Should I dip into my RRSP while on maternity leave? + MORE Jul 4th

As young people struggle to gain a foothold in the housing market, houses are more than ever a good financial investment. Attempts to rein in the Canadian market are fighting some overwhelming economic forces.

I’ve read that one of the best times to withdraw from an RRSP is when you’re earning less money. I’m currently on maternity leave and would like to withdraw $5,000 from my RRSP to pay some bills. What do you think?
—Krystal Lee Young, Toronto
The very, very best time to withdraw from an RRSP is when you’re retired. Sure, you can withdraw funds during periods of low income but I’m not a fan of this approach. The first reason is that the government will withhold tax, meaning you won’t receive the full $5,000 you take out. Second, you’re taking the money from your future self. Not only will you need to scramble in the future to replace the money you withdrew, but you will also miss out on the power of compound interest in those few years. Third, you won’t ever get that RRSP contribution room back. And fi nally, even if the tax argument is compelling, you’re setting a precedent that your RRSP can be used for something other than retirement, which I think can be dangerous…

TORONTO – Canada’s dollar is up in what’s expected to be a quiet morning as the United States marks the Independence Day holiday.
The Canadian dollar was at 77.74 cents US, up 0.32 from Thursday prior to the Canada Day holiday.
The Toronto Stock Exchange trades today but American markets are closed.
The Dow Jones index futures contracts are up about one per cent or 14 points at 17,880, S&P 500 futures advanced 2.5 points to 2,098.75 and the Nasdaq futures gained 5.50 points to 4,438.75.
The August crude contract is at US$49.17 per barrel, up from Thursday’s settlement at US$48.33 a barrel. August natural gas is at US$2.94 per mmBTU, up from $2.92 on Thursday.
The August gold contract is at US$1,354.00 an ounce, up from $1,320.60 on Thursday, and September copper contracts are at US$2.24 a pound, up four cents from Thursday.
The post Loonie, oil, gold edge up; TSX to re-open but U.S. markets idle for holiday appeared first on Canadian Business – Your Source For Business News.

(Spencer Platt/Getty)
The time to buy tulip bulbs is when they’re dull blobs, not when the flowers sprout in spring. Investors would be wise to take a page from the gardener’s handbook. As much as we want to buy things when they are most attractive, the best investments are usually the ones covered in dirt.
For the past two years, energy stocks have looked quite dirty, as the price of oil sank to a latter-day low of US$27 a barrel in February. At that price, most Canadian producers can’t cover their operating costs, let alone fund the effort to replace their reserves. But as oil prices firm up around the US$50 mark, investor anxiety is abating. Industry fundamentals are clearly improving: American production is down, consumption is up and supply and demand are inching toward a balance. And since there’s been so little investment in the sector for two years, there’s a high possibility of demand exceeding output in the future. That presents an enticing prospect for companies that maintained or increased production through the crash…

(Jeff McIntosh/CP)
“Don’t try to catch a falling knife” is a common saying on Bay Street. That is, if you’re always looking to buy stocks on the cheap, you may end up reaching for the first-aid kit. But if you limit your choices to long-running large-capitalization stocks, the odds of coming away unscathed improve. With the Dogs of the TSX strategy, you’re trying to catch Canadian blue chips down on their luck, in the hope they have the wherewithal to recover.
This screen simply identifies the 10 stocks on the S&P/TSX 60 index with the highest dividend yield. It’s modelled after the popular Dogs of the Dow strategy, which restricts its sample to the Dow Jones Industrial Average. Since blue-chip firms typically don’t cut their dividends, the high yields might just suggest that these companies are near the bottom of their business cycles and, as a result, will see returns revert to the mean. Plus you get to enjoy those juicy payouts while you wait.
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