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Advice for my little brother

14K views 36 replies 16 participants last post by  OntFA 
I want to help my little brother get on his feet financially. The problem is, I'm just learning myself;

I've been in Altamira funds for 20 years, and am planning to switch to ETF's with a reasonable asset allocation and re-balancing. But I'm just learning about this stuff myself!

Here's what I plan to tell him initially:

"I suggest you look into TD e-Series mutual funds. These are "index" mutual funds, and have the lowest price of just about any mutual funds available. Index funds just follow established market indexes, and usually beat most other more managed funds most of the time, since it turns out that in a market with a lot of educated players, nobody can make better guesses about market movements than anyone else. Here's a couple of links for the

Later, you should consider even cheaper index ETFs, but hold off on this idea until your portfolio has grown bigger (this is because there is a brokerage fee to buy them, so you generally only want to do it with bigger blocks of money). "

...is this good advice? Is the TD fund family the best choice for now (I've no experience with them personally)? Is there anything else I should be telling him???

If you have comments, Thanks in advance!!! :)
You are recommending this to a relative not knowing fully what you are recommending & saying that you're just learning youself

Well its a tough call, especially brother-to-brother, it needs some further investigation I'd say, especially if your brother follows your recommendation and it goes the wrong way

Although, TD series funds - I suppose are OK, not something I would do

Good luck
 
for the guys at work who ask me how to start I generally tell them to put their money into the ING street wise funds. This is simple and straight forward for a beginner. I then tell them once they get $20 to $30k they can think about shifting to the TD e funds and eventually move into etfs. The complexity increases and they get more knowledgeable and have gotten use to the fluctuations in the market
I agree with mfd that start slow and easy, know the ROR, yield expectations & risks involved, since not everyone has the same tolerance level nor the understanding of the what could turn out to be high risk or even higher MER's

On ETF's I could throw in the iShares CDN S&P/TSX 60 Index Fund 'XIU' - buy it then sell covered calls on this ETF at the money long. Then all being well its possible on a one year term to yield better than 10%

Then there are other complex investing methods which are way too much for those starting out
 
First of all only 1 in 10 advisors are licensed to sell etfs in the first place. Therefore the majority of diyers who buy etfs do so without an advisor.

IMHO for very liquid etfs such as the xiu the price always trades pretty close to nav.

Personally I used to invest in mutual funds through td canada trust. For the most part these mutual fund reps were useless. all they wanted was your money. They never explained the inner workings of a mutual fund. You were basically paying these bank reps a trailer fee for doing nothing.

Personally I have been a diy etf investor for 5 years in a discount brokerage account and have never looked back.
you do know that the majority of bank FA's will tell you that the general public dont know their ar$e$ from their elbows and that is why bank advisors are the best to be trusted thing going:eek:

Squash if you have mastered DIY trading especially ETF's well done - you're one of the lucky ones, the rest I guess will lose money DIY or with an advisor

Everyone needs a shoulder to cry on - brokers and advisors are always winners

disclosure: I have not used an investment or financial advisor since 1987
 
More information does not make for a more informed investor or provide greater insight. More information, one could argue, adds to confusion because of information overload.


How many people do you know, squash, that actually use ETFs the way they were originally intended - eg with just a handful of funds covering the major asset classes a la couch potato? I haven't met one person yet. I haven't met anyone who could not resist the Ag ETF or the China ETF or the short ETF or whatever else is drawing attention and sounds real sexy. And that stuff destroys returns more than an extra 1% fee ever will.
The OP big brother as well as little brother if they are reading this thread now must be totally confused

ONTFA, you made a comment "How many people do you know, squash, that actually use ETFs the way they were originally intended - eg with just a handful of funds covering the major asset classes a la couch potato? "

would you care to expand or elaborate on that specific to "use" and "intended to"?

My POV the way that I see it is that an ETF is just another equity of sort to buy, hold, collect dividends (roll them over to buy more stock if you dont need the income) and then maybe one day exit with a nice profit or have enough dividends to supplement your living costs (couch potato style)

Of course the more experienced investors may trade in/out, even sell CC options on the ETF's and role the option money with the dividends to buy more ETF's (dont go there)
 
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