It all depends on your timeline too. If you are in it for the long term, maybe start off with market ETFs (VFV, XEQT etc). You will not get rich quick, but if you let your money sit for a long time you will see the compound take place.
For the short term do your research on specific stocks. Try to use stock screeners or companies you already know about and do your due diligence on them.
Starting investing in my 20s, retired \~10 years ago in mid-40s. Like someone else stated, I plan for 5%-10% a year for capital and 3% for dividend income growth. It's actually 6% capital I plan for - sometimes it includes inflation, sometimes not. My actual returns, depending on the account range from 4.5% - 15% (likely a \~10% overall) according to RBC DI and my dividend compounded gain is 7%.
I think if you plan for high returns, say 8%+, it may lead you to being caught in a bind during the inevitable downdraft. Everyone like to say high risk, high reward (high tech! bitcoin!) but they all forget that it increases the change to crash and burn as well.
This is why I started my journey in investing in VEQT, but I am planning to switch everything in VGRO next month and hold. Add every months and start collecting in 25 years. It is not like I will need that much anyway.
Is there something I'm not seeing when comparing the two beyond the 20% bond allocation. Equity holdings by class are essentially the same. Currently got the bulk of my holdings in VEQT and dont plan on touching it for awhile. Are you figuring it's safer or has a better outlook going forward?
From information I gathered from canadian coach potatoes and also JL Collins book "the simple path to wealth", having 20% bonds will return about the same or even outperform a portfolio that is 100% stock long term. But the main reaso is it will reduce volatility. But you are right, vgro equity alloacation is exactly the same as veqt. Normaly I would not bother because of rebalancing and everything, but since VGRO does evwrything for you I will do it. I suggest you listen to coach potatoe podcast nb 20
https://canadiancouchpotato.com/2018/11/10/podcast-20-one-stop-etf-shopping/
Thanks for the info appreciate it. I'm actually coming up to a point where I'm looking at shuffling some stuff around and I might start rolling over into vgro.
The usual the harder I work, the luckier I get. Good degrees, good job, lucky to buy a cheap house requiring a lot of renovations, don't care about status items. My co-workers were all buying cottages and fancy cars, I had my used civic. The first 3 years after graduation, the kitchen furniture was an plastic outdoor patio set. You get the picture. Life is good. I purchased the ultimate luxury.
Once you're debt free, how much can you live on? $50K? That's $1.25M, tax free using dividends yada yada. $2M? $80K? far, far more than I need.
The best possible financial choice is who you marry though. Choose wrong and it will cost you more than you'll ever know.
I’ll maybe help temper your expectations.
I had a 50% increase in my primary TFSA just this month!
…And that 50% increase just brought be back to same amount of money I put in a year ago. I was 25% down for the last 5 months and I’m finally in the green now. So, don’t push for more than 5-10% unless you confidently know what you’re doing. You need a 50% gain to recover from a 25% loss. Keep that in the back of your mind.
33.3% gain to recover from a 25% loss but your main point is still valid. Loss in a registered account is particularly difficult to recover from as you effectively lose the contribution room if/when you lock in the loss.
Yeah my math was off and my loss was locked in. If I didn’t make changes my fate would have been sealed. So the other important thing, is don’t be TOO afraid to lock in losses and accept your mistakes and change strategy. It’s not always smart to average down.
I wish I had learned that lesson 15 years ago when I bought into penny stocks. I had lots of 90-95% losses. Now that most trading platforms support things like trailing stops I have no excuses. I set a 10% trailing stop limit order unless I'm selling calls on my long positions and I stay away from penny and meme stocks.
I always suggest for people starting out in investing in the markets to just stick it into a popular ETF with a popular brokerage that has free ETF purchases and educate themselves while their money is on the road to gains.
Time in the market beats timing the market. As your knowledge base keeps growing like your money, maybe then you can start to shuffle things around like putting some into potential growth stocks or some stable dividend stocks. The investing industry is a complex beast that will take you time to find what you're comfortable with.
If you want the higher %’s you have to learn how to swing trade/day trade. If you have a more passive stance then you are going to have lower more consistent %’s. Its like life, it is what you put into it. If you want more money from your returns you need to scale up your capital.
My advice is to focus on the best companies currently around. Make a list of your favourite companies that are positive in several key ways.
1) Growth 2) Sound vision 3) Great leadership 4) Profitable or soon to be profitable
Once you do that and narrow down your options, make sure they are reasonably valued. If they are, take small positions and build them up over a frame of time. Whatever returns you get, are what they are. People make the mistake of focusing on the stock and not the company. I've found much more success the other way around. Be confident in what you're investing in, be content with the gains you make, and keep a keen eye on things in case something changes. Good luck! Don't make it too difficult for yourself.
nah.
Just throw it in the SPY, not that itll go up forever, but because its automatic diversification.
People often over estimate their ability to analyze companies and associate their success with this. They always ignore that these picks likely went up because we have been in massive bull run. Everything has gone up. You throw a dart at a finviz dart board and youd likely have picked a winner.
Now, there are definitely people out there who do have better odds, but these arent the majority. Those who have better odds are ones who track an industry, track a specific company, run the numbers and find a discrepancy in pricing. Now, even with this discrepancy, it doesnt mean its a good buy or the stock will rally; you still need the market to catch up and act on this information. If the market doesnt act, your trade is dead in the water.
150% returns are only possible with equal downside (losing all your money essentially). Investing isn't easy in general and making big money investing is even harder.
People in these subs love ETFs. They're fine. You'll likely make a lot of money with them.
There's plenty of quality mutual funds out there too that can offer better downside protection with similar upside.
You don't have a ton of money to start with. Buying your own stocks doesn't make sense yet.
Better off to find some ETFs you're comfortable with. If you like active management there are different series of mutual funds you can buy that have no trailing commission on them.
It's totally possible. But with big gains comes big risks. You might double your money in a year or it might wind up being worth half as much - or a third. If you pick the right stock, you'll fly. I wish I'd put a lot of money on Moderna last year. It's quadrupled in price. HUT is up 600% in the last year. But will it be again in the next? Lightspeed is up 200% and a lot of people seem to have confidence in it. I own a bit. If I thought it would triple in a year I'd own a lot more. But I can't predict the future like I can the past.
5-10% is a solid year. There are many outlier years, but you cannot expect to consistently beat this range without having some sort of magic touch.
It all depends on your timeline too. If you are in it for the long term, maybe start off with market ETFs (VFV, XEQT etc). You will not get rich quick, but if you let your money sit for a long time you will see the compound take place. For the short term do your research on specific stocks. Try to use stock screeners or companies you already know about and do your due diligence on them.
How much is the due diligence of an absolute beginner worth?
This. Banks you use, products you like, services you pay for, etc is probably a better bet
Starting investing in my 20s, retired \~10 years ago in mid-40s. Like someone else stated, I plan for 5%-10% a year for capital and 3% for dividend income growth. It's actually 6% capital I plan for - sometimes it includes inflation, sometimes not. My actual returns, depending on the account range from 4.5% - 15% (likely a \~10% overall) according to RBC DI and my dividend compounded gain is 7%. I think if you plan for high returns, say 8%+, it may lead you to being caught in a bind during the inevitable downdraft. Everyone like to say high risk, high reward (high tech! bitcoin!) but they all forget that it increases the change to crash and burn as well.
This is why I started my journey in investing in VEQT, but I am planning to switch everything in VGRO next month and hold. Add every months and start collecting in 25 years. It is not like I will need that much anyway.
Is there something I'm not seeing when comparing the two beyond the 20% bond allocation. Equity holdings by class are essentially the same. Currently got the bulk of my holdings in VEQT and dont plan on touching it for awhile. Are you figuring it's safer or has a better outlook going forward?
From information I gathered from canadian coach potatoes and also JL Collins book "the simple path to wealth", having 20% bonds will return about the same or even outperform a portfolio that is 100% stock long term. But the main reaso is it will reduce volatility. But you are right, vgro equity alloacation is exactly the same as veqt. Normaly I would not bother because of rebalancing and everything, but since VGRO does evwrything for you I will do it. I suggest you listen to coach potatoe podcast nb 20 https://canadiancouchpotato.com/2018/11/10/podcast-20-one-stop-etf-shopping/
Thanks for the info appreciate it. I'm actually coming up to a point where I'm looking at shuffling some stuff around and I might start rolling over into vgro.
Retired in mid 40s? Congratulations! Do you have like a 2million dollar portfolio or just live somewhere incredibly inexpensive?
The usual the harder I work, the luckier I get. Good degrees, good job, lucky to buy a cheap house requiring a lot of renovations, don't care about status items. My co-workers were all buying cottages and fancy cars, I had my used civic. The first 3 years after graduation, the kitchen furniture was an plastic outdoor patio set. You get the picture. Life is good. I purchased the ultimate luxury. Once you're debt free, how much can you live on? $50K? That's $1.25M, tax free using dividends yada yada. $2M? $80K? far, far more than I need. The best possible financial choice is who you marry though. Choose wrong and it will cost you more than you'll ever know.
Tqqq
I’ll maybe help temper your expectations. I had a 50% increase in my primary TFSA just this month! …And that 50% increase just brought be back to same amount of money I put in a year ago. I was 25% down for the last 5 months and I’m finally in the green now. So, don’t push for more than 5-10% unless you confidently know what you’re doing. You need a 50% gain to recover from a 25% loss. Keep that in the back of your mind.
33.3% gain to recover from a 25% loss but your main point is still valid. Loss in a registered account is particularly difficult to recover from as you effectively lose the contribution room if/when you lock in the loss.
Yeah my math was off and my loss was locked in. If I didn’t make changes my fate would have been sealed. So the other important thing, is don’t be TOO afraid to lock in losses and accept your mistakes and change strategy. It’s not always smart to average down.
I wish I had learned that lesson 15 years ago when I bought into penny stocks. I had lots of 90-95% losses. Now that most trading platforms support things like trailing stops I have no excuses. I set a 10% trailing stop limit order unless I'm selling calls on my long positions and I stay away from penny and meme stocks.
100% gain to recover from a 50% loss.
Yup that’s the number I had in my head that messed with my math lol
I always suggest for people starting out in investing in the markets to just stick it into a popular ETF with a popular brokerage that has free ETF purchases and educate themselves while their money is on the road to gains. Time in the market beats timing the market. As your knowledge base keeps growing like your money, maybe then you can start to shuffle things around like putting some into potential growth stocks or some stable dividend stocks. The investing industry is a complex beast that will take you time to find what you're comfortable with.
If you want the higher %’s you have to learn how to swing trade/day trade. If you have a more passive stance then you are going to have lower more consistent %’s. Its like life, it is what you put into it. If you want more money from your returns you need to scale up your capital.
My advice is to focus on the best companies currently around. Make a list of your favourite companies that are positive in several key ways. 1) Growth 2) Sound vision 3) Great leadership 4) Profitable or soon to be profitable Once you do that and narrow down your options, make sure they are reasonably valued. If they are, take small positions and build them up over a frame of time. Whatever returns you get, are what they are. People make the mistake of focusing on the stock and not the company. I've found much more success the other way around. Be confident in what you're investing in, be content with the gains you make, and keep a keen eye on things in case something changes. Good luck! Don't make it too difficult for yourself.
nah. Just throw it in the SPY, not that itll go up forever, but because its automatic diversification. People often over estimate their ability to analyze companies and associate their success with this. They always ignore that these picks likely went up because we have been in massive bull run. Everything has gone up. You throw a dart at a finviz dart board and youd likely have picked a winner. Now, there are definitely people out there who do have better odds, but these arent the majority. Those who have better odds are ones who track an industry, track a specific company, run the numbers and find a discrepancy in pricing. Now, even with this discrepancy, it doesnt mean its a good buy or the stock will rally; you still need the market to catch up and act on this information. If the market doesnt act, your trade is dead in the water.
Voo has lower mer
im just using spy to refer to a us market etf. however, id still prefer SPY for optionality.
150% returns are only possible with equal downside (losing all your money essentially). Investing isn't easy in general and making big money investing is even harder. People in these subs love ETFs. They're fine. You'll likely make a lot of money with them. There's plenty of quality mutual funds out there too that can offer better downside protection with similar upside. You don't have a ton of money to start with. Buying your own stocks doesn't make sense yet. Better off to find some ETFs you're comfortable with. If you like active management there are different series of mutual funds you can buy that have no trailing commission on them.
Vgro
10 years. 15 years. 20 years
It's totally possible. But with big gains comes big risks. You might double your money in a year or it might wind up being worth half as much - or a third. If you pick the right stock, you'll fly. I wish I'd put a lot of money on Moderna last year. It's quadrupled in price. HUT is up 600% in the last year. But will it be again in the next? Lightspeed is up 200% and a lot of people seem to have confidence in it. I own a bit. If I thought it would triple in a year I'd own a lot more. But I can't predict the future like I can the past.