Investment advice in Canada

[tim008]

Hi everyone. I'm new to this whole investment thing, so I'm looking for a bit of advice on what to do and how to do it.

I have about $1000 a month that I want to put somewhere, and this amount will grow over the next few years. I'm in my early/mid 20s so the purpose of it is mostly just for long term growth, but also to save up for a house and car.

Since I'm just starting out, I think I'd rather put it in some type of low cost index fund or ETF. I know that anything more heavily managed that charges a 1-2% fee over a long term return of 5-6% will compound and eat away over a quarter of the earnings.

I guess my question is: is this a good idea? If not, how come and what do you think would be better?

Also, I'm not sure how I would actually go about this. Should I talk to some financial adviser at a bank to set it up for me, or sign up for something myself like iTrade? What would be the most low cost way of consistently putting in money every month or 1/2 month? In the U.S., I hear that Vanguard is highly recommended for this sort of thing as they're pretty low cost, but I'm not so sure about Canada.

Finally, what fund should I actually get?

I know this is a lot, so I really appreciate any help you can give! Thanks in advance!

Edit: any thoughts on the Horizons S&P/TSX 60 Index ETF (http://www.hbpetfs.com/pub/en/etfs/?etf=HXT&r=o)? Lowest management fee I've seen at 0.07%, and it's one of the commission free ETFs on iTrade. I'm guessing there's no other hidden fees in between...

How would this ETF compare to something like TD's eSeries Canadian or Dow Jones Index Funds with low MERs of 0.33%?
http://www.tdcanadatrust.com/products-services/investing/mutual-funds/td-eseries-funds.jsp?tab=what-does-td-offer

[SkimGuy]

First of all, if you're going to need the money in a few years, there's no point in investing it. If you invest for the short term you might be forced to sell at a loss if you need the money that badly. You should always invest with money you can afford to put away for a while.

$1000.00 a month is a good start, but make sure you have enough cash to survive without having to borrow/go into debt. I wouldn't suggest investing such a low amount (<10k) since commission fees will likely outweigh any benefit of investing at such a low principal/time horizon.

Getting an investment adviser is good if you have a lot of money/need some advice for big picture things (i.e future financial goals, estate planning). They help with investments as well but as stated above, it's not really cost effective at this point. Doing it yourself is also a viable option.

If I were you, depending on when you needed the money, if it's less than a few years, I would just keep it in the bank.

[rfdrfd]

I suggest you put it in your TFSA, so you don't have to pay any taxes on any capital gains (hopefully you have gains)

HXT or those are not bad, but you have to know WHEN to buy it, because you are betting on the market going up. If it goes down, then you will lose money.

To know if its the right time to get in, you'd have to learn more about how to read the market (US).

If you ask a financial advisor, they will just tell you "oh ya, good time to buy now". THey say that to everyone, everyday, this week, last month, last year. They don't care, because they just want your money to be in and they (usually) get a cut of it somehow. Which is also why an advisor of mutual funds never tell you to sell it.

IMO, Europe crisis is FAR from over, it is NOT time to go long yet. Last week's "deal" pushed the markets up, guess who was doing that? Big professionals were tricking the public to buy, so they can short it. I could be wrong, but I doubt it. Spain isn't even big headlines yet, and Spain's economy is MUCH bigger than Greece. Look what Greece did to the markets. When Spain gets highlighted, its gonna be nastier than Greece's troubles.

If you really must buy somehting now, and would consider stocks, pick companies that are doing great even during the Greece issues. Like McDonald's, or Altria (both making 52 week highs every week), and Canadian REITs (wonderful uptrends and good dividends) like REI.un, , etc.

[tim008]

First of all, if you're going to need the money in a few years, there's no point in investing it. If you invest for the short term you might be forced to sell at a loss if you need the money that badly. You should always invest with money you can afford to put away for a while.

$1000.00 a month is a good start, but make sure you have enough cash to survive without having to borrow/go into debt. I wouldn't suggest investing such a low amount (<10k) since commission fees will likely outweigh any benefit of investing at such a low principal/time horizon.

Getting an investment adviser is good if you have a lot of money/need some advice for big picture things (i.e future financial goals, estate planning). They help with investments as well but as stated above, it's not really cost effective at this point. Doing it yourself is also a viable option.

If I were you, depending on when you needed the money, if it's less than a few years, I would just keep it in the bank.


Thanks Skim. That's not all of my leftover earnings, so survival won't be a problem. I'm also not sure when I want a house yet considering the prices in Toronto, so I guess I'd rather not sit on it until that happens. I'll still have some money on the side, 25K from an RRSP, and sell a bit if need be but unlikely.

Think I"ll stick with TDs eseries for now then, as it doesn't have any commission fees.