Investing

Looking for investing advice

  • Last Updated:
  • Nov 4th, 2019 1:22 pm
[OP]
Deal Expert
User avatar
Feb 8, 2014
15933 posts
5190 upvotes

Looking for investing advice

I am wondering how to begin investing. I am looking at a 25-30 year timetable and currently have no investments. I am looking for relatively passive investing, but of course diversified.
There is no employer match or anything of that sort indicated in my case.
I know of index funds but do not know how to invest in them, and i might be interested in a few specific stocks but only as a very small part of my portfolio. I am also interested in other areas but not sure what to look at for good returns.
Are there advantages to dividend stock/funds over index funds?

I assume i need an account/brokerage to buy the investments from, are some much better then others?

TIA
All spirits are enslaved that serve things evil
120 replies
Deal Fanatic
Jul 1, 2007
8220 posts
1150 upvotes
Don't buy individual stocks.

Save what you can.

Ensure you are completely free of consumer debt (everything that isn't mortgage or maybe car loan). Swear to yourself that you will never go into debt for consumer purchases and you will never carry a balance on your credit card.

Build up an emergency fund of 3-6 of cash flow needs, or around $20K, whichever is higher.

THEN start saving long term via your TFSA/RRSP. Just keep shovelling money into there as you make it and are able to save. Don't expect to ever touch it until you're retired. Invest it in a low cost index portfolio that maintains the majority of its allocation to global (outside Canada) stocks.

That's all you need to know.
Money Smarts Blog wrote:
Nov 29th, 2010 11:18 am
I agree with the previous posters, especially Thalo. {And} Thalo's advice is spot on.
Deal Addict
Jul 23, 2007
3819 posts
1630 upvotes
As far as dividend funds, each to their own, but I didn't enjoy the ride through the 2008 - early 2009 financial crisis. My individual Canadian dividend growth equities held up much better at the time and I've stuck by them ever since in the taxable account. The TFSA and RRSP are all in index funds/ETF's since around 2010/11.

Everyone has their own preference for online brokerage, but I've been with TDDI for well over two decades now, and I've had no complaints.

For more on index funds/ETF's check out

https://canadiancouchpotato.com/
Deal Guru
Jan 27, 2006
11471 posts
4720 upvotes
Vancouver, BC
Don't expect a free lunch just because you are looking at index funds. You will be well-served if you:

1. Understand your risk tolerance.
2. Understand what those index funds invest in and how they perform in various market conditions.
3. Understand what your expectations are for those funds over the next 25-30 years.
4. Understand what a diversified portfolio is and how it affects your returns.
5. Understand that there is no such thing as a 'set it and forget it' plan. You need to regularly spend some time to see what your investments are doing, adjust for any changes in your life, and to investigate new investment vehicles.
Deal Fanatic
User avatar
Sep 1, 2013
5198 posts
402 upvotes
Quentin5 wrote:
Oct 13th, 2019 6:44 am
Are there advantages to dividend stock/funds over index funds?
Most people should buy index funds. For more details, check out:

https://canadiancouchpotato.com/
Quentin5 wrote:
Oct 13th, 2019 6:44 am

I assume i need an account/brokerage to buy the investments from, are some much better then others?
Assuming you are not trading frequently, it really doesn't matter what discount brokerage you use. You should probably just open an account at whatever bank you currently have your chequing account with
Member
Oct 31, 2014
214 posts
87 upvotes
Edmonton, AB
There are a few brokerages!

I chose Questrade 5 years ago and have been please.

It's free to buy ETFs, you can buy one like VGRO.to which has thousands of stocks, across the world. And keep adding to it monthly.
Deal Expert
Aug 2, 2001
16014 posts
6196 upvotes
a) Index funds allow you to spread your risk over a large group of stocks. Investing in one or two stocks puts your risk in there. Imagine if you had invested solely in Nortel or Blackberry?
b) Questrade is a great brokerage with low fees. It also allows free investing in ETFs. Remember that ETFs are often treated like stocks and you pay for each trade - so if investing regularly that could add up. The online brokerages like Questrade and Qtrade seem to have lower fees than the big banks.
c) Stocks that produce dividends are simply stocks that decide to return part of their profits to shareholders. Does that mean that their return is always better than stock with little to no dividends? No. You should be judging a stock based on it's overall return, not just it's dividend return. Don't get me wrong - some are pretty solid investments but it's not because of their dividend but because of their overall return.
d) You can read up on ETFs that are comprised of a series of other index funds to create a mix of equities / bonds. For example, look up VGRO and VBAL. These are often a good choice for someone that just wants to put their money into a fund that does all the management at a very low fee.


Good luck!
[OP]
Deal Expert
User avatar
Feb 8, 2014
15933 posts
5190 upvotes
Thalo wrote:
Oct 13th, 2019 2:29 pm

Ensure you are completely free of consumer debt (everything that isn't mortgage or maybe car loan). Swear to yourself that you will never go into debt for consumer purchases and you will never carry a balance on your credit card.

Build up an emergency fund of 3-6 of cash flow needs
Covered.
THEN start saving long term via your TFSA/RRSP. Just keep shovelling money into there as you make it and are able to save. Don't expect to ever touch it until you're retired.
This is the basic idea
Invest it in a low cost index portfolio that maintains the majority of its allocation to global (outside Canada) stocks.

That's all you need to know.
Thats my thoughts as well (though i would include Canada as well) but i want to know more about the other options, partially to be sure i am making the best choice, partially out of interest in learning more about how things work.

Stryker wrote:
Oct 13th, 2019 2:55 pm
As far as dividend funds, each to their own, but I didn't enjoy the ride through the 2008 - early 2009 financial crisis. My individual Canadian dividend growth equities held up much better at the time and I've stuck by them ever since in the taxable account. The TFSA and RRSP are all in index funds/ETF's since around 2010/11.
What are Canadian dividend growth equities?
Everyone has their own preference for online brokerage, but I've been with TDDI for well over two decades now, and I've had no complaints.
I have read elsewhere about TD being a good brokerage and i have also come across Vanguard several times.
For more on index funds/ETF's check out

https://canadiancouchpotato.com/
Will do
craftsman wrote:
Oct 13th, 2019 4:31 pm
Don't expect a free lunch just because you are looking at index funds. You will be well-served if you:

1. Understand your risk tolerance.
2. Understand what those index funds invest in and how they perform in various market conditions.
3. Understand what your expectations are for those funds over the next 25-30 years.
4. Understand what a diversified portfolio is and how it affects your returns.
5. Understand that there is no such thing as a 'set it and forget it' plan. You need to regularly spend some time to see what your investments are doing, adjust for any changes in your life, and to investigate new investment vehicles.
1. My risk tolerance is i don't really care how things do in the short term as long as when i get close to retirement it has recovered. If that makes sense.
2. If index funds mirror an index then as i understand it thats how they perform (minus MER). As for other funds i am interested in learning more. Do some do better then others in downturns
3. I would hope for something similar to historical returns, while knowing past performance is no guarantee of future results. However if i am not mistaken beating the index long term is uncommon.
4. Obviously i want the highest returns in the end but i'm not interested in high risk of losing everything. If i invest beyond index funds what are the other vehicles to consider?
5. It would be nice to be low maintenance but if new instruments come along i am happy to look at them.
Last edited by Quentin5 on Oct 14th, 2019 1:30 am, edited 1 time in total.
All spirits are enslaved that serve things evil
[OP]
Deal Expert
User avatar
Feb 8, 2014
15933 posts
5190 upvotes
CheapScotch wrote:
Oct 13th, 2019 10:43 pm
Most people should buy index funds.
Why?
CheapScotch wrote:
Oct 13th, 2019 10:43 pm
Assuming you are not trading frequently, it really doesn't matter what discount brokerage you use. You should probably just open an account at whatever bank you currently have your chequing account with
Do some have lower fees then others or other reasons to consider them?
My credit union does not allow me to buy any fund i wish, they don't have index funds, and are even more restrictive with the funds they do offer, i explain a bit more below.
I don't know what Simplii offers, i can look into that
SheaButters wrote:
Oct 13th, 2019 10:55 pm
There are a few brokerages!

I chose Questrade 5 years ago and have been please.

It's free to buy ETFs, you can buy one like VGRO.to which has thousands of stocks, across the world. And keep adding to it monthly.
Is there a list of them and are there advantages of some over others?

TrevorK wrote:
Oct 13th, 2019 11:07 pm
a) Index funds allow you to spread your risk over a large group of stocks. Investing in one or two stocks puts your risk in there. Imagine if you had invested solely in Nortel or Blackberry?
This would be a small amount of disposable fun money on individual stocks, not a serious investment meant to beat the market and make me rich overnight. I would not complain if that happened (and i get hit by lightning twice and then a meteor).

b) Questrade is a great brokerage with low fees. It also allows free investing in ETFs. Remember that ETFs are often treated like stocks and you pay for each trade - so if investing regularly that could add up. The online brokerages like Questrade and Qtrade seem to have lower fees than the big banks.
So far TD and Questrade have been mentioned and i have come across Vanguard in reading. I am interested in knowing more.
c) Stocks that produce dividends are simply stocks that decide to return part of their profits to shareholders. Does that mean that their return is always better than stock with little to no dividends? No. You should be judging a stock based on it's overall return, not just it's dividend return. Don't get me wrong - some are pretty solid investments but it's not because of their dividend but because of their overall return.
I am assuming there are funds that are mainly dividend stocks?
I also have heard of REITs, bonds, equities and so forth. I don't know much about them or what else is available.

I also do not understand the difference between a mutual fund and an ETF
d) You can read up on ETFs that are comprised of a series of other index funds to create a mix of equities / bonds. For example, look up VGRO and VBAL. These are often a good choice for someone that just wants to put their money into a fund that does all the management at a very low fee.
All the management vs what extra work on my behalf?
Why would i choose these over an index fund?
I recently met with someone at my credit union and they gave me several prospectus including Fidelity Global Growth Portfolio, but on the next meeting mentioned there was a minimum buy in of over 75K then offered me a much lower return fund option instead...
Good luck!
Thanks
All spirits are enslaved that serve things evil
Deal Addict
Jul 23, 2007
3819 posts
1630 upvotes
Quentin5 wrote:
Oct 14th, 2019 1:16 am

What are Canadian dividend growth equities?
Personally, I'm always on the lookout for Canadian companies that can consistently grow their dividends faster than inflation.
[OP]
Deal Expert
User avatar
Feb 8, 2014
15933 posts
5190 upvotes
Stryker wrote:
Oct 14th, 2019 5:04 am
Personally, I'm always on the lookout for Canadian companies that can consistently grow their dividends faster than inflation.
I worded it badly, i meant what is an equity. From a quick google search it seems to mean the same thing as a stock.
That said are you willing to share some names with us?
All spirits are enslaved that serve things evil
Deal Addict
Jul 23, 2007
3819 posts
1630 upvotes
Quentin5 wrote:
Oct 14th, 2019 5:32 am
I worded it badly, i meant what is an equity. From a quick google search it seems to mean the same thing as a stock.
That said are you willing to share some names with us?
Well, one can always start with the holdings of the dividend aristocrats on the S&P/TSX that have increased their dividends for at least five straight years. Make your own watch list for those companies that interest you. That's what I do.

https://www.blackrock.com/ca/individual ... index-fund#/

Another place when just starting out is to pick from the highest yielding stocks on the TSX 60 the one's that also increase their dividends each year. You can find them at Barchart. Just go down about a third on the page. Where it shows Main View choose Fundamental and click on dividend yield. Not all, but most of the equities in my own portfolio are already listed on the TSX 60.

https://www.barchart.com/ca
Last edited by Stryker on Oct 14th, 2019 7:10 am, edited 1 time in total.
[OP]
Deal Expert
User avatar
Feb 8, 2014
15933 posts
5190 upvotes
Stryker wrote:
Oct 14th, 2019 6:37 am
Well, one can always start with the holdings of the dividend aristocrats on the S&P/TSX that have increased their dividends for at least five straight years. Make your own watch list for those companies that interest you. That's what I do.

https://www.blackrock.com/ca/individual ... index-fund#/

Another place when just starting out is to pick from the highest yielding stocks on the TSX 60 the one's that also increase their dividends each year. You can find them at Barchart. Just go down about a third on the page. Where it shows Main View choose Fundamental and click on dividend yield. Not all, but most of the equities in my own portfolio are already listed on the TSX 60.

https://www.barchart.com/ca/stocks/indices/tsx/tsx60
Interesting, thanks
Your barchart link goes to
"http://www.jdoqocy.com/click-749547-111 ... &sid=rfdcb"
All spirits are enslaved that serve things evil
[OP]
Deal Expert
User avatar
Feb 8, 2014
15933 posts
5190 upvotes
Stryker wrote:
Oct 14th, 2019 7:13 am
Nope, it doesn't seem to like the link. Best to search for TSX 60 on google and you should find the link for barchart part way down.
Weird, in my quote of your post the link changed again to something else.
RFD has been possessed by great evil

Anyways i did find it, thanks
Do you find your getting better then market returns?
All spirits are enslaved that serve things evil

Top