23 Year Old portfolio- any suggestions?

[fisher7]

I have graduated from school and this past year I have been really trying to save as much as possible (for a house, retirement) I currenty live at home for free and my portfolio looks somethig like this:

1,200- High interest savings acount (Scotia)
10,500- High interest savings account (PC)
8,500- Scoita GIC (matures in 2 years)
5,000- Scotia Balanced Fund (foreign equity)- RRSP (put 75/month)
1,000- TD Precious Metal Mutual Fund (put 40/month)
2,000- TD Canadian Income Fund (put 60/month)

I bought the Scota RRSP Balanced Fund last year and since then I am down almost $800. The two TD Mutual Funds I just bought and am interested in hearing what you all think of the 3 funds. As for all the money in my PC account, I'm really unsure on what to do with it. If you were in my position and looking to buy a house in say 2-3 years what would you do?

[AllWheelDrift]

If you're looking to use the money in 2-3 years it means you should be relatively conservative. The precious metal fund is high risk. I bet with rising gold it's had stellar returns recently which is probably why you bought it. There's nothing wrong with having some exposure, but I personally think you're putting too much into it. On the other hand, many people continue to be very bullish on gold.

Don't worry about losses over the past year, it's been a difficult time and probably will remain so for the short term.

For your goal of buying a house, you should save up around 20k in your RRSP in low risk investments (mostly GIC, High Interest Savings, Money Market with maybe up to 20% in a Canadian Index Fund) with the intention to withdraw it for a down payment under the HBP. Anything in your RRSP beyond that 20k is for your retirement and should be invested more agressively. I'd favour a combination of Canadian, US, and Foreign index funds.

You may also wish to save up outside your RRSP for your house downpayment (since you may want more than 20k.) Again, those investments should be very conservative. Your PCF account isn't a terrible choice though you could probably get a better return with a GIC ladder. Just be careful that you'll have access to the money when the time comes to buy the house.

[gerbil]

Before you get into the whole investment, mutual fund, gic's and all the terminology in finance ...

you should understand How Money Works first and really realized how your money really grows.

[Impossibles]

I'm slowly becoming of the mind that you don't get good returns with mutual funds. Even with good performing funds, one you take out the management fees, you are left with dismal returns. A very good fund is one that 'beats the market average'....in my opinion, just being a hair above average is not a very high goal.

I just read this book: http://www.chapters.indigo.ca/books/...reenblatt%2527

I'm going to try his strategy for my RRSP savings. (google magic forumla investing for more info). Its a very fundemental strategy, which in my mind makes it a good choice.

Everybody will tell you different things you should do, but really only you can decide how much risk you are willing to take, what you consider good returns, and how much work you're willing to do. The best advice I can offer is to learn as much as you can from many different sources and make your judgement from them.

[Impossibles]

BTW, you're doing very very good for your age. Keep up the good work.

[Octavius]

BTW, you're doing very very good for your age. Keep up the good work.

+1

I'm 23 my portfolio is only about 1/2 the size of yours...that being said I've had more expenses then the average University student and I'm still completely debt free.

I agree in going conservative with your investments though. No point in going high risk at this point when you're a couple years away from hopefully owning a house.

[fisher7]

Thanks for all the advice so far! My plan is to hold my three mutual funds for many years 10+ and keep investing monthly. That money isn't for a house that's where my GIC's and Savings account money will come into play. I have been looking at index funds and money market GIC's.

[asdfvcx]

That money isn't for a house that's where my GIC's and Savings account money will come into play. I have been looking at index funds and money market GIC's.

Money market GICs doesn't make sense. Did you mean market-linked GICs?

If so, these are pretty bad investments. And they are quite horrible if they are help outside of a RRSP, because of the way they are taxed.

As well, is your income fund outside of an RRSP? It may also not be taxed nicely.


Do you have a plan for your investments? Some type of asset allocation that you have written down, or at least formulated in your head? Or are you just picking and choosing as you go along.

If you are going to do this on your own, you do need to formulate a plan. And if you're not sure you know enough to create a good plan, you either need to further educate yourself or get yourself some professional help. Just trying to make it up as you go along is not a great way to plan for retirement.

[BillyParadise]

Is your RRSP maxed? If not, move your investments into the RRSP this month and get a good tax rebate for it. You can pull it out for your house when ready with first time homebuyers plan.

[bonzo]

Is that first time buyer plan really that good? Won't you be repaying it when your in a higher tax bracket (summer job vs real job) then before?

[fisher7]

Yes, my RRSP is maxed out. As for my other 2 mutual funds (seems like most think they're not the best investment) I opened them because I was looking at having them for the long term (10+ years). I'm going to keep putting money into them monthly and figured that these two funds are probably better than having my money just sit in a high interest savings account. I'm hoping that both funds can give me at least an average of 7% return (after paying MER).

[gerbil]

Yes, my RRSP is maxed out. As for my other 2 mutual funds (seems like most think they're not the best investment) I opened them because I was looking at having them for the long term (10+ years). I'm going to keep putting money into them monthly and figured that these two funds are probably better than having my money just sit in a high interest savings account. I'm hoping that both funds can give me at least an average of 7% return (after paying MER).

i forgot to ask .. what's your net worth again?