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Beginner investing.

M

MCBTunes

Dec 17, 2004
797
1
Martensville, Sask
#1
Hey I was wondering if I could get alittle advice on some investing... I would like to put just like 30 bucks a month away to help me down the road. retirement or even just into my early-mid 20's i'm 18 now... mabe put in 2-300 now and just add slowly... Where should I look? I get like 2.8% on savings now so a GIC is useless... But what about mutual funds, stocks, bonds, RRSP... something like that?

Keep in mind I'm living in canada. I dont want anything too complicated, none of this buy and sell like crazy stuff, I just want to see it grow! :)

Advice?
 
#2
MCBTunes said:
I dont want anything too complicated, none of this buy and sell like crazy stuff, I just want to see it grow! :)

Advice?
Click to expand...

That's the right attitude if you want to build wealth far into your future. I would advise to invest in blue chip stocks because they are usually the most stable in terms of growth and reliability. The risk isn't as high as some of the cutting edge businesses out there. Don't get me wrong - you can get rich off a new business, but IMO the risk isn't worth it when your goal is to build wealth over a long period of time. Also, I don't know what it's like in Canada, but when you sell a stock in the US, you get hit harder with taxes if you sell it before owning it for over a year. Don't get your hands into too many things. I would suggest having a small portfolio to start out. Too many stocks can get confusing. When you get older, convert your stocks into mutual funds. Bonds are nice if they have a high interest rate. I don't know if bonds come with adjustable interests rates, but if they do, definatley get that. A fixed interest rate could depreciate your investment if deflation occurs. (which probaly won't happen, but you never know.) On the other, if you get an adjustable rate, your investment will grow with inflation. Of course, the opposite can happen if you have a fixed rate: you'll actually come out on top if deflation were to occur.

And while we're on the subject: What's everyone's thoughts on day-trading?
 
#5
On a Roth IRA, you don't pay taxes on the interest gained UNLESS you draw your money out early, correct? How many years does it have to be in the account?

Also, as a side question, how does that work out for the people running the IRA program? Please pardon my ignorance on the matter, but I don't know anything about investing, and I would like to get smarter. Who's making money off of this? (Besides the investor.) And how?
 
#7
Firstly, before you commit to anything (and everyone so far seems to have ignored this), you need to work out what you are investing for, how long do you expect to keep the money invested, how long can you afford for the money to be locked up (if at all), how liquid do you need your investments to be and how much risk are you prepared to take.

If you don't know the answers to these questions, you should be talking to someone who can guide you through them. For example, if you are investing now (at 18) for your retirement and you do not want / need to access your money before then, then you can probably afford to lock your money up for life in a pension fund with a high risk investment strategy. That is very tax effective and is likely to have the highest returns over a long period of time, but you wont be able to access the money and there may be years when you make losses.

OTOH if you are saving for only a few years or for potential emergencies, then a low fee high interest bearing bank account may be the way to go.

Shares are good mid to long term investments for reasonable sums of money ie $5000+, but if you only have a little or want to contribute monthly / weekly, then the brokerage will kill you.

Mutual funds allow you to access a lot of investments, but the high fees are often reduce your returns over what you could otherwise get if you invested yourself. But firstly you need ot consider your timing, your goals and you risk profile.
 
#8
Mark Latimour said:
Firstly, before you commit to anything (and everyone so far seems to have ignored this), you need to work out what you are investing for, how long do you expect to keep the money invested, how long can you afford for the money to be locked up (if at all), how liquid do you need your investments to be and how much risk are you prepared to take.
Click to expand...

Don't be silly, mark. This isn't the outback, where people store their money in koalas' asses. We don't have to consider such "common sense" questions over here in North America. It's the land of prosperity and as long as I use Mastercard I will come to own many priceless things.

brad cook
 

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