TD Asset Management

   So, some personal news before I rant about dolla'-dolla'-bills.

   This morning, we had the scare of our lives when my eldest, Jacob (who is 3 years old), from what I can deduce; woke up out of bed around 5:30'ish this morning, put his boots on and unlocked the door, went out to our car, come back inside, took his boots off, and came into my bed and went to sleep...  This may seem quite trivial in text, but the scare of my life was realized this morning.  We're headed to buy some chain-locks for the doors and install them far, far, out of reach.  ...Anyways.

   I've done some more learning about the eServices service from TD, and just how it works.  I always through money was an instantaneous thing, like making transfers from account to account.  When buying index mutual funds, this is -not- the case.  I'm still not 100% sure of how long it takes, but this is a general idea.

   For information of my assumptions; TD Waterhouse HQ is located in Ontario, and follows their timezones.

   I put some money into my Tax Free Savings Account, and planned to purchase some Index Mutual Funds on Friday, directly after work (3:00 PM MST.)  I'm assuming that by the time I put the money into my account, got home to do the business of buying the stuff, and process everything, the TD Waterhouse eServices Discount Web Broker must've already finished its buys/sales for the day, or order processing.

   It wasn't until Wednesday that these transactions I'd made on Friday, showed up.  The order status goes from;

• Order Status: Open.  [I'm assuming this is to request a purchase.]
• Order Status: Filled.  [I'll also assume that this means that they've checked your account, you have enough funds, and they've bought what you've asked for.]
• Order Status: Closed.  [And finally it's to assume that this is the transfer of everything in to your possession.]

   Looks to me like 3 full business days are required to make a unit purchase of an Index Mutual Fund through TD's discount web broker.

   That was fun!  ...!  ...

   So, in total, I've bought three whole units.  TDB909, TDB902, and TDB 900

Action	Name	Qty	Price	Book Value	Market Value	Gain/Loss $	Gain/Loss %	% of Account
	Securities Cash Total Account Value			$300.23	$303.74   $8.00 $311.74	+$3.51	+1.17%	97.4%   2.6%
Buy|Sell	TD CDN INDX -E /NL'FRACTDB900	4.876	$20.72*	$100.00	$101.03	+$1.03	+1.03%	32.4%
	Average Cost/Unit:$20.51 Loan Value:N/A
Buy|Sell	TD CD BD IDX-E SE/NL'FRACTDB909	8.716	$11.60*	$100.23	$101.11	+$0.88	+0.88%	32.4%
	Average Cost/Unit:$11.50 Loan Value:N/A
Buy|Sell	TD INTL IDX E SER/NL'FRACTDB911	10.661	$9.53*	$100.00	$101.60	+$1.60	+1.60%	32.6%
	Average Cost/Unit:$9.38 Loan Value:N/A

   This is what my statement looks like right now.  ^^;  Very happy, considering I've made a whopping $3.74 in two weeks!    My portfolio diversification will look larger shortly, when next pay-period I will be able to purchase the final index mutual fund in my portfolio (TDB902).

   My next post, I'm going to take a look at the TD Website that manages assets.  TD Asset Management looks like a legit TD website.  Here, you can look up what you want to buy, and take a look at some of the more involved details.  I'll copy/paste some of TDB952.  I'll try and explain what I can right now, and what I can't, I'll look at in a little while.  Maybe next post?  Anyways..

Fund Codes:	TDB952 [ This doesn't need explaining.  It's just the name of your fund. ]
Minimum non-RSP Investment:	$ 100.00  [ I already know this one!  This is just the minimum amount of dollars able to be invested. ]
Minimum RSP Investment:	$ 100.00  [ As above. ]
Minimum Subsequent Investment:	$ 100.00  [ Subsequent means (Continuing After First).  Still a minimum of $100.00! ]
Early Redemption:	Up to 2.00% of purchase cost if redeemed within 30 days of purchase.   [ My advice?  Don't ever do this.  This is a penalization that you will pay for, to feed your greediness.  Flat out penalty for early withdraws. ]
MER: [ * ]	0.35% MER as of June 30, 2012 [ MER means "Management Expense Ratio."  This is how much money it costs to own this fund.  When MER is deducted, I'm not sure.  I will definitely look into this. ]
Sector Class:	U.S. Equity   [ Classification of what this index fund focuses on.  I.E.  Equities, Bonds, Real Estate, etc. ]
Inception Date:	Nov. 26, 1999  [ Creation Date. ]
Assets: [ * ]	$ 462.61 million as of Feb. 28, 2013. [ I don't know what this means, or how it is relevant to return rates.  This is another I'll look into. ]
Minimum PPP Amount: [ * ]	$25.00   [ Not sure what this is, or what PPP even is.  Maybe it's a cheaper way to invest in this option?  ...I doubt it. ]

   The TD Asset website has lots of other neat features.  Like tracking the history of a specific fund.  For the TDB952 (In the above table) the same information came from the same site.  Lots of graphs, historic information, manager information, and facts about the current fund.

TDB952.  Performance from 2003 ~ 2013.

  I know that with the TD eSeries Index Mutual Funds there is an option, while purchasing, that will allow you to allocate your dividends either BACK INTO your fund, or NOT.  While you can do as you please, I think the whole purpose of investing this money is so that our dividends reinvest themselves, allowing the interest to compound.  On other websites, or other places, reinvesting your interest is called, "DRIP."  DRIP stands for, "Dividend ReInvestment Program."  So, whether you're purchasing through TD eSeries, or elsewhere, it's in your best interest to make use of DRIP plans, because that's what'll make the big dollars!

   Good luck making lots of money!  Take a look around the TD Asset Management website.  There's a lot of information there on the eSeries mutual funds!  I mean, some really groovy stuff!  I'll also try and work on getting a table set up for the side of the website with all of my information.  Lots to do, I know...

Dollar Cost Averaging and Compound Interest.

   I've been thinking of doing some custom website coding for the blogger. I'd like to put this table at the side of the website, to show actual real-time money INPUT and OUTPUT (How much I've deposited, and my overall turnout.) (These are imaginary figures, for the time being.) An example would be such:

Index Mutual Fund Name	Amount Invested	Market Value
TDB900	$200.00	$400.00
TDB902	$100.00	$98.00
TDB909	$100.00	$150.00
TDB911	$100.00	$50.00
Time Elapsed:  6 Months
Total Invested: $500.00	Total Value: $698.00	Total Worth: + $198.00

   So, in other news.  I turned my first real profit today!  <3  I know it will most likely disappear tomorrow, and watching these index funds this closely is sort of redundant..  But, because it's my first investment, I'm pretty excited about it.  Payday is coming up, and I'm looking forward to investing my $152.00 so I can buy into index funds TDB902 and TDB909.  Anyways, this is just more personal garble and I'll move on to some actuality..  (By the way, it was my first $100.00 investment, and I checked today and it's worth $101.00.  Woo, a whole dollar!)

   So, remember how I was telling you that I didn't -really- understand the whole concept of an index fund, and I just kind of blindly fell into submission and started?  Well, that's all still true, but I've been reading a bit more about the definition of an Index fund.  While I can't find anything that doesn't refer "Index Funds Follow and Index and blah.." which to me just sounds like a reiterating statement that explains actually nothing...  But!  I did stumble across an article that explained it quite well, or so I'd like to believe.  Kerry, over at SquawkFox, did it quite well.  If you're not willing to go there (which you should) to read the article, I'll sum it into my own wording;

   "Index Mutual Funds are Mutual Funds that are not managed by a humanoid.  These funds are managed by a computer, and follow a, usually, major economic stock market index (ever heard of the Toronto Stock Exchange?)  If you're not following, remember those squiggly marks on that small Andex chart I posted?  Those.."

   She later goes on to explain a bit of the benefits associated with Index Funds, so that's a plus in my books.  Better overall long-run returns, lower management fees, no stupid humans involved in wrecking things up..  Anyways.

   I hope that helps make a little bit more sense.  On to today's topics;
-Dollar Cost Averaging.
-Compound Interest Rates.

   Dollar Cost Averaging.

   This may sound like some super complicated strategy in the professional world of lucrative stock trading and whatnot.  It is not.  This is a simple concept in which a lot of 'professional' persons are mislead around.  Pride and Greed are powerful things, but they can often get in the way of each other when they're side-by-side.  Let me explain..

   The concept of buying stocks is; Buy High, Sell Low.  This means you have to watch the markets, and pay a lot of attention as to when to do these two things.  This is what a professional is going to do with your money.  Unfortunately, nobody can really tell how the stock market is going to react, so..  People will buy a low priced stock, thinking it will rise, only to see its price plummet more.  To cut the losses, they'll sell at a lower price.  They've now bought low, and sold lower.  Many are afraid to commit to buying high because of fear entertained by the concept of stocks reaching a plateau and not rising much more.  This stereotype perpetuates itself within the stock market, and the only real loser is you, who are paying these people to literally play with your money.  You'd probably be better to take it to the Casino.  At least there, you'll get free drinks and food if you have enough money to blow...

  Anyways, getting carried away...

   Dollar Cost Marketing means you, and I cannot cannot cannot stress this enough, routinely purchase your portfolio's Index Funds.  This means that when the prices are normal, you get a normal price.  When the prices are high, you get a little less than average.  When prices are low, you get a little more than average.  Not only does this rule incite discipline within ourselves, but it also means that we're usually getting a better deal.  We're investing in these index funds for the long haul, so we'll be investing as the cost rises, anyways.  While it seems a little scary when the markets take a dip, we're actually just getting a much better deal on buying our funds.  We're getting cheaper units while the markets in a downturn, and when it rises again (stop it, the only time the market won't recover is if the U.S. petro dollar is obliterated...) we're actually looking much better because we now have a boatload of shares we got for a steal.  Dollar Cost Averaging.  Don't forget this term.  Just, always routinely purchase your index funds.  This is what it means, now, go put it in to action!

   Compound Interest Rates.

    Okay, so I'll say this again, I'm trying to keep complex mathematics out of this blog.  So, you'll just have to trust my math while I show it to you.

   Let's learn a little about the term "Interest" first.  Interest is the term used to tell you what to expect your dividends to be.  I mean, your interest means just how much money you're looking to earn for having your money in the bank, investment, etc.  If you have a yearly interest rate of 2%, it means that for every dollar you have in the bank, you'll earn 2 cents for every year it sits there.  So, you technically earn 2 cents for doing nothing.  That's all this means.  Interest is how much money your money is going to make you.  Got it?  Good.

   Compound Interest means when that interest is earned, it's not taken out of the account.  It's put back in the account to accumulate more interest on itself.  This is how your money really potently starts to duplicate itself.  Let's look at a 10 year period for a flat $100.00 in the bank at a 5% interest rate.

Year	Principle	5% Interest Rate	Interest Earned	Total
1	$100.00	5%	$5.00	$105.00
2	$105.00	5%	$5.25	$110.25
3	$110.25	5%	$5.51	$115.76
4	$115.76	5%	$5.79	$121.55
5	$121.55	5%	$6.08	$127.63
6	$127.63	5%	$6.38	$134.01
7	$134.01	5%	$6.70	$140.71
8	$140.71	5%	$7.04	$147.75
9	$147.75	5%	$7.39	$155.13
10	$155.13	5%	$7.76
Amount Reinvested:		$45.00
Actual Interest Earned:		$10.13

So, what this all really means is that instead of every year, pulling the $5.00 out of the bank that you'd have normally made, you just let that money sit in the bank.  In year 2, you earned 5% on $105.00 instead of $100.00.  Because it was such a low number (Only one hundred bucks) and for such a short period (10 years is nothing.) you only earned an extra $10.00.  But that money is only there because of the compounded interest.  You'd never have seen that if you didn't keep your five dollars in the bank. 

   This is how compound interest works, and why it's important.  You can see that it's definitely an upward spiral the longer this continues.  At first, you made...  If you weren't paying attention and are too lazy to do the math:  You earned; $0.25 / $0.26 / $0.28 / $0.29 / $0.30 / $0.32 / $0.34 / $0.35 / $0.36.  I suppose it looks pretty unimpressive with such small numbers, but in time the power to explode is within!

   I'm sure in a few years I'll be looking at other avenues of investing my money.  I'm still leery to the concept of the stock market, and I haven't learned a lot about ETF's just yet (Although I think they're very similar to Index Mutual Funds, except in the way that they're priced and what they cost to manage..)  I've read things about "Dividend Yielding Stocks, DRIP plans, etc."  This is something I will continue to read about, and it's something I'll definitely keep in the loop on the blog.

   Good luck saving your money!  I'm going to look into what hidden costs there are in the Index Mutual Funds in my portfolio, if there are any, and try and do some reading about Exchange Trade Funds.

Damned Money!

Hello!

   My name is Jordan, and I love money!  Well, who doesn't, though..?  What we all don't know about our money, is that its an asexual creature that can self replicate all on its own after only a little attention and direction from you!  Cast aside the Ouroboros Dollar Bill vision, and let's get in to what this blog will be all about~.

   Like I said; my name is Jordan.  I'm just a regular Joe-Schmo.  For as much as I love money, I really don't know anything about it.  And that's exactly what the Blog is about--people who don't have a clue about money.

   I'm starting from Day 1, and I'll catalogue my adventures in learning about money, investing money, and help it do exactly what I said it'd do--self replicate and all.  This is blog is dedicated and will solely talk about Canadian Investment methods.  I will do my best, for you and I, to give real portrayals of real dollars, fund names, and my own understandings.  This is also my first blog, so...  bare with me...

   So, this is the introductory post.  My next post will be immediately following this, and will discuss some of the things I've learned since starting from 0 knowledge, last month.