What to do, now
RRSP season can lower your tax bill while building your retirement base. The catch is that the calendar can mislead you. A last-minute contribution can still help your taxes, but it is often paid in cash while you decide what to buy. That delay could take away momentum. The benefit is linking the deduction to an investment that you can live with for years.
The one move I would make this week is simple: contribute and invest immediately, in the same meeting. No ‘temporary parking’. Put the money in your RRSP and then put it into a broad, low-cost core holding that fits your long-term plan. That one step protects you from the most common RRSP seasonal mistake, which is turning a tax strategy into a market timing decision. This step limits your choices when your brain wants to turn. The RRSP season creates decision pressure.
Everyone starts comparing funds, reading popular shots and questioning everything. A core position gives you a default position. You can add other ideas later, but your contribution will grow immediately. It also protects you emotionally. If the markets fluctuate next week, you will have fewer regrets because you followed a process and not a prediction. When markets recover, don’t stay on the sidelines. Repeatable behavior usually trumps smart timing, especially within an RRSP where the real benefit comes from continuing to invest.
Consider ZCN
If you want a clean core for Canadian stocks, the BMO S&P/TSX Capped Composite Index ETF (TSX:ZCN) fits the task. Its purpose is to track the S&P/TSX capped composite indexgiving you broad exposure to the Canadian stock market in one transaction. You get the banks, the energy giants, the railroads and the industrial names driving the index, with a cap on individual weights to smooth out the concentration of individual stocks.
ZCN also remains cheap with a management fee of 0.05% and a management expense ratio (MER) of around 0.06%. That sounds small, but the costs are reversed every year. Recent numbers show why it works for RRSP season. It grew into a large fund, with assets of approximately $13.5 billion in the Fund Library. At the time of writing, it offers a yield of around 2.2%, providing a small flow of money along the way. It also delivered a strong annual return of 27%, reflecting a good outcome for Canada’s financial sector and a more stable tone in the energy sector. They look back to the future, but emphasize that ‘boring Canada’ can still work.
The prospects for ZCN will depend on two Canadian realities. Banks still determine a large part of the index, so credit quality and credit growth will matter. Energy is still the kingpin, so commodity prices can quickly improve or delay results. That is the trade-off with Canada: concentration is part of the territory. Still, this is what just $7,000 could make from passive income alone.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | ANNUAL DIVIDEND | ANNUAL TOTAL PAYOUT | FREQUENCY | TOTAL INVESTMENT |
|---|---|---|---|---|---|---|
| ZCN | $43.18 | 162 | $0.96 | $155.29 | Quarterly | $6,995.16 |
In short
So, is ZCN a buy for others during RRSP season? That may be the case, if you want simple exposure to Canadian stocks, low fees, and a portfolio you can ignore most days. That may not be the case if you want a lot of exposure to American technology, or if you can’t deal with lagging behind in Canada. But if your goal this week is one smart move that you can execute, contribute to, and invest in right away, let a broad-based ETF like ZCN do the heavy lifting. Pair it with a US or international stock ETF later if you want more growth, but start here today.
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