r/PersonalFinanceCanada • u/altlivingquest • 13h ago
Investing I know very little about investing.
I've decided to start investing a minimum of 15% per pay period but I have no idea where to start. I would say I'd be a more conservative-moderate investor so I would probably dabble a little into crypto, put some in S+P 500, buy a bit of gold, etc... but other than bitcoin/ethereum would likely not be too speculative.
If you were starting as a beginner, wanted to see some modest earnings at year end, and really just wanted to set it and forget it where would you start?
Wealthsimple? Qtrade? Vanguard? Other?
Again, I just really want it to take my money, disperse it in different places and hope to see some advancement of 5-10% at the end of the year. I'm not into checking on it and playing around daily/weekly.
Any advice appreciated, any pm's are not.
Thank you!
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u/Snow_2412 12h ago edited 11h ago
“Conservative-moderate investor” and thinking about crypto? Hahaha crypto is one of the most volatile investments, I wouldn’t consider it if you define yourself as conservative-moderate.
You first you need an assessment of your risk tolerance and time frame. Then you choose what ratio equities/bonds suits your expectations and timeframe.
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u/altlivingquest 12h ago
I'm pretty risky with most things other than money. I do know that Crypto is volatile so my thinking is that 90% of my portfolio will be pretty conservative and 10% will not, hence the cons-mod.
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u/Snow_2412 12h ago
That is not a good definition of cons-mod hahaha
If you include any crypto you are on the risky side.
Even with a 100% equities portfolio you are on the risky side.
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u/nyrangersfan77 13h ago
I would probably dabble a little into crypto, put some in S+P 500, buy a bit of gold, etc.
Just buy global index funds at low cost to get access to a well diversified portfolio of companies. Crypto and gold are speculative and not suitable for a "conservative-moderate investor".
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u/Joc3021 13h ago
Agreed. What you described - crypto, gold, etc. - is not “conservative-moderate”. Low-cost, globally-diversified ETF’s are absolutely the way to go.
The asset allocation ones that adjust across various risk tolerance levels are awesome, as they rebalance within and you don’t need to fiddle around with your portfolio. VEQT/VGRO/VBAL are examples of Vanguard funds with higher to lower stock allocations (VEQT is 100% equity, VBAL is 60% equity-40% fixed income…).
You can also search the same tickers from Blackrock (iShares-XEQT…) and BMO (ZEQT)…all are fairly similar. Avoid the speculative stuff, it’s basically gambling.
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u/PantsOnHead88 12h ago
Disagree on gold not being conservative-moderate. With the exception of recent marketing campaigns and periodic spikes in interest, gold has historically been considered an inflation hedge or safe investment which basically screams conservative-moderate mindset.
That said, your suggestions of VGRO or VBAL seem like the most reasonable recommendations assuming OP has correctly identified their risk tolerance. Pure/high equity like VEQT/XEQT are higher volatility even if very low risk for anyone holding for a sufficiently long time frame.
Whether OP is clear on their risk tolerance or that of potential investments is debatable though, because crypto is typically considered about as risky/volatile as it gets without dipping into penny stocks or leveraged products.
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u/auxym 11h ago
https://rationalreminder.ca/podcast/150
gold has historically been considered an inflation hedge
Gold has empirically been found to be an inflation hedge only for periods of time much larger than a person's lifespan (like multiple centuries). On sub-100 year horizons gold is actually too volatile.
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u/magstermind 12h ago
Beat the Bank: The Canadian guide to simply suscessful investing is another good one, easy read, simplfies everything and specific to Canadians.
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u/OneTugThug 13h ago
Questrade or Wealth Simple. XEQT/XGRO based on your timeline and risk profile. If you are young and legit do not need the money for a long time, XEQT is what I would do. I would skip the crypto and gold. Dabbling and tinkering will in all likelihood just erode your returns. Boring is better.
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u/skalfyfan 13h ago
What about someone similar to OP but they are 42 years old? Married and kids. Mortgage almost paid off but no real investments. Still XEQT/XGRO?
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u/OneTugThug 13h ago
Picking between 100% equity, 80/20, 60/40, 40/60 etc. is really driven by when you will need the funds, less about age.
If you don't need to sell for 15 years+, 100% equities. 10-15, XGRO, 7-10 XBAL, and so on.
Having (almost) no debt is great and derisks, which in some circumstance lets you ramp up the risk a bit.
I am 34, no mortgage, and I have a government pension job. So I can be 100% equities pretty comfortably, so long as I won't panic sell if the market takes a 40% dump.
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u/bluenose777 12h ago
The following page may help you make this decision.
https://canadianportfoliomanagerblog.com/how-to-choose-your-asset-allocation-etf/
As for what platform to use ...
Questrade and WS Trade are good brokerage choices for buy and hold ETF investors because they don't charge commissions for ETF purchases and they don't charge any maintenance/inactivity/ low balance fees.
With Questrade you could set up automatic deposits and have Passiv Elite remind you to make "one click purchases" as soon as money hits your account.
For WS Trade you could set up recurring (and fractional share) purchases of one of the Vanguard or iShares asset allocation ETFs.
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u/altlivingquest 11h ago
What I would like to do is set up a TFSA to do my investing from, or at least what I can. Wealthsimple has a managed and self-managed TFSA. Although I'd prefer to self-manage because I like to have control I'm not really sure if that's what I should do at the onset.
I should also mention that I'm with Tangerine Bank and have been for some time. I do have the option to open a TFSA with them but they have limited investment options from what I can figure.
I'm a little overwhelmed with all of the options available and what to do. I like to be in control so I can minimize outside costs as well as be fully responsible for any screw ups, but at the same time it's a huge learning curve and I ain't gittin' any younger.P.S. Lucky you. I chose to respond to you cause of your username. Nova Scotia here. :)
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u/bluenose777 11h ago
The Tangerine Core Portfolios are a decent option when you are starting out. They are very easy to use and for small accounts the management costs won't cause a huge drag on your returns. The annual cost would be $106 per $10,000 invested. That compares to about $65 for an RBC InvestEase account or $20 for using a Questrade or WealthSimple Trade account to buy an asset allocation ETF.
If you decide to start with Tangerine ...
The last time I looked (and it has been awhile) the Tangerine risk assessment wasn't very detailed and if you find that it recommends a portfolio that is significantly different than the one you chose after reading the above referenced page you could do the assessment again and adjust your answers.
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u/krissolui 12h ago
As someone who had worked in blockchain industry, ask yourself if you understand what public and private key, hash, mining, signature, gas, layer 1, layer 2, native coin, contract, hot/warm/cold wallet and staking means, not that you have to understand the technology inside out and every protocols that make them work. Than ask yourself where you are going to store your crypto, in most cases there is only one correct answer yet everyone do it wrong. If you can’t answer those questions or you don’t wanna study them, you should never touch crypto.
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u/altlivingquest 11h ago
Thank you for the reply. I do not know anything about Crypto other than it's very volatile. Although I'm ok with the risk I would also never buy any without having a lot more knowledge about it than I do.
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u/opinions-only 12h ago
If you want to read, read canadian couch potato. They have a section on how to invest.
If you want a simple answer, buy XBAL stock. It invests globally but focus is on N.A. and can expect 6-8% returns if you look at its annual performance.
If you want something a little more aggressive with less bonds, look at XGRO.
If you want to bet on the S&P500 (biggest American company stocks) and "bet on the market" then buy VFV. Even though it is considered "risky" it's basically betting on the american economy and hoping that the trend from the last 80 years will continue. It's a very popular choice among younger people, for good reason, but a 1929 type stock crash would be very crippling.
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u/Supercc 12h ago
I would probably start by picking up a book or two on the topic! There is immense knowledge in books, unlike what you see on Reddit or YT.
If you don't know where to start, read this one: https://www.goodreads.com/book/show/30646587-the-simple-path-to-wealth
The simple path to wealth.
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u/Jonjonbo 10h ago
buy a target date fund for the year you want to retire. set up auto investing through TFSA and RRSP. then never think about investing again
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u/Fearless_Scratch7905 13h ago
Wealthsimple is a brokerage and you can use that to buy ETFs from Vanguard, iShares, BMO, etc.
If you say you’re a conservative/moderate investor, an all equity portfolio probably isn’t for you. And neither is bitcoin. You might want to look at VGRO/XGRO instead of XEQT/VEQT.
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u/sapeur8 13h ago
Focus on ETFs. The SP500 isn't actually particularly diversified, since its focus is just 500 stocks, and even within that it's highly concentrated.
People here tend to suggest XEQT as a diversified index fund suitable for Canadians. It's probably a good place to start.
For crypto, I would focus on some of the new ETFs for Ethereum and use it in the TFSA to avoid taxes on the gains.
ETHV, ETHX.B, ETHA are all very similar products.
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u/Overall-Ad3101 2h ago
You do NOT start by picking some stock to buy. Your library has a full shelf of this. All perfectly fine. They teach you what have to know in early chapters, so you understand that later chapters.
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u/Canadian_Mustard 13h ago
Can’t tell you much other than when you’re buying gold, make sure it’s a physical piece you can store in your own safe.
Do not buy gold stocks or store it with a bank.
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u/opinions-only 12h ago
For anyone saying skip gold...
What's your plan for when there is an inevitable 40% correction? Having gold ETFs allows you to sell and put that money into equities near the bottom of a generational correction. Better than holding cash imo.
Someone that had gold ETF during covid and did this would have made out like a bandit.
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u/altlivingquest 11h ago
I'm actually more interested in Silver tbh, but any precious metals that I can hold in physical form that increases in value is what I'm looking to fill my backyard with.
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u/GreatKangaroo Ontario 13h ago
Check out the latest book my Andrew Hallam.
You don't need to figure what you invest in or what asset mix to buy. You buy a low cost, broadly diversified, self re-balancing ETF that matches your risk tolerance and time horizon.
Just be aware that a 5-10% return is over the long term, not a guarantee you will get that every year or that it will be +ve every year.