decisions from a high level that you have as a capital allocator of a company. Now, if you want to reward shareholders in the best way possible and ultimately drive the stock price for shareholders up in the future, you have to decide how you're going to deploy your company's cash into these

five options. Now, if you choose option four, which is in our case, pay a dividend, you can hypothetically still do the other four options, but you have now less cash to do so because you just paid a bunch to shareholders. Now, companies that are able to do option one, invest in organic growth opportunities, or option two, do acquisitions to grow their business at a higher rate of return, and they have better opportunities for doing that than paying you as a shareholder cash via a dividend, then they are, in my mind, completely irresponsible as a capital allocator to choose dividend first. Given that, these companies, it is actually very silly and worse for shareholders for them to pay a dividend. And the reason I bring this up to your core question is companies that you're investing in that you want to own for 10, 20, in this case, in your example, even 40 years, which is incredible to have that long runway, investing in only companies that pay a dividend, you might be putting yourself out of

companies with really long growth runways that are saying to shareholders, look, we have way better ability to make you money than pay a dividend. All right, so back to your core question. Personally, I utilize RRSPs to reduce my taxable income. That's why I'm using an RRSP. If I'm utilizing a TFSA, I'm maxing it out because there's basically a scenario where adding to a TFSA in your stock portfolio can't really ever be a bad idea. I mean, they just always are good. Now, to answer your question, utilize both. That's what I've done. I max out my TFSA first, and then I put the rest in an RRSP to reduce my taxable income. And then after that, if I max out my taxable contribution limit in the RRSP and the TFSA, I put some in a non-registered account.

Now, for me personally, I do not max out my TFSA, and I prefer to put it in a non-registered account once I've maxed out my TFSA. I don't want to max out an RRSP contribution because if I still have this long runway for growth, like you're talking about, if it compounds to say $2 million, Simon, it is going to be actually tax inefficient for me when I withdraw on it. Yeah, no. So that's a good point. So I'll just kind of build on that a little bit. So like you said, I'll just give you a high level of what to consider for RSPs or TFSA, whether you want to choose whichever vehicle or both, like Brayden said. So if you're solely focused on a dividend strategy, like you you mentioned and maybe you'll reconsider after what brayden

said then rsp is probably the way to go since um u.s stocks won't have a withholding tax canadian stocks won't as well but u.s stocks i'm thinking you'll probably have some dividend payers are in the u.s so that's the big advantage there if you you have a U.S. dividend payers in your TFSA, then a withholding tax of 15% will be applied when the U.S. dividend is paid out. You'll see it. So if ever you hold a U.S. dividend paying stock in your TFSA, when it pays the dividend, you'll see that it will say that there was a dividend tax withheld. You could use your RRSP for the first-time home buyer programs. Not sure if you've had a home before. You might be eligible for that. There is an argument to be made that your compounding base will be higher since you put the funds

pre-tax. So obviously your base is higher when it compounds. The TFSA on the other hand, I really love that vehicle because it gives you more flexibility. You can withdraw the funds whenever you want without being taxed since you've already been taxed. Obviously, it requires a bit more discipline because there's more flexibility, but because you're looking to invest for a long period of time, you have to make sure you kind of stick with it. There's more certainty because you've been taxed, no forced withdrawals when you hit 71, just like an RRSP. And I've said it before, I do prefer TFS in general over an RRSP. There's an argument to be made for an RRSP, especially if you're a higher earner. But even

if you're a higher earner, and that's my argument to people that really swear by RSPs. There is really no way of knowing where the tax rate will be. People project and think that it's going to be the same tax rate as it is today or similar tax rate. You have no way of knowing that. So you don't know whether it's going to be in 40 years from now. If you need to take money out before retirement for whatever reason, the taxation could be even higher than the tax credit you got since you'll still be working and keep in mind the minimum withdrawals like brayden kind of touched on a little bit can be really huge depending on your balance of the rsp when you hit 71 when you'll be forced to start withdrawing obviously you could

start withdrawing before that but just as to wrap your head around it, if you have a $1 million balance, which is actually not that much when you think about it, if you've been saving, especially in 40 years, think about, you know, inflation adjusted from now 1 million. Yeah. And the minimum distribution for that amount is $50,000. That's the minimum, obviously 2 million balance. It's a hundred K minimum distribution for that amount is $50,000. That's the minimum. Obviously, 2 million balance, it's 100K minimum distribution. And it goes up every year as you get older as well. So you don't have any control over that when you hit that age. Yes, there's always the income splitting part that you could do.

I won't touch on that. But again, you never know if you're going to have a spouse or not when you retire. These are all unknowns. And that's my big pet peeve with the RSP is there are so many unknown variables so far out in the future. And that's why I'm not the biggest fan of that vehicle. I mean, it may work for you and that's perfectly fine if you do research and you think that's the best option for you. But of course, I like the TFSA better because of that flexibility. Yeah, fair enough. And there are many cases if you are in a high tax bracket to utilize an RSP and it makes complete sense. I guess my short answer to this is you can't go wrong using your TFSA. It's just going to be overall a fantastic vehicle

and a great option for everyone, whereas RSP is very dependent on your situation. So from our perspective on the podcast, it's very easy for us to say, use your TFSA, max that baby out. It's only what, like 6,000 a year right now. So I think that that's a reasonable target for most. As do-it-yourself investors, we want to keep our fees low. That's why Simone and I have been using Questrade as our online broker for so many years now. Questrade is Canada's number one rated online broker by

MoneySense. And with them, you can buy all North American ETFs, not just a few select ones, all commission free so that you can choose the ETFs that you want. And they charge no annual RRSP or TFSA account fees. They have an award winning customer service team with real people that are ready to help if you have questions along the way. As a customer myself, I've been impressed with Questrade's customer service. Whenever I call or email, every support rep is very knowledgeable and they get exactly what I need done quickly. Switch for free today and keep more of your money. Visit questrade.com for details. That is questrade.com. Here on the show, we talk about companies with strong two-sided networks make for the best products. I'm going to spend this coming February and March in an Airbnb in South Florida for a combination of work and vacation and realized, hey, my place could be

a great Airbnb while I'm away. Since it's just going to be sitting empty, it could make some extra income. But there are still so many people who don't even think about hosting on Airbnb or think it's a lot of work to get started. But now it is easier than ever with Airbnb's Airbnb. your time away. Find a co-host at airbnb.ca forward slash host. That is airbnb.ca forward slash host. All right, Simon, you want to do the next one? Yeah, let's do it. So question from Joe. Hi, I'm a big fan of the podcast. Can you talk about FLT Drone Delivery Canada? Thanks, Joe. So I had a quick look into this one. I'd never heard of it before, I'll be honest. So at first glance, I'll be honest, I really don't like what I see. I went on their investor relation website. It's really focused on what looks like a lot of stock promotion,

which is not surprising for a venture stock. I would almost say that I'm more surprised than not when it's actually looks like a legit IR website versus more of a stock promotion. I had a look at their financials. Obviously, I couldn't access them through their investor relations website. I had to go on CDAR. And that's another sign. I find more transparent businesses will usually have links to regulatory filings directly on their investor relations website so that's just little signs you can see just like that they had 213 000 of revenues

for the first six months of 2021 and an 8.3 million loss all that while having 229 million in market cap they also burned 6.3 million in cash during the first two quarters. So when you're looking at the cash flow, their share count increased 25% to 223 million shares from June 2020 to June 2021. So that's pretty high. And for me, like, to be honest, it's just very risky. You know, they may have i haven't listened to any of their calls or anything like that i'm sure they'll mention like the total

addressable market how it's big and blah blah blah i mean that's all nice and dandy but uh you know amazon is also in the business of testing these drones out and doing delivery so there's also some massive players with deep pockets um yeah i yeah personally i would just not touch that with a 10-foot pole but you know i know these uh low price well let's just say these uh low price per share um not this is a high valuation so let's not get that confused but the low price per share i think this one's under a dollar i know they can be very attractive at first glance but be very careful when looking at these penny stocks that's my main advice to people if you're still interested in investing in penny

stocks like just make sure you turn every single rock before you make a decision of investing in them yeah well put i like how you brought up that some of these venture stocks that just ring the alarm bells of sketchiness, you can't find their financials on their investor relations and they purposely go out of their way to make you have to go to CDAR to download their financials. Now, where there's smoke, there's some fire. And my God, if you are hiding your financials, but legally have to post them to CDAR, something's up. You obviously as a management team don't want people to be digging into them. They want to create friction and make people have to actually go use CDAR,

which is a terrible experience. CDAR is, oh God, like the front page of CDAR, you feel like you're in a time machine back to the nineties. But that's beside the point. So I like that you brought that up. If they don't post their financial statements on their IR website, I am not impressed. Okay, so this is a really simple answer from me. Hell to the no. When you buy stocks for the story and not the business, this is what happens. This company went public on the TSX venture at $1.60 in August of 2011, which Simon, that was over 10 years ago. I know that's scary. That was over 10 years ago. It trades for 99 cents today. They literally did nothing for nine years. It had expenses, like, you know, a hundred thousand dollars expenses and zero revenue. And I think the company finally generated, I think $265,000 in sales last year when I looked at their statements.

So what? They generated $265,000. This is probably in the range of what an average Canadian made on the value of their home last year, which is a whole other discussion. But to give you an idea of really, this is not a lot of money. Even if all of a sudden they start winning drone delivery contracts, which I'm skeptical to begin with, you will have lots of time to reassess and buy the stock when they're doing something worth paying attention to. So if you're interested in the business, you have some insight into it, you don't have to rush into this one. It's still small. So you're going to have lots of time to buy it if you want. Right now, it's got way too many flags. And when it comes to penny stocks, Simon,

I see this all the time. You'll get a stock pitch from a buddy, a friend, a family friend. Canadian Thanksgiving is coming up soon. So you'll be sure to get one at the Thanksgiving table, The Canadian Thanksgiving is coming up soon, so you'll be sure to get one at the Thanksgiving table, of course. Is Simon, I have a stock here. It trades for 26 cents. And if it can just go to 50, I double my money. And it's like, do you even know what the business does? Like, this is terrible stuff. So if you hear a pitch like that, just smile and wave.

Get on the alarm bells and just be cautious. Yeah, and remember this one, too. It may look cheap just to buy one share. This thing has a $220 million market cap. It's crazy. I know, and it trades for penny stock. It's got all the telltale signs of just sketchiness. Hey, you know what? Maybe it does well.

Maybe we're missing something, but this is not a new company. It went public in 2011. All right, moving on. Can you please take a look at JK on the venture? We got a lot of venture requests today, Simon. What's going on? Can you please take a look at JK on the venture? We got a lot of venture requests today, Simon. What's going on? Thanks for your work, guys.

Simon, what do you think? Yeah, so this one I had to look into a little more. I'd never, another one never heard of. So I did a little bit of research. I don't think it's another phase drive at first glance. They seem to have a bit more of a business. His question mentioned that he thinks it's a phase drive, right? Yeah, exactly. From what I can tell, Just Kitchen rents ghost kitchens for restaurants. What a ghost kitchen is, is when a restaurant basically only does delivery or takeout.

There's no actual dining experience. You can't sit down and eat. So typically they'll use apps and stuff like that. It's nothing new though. This is from personal experience back in 2011, I believe. The city of Ottawa came out with a new street food vending program. So you had food trucks that had to apply to get specific trucks and they were evaluated based on their menu and they wanted other stuff other than chip trucks. And a lot of them, part of the pitch, they had to say where they would be preparing their food because you cannot do that just at your home. It has to be a licensed kitchen. And a lot of them would actually rent space in these type of ghost kitchens to be able to prep the food and then head out on the road. So it's not a new concept, but it is something that's gaining more and more popularity,

especially with the pandemic, restaurants being closed, people still wanting to order. So I also listened to an interview of the founder on YouTube with the financial post, which was interesting. Although it's listed in Canada, most of its revenues are coming from Taiwan. So with 13 ghost kitchens there, they're looking to expand in Southeast Asia first and then to the US. Two thirds of their brands are their own in-house brands. So in other words, they are in the restaurant business. They also partnered with two Michelin star restaurants and some other brands, including TGI Fridays. They burned quite a bit of money, $6.2 million in cash for the first nine months of the year. They got proceeds from their IPO for $32 million earlier this year.

But because they burned so much cash, their cash is already down to 24 million they had 7.4 million in sales for the three quarters versus 712 K for the same period last year so yes revenue 10x during this period but I mean it's something it's a company to keep an eye on I would say if that's the type of business that you'd be interested in it's still very early has a market cap of about 125 million as we're recording it's still very small I'm not sure if there's really a mode behind that I don't know if like there's nothing in my mind that stops anyone else from doing this type of of model and at the end of the day, it'll probably just be a scale thing and trying to get the most business out of it. So if that's something people are interested in, make sure you

keep an eye on him. It's a recent IPO, so I wouldn't touch it right now. Maybe give it a year, see where it's at, especially since it's burning so much cash. you want to see if they will actually survive in a year or two. But I wouldn't call it a phase drive per se. And I do like they're not doing a bunch of verticals that are not related to each other. They seem to be focused on that one thing. This is a very legit business. It's just a very legit business that I want nothing to do with.

I mean, let's look at all the great companies out there today. They have scale and they have competitive advantages that make them durable and very difficult to repeat what they have done. repeat what they have done. It is very difficult for new competitors to take and disrupt the moat that the greatest companies on this planet have built. Ghost kitchens provide zero moat from my perspective. Unless I'm just blatantly missing something here, I don't see a real durable competitive advantage. It looks like a cool, unsexy business that just happens to be publicly traded. Yeah, I think it's almost like the kind of business you'd see on Dragon's Den. It's a nice little- It's cool. You're going to make some money. Exactly. That could become a nice little business, probably make someone a decent chunk and chain for like owner operator and maybe a small,

you know, not too big base of employees. But I'm like you said, I'm not sure if I see that becoming much, much bigger in the years to come, at least not without a lot of competition. Yeah, fair enough. What's the next one, Simon? So next one is a question from Paulul so hello i've been listening to your podcast for a while and loving it i'm currently using cibc investors edge to buy my stocks i was wondering if you would share what the best investing tool um in brackets company to use when investing i'm more interested in hearing what's good and bad about each. Thank you, Paul. So I did a little bit of research on this one just because just for myself, I'm definitely potentially looking at changing brokers.

It's nothing I'll do swiftly because it's a bit of a pain to switch, first of all, but it has to make sense. So I divided. There's a couple of things before I kind of go into the different brokers that you should consider when you're considering a broker. Commission fees, obviously that's a big component. Minimum balance fees, some platform will charge you every quarter if you don't have a certain balance or in some cases they'll waive it if you do a certain amount of trades there's other fees like withdrawal fees for RSPs lifts riffs so these are all things that you should have a look because some may have at first glance

low commission fees but some of the other fees that you might be using a bit more often may be higher so I divided them in three buckets once to avoid compared those that have competitive pricing but not the lowest pricing, and then the lowest pricing. Mostly based on fees, commission fees, so keep that in mind. The ones I would avoid because they're high fees, they're all $9.99 or $9.95. A trade is TD Direct Investing, Scotia iTrade, BMO Investor Line. And actually, I put RBC Direct Investing. No, I moved that one. Simon, I moved that one.

That one's $9.95. I don't think so. I think it's $6.00. I checked. I checked. It is. It goes down to like $6.95 if you're conducting more than like 150 trades in a month or something ridiculous.

Okay. That's why it's changing my nose. You're the culprit there. I pulled a fast one on you. Yeah. Okay. Perfect. No, that's fine. Then competitive pricing, but not the lowest in terms of commission. I would put Questrade here. It does offer free ETF buying and CIBC Investor Judge. So the one that Paul is using, but it does not offer free ETF buying. And then the lowest pricing. So I have three in that category and I full transparency. I'm sure I missed a few here. I think there's some smaller ones that I may not have mentioned, but these are the bigger ones. First one, we've talked about them before. Wealthsimple. they have free zero commission they also have fractional shares but

their interface is very basic and they definitely try to encourage people in trading so be careful with wealth simple especially um yeah just kind of they're also missing a lot of u.s tickers okay there you go and i had read that. I wasn't sure if it was still true, but there you go. That's another thing. The other one that's really interesting, we've talked about it maybe a month or two ago, or maybe a month, I think, National Bank for zero commission on stocks and ETF. They do charge commission on options trading, but we don't really do that ourselves. But people may be interested in that their platform at first glance looks decent but full disclosure i haven't tried it myself the last one and the one that personally i find very interesting is interactive brokers

this one has a low cost for me based on how many shares i buy would probably be a dollar or two per trade so they have kind of pricing for the amount of shares you buy would probably be a dollar or two per trade. So they have kind of pricing for the amount of shares you buy. There's a minimum of a dollar per trade and then a maximum fee of 0.5% of the total trade. Obviously, you'd need some pretty massive volumes to hit that 0.5%. I'm not yet there. The platform looks quite powerful, and it does offer fractional trading. So I didn't know that. When I went on their website, I actually noticed they offer fractional trading. So if the fractional trading is your thing, there's two really for you.

It's Wealthsimple or Interactive Brokers. But definitely look at some YouTube videos. Some people just kind of give an overview of what the platform look like oftentimes even the the services themselves will give a little quick tour of what it looks like make sure you like the feel but more importantly make sure you're aware of all the the fees i ranked them mostly on commission here but make sure you look at the other fees as well the minimum balance withdrawal, and things like that. Yeah, it all comes down to as a percentage of what you're investing. If it's exceeding 1% or 2%, then I'd look at trying to get lower pricing on your trades. And there's lots of competition out there. I mean, how many brokers did you just

list? And it's really in this fight to zero. So the ones that have innovated with the lower fees right out of the gate, I think that that's a good thing. When it comes to the big banks, I get it. It's helpful to have it connected to your bank. So maybe that's some upside. Helpful to have it connected to your bank. So maybe that's some upside. Some of them have nicer user interfaces than others. So I get all of that. The one thing that I would recommend is don't swap out a nice interface for actual features.

I think that that's a key, right? right at the end of the day yeah some of them look prettier than others but the ones that actually work give you the information you need quickly and don't have really any bugs those are the ones that you're going to want to go for even if it's uh not as pretty so that's that's my recommendation um but you you have so much option there's a lot of competition so yeah there's a few i didn't mention like i said like especially there i know desjardins quebec has one i know laurentian bank in quebec as well i'm assuming canadian western bank also has one but those are they're kind of smaller players in this space so do your research these are just some of the

main ones but uh what br Braden said definitely applies. So we'll go on to our next question. As do-it-yourself investors, we want to keep our fees low. That's why Simone and I have been using Questrade as our online broker for so many years now. Questrade is Canada's number one rated online broker by MoneySense. And with them, you can buy all North American ETFs, not just a few select ones, all commission free so that you can choose the ETFs that you want. And they charge no annual RRSP or TFSA account fees. They have an award winning customer service team with real people that are ready to help if you have questions

along the way. As a customer myself, I've been impressed with Questrade's customer service. Whenever I call or email, every support rep is very knowledgeable and they get exactly what I need done quickly. Switch for free today and keep more of your money. Visit questrade.com for details. That is questrade.com. That is questtrade.com. Here on the show, we talk about companies with strong two-sided networks make for the best products. I'm going to spend this coming February and March in an Airbnb in South Florida for a combination of work and vacation and realized, hey, my place could be a great Airbnb while I'm away. Since it's just going to be sitting empty, it could make some extra income. But there are still so many people who don't even think about hosting on Airbnb or think it's a lot of work to get

started. But now it is easier than ever with Airbnb's new co-host network. You can hire a local quality co-host to take care of your home and guests. It's a win-win since you make some extra money hosting on Airbnb, but can still focus on enjoying your time away. Find a co-host at airbnb.ca forward slash host. That is airbnb.ca forward slash host. That is airbnb.ca forward slash host. He says, hi, new to Stratosphere. Thanks for joining Stratosphere, by the way. Simon, you can see here, I got some nice new Stratosphere swag. So I got the quarter zip. I'm looking like a real dad out here. He says, I've been listening to the Canadian Investors Podcast for the past few months.

I'm from Quebec and not perfectly bilingual, so sorry in advance for my English. You're doing great, Philip. And I've seen you on the forums. Your English is great. Don't worry. I'm trying to find all the podcast talks about Topicus. My question is, I'm trying to understand why is Topicus on the TSX Venture? That's a great question. So for those who are not familiar with Topicus,

Topicus is ticker TOI on the Venture, so TOI.V. And really the simple answer is why is this thing listed on the TSX Venture? This is just my opinion. I haven't heard Mark talk about it much. I think his latest press release, he might have discussed it, so I'll have to go read that. But this is what I think. It's cheaper to list on the Venture, so that actually makes some sense. And it moves at pretty low volume, so they might not need the requirements of the bigger

exchanges topicus and consolation have legit like the most lethargic chill investor base so there's not a lot of volume moving the people that own shares buy and hold shares forever they don't trade them the insiders have a huge amount of ownership so that already affects the share count. Mark Leonard, the CEO of Constellation, not of Topicus, only lists Constellation on the TSX, for instance, because he has very little care for attracting new investors in the US and globally with a listing on the New York Stock Exchange, for instance. So when Mark decided he was going to spin off Topicus out of Constellation, I don't think he was really caring. I think he was looking at cost for the most part. He wants to treat the current investor base the best he possibly can, which is keep costs low, grow free cash flow per share, don't dilute the share count. Don't bid up the price by attracting new investors from new markets.

Make good acquisitions and compound the business over time. And that's how he lives his life as a shareholder and owner and operator. And that's exactly what he's done. So I don't think there's any real great reason beyond that from my perspective. I agree it is a bit silly the size of Topicus now trading on the venture now. So I could see the confusion of why it exists on the venture, but I wouldn't read too much into it to be honest with you. Yeah, I think you said it well. I mean, I wouldn't worry too much about a company like topicus which obviously

is backed by a major company that has a solid track record and mark lenner at the helm um i would tend to agree with braden on that it's probably for price on the one hand because it's cheaper to do it and on the other hand it's possible they just don't meet some of the requirements for the tsx yeah fair enough okay so now on a question from Matt. So, hey guys, great show. Keep going. We definitely plan on keep on going for at least a foreseeable future. Which platform are you suggesting for high interest savings account? A platform with the best rate, not only a promotional rate, needs to be safe to be safe thanks so this one was a pretty quick one to do for me I just did a bit of research took me about 10-15 minutes to find really the

best options that are there right now and of course like Matt just said I mean you have to be careful because some of them may look attractive you may see a 2.53 percent but then you look and it's like a three month rate type of deal and then it drops to like 0.25 percent so that's uh that's something to look out for so i did find uh three high interest savings account that offer 1.25 percent which is the highest rate on the market right now one of them i kept getting an error on the website haven't really heard of them, I kept getting an error on the website. I haven't really heard of them before, so I won't mention it. So anyways, that's just a side note. So that's why I did find three. So the other two, it's EQ Savings Plus account offering 1.25%. Like I mentioned, the other one is Motive Financial Savvy Savings account at 1.25% as well i have the this last one the motive one

i mean obviously any of these two is fine and there's some others that you'll be able to find that offer between one and 1.20 as well just make sure whenever you find a savings account that it is cdic insured so some of them um you might find some good rates but always double check with the cdic website that they are covered by them that's probably the biggest thing especially you're you're saying that you want it to be safe so that would be the the biggest thing to to look at here but right now there's really just two options eq bank i have heard very good things. I don't know about the other ones. And I personally have some experience moving some money into EQ Bank. They make it very frictionless. And I would say that I recommend it. I see you know the other one well. So both of them are CDIC insured. So go with the one that seems to have the least amount of friction for moving your money there.

Yeah, Motive is fine. Very basic interface. It's actually a division of Canadian Western Bank. So it's completely legitimate. I've been with them for a couple of years now. They've always, them and EQ seem to always have the best rates pretty much. So I don't think you can go wrong i would not be surprised that eq has a better interface overall the eq interface is slick and uh they've done well you know they're the only real pure play

digital bank in canada and so if you're a pure play digital bank, you better have a nice interface because that's all you have. You have no real property beyond that. All right. Question from Dale. Hey, guys. New to the show, but a big fan of the show and very new to investing. Thanks, Dale. My TFSA is maxed out and I have a sufficient emergency fund with no high interest debts in my life.

Dale, you're killing it, man. Good work. I plan on fully investing my TFSA, tax-free savings account, in a diversified index portfolio through dollar cost averaging, passively investing for the foreseeable future. Dale, you seem like a smart guy already so far. You're killing it. I am also opening a cash account on the side to take positions in some companies for the long term. I do not plan on utilizing the funds in my TFSA and just want them to grow for the next 25 to 30 years and beyond. Should I leave my TFSA invested entirely into index funds like ETFs and passively invest through dollar cost averaging? Or should I add some positions like individual companies within the account? I understand this may be totally subjective, but any insights would be

greatly appreciated. Thanks, Dale. We appreciate you, my dude. And you seem like a patient, level-headed investor already, even though you're new. So keep it up. Now, you cannot go wrong with the passive index strategy that you're planning to roll out here or potentially already rolling out. But again, if you want to have some great companies in there as well. I believe you can do both. Now that is a question we see often. And that's exactly what I did personally. You know, I host a podcast and I did that. You know, I had the index funds in some individual companies when I was like 18, 19 in my early twenties, as I gained more conviction as an investor and then in some of those broad-based index funds. And I had that as most of the portfolio as I learned more and more. Now,

luckily, I was smart enough to do that so I didn't make any silly investing mistakes when I was young. Now, fast forward to today, I'm 100% allocated into about 14 individual stocks because I do this full time, not just the podcast, but with Stratosphere. And I like to think, Simon, that I know at least a little bit of what I'm doing here. So I'm 100% allocated to 14 individual stocks that are great businesses. But there's no harm in doing both, which is index in diverse index funds with ETFs in a passive approach, but then also buying great companies and holding them. The key here for me is, are you going to actually hold them? Are you going to be trading a lot? Are you going to be tinkering around with your portfolio? them? Are you going to be trading a lot? Are you going to be tinkering around with your portfolio?

Hopefully not actively trading and thinking like a long-term owner, but you won't really know those answers until you start to know how you react. So maybe you buy a few companies, you realize this volatility, this just ain't for me owning individual stocks. I'm going back to the passive strategy. Then you'll know. So maybe you just got to try it out. But no matter what, they'll keep it up. Yeah, yeah, I think you put it well. So I'm going to build a bit on what Brayden said. So investing in the index fund is a great way to go.

You get that instant diversification, low fees, and you'll know that you'll match the benchmark because you're tracking it. To me, it really all comes down to the time you want to commit to investing. Picking individual companies, like Brayden said, does require more of a time commitment. You have to learn and understand the business. You have to keep track of the business and make sure that your investment thesis still applies over time. As a side note, I recommend writing it down when you start your position just so you can look back at it later on. It might not sound too bad if you have a few, but if you ever get to like 15 plus, it can be really hard to stay on top of them, especially if you have kids, you have family, you have like hobbies,

your regular job, trying to squeeze some time in there it's not always easy just from personal experience you also want to make sure that the business you invest in are actually doing better than the market because if you're not beating the market then really what's the point in picking your own stocks you can just do the index fund equal the market no work and then you just let it be and just kind of sit back and relax. At the end of the day, I think the biggest part is just knowing yourself. Personally, I do both. I recently reduced actually my stock holding because I found I didn't have enough time to stay on top of more than the 15 businesses I had.

So now if I'm just going on top of my head, I believe I have 11. But I know some people who have 25, 30, 40, 50 stocks. I mean, that's a lot of stocks to stay on top. And not only that, if you're getting like towards the top of that range 50. I mean, you can make a case that you're almost like mimicking like index returns at that point, because you're starting to have quite a few. So I think it all comes down knowing yourself. What do you want to do? Do you enjoy researching companies like we do? That's a big part of it too. Yeah, good point. If you own 50 stocks,

I mean the ROI on your time to keep track of that compared to what the returns will look like if you just owned QQQ, which is the NASDAQ 100. I'd be shocked if there's any value in really owning 50 individual securities. I don't see how that could ever be something worthwhile when you can just buy 100 with an index fund and never spend a single time looking at it, except for the times that you just continue to buy and continue to dollar cost average and just keep plugging away on the passive strategy. So I think that that's a good point you brought up, Simon. Yeah, and it can also be less stressful for people to have index funds, right? I think that's something we probably haven't talked a lot, but you'll feel the swings a lot more if you own individual stocks

just because you're less diversified might not be a bad thing you might have super strong conviction and hold what what is it brayden like 75 of your portfolio in constellation or i may i may it was on Constellation? It was a drawdown yesterday in the market. I may have thrown another $10,000 in Constellation software. Okay. Now, I'm just teasing, but it's also a personality trait. I know you wouldn't panic, but if you don't have that many stocks and then there's a big market correction, there's a chance that your stocks will correct even more than the market in general if you just had an index fund so keep that in mind as well these are all consideration you may not know yourself as well as we do when it comes to that and you won't know for sure until you do go through a 30 40 percent and then you know you just have to learn from that

too yeah well put thanks for listening so much, guys. We appreciate it. If you want to actually hear when we do these mailbag episodes, your actual voice played on the show, you go on the canadianinvestorpodcast.com. There's a button, there's a little microphone button. You can click on the side there, whether you're on the mobile version of the website or on the laptop version of the website, you can record something for us to play on the show. And we like doing one of those, you know, we've been doing them pretty much every quarter, every few months. And I think it's a great way for us to connect with you guys. But if you want to keep leaving emails, we'll do these style of

questions as well. No bad questions, Simon. There are no bad questions because whether you are a expert in investing and finance or you are brand new, everyone knows that no one was born an expert. Everyone had to figure this stuff out, whether through formal education or whether listening to podcasts like these ones, we live in the golden age of information, Simon, where you can really focus and hyperscale your learning in pretty much anything. And investing in finance is an extremely useful skill and one that is not taught in school, Simon I mean, like they still are not teaching this stuff. So we appreciate y'all for listening. If you go to stratosphereinvesting.com, you have two weeks to sign up for the pricing that is available right now before we raise them with the new launch.

Simon, how sexy is the new platform? It's nice, eh? with the new launch. Simon, how sexy is the new platform? It's nice, eh? Yeah, yeah. It looks like it's, you know, top of, how would I say that? Really high, like top of the end when it comes to technology,

really good interface and just had the cutting edge of technology. The cutting edge. That's the word I was looking for. I'm not even paying him for him to say that. It's cutting edge. Way better than, not that the other one was not good but i feel it's much more user friendly and much easier to use so i think that's probably the the biggest it was clunkier because you know we were not on

the the best cloud provider and stuff like that so but we're coming out with that new that new new. And if you listen to the podcast, you can use code TCI when buying a membership at Stratosphere. That is code TCI for 15% off. This really supports my company. So I really appreciate y'all. We will see you in a few days. Take care. Bye bye. The Canadian investor podcast should not be taken as investment or financial advice. Brayden and Simone may own securities or assets mentioned on this podcast. Always make sure to do your own research and due diligence before making investment or financial decisions.