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Email this4:07 pm
May 9, 2020
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Hey Everyone,
I hope you all are still well as can be. As a student and new investor, I continue to see how much more you all know about investing and return for some quick advice.
That is... I have about 7k to invest. The other approx 9k I have will likely go to joint real estate property, in exchange for a proportionate cut of the monthly rental payments and then the future sale (approx 5 years). From my research a while back, I tentatively concluded that an ETF would be better for me than mutual funds, although I forget exactly why and will have to double check again now. Robo-advisors would be something you guys recommend I assume (lower fees, safer from human bias somewhat, etc.)?
I am notorious for procrastinating on financial decisions because I don't want to make the second-best choice for my money. However, everyone's help motivated me to open up some HISA/TFSA accounts recently that I had been stalling on for too long.
Having mentioned my hesitancies, you can imagine how frustrated I am that I missed out on the massive dip in the markets due to COVID. Is it smart to expect a second dip or should I just cut my losses and invest now while it is still somewhat lower than before? From what I have read the market is bound for a crash or whatever you want to call it, given the historical pattern of our systems. Is this something I should worry about or is this iffy foresight to begin with?
I know the market is only so readable, so don't worry I don't think it something you can be always sure about.
So my original Q: What are the best ETF options? I was told you generally need a brokerage to invest, what are the ones you guys objectively recommend? I'm assuming the situation is similar to banks, in that the smaller discount ones offer the best rates & positives in exchange for customers?
These are the most pressing questions on my cur-fuddled mind at the moment.
Thanks a Ton Guys,
Jake 🙂
4:36 pm
April 15, 2020
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Do what your priorities are? Put a little in this. A little in that. After a while you will get where you want to put your money.
4:55 pm
April 20, 2019
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I was in your shoes a year ago. My advice for what it’s worth is to use Questrade (free etf purchases) or wealth simple trade(Free buying and selling- the platform has limitations though) . I would suggest an All in one etf like xeqt or something less risky like xgro/vgro or s and p 500 etf like vsp. Stick with Canadian listed etfs. Overall, I t really depends on your risk profile and time horizon. That’s the boring and safer way to invest and better for people trying to use a Canadian couch potato investing approach. Literally you buy the etf and can forget about it mentality.
No one can predict market moves but I am hoping for something of a pullback towards later summer(after 2nd quarter earnings come out] or fall but no one knows. I wish I did.
I am curious what others on here with more investing experience may suggest. GL
6:04 pm
April 15, 2015
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I have had a couple of GIC's come due within the last month.With the low rates to reinvest it in GIC's,I am keeping the cash on the sidelines,waiting for a possible 2nd dip for the markets to get in line with the world problems.If the markets happen to stabilise after a few months I will just buy more ETF balanced funds.
7:20 pm
May 9, 2020
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suburbs4life said
I was in your shoes a year ago. My advice for what it’s worth is to use Questrade (free etf purchases) or wealth simple trade(Free buying and selling- the platform has limitations though) . I would suggest an All in one etf like xeqt or something less risky like xgro/vgro or s and p 500 etf like vsp. Stick with Canadian listed etfs. Overall, I t really depends on your risk profile and time horizon. That’s the boring and safer way to invest and better for people trying to use a Canadian couch potato investing approach. Literally you buy the etf and can forget about it mentality.No one can predict market moves but I am hoping for something of a pullback towards later summer(after 2nd quarter earnings come out] or fall but no one knows. I wish I did.
I am curious what others on here with more investing experience may suggest. GL
Thank you so much. Yes I am definitely the couch potato type, can't spend that much time thinking about such volatile markets.
I was definitely goiing to consider Wealthsimple, they are just so massive, they seem well-liked, and they have even written their own robo-advisor comparison articles. I was also going to consider ModernAdvisor. Interesting you recommend Questrade, I'll have to redo my research on all them again.
Buying ETFs through robots-advisors has got be easier than brokerages. Any other reasons why you guys like robo-advisors more or less than traditional investing?
I am curious why you suggest to stick to Canadian listed etfs? I know very little about ETFs so the reason could very well be obvious haha, sorry if its a dumb question.
Hopefully some more seasoned investors can comment as well.
- Jake 🙂
7:21 pm
May 9, 2020
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semi-retired said
I have had a couple of GIC's come due within the last month.With the low rates to reinvest it in GIC's,I am keeping the cash on the sidelines,waiting for a possible 2nd dip for the markets to get in line with the world problems.If the markets happen to stabilise after a few months I will just buy more ETF balanced funds.
Solid advice/plan, thank you. Ya as bad as it is, I'm really hoping for a second dip so I can invest with better upside.
- Jake 🙂
7:22 pm
April 15, 2020
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semi-retired said
I have had a couple of GIC's come due within the last month.With the low rates to reinvest it in GIC's,I am keeping the cash on the sidelines,waiting for a possible 2nd dip for the markets to get in line with the world problems.If the markets happen to stabilise after a few months I will just buy more ETF balanced funds.
If you have cash invest it. Prices fluctuate. The dividends keep coming. I received my income tax refund late February. Enough to pay off my 2020 RRSP contribution in early March. Not much left from my tax refund. I plugged it into an oil stock. It dropped 62% in a few weeks of March. Oil is recovering quickly. I will collect a dividend every three months.
7:27 pm
May 9, 2020
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interesting, thank you!
7:41 pm
April 26, 2019
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Questrade...iTrade.....whatever. Make sure you know all the fees and costs of trades before you sign up. Ie iTrade has free TFSA accounts and a list of numerous free trades. Outside of TFSA be prepared to pay fees and what you have to invest is not enough to avoid fees. Unfortunately every thing has gone downwards. So if you take advantage of lower trades due to the economy.......get yourself a real expensive glass ball.
8:32 pm
January 3, 2013
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Hi. Whatever you do, don't be greedy and avoid the mistake I did couple years ago. I came here and people advised against my plan. I refused. It was fun at the beginning. Very fun. Couple hundred dollars a day but eventually in a year I got out with $22K loss.
I used Questrade. If you know yourself and sure that you won't be getting into the greed day trading game, then go for Questrade. It is great for buying ETFs. I think it is the best.
I recently joined the WealthSimple using their Mutual Fund for my kid's RESP. They re-balance etc for 0.5% fee.
I also like Tangerine Mutual Fund. Very easy platform but high fees which I could avoid so far by selling before Dec. I think that's when they pay dividends and also take the fees. I sold half of what I had on my wife's TFSA in Tangerine today. A good 3% recent in 2 months. Will see how the market shapes by next week for the other half.
Everything else I have are either in GICs are jumping between banks for offers. I had Simplii offer and now in Tangerine 2.75% till end of the month.
Honestly, I got to a point that an average 3-4% interest is good enough.
As you mentioned Do NOT try timing the market. You will lose your mind. Why I didn't buy earlier .. Why I didn't sell earlier. Why I didn't wait more ..
What to do? Do not put all your money in one shot. You can do WealthSimple, TD e-series, Tangerine, etc to have automate contributions.
What I did in this Pandemic? I put couple thousands .. Then started daily contributions. This way I won't keep saying why I didn't buy more yesterday etc.
Hope this helps.
9:48 pm
October 21, 2013
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New investors usually don't want to hear this, but if you want to succeed, prepare for a long and boring ride. True success is not spectacular. Banish the stars in your eyes. Avoid everyone who brags about their past spectacular successes as if they had a bad case of Covid-19.
If you've done all that, you might be ready for a modest investment in ETFs. Spread them out over a year. Rebalance when the proportions get significantly out of whack.
10:17 pm
April 15, 2020
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Loonie said
New investors usually don't want to hear this, but if you want to succeed, prepare for a long and boring ride. True success is not spectacular. Banish the stars in your eyes. Avoid everyone who brags about their past spectacular successes as if they had a bad case of Covid-19.If you've done all that, you might be ready for a modest investment in ETFs. Spread them out over a year. Rebalance when the proportions get significantly out of whack.
When I heard about EFT's my bank offered a one evening seminar at the branch. I would say 2004-2009 although I could be corrected. I was fully invested in stocks at that time. The bank was interested in selling them. I NEVER purchased any. Not for me. A friend said they were good. I had TWO zeros. Bramalea. A real estate development company in Brampton in late 1990's. Nortel 2009. Nortel is still in my account.
12:53 am
February 27, 2018
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I mentioned somewhere in another thread. If financial advisors are so knowledgeable, why aren't they millionaires themselves? They work 9 to 5, 50 weeks a year making their money off the commission fees they charge you, for telling you what to buy to become rich? It's just crazy.
Added edit.
I try to walk outside everyday for at least an hour and on my journey, I walk past this house with an unkept lawn. On the side of this guy's pickup truck he advertises his business, landscaping/snow removal. I always laugh and shake my head as i walk past. Who in their right mind would hire you?
4:33 am
April 15, 2020
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Kidd said
I mentioned somewhere in another thread. If financial advisors are so knowledgeable, why aren't they millionaires themselves? They work 9 to 5, 50 weeks a year making their money off the commission fees they charge you, for telling you what to buy to become rich? It's just crazy.Added edit.
I try to walk outside everyday for at least an hour and on my journey, I walk past this house with an unkept lawn. On the side of this guy's pickup truck he advertises his business, landscaping/snow removal. I always laugh and shake my head as i walk past. Who in their right mind would hire you?
Believe it or not I believed in the same idea. If they are so smart why are they still working?
6:25 am
March 30, 2017
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If you are to put your money into etfs (which makes sense given the modest amount u have at the moment), check the MER and other hidden fees that the etfs charges.
Any established index ETFs (XIU, etc) are charging 0.1-0.2% each year, which is a reasonable amount given all they do is to mirror an index. However the bulk of the etfs especially "special purpose" one are much higher.
I recommend AGAINST any mutual fund, as the high fee just eats into your potential return in the long run.
Spend some time each day reading and learning investment, do NOT use a financial advisor, especially those just take 1% off your total asset under management every year, both good years and bad. I keep hearing stories that IAs take 1%, and all they do is put the client's money into mutual funds, which means another 1-2% hit every year on top for the client. That certainly makes the IA rich as they also get a 0.25-.5% commision from the funds every year on top.
If you are a professional / business owner and have zero time to manage your net investment (6 figures+), then maybe an IA will offer some value.
Others already said if an IA is so good at it, they wont need to work. Just like the fortune teller 🙂
8:45 am
April 6, 2013
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savemoresaveoften said
…I keep hearing stories that IAs take 1%, and all they do is put the client's money into mutual funds, which means another 1-2% hit every year on top for the client. That certainly makes the IA rich as they also get a 0.25-.5% commision from the funds every year on top.
…
The advisor is not supposed to be double dipping like that. One is not supposed to be paying the advisor directly 1% each year for class A mutual fund units that charge 2%/year MER and pay a 1% trailer to the advisor! The advisor is then collecting more than than the mutual fund portfolio manager who is doing the actual active management of the money.
If one is paying the advisor 1% each year directly, then one should be have class F mutual funds units with 1%/year MER and no trailer to the advisor. Alternately, one should be paying nothing to the advisor directly and own those class A mutual funds units with 2%/year MER that pay a 1% per year trailer to the advisor.
If one is a do-it-yourself investor, then one should own class D mutual fund units with 1¼% per year MER that pay a ¼% per year trailer to the dealer for providing the web site.
One needs to develop some "street smarts" to not get ripped off like that by mutual fund salespeople who pretend to be investment managers. Those salespeople really are not investment managers. A one-month course and a multiple choice exam is not enough to become competent in evaluating investments.
7:05 pm
April 20, 2019
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finance trance said
Thank you so much. Yes I am definitely the couch potato type, can't spend that much time thinking about such volatile markets.
I was definitely goiing to consider Wealthsimple, they are just so massive, they seem well-liked, and they have even written their own robo-advisor comparison articles. I was also going to consider ModernAdvisor. Interesting you recommend Questrade, I'll have to redo my research on all them again.
Buying ETFs through robots-advisors has got be easier than brokerages. Any other reasons why you guys like robo-advisors more or less than traditional investing?
I am curious why you suggest to stick to Canadian listed etfs? I know very little about ETFs so the reason could very well be obvious haha, sorry if its a dumb question.
Hopefully some more seasoned investors can comment as well.
- Jake 🙂
I only suggested Canadian listed etf’s to make it simpler for you starting out. Taxes are more beneficial in TFSA etc but it’s likely a moot point with smaller sums. Foreign withholding taxes from the USA etc. Also when starting I’d avoid worrying about currency conversions and brokerages charge you more( give bad conversion rates )etc.
I suggest wealthsimple Trade not wealth simple. They are different platforms. I’d rather manage my own stuff and not using robo advisors but for some they would prefer that.
4:56 am
October 21, 2013
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I'd go with the robo until such time as you learn more than the robo knows. You could get yourself into a whack of trouble doing it yourself. Most people do.
A few years ago the people at WealthSimple tried to set up a system where they would, for a fee, coach people on how to do it themselves but it proved basically unworkable. People did not learn this stuff easily, were afraid to make trades, did the wrong thing, needed a lot of help, etc. And these were people who wanted to learn, ostensibly. So, they discontinued it because these clients required too much support (=time, money).
6:15 am
February 24, 2015
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If most of your investible assets will be in real estate (Ontario, I assume), you should invest in something that does not overlap. If would pick something like zqq, because it offers long term growth and is hedged to (not affected by fluctuations in) the Canadian $. It is concentrated in 3 stocks, Microsoft, Apple, and Amazon, but those are 3 quite different businesses. If you learn a little about technical analysis, especially RSI and moving averages, you will be more confident about when to buy.
Please write your comments in the forum.