Personal Finance

How should I invest my money? (investing newbie)

  • Last Updated:
  • Apr 14th, 2011 12:39 pm
Newbie
Apr 7, 2011
32 posts
1 upvote
ontario

How should I invest my money? (investing newbie)

Hi, l just signed up at the forum and want to ask some of your expert opinion on my situation.



Thanks in advance!
9 replies
Deal Addict
Feb 5, 2010
2764 posts
183 upvotes
Sounds like you won big in gambling or a small lottery prize. Nice.
Deal Addict
User avatar
May 15, 2010
2000 posts
115 upvotes
North York
You have a dangerously high percentage of your net worth in real estate. I'm guessing you're asian. Even a minor correction could significantly damage your net worth. Have you considered building a couch potato portfolio with ETFs?
Deal Fanatic
Jul 1, 2007
8569 posts
1763 upvotes
Dilton wrote: You have a dangerously high percentage of your net worth in real estate. I'm guessing you're asian. Even a minor correction could significantly damage your net worth. Have you considered building a couch potato portfolio with ETFs?

And to add insult to injury, all that cash! You should have properly invested your money in the markets years ago and not agreed to purchase those stupid condos! Can you still back out?
Money Smarts Blog wrote: I agree with the previous posters, especially Thalo. {And} Thalo's advice is spot on.
Newbie
Apr 7, 2011
32 posts
1 upvote
ontario
Dilton wrote: You have a dangerously high percentage of your net worth in real estate. I'm guessing you're asian. Even a minor correction could significantly damage your net worth. Have you considered building a couch potato portfolio with ETFs?

yea, haha...
Newbie
Apr 7, 2011
32 posts
1 upvote
ontario
Thalo wrote: And to add insult to injury, all that cash! You should have properly invested your money in the markets years ago and not agreed to purchase those stupid condos! Can you still back out?

I don't know how to invest in the market..that's my problem..
Newbie
Apr 7, 2011
32 posts
1 upvote
ontario
Dilton wrote: You have a dangerously high percentage of your net worth in real estate. I'm guessing you're asian. Even a minor correction could significantly damage your net worth. Have you considered building a couch potato portfolio with ETFs?


which one is better?

Classic Couch Potato

The original and the simplest. You split your money into three equal parts and invest as outlined below. Once a year, you rebalance to get back to your original asset allocation:

1) Canadian equity (33.3%)
2) U.S. equity (33.3%)
3) Canadian bond (33.3%)

Global Couch Potato

This portfolio is more diversified than the Classic, and thus should have less risk. It spans the world by splitting your money into five equal piles. Two of those piles go into Canadian bonds; the remainder are invested in Canadian, U.S. and international stocks:

1) Canadian equity (20%)
2) U.S. equity (20%)
3) International equity (20%)
4)+ 5) Canadian bond (40%)

thanks!
Member
Jun 7, 2009
259 posts
9 upvotes
jackpotj wrote: which one is better?

Classic Couch Potato

The original and the simplest. You split your money into three equal parts and invest as outlined below. Once a year, you rebalance to get back to your original asset allocation:

1) Canadian equity (33.3%)
2) U.S. equity (33.3%)
3) Canadian bond (33.3%)

Global Couch Potato

This portfolio is more diversified than the Classic, and thus should have less risk. It spans the world by splitting your money into five equal piles. Two of those piles go into Canadian bonds; the remainder are invested in Canadian, U.S. and international stocks:

1) Canadian equity (20%)
2) U.S. equity (20%)
3) International equity (20%)
4)+ 5) Canadian bond (40%)

thanks!


The data is all available from TD mutual funds (e-series I'm assuming).
If you back-track it, I believe the Classic method will have out-performed the Global method (because in the last 10 years only Canadian index and Canadian Bond index were returning 5+% year after year).

This doesn't not mean Classic > Gloabl.
Future returns cannot be guaranteed using past data.
Newbie
Nov 6, 2006
11 posts
Richmond Hill
jackpotj wrote: yea, haha...

my parents taught me to invest in real estate.

yea i am afraid of the correction too, but the real estate is going very crazy at the moment.. there's one house that i didn't bought around 4 months ago, the house was selling for around 350,000. Now it costs 390,000. 40,000 profit in 4 months.

I will google and have a look at the couch potato portfolio with ETFs, thanks for the advice!

I would recommend , since you are in a unstable job

Break down your cash into different sub accounts with different time horizons and purposes based on your situation. Diversify across the board in different regions, markets, sectors for each account based on the time horizon for propose of that account. Also look into tax sheltering opportunities, even insurance while you can qualify,if it serves the purpose but considering your job situation it might not be The Answer. Insurance is usually the last place people think of while they have the money, but its one of the ways to have tax sheltered growth.
Sahil Bhrany's Website

"Money never starts an idea; it is the idea that starts the money."
Member
User avatar
Apr 7, 2011
327 posts
toronto
I recommend stashing it under your mattress, that's the safest place I know.

and on the bright side you can take what you want, when you want, and not be taxed on it.

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