Hi James,And sorry I did not mean to sound discouraging. I find all of this stuff very fun, I'm just saying that there is a very counterintuitive thing that happens when investing: the fewer actions you take, the better you'll do.
That's assuming you start with reasonably solid investments. Even a low fee balanced mutual fund will give better long term results than what most investors achieve, even some very intelligent investors.
And hedge funds, which make a lot of active decisions, great analysis, and the best models on earth, often don't outperform.
Thanks for the advice. Here's my full story and context. We're a couple in our mid-30s. Actually, I'm 32, she's 34, soon to be 35. I've been working as an engineer for 8 years, she's been working for only 5 years and started making some decent money about 1 year ago. We live in Montreal, we don't do 6 figures, but we got decent salaries. We bought a duplex last year, which got me to use absolutely all of my investments (TSFA, RRSP) because she had no savings on her side and still our down payment was less than 6 figures so we bought with a down payment of only 5%. Before taxes, the rented unit pays 40% of the mortgage. Though, we must do a lot of renovations, almost 6 figures at first, then hopefully 15-20k per year for the next 5 years. How much we'll be able to do depends if we have kids soon, and it's in the plan. If having kids doesn't work, we'll be planning on adopting, which is another big project.
In the first decade of my investing life, when I was in my 20s, I was just working with banks, not really knowing what I was doing, but simply trying to get access to the best mutual funds, which was what my bank's financial advisers suggested. All that comes with some questionnaire trying to figure out what kind of investor you are and I was always working with them to tweak the results to get on the most aggressive path. Yet, I don't think I got such good advice. I mean, I was in my 20, nothing to lose, an engineering career on my way, I just wanted to be 100% equity and 100% aggressive growth. My goal was not to look at how my investments were doing. I just wanted to set up a weekly investment out of my personal account and never think about it, which is what I did. But they got me split my money into MFC4410, MFC4440, MFC4444 and stuff like that until I asked for stuff like MFC4421 and that's just because the selection was pretty limited. I also planned to change bank, but I only ended up doing that when we got a mortgage. Me and my spouse are now in a total of 4 banks since we bought and that's because I took time to search for the best out of each.
So, anyway, all that to say that during my first decade "investing", my investment style was simply to setup a weekly transaction into a growth portfolio, never look at it, never think about it and that's what I did, but I didn't have access to good advice and good funds, except maybe for MFC4421. They always got me into 80/20 equity/fixed when I wanted 100% equity. What was I really going to lose with my 15k$ initial investment and 100$ weekly contribution? Did I really care if there would be downsides of -35%, I was not going to look at it, as long as there's a 50% upside after that since the financial adviser should be suggesting me solid mutual funds I can trust.
I never knew we could invest by ourselves. Well, I saw the options in some banks, but I always thought it was for big investors and comes with big commissions. I never knew about retail investors. This year, after the crash, a friend told me her boyfriend invested 5000$ then took out 6600$ one week later for 1600$ profit. I started searching and found low-fee brokerage like Questrade (which is what I'm using).
In my personal account, I'm back to almost no money and that's the money I'm playing around with my own investments in my TFSA (in which I can put lots of money since I recently withdrawn everything).
But I also plan to manage our matrimonial money and that'll be "safer" investments. Still, I'm a bit reckless, but I like to learn from mistakes. I already did my first big mistake. We have almost near 6 figures of money for our initial renovations and I invested about half of it, even knowing that we'd be needing it a few months after. At first, I invested 1/4 of it. That money managed to go up +15% and is now stable at that level, so I'm super happy. But then I invested another 1/4 without watching for red flags. That's just my lack of experience, I could've easily seen that red flag, but I didn't have any official procedure yet when investing. That money went down to around -25% and it's now stable at around -15% and at the moment all that money invested (1/2 of the renovation money) is oscillating from -3% to +2%, so my mistake on my second investment erased all my potential profit of my first investment. (What's funny is that in my personal portfolio, I've invested in another stock of the same industry and I'm currently up by +77% on that one, so it's balancing out, I guess)
Now, that seems pretty risky, but I have back up plans. My personal money is currently at +25% and that is now worth about 1/3 of all the money I invested so far. Therefore, the full overview on all money invested is currently at +7% in 3 months. And if anything really turns bad, I can either sell everything before losing money on my first year knowing I need 2/3 of my invested money, or simply postpone the renovations.
At the moment, our matrimonial money is all for renovations that we'll do in the next 5 years, so there's no true risk in my opinion because renovations can always wait.
Now, I still haven't talked about emotion. Yes, we are all humans, we make mistakes, we get overexcited, we get stressed out and we take irrational decisions from time to time. We also take decisions from our guts feeling. Some say we have 3 types of decision-taking : using our brain, using our heart and using our guts. I take that into account because one my favourite subjects is about psychology, cognitive biases and much more. So i'll definitely balance out knowledge on psychology, rational decision-taking and decision-taking processes. I plan on studying to find out some kind of automated process to scan for opportunities and to decide when to buy and when to sell. I'm looking for some kind of algorithm trading but for long-holders. I may also go on the US side. If you look here (What is your favourite USD growth stocks?), I just started screening some US stocks and there are stocks like ROST and UNH who has about 24% CAGR on a 30-year range of steady growth. To put that into perspective, it's outperforming AAPL over that 30-year range. Again, past results doesn't guarantee future results, but I'm pretty sure I'd be glad with CAGR over 20%.