You have $10,000 invested within your registered retirement savings plan (RRSP) in common shares of Canadian companies. All taxes on earnings within your RRSP are deferred until the time when you decide to withdraw money from your RRSP. Withdrawals are taxed fully as regular income in the year the withdrawal is made. Withdrawals do not have to start being made until the investor is aged 71. You also have $10,000 outside of your RRSP that you have invested in Government of Canada bonds. Interest on bonds held outside your RRSP is fully taxed in the year it is earned.
You have recently been talking with your broker and she has suggested that your investment plan should be the opposite of what it currently is. That is, your RRSP should hold the bonds and your non-registered investments outside your RRSP should hold shares.
Required:
Explain in general terms the broker's thinking on this matter.