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So last year, I contributed about 15k into a self directed RRSP account. And when the market took the plunge, in fear, the account remained in cash. To this day, it still is in cash not earning anything or working for me. I'm just worried about investing, wondering if this is a M curved recession. Another stock market crash may be on the horizon after the stimulus money runs out.

I'm glad I found this site, I was just wondering if anyone could good me some advice on what to do with the money? Thank you.

PS. I am a beginner invester as well.
 

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Yes theirs another correction coming, when who knows. It's time to do research and know were your moneys going.
 

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Yes theirs another correction coming, when who knows.
This is like saying sometimes it rains sometimes it doesn't rain. OF COURSE AT SOME POINT THERE GOING TO BE SOME KIND OF CORRECTION. STOCKS ARE ALSO GOING TO GO UP IN THE FUTURE.

At least put it in a GIC or something that earns some interest until you make up your mind. Sometimes I also find it hard to make a decision. I have found my comfort zone and this has made me a little more comfortable. In the beginning I was checking my stocks every 5 minutes which got to be a little OCD. Now I have a system where I kind of set it and forget it.

No one can tell you what the proper direction for you. Some people like dividend stock, some buy and hold their stock, some day trade and there are about a million ways to do that. Everyone thinks they have the best system. Some will sell their "super" system to you. At the end of the day you need to sleep at night and so you need to find your own comfort zone otherwise you will go nuts worrying.

You might also try website I use called www.wallstreetsurvivor.com they allow you to do practice trading for free. This way you can find out what you like. They have a couple restrictions I don't like, no penny stocks and no canadian stocks either.

Good luck :D
 

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Buy XIU.TO with your 15k.
Then every month add AllowedRRSP/12 to your rrsp. With your monthly contribution: if S&P 500 is below 1200 buy a stock index ETF, like XIU.TO; if it's over 1200 buy a bond index ETF, like XBB.TO. In addition to that: when S&P 500 gets over 1500 start to sell your stock ETF (a small portion of it each month) and buy your bond ETF with the proceeds. When S&P drops below 1000 start to sell your bond ETF and buy stock ETF.
Next market cycle, modify the numbers according to the previous cycle range. A cycle usually lasts a few years (3 to 10).
You'll probably make about 10-12%/year using this strategy (over a period of 10-20 years).
 

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I'm glad I found this site, I was just wondering if anyone could good me some advice on what to do with the money? Thank you.
Dollar cost average into a simple balanced mutual fund. Any one of the big banks' Monthly Income funds will work well for this purpose. Invest 1/4 of your money now, then in 4 months time invest another 1/4, repeat and repeat until the entire sum is invested. This way, no matter which direction the market goes, you will be participating. If it goes up, you have some money working for you; if it goes down, you still have money to invest to take advantage of lower prices. With the balanced fund, you are buying a selection of both stocks and bonds, so you will have exposure to whatever is doing well at the time. With a monthly income type fund, the monthly distributions allow you to reinvest in additional units on a monthly basis further smoothing out the average cost of all units owned over time. This will get you started, but before you move to anything more sophisticated than that, you will need to educate yourself on investing. A good place to start is www.shakesprimer.com
 

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My advise was very simple "Do some research" If you missed this rally completely you are not ready to self invest.

I've been selling for 3 months and really hope the rally continues so I can lock in some more profits.
 

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I would advise against reading lots of books. Most of them are a waste of time. I read a lot of books about technical analysis and fundamental analysis and all sorts of strategies. The thing is I've tested most strategies and they just don't work. They tend to work in the past (when the strategies were "discovered" - by data fitting) and not at all in the future (in this case after the books were published). Other strategies are just untestable voodoo and it would be a gamble to employ them. You'll have a much better time in Vegas. If any strategy would really work, then everyone will trade it and because of that it would stop working.
Just read some basic books (or you can easily find all the information you need on the net) about the mechanics of investing/trading and then aim for a low long-term goal like 8-10%. That is easy with a balanced minimal portfolio of indexes and it does not require more than 15 minutes a month of wasted time. Don't try to compete with the Wall Street bots.
 

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If the market drop last year worried you that much then you are not ready, at this point in your life, for investing in equity funds. (It doesn't matter if it is an aversion to risk generally, or because in your current financial situation you need security of your capital.)

As another has suggested, at least put the money into something that earns interest, with capital protection, like GICs, until you are ready to invest in the market.
 

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Books:
Random Walk Down Wall Street
The Intelligent Investor
The Wealthy Barber (less to do with investing but good baseline anyways).

Because you're a beginner, you should not buy individual stocks (don't put all your eggs in one basket).

Investing concepts to google up and have basic understanding:
Index Funds & Index ETF's - More volatile but bigger returns
Bonds - less volatile, generally lesser returns

Aside from that, just read financial blogs like this one and some reading.
Ignore all fads on technical trading etc, and stick to the basics.
 

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So last year, I contributed about 15k into a self directed RRSP account. And when the market took the plunge, in fear, the account remained in cash. To this day, it still is in cash not earning anything or working for me. I'm just worried about investing, wondering if this is a M curved recession. Another stock market crash may be on the horizon after the stimulus money runs out.
There is a metric ton of advice that could be offered here, and by virtue of the fact that I don't want to type too much, I will invariably end up omitting some salient tidbits.

But I have a few general pieces of knowledge that I would impart:


(1) Your first goal is to get educated. Read a copy of The Intelligent Investor. Surf over to Bylo, Canadian Capitalist, and StingyInvestor. Pick up a copy or two of Canadian MoneySense and Canadian Moneysaver. Consider this to be the "required reading" portion of your homework. :)


(2) Based on (1), you should get reasonably acquainted with your objectives -- that is, your risk exposure, your desired asset mix, and how much stock/bond investing is for you.


(3) (a) After all of that, you should re-assess if you are still interested in (and up to the challenge of) pursuing the self-directed RRSP. If not, don't be discouraged or feel bad -- at this point, you simply need to be truthful to yourself. If you can't stomach the possibility of, say, 50% losses, perhaps do-it-yourself stock investing isn't right for you, and an ETF or fund-based approach, such as the couch potato portfolio, may be more to your liking. At this point, you should possess a sufficient understanding of your own personality to gauge whether or not you can execute the actions that will be required to buy and manage your stock portfolio without allowing your emotions to (detrimentally) take control. (This is a key concept, and something that many investors trip over.)

(3) (b) Assuming that you wish to continue with the self-directed RRSP, reflect on what both Ben Graham and Warren Buffett have suggested -- it is neither the economy nor the market that should concern you. Rather, focus on the quality of the prospective individual companies in which you are hoping to invest, as they are (individually) easier to evaluate, understand, and predict. (For all intents and purposes, ignore the wider markets.)

(3) (c) Be fearful when others are greedy, and be greedy when others are fearful.

(3) (d) With investing of any sort, adopt the viewpoint that you are intending to become a part-owner of a company, and plan your actions accordingly. Always be sure to read the most recent annual and quarterly report front-to-back, and ensure that you fully understand what the company does, how it makes money, how it will grow, and what makes this company "special".



So, if you want some practical suggestions, you may wish to do something like the following. Standard disclaimers apply (do not construe this as financial advice, I am not a professional investor, your mileage will vary, don't sue me if this doesn't work, you need to do your own diligence, and so forth).

( Many people will suggest that, with $15k or as a beginner, you ought to avoid individual stocks. I don't really agree; this strategy worked fine for me when I was starting out, but then, I am both very methodical and also stubborn. :) )

Formulate and run stock screens (based on the defensive investing criteria outlined in "The Intelligent Investor" and/or the screens on the Stingy Investor website) for Canadian markets. To do this, I use my brokerage account's stock screening features, which I quite like. (US markets are fine, too, but keep in mind that there exists potential for additional losses due to currency exchange fluctuation.)

Using the summarizing information offered in things like the "Financial Post Investor Report" for each stock, narrow down your selection to a couple of companies that interest you, have a long history of >= 10% RoE per year, low debt, and good cash flow, and which you understand. Then read their annual reports and widdle-down your list. Do a quick search on websites like the Financial Webring Forum, StockChase, and StockHouse to see what other people are saying about these companies.

With $15k, I might consider investing $5k per stock, for a total of 3 stocks, and incrementally keep adding new stocks to my portfolio (in similar amounts) as time went on. (I would do this until I had built up a reasonably balanced portfolio, at which point I may wish to start taking larger positions.) This ensures that your "overhead" (trading costs) are a reasonably small (< 1%) portion of the purchase for each stock.

When buying any stock, always use limit prices which you define (i.e., do not use market prices). Run your ideas past a friend or spouse, as it's easy to get caught up in the excitement of a purchase and lose sight of "the big picture".


--Kris
 
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