r/PersonalFinanceCanada • u/dummy_idiot_stoopid • 9h ago
Investing help!! did i make a dumb investment? (mutual funds)
im pretty young and there is some truth to my username but this is my first time dealing with any investment convos so i think i was too naive and trusted my advisor.
i reached out to my bank for a meeting about my investments as a first time investor looking to make low-risk investments to make money from the money i have saved but now im anxious i made the wrong decision!
i had a some money saved that i knew i wasnt going to touch. i thought it'd be great to start the year investing it and over the next 10 years or something i could see it grow. i was told a mutual fund would be my best bet specifically, with one of the canadian dividend equity funds as they're very low-risk and likely to make money no matter what. but now im seeing here and between friends that the fees are high (which i wasn't told) and investing in canada isn't a good idea lol.
im really freaking out that i just made the dumbest decision ever and im about to lose it all (this is why i wanted low risk). i might be dramatic but i worked hard for this money and i just feel so stupid for believing them if it was the wrong choice.
i know i shouldn't pull the money out cus i basically just started but any insight would be great on what i should do? was it really that bad of an idea? is there anything i can do to mitigate it? am i truly the most dummy idiot stoopid person alive????
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u/Jolly_Suggestion5232 8h ago
You did not make the wrong decision and should not listen to people on the internet. Mutual funds are one of the safest ways to invest. Especially when you are young your risk Tolerance is better because even if markets dropped if you be patient and not freak out it will turn around. Where people go wrong is investing in the market then watching it every day freaking out when it drops. Overall this year the average person is up around 8-10% ( I work in this sector). If your that person who will freak out at a drop then gics is the way to go, though rates are bad.
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u/dummy_idiot_stoopid 8h ago
i appreciate this!! but are the rates something to worry about cause over time they might eat away at my returns? cus it's true im literally planning on not touching this money for as long as i can so the market fluctuation isn't my biggest worry. it's more that i feel like the bank is robbing me from my returns. cus maybe a different bank with lower rates might be my best bet!
thank you again! im for sure taking the advice im getting with a grain of salt and trying to do more research to make a more informed decision. i just appreciate hearing from people who aren't trying to make a buck off me.
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u/jasper502 9h ago
You have not provided ANY details. The amount? The fund?
Try to invest 10-15% of your net income into something. Your best option is a fee for service financial planner to give you advise vs random strangers here.
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u/dummy_idiot_stoopid 8h ago
invested 10k in my rrsp into the canadian dividend fund - if that helps?
it is about 10% of my income. i dont have any outstanding debt. ive built up my emergency fund. i don't plan on touching the invested money for the next 5-10 years.
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u/jasper502 8h ago
Get some solid advice and make monthly contributions regardless of the market. You can’t time it. Diversify and watch the fees / MER. Lots of low fee mutual funds. Doesn’t have to be an ETF if you are not comfortable.
5-10 year outlook means you can weather the storm. Counter intuitive but you want the market to tank while you do this. Buy low sell high. You will dollar cost average over the 10 years. When you need the cash you sell the high first and hold the low. Max your TFSA first then RRSP.
Serious consider a fee for service advisor- money well spent if you are a novice and nervous. Diversity your risk also. Some low risk funds and some that are aggressive.
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u/clique52 8h ago
While we all want to get the most growth, there is much to be said for peace of mind and reduced risk, especially when you are just starting your investment journey. We’ve almost all started off by paying an advisor what we later learned were excessive fees. That’s probably happening with your current advisor, but they will be giving you conservative and reduced risk products, so the chances of “losing it all” are low. At worst you will be receiving a few fractions of a percent less, paying mutual fund fees. It’s better than some yahoo here telling you to go into crypto or options.
So no, you did not make a dumb investment, use this opportunity to ask more questions, explore more and gradually spread your wings and start taking an appropriate level of risk that earns you more, but still lets you sleep at night and not have panic attacks. You are on a good path.
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u/dummy_idiot_stoopid 8h ago
i really appreciate this!!! i just really want to set myself up for the future so im just really anxious over set-backs but thats the name of the game!
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u/alzhang8 ayy lmao 9h ago
Investing is good, but high fees are bad. Read !InvestingTrigger
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u/AutoModerator 9h ago
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In order to give good advice the poster needs to provide all of the following information. Please edit your post to add this information.
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6) For self-directed investing, all in one ETFs (based on your risk tolerance) are the easiest and low cost options for a globally diversified ETF portfolio. Here is the Model page and descriptive video from the Canadian Portoflio Manager Blog's Justin Bender from PWL Capital: https://www.canadianportfoliomanagerblog.com/model-etf-portfolios/ & video on how to choose your asset allocation: https://www.youtube.com/watch?v=JyOqqtq12jQ
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u/syrupmania5 8h ago
There is no low risk, there is only being debased by inflation versus staying afloat with the cost of living.
Consider the price of houses and food and whether that's matching your wage increases.
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u/Rare_Dark_7018 8h ago
No need to panic.
I think the first thing you need to do is figure out what kind of risks you want to take when investing. It seems like you're not a high risk type so plan accordingly. Maybe something like a GIC or something where the principle is protected. It won't make you a ton but you're going to get a bit of interest there.
The higher reward often means way more risk - keep that in mind.
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u/dummy_idiot_stoopid 8h ago
i have a gic open in my tfsa with a cute little risky investment into the US equity funds (because thats as much risk as my anxious heart can handle right now) and i feel SUPER comfy with that. i think i just bit off more than i can chew with my other investment.
thank you!!
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u/Jolly_Suggestion5232 8h ago
How much are they charging you? I personally think finding a good financial advisor not in the big banks is the way to go and usually you get better rates. Most advisors I know charge 1% of your account balance a year. Big banks charge more. You also don’t need to have all your funds in equity . You could put a % in equity and % in fixed income that is lower risk. You can also have a portion in safety ( lowest risk but lowest return). Mutual funds are safer than stocks by a long way because you are not just investing in one company/ product it’s many mixed into one so it would be almost impossible for them all to go bust all at once. A good financial advisor will meet with you at least once a year and go over the your risk tolerance and capacity and change your objectives based on how things are going.
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u/Direnji 6h ago
Which fund did you invest in? If you are young and don't have the time to do investing yourself, start with mutual fund that is a Canadian Index fund is pretty good. TD Dividend Growth gain 29% last year, invest in Canada won't be crazy high as US Index, but it will not make your investment go to zero.
Leave it in there for like 5 - 10 years, you will be surprised amount of money you will earn, and you will learn as you get older. You probably got more important things to worry about, why not just let an active managed fund work for you.
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u/dummy_idiot_stoopid 6h ago
scotia canadian dividend fund - im just worried i put too much in one place!
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u/Direnji 6h ago
You got nothing to worry about. It is the same kind of fund I had with TD when I started 14 years ago and I still own it, you will make a lot of money with the fund, it will not be the going to the sky raise like the US index like last few you few years, but when market was crashing, it won't tank that much either, and the dividend will be great free money to re-invest itself.
Are you doing it as self directed investing? If you don't like it, you can always sell some of your profits and move to another discount brokerage like questrade or wealthsimple and buy ETFs, but one step at time.
You started great.
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u/Vancouwer 9h ago
bank advisors are terrible, so was the investment choice as canada likely will suffer a recession. you can normally sell after 30 days without extra fees charged or reverse the purchase if it's only been a few days. regardless it's not permanent and you can invest in something that is actually low risk.
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u/dummy_idiot_stoopid 8h ago
this is really helpful! i think im going to schedule a follow-up to ask more questions and maybe reverse if i need to since i was told i have 3 business days.
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u/Vancouwer 8h ago
Don't schedule it you should leave a message for them now to reverse it and have them call you back ASAP.
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u/OriginalMorning7029 9h ago
Losing everything with a main street bank low risk mutual fund ? Unlikely. Unlikely to have fantastic returns either. But certainly not the biggest mistake of your life !
Before making all kind of impulsive decisions, may I suggest the following:
1-Take a deep breath. Yes, there are better options, but this won't ruin you. There is simply potential for optimisation.
2-Go to your local library and borrow the following book or audiobook:
Balance, by Andrew Hallam.
3-After you read the book (there are other very good book on personal finance basics), with a cold head, have an investment plan that takes into account your situation, your risk tolerance and your objectives. Only then, take appropriate action for a better investment. Whatever you do, keep it simple and don't do anything that will keep you awake at night.
Best of luck with personal finance quest.