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Hello everyone,

I've built a decent amount of savings over the years and I'm ready to start investing some of it. When it comes to personal finance and creating wealth, there is no better long-term investing strategy than the stock market. But how do I start investing? What do I need to know? Please help me.

Thanks,
alexasmith.
 

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The simple answer is: index funds. They are the easiest way to start getting some stock exposure and index funds are readily available everywhere. The TD e-series index funds for example are some of the lowest fee index funds around and suitable for investing any amount.

When it comes to personal finance and creating wealth, there is no better long-term investing strategy than the stock market.
You might be starting off with a somewhat incorrect assumption. Most of us around here acknowledge that stocks are an important part of a long-term investment philosophy, but stocks are usually not the only thing that someone holds as an investment mix. Mathematically, there is not even a significant advantage to holding 100% stocks versus say 60% stocks.

So I would correct your statement by saying that the best known long-term investment strategy is a diversified portfolio that includes both stocks and fixed income. Therefore, fixed income such as bonds and GICs are also a key part of long-term investing.

A mix of 50% stock and 50% bond exposure is a traditional portfolio that has been shown to generate excellent returns. As is 60% stocks 40% bonds. There are many ways to achieve this, but the simplest is to use a couple index funds such as the TD e-series.

One way to start investing would be to:

  • Figure out how much money you want to invest (which locks the money away and makes it unavailable)
  • Put 1/4 of the money into TD Canadian Index Fund e-series
  • Put 1/4 of the money into TD Canadian Bond Index Fund e-series
  • Keep reading and learning throughout the year
  • A year later, put another 1/4 each into both index funds
 

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Agree with James.

I would highly recommend getting a copy of The Wealthy Barber Returns (the new version that came out a few years ago, updated from the original.) If you don't want to buy it (but it's WELL worth having), then the library will have it.

*and- stay away from penny stocks!!!
 

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Hello everyone,

When it comes to personal finance and creating wealth, there is no better long-term investing strategy than the stock market. But how do I start investing?

Thanks,
alexasmith.
Creating wealth for who ? The average investor ? I do not think so.
 

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One of the biggest considerations for investors with a minimal amount of funds is not only what to invest in but also how to go about investing. Not long into your investment journey you may find yourself bombarded with minimum deposit restrictions, commissions and the need for diversification, among a myriad of other considerations.
 

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I'm on similar path as OP. Read Millionaire Teacher (good concepts which could be condensed into 50 pages). Research information on this forum. You may end up agreeing with everyone who has posted about strategy.

Word of caution, TD makes life difficult when trying to move money into e-funds because they are not money makers for them (low MER). I've spent the past 3 weeks trying to do this, met 3 times with TD advisors, countless phone calls, and still have 75% of my portfolio in crappy mutual funds waiting to be converted over.

My mix once TD gets its act together:
Stocks (TD, RY) - 10%
TDB900 (Toronto index)- 25%
TDB902 (us index) - 20%
TDB909 (Cdn bonds) - 25%
TDB911 (intl index) - 20%
 

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Well, the first thing to do is probably get started with one of the more traditional, conservative approaches like the couch potato or index investing. Getting started is key, don't suffer from analyse paralysis.

Once you get started, start reading, and read a lot. Especially the different investment strategies out there. There are thousands of them. The purpose of this research is to discover what kind of investor you are. Don't try to emulate someone else,,it won't work. You need to find what kind of investing matches your personality. For example, if your lazy, and don't like following the market, day trading is not for you. Don't fall for the "this strategy doesn't work" arguement. Many people write things like "buy and hold doesn't work in today's market". That's not true (I'm a successful buy and hold investor), it just doesn't work for the person writing the article (just as day trading doesn't work for me...but I know successful day traders). The trick is finding what matches your personality, because nothing works if your fighting yourself.

Finally, I'll tell you there are many long term investment strategies that can work better than stocks. Running a business or investing in real estate can also make you a lot of money...if that matches your personality. If not, it can lose you a fortune just like stocks.

These are all just tools, knowing how they work and wanting to work with them every day are two different things. To be successful, you need to want to work with them.
 

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It's not a bad way to get started, better than doing nothing. For someone starting out, I wouldn't recommend jumping into day trading, options, margin accounts, etc.

Also, they are restricted from investing like the 1% because they don't have the assets to legally invest in those things. You need to be a qualified investor.

However, I agree with tygrus that these methods yield pretty poor returns and, as you gain experience, will seem like a waste of time.

Better to get started slow than get burned and be forever scared.
 

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If you guys think the 1% buy index funds, boy I have some oceanfront property in sask to sell you.
If you believe that investing like the 1% is the only way to go then what are you doing wasting your time on this forum? Aren't you a billionaire by now? Forums like these should be beneath you!

To the OP...

You should read a few books, gather information, formulate a plan and execute YOUR plan.

P.S. I too enjoyed the Millionaire Teacher. It's a great book which is fairly simple to understand. Also, look into the couch potato portfolio with TD e-Series funds or ETF's.
 

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Mawer are great for MF's with solid history of past performances.

I would also advise to stay away from MF/Index MF bonds as none can really beat the general market in bonds, so go for the cheapest solution, bond ETF's (ex. VAB).
 

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If you guys think the 1% buy index funds, boy I have some oceanfront property in sask to sell you.
[SARCASM] Yes, ultra-high net worth individuals can buy "exclusive" investments like hedge funds and private equity funds sold only through offer memorandums, that the 99% don't have access to. Such exclusivity seeking individuals are referred to as "whales" by wealth management professionals.[/SARCASM]
 

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Depends on whether it provides info one needs. If you can post the topics, it would give a better idea of what the course covers, which would allow comments on the info.

The mechanics of buying/sell with today's web based discount brokers lead me to believe you won't need it ... at least I never did.
Then too, one can signup with several brokers now to have a practice account to learn the mechanics.


The hard part is figuring out what to buy/sell and when to do it.



Cheers
 

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...
Word of caution, TD makes life difficult when trying to move money into e-funds because they are not money makers for them (low MER). I've spent the past 3 weeks trying to do this, met 3 times with TD advisors, countless phone calls, and still have 75% of my portfolio in crappy mutual funds waiting to be converted over.

...
... hmmm? ... interesting ... if these funds are not closed, why make it difficult to purchase these funds or is it strictly a doing of these "TD" advisors?
 
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