Invest or not invest?

[GS8]

So I have money bulking up in my TFSA and was debating whether to invest it into something like RRSPs / GICs or invest it in the market.

The tanking dollar and talks of another interest rate cut have me wondering if there's even a point?

Instead of investing, I was also considering buying SOME car parts for the money I've saved so far. Namely a new front bumper for my G8.

I already have a bunch of RRSPs that I've amassed for the last 12 years.

I'm no money expert. Uncertainty always keeps me at bay especially considering how hard I work for my money. I'd rather leave it stagnant than to lose any of it.

What would you guys do?

[pastarocket]

Here's what I would do. Talk to an investment advisor with your bank. The advisor can help you set up an investment plan. You need to find out what kind of an investor you are? Risk averse or aggressive investor looking for capital gains? What is your expectation for investment return? These are the kinds of questions that you need to answer.

What investment products are you comfortable using? GICs, mutual funds, stocks, ETFs (exchange traded funds). Again, the investment advisor can help you by doing an investment review of your investment goals, aversion to risk, to determine what type of investor you are.

You also need to think short term, 1 to 3 years, long term 5 to 10+ years, what you are going to do with your money from investments. Do you need that money down the road to buy a home? I assume that you know that a TFSA enables you to get a return on your investment tax free. You can with draw money from a TFSA without paying tax.

Conversely, you pay a penalty tax to the government when you withdraw money from an RRSP. Unless you are withdrawing the money from an RRSP through a homebuyer's plan, you're paying tax from the RRSP withdrawal.

I would definitely talk to an accredited investment advisor. Talk to your account manager at your bank to see if he/she can recommend a certified financial planner. Ask the financial planner about their employment history, what services they provide, how they can help your investment portfolio, and what service fee/commission that he/she charges for services. We want to make sure this financial planner/investment advisor is a legit advisor instead of some scammer who wants to run investment scams by stealing your money.

[tiger_handheld]

Wrong section

The Business and Financial Forum - Vancouver's Top Classifieds and Automotive Forum - REVscene.net

Leave stagnant = -2% return (inflation is around 2%)
GIC = - return (most GIC's are around 1.5 or lower these days)
Market = ??? (whats your age, goals, risk tolerance, time frame)
Car parts = ? (how much do you value a nice looking car? could yeild to some sexy time with a cute girl who's into cars, could not..)

Before you see any advisor, come up with some answers to those questions. Most major bank advisors are nothing more than sales people with a fancy title and office. They more you can show you know something, the less they will clown you.

[duc_evo_sp]

"legit advisor" LOL

If your not interested in learning how to invest you should allow a "legit advisor" to take your money to place it in anything that get him his commission.

Worst Advice EVER

[DaFonz]

Originally Posted by pastarocket

Here's what I would do. Talk to an investment advisor with your bank. The advisor can help you set up an investment plan. You need to find out what kind of an investor you are? Risk averse or aggressive investor looking for capital gains? What is your expectation for investment return? These are the kinds of questions that you need to answer.

I would definitely talk to an accredited investment advisor. Talk to your account manager at your bank to see if he/she can recommend a certified financial planner. Ask the financial planner about their employment history, what services they provide, how they can help your investment portfolio, and what service fee/commission that he/she charges for services. We want to make sure this financial planner/investment advisor is a legit advisor instead of some scammer who wants to run investment scams by stealing your money.

Investment advisors at banks are perhaps one of the worst people you can go to for unbiased information. They all work on commission there and will sell you funds that gain them the highest commissions, not the things in your best interest.

There's also no such thing as an accredited investment advisor. The only licenses they hold are to sell mutual fund products / insurance / etc. Having the license to sell products is completely different from being able to provide useful advice.

A CFP is a decent recommendation though.

To OP:

- You are losing money by sitting on it. GICs will also lose you money over time.

If you want simple:
A Periodic Review of Diversification

If you want a good financial advisor, look for one that is fee based. Anyone that works for you for "free" is costing you a ton of money in the long run.

[RFlush]

Book and Weblog ? Authored by Garth Turner ? Greater Fool ? Authored by Garth Turner ? The Troubled Future of Real Estate
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[duc_evo_sp]

RFlush is a G, just won my respect.

Originally Posted by RFlush

Book and Weblog ? Authored by Garth Turner ? Greater Fool ? Authored by Garth Turner ? The Troubled Future of Real Estate
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[GS8]

Originally Posted by RFlush

Book and Weblog ? Authored by Garth Turner ? Greater Fool ? Authored by Garth Turner ? The Troubled Future of Real Estate

Good read. Can't say I've ever been bothered to touch real estate.

My friend bought a Duplex for $500k. It wasn't even perfect. The basement was far from it. He must have invested another $70k just in repairs and landscape. I asked him why did he buy now and he just responded with 'I don't want to rent'.

Then he lost his job....

And now he and his fiance struggle. To top it off. his tenants are moving out. So now they have a giant mortgage with no tenant to help leverage the payments.

As for myself:

Looks like I have a lot of reading to do if I want to establish some direction. I don't revolve around money but still need to be smart about the choices I make. Kind of feels like I'm throwing money in the washing machine and hoping it doesn't wash out.

[radioman]

Depending on how much money you make contributing to your RRSP isn't a bad idea. Make sure you use any matching contribution amount your employer currently offers.

If you dont like risk consider looking into some segregated funds. Which you can have your registered funds (TFSA, RRSP). For what its worth my TFSA Returned 11% in the last 12 months in a "low" volatile fund.

Find a CFP and don't think the bank is the only option.

[duc_evo_sp]

I don't like RRSP's, it's a fools investment or a lazy man's investment

Originally Posted by radioman

Depending on how much money you make contributing to your RRSP isn't a bad idea. Make sure you use any matching contribution amount your employer currently offers.

If you dont like risk consider looking into some segregated funds. Which you can have your registered funds (TFSA, RRSP). For what its worth my TFSA Returned 11% in the last 12 months in a "low" volatile fund.

Find a CFP and don't think the bank is the only option.

[radioman]

Care to elaborate?

[duc_evo_sp]

Originally Posted by radioman

Care to elaborate?

Exactly, your so lazy to figure it out for yourself. I'm not your mother, I don't want to hold your hand.

[rawr]

Why not rsps? Lowers your income for the year, potentially putting you in a lower tax bracket. Tax deferred until you withdraw. By the time you withdraw yourw gonna be retired, so you'll pay less taxes. If you're putting money aside for retirement I don't see why this is a stupid idea like you say.
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[SiRV]

My top two reasons for RRSP:
1 - lower's taxable income for the year
2 - evades US-withholding taxes on my US holdings

[SiRV]

My personal favorite piece of advice is to build up a well diversified portfolio of a few ETF's that capture the market in it's entirety.

If you're afraid of buying ONE specific stock due to fears of one company crashing, why not buy ~7000-50,000 stocks? Over the long run (10-20 years) your bound to come out positive.

Check these links out:
https://personal.vanguard.com/us/fun...FundIntExt=INT
https://www.vanguardcanada.ca/indivi...tm?portId=9554
https://personal.vanguard.com/us/fun...FundIntExt=INT

Just by holding those 3 symbols in your portfolio will expose you to ~10,000 stocks
Removes risk of 100% failure (you're money going to zero).

The worst that can probably happen will probably be a 30% decline, followed by a rebound over a few months/years depending on circumstances.

Another piece of advice... don't try to time the market, it's just as bad an idea as picking a stock. Jump in when you can, otherwise you'll get priced out. Think back to 12 years ago when you started your RRSPs, don't you wish you had invested in anything at all?

[1.7El_guy]

Originally Posted by pastarocket

You also need to think short term, 1 to 3 years, long term 5 to 10+ years, what you are going to do with your money from investments. Do you need that money down the road to buy a home?

You really need to think about this before seeing any investment adviser for help.

If you want peace of mind, stick with managed solutions that gives you the right amount of risk/reward. If you don't have an idea, ask yourself this question: If you invest 1000 and lose $50, will you be able to sleep at night? How about $100?

That % will give you an idea which category of risk tolerance you fit into. Now go on globe and mail investment to read up on some funds. Do your own DD.

[DaFonz]

Originally Posted by RFlush

Book and Weblog ? Authored by Garth Turner ? Greater Fool ? Authored by Garth Turner ? The Troubled Future of Real Estate
Posted via RS Mobile

Garth Turner gives questionable investment advice at best.

Garth Turner - Greater "What" - Exactly ?

Anti-Turner ETF - Theoretical Returns 2010 -2011 |Garth Turner - Greater "What" - Exactly ?

Garth Turner as a personal wealth manager?

Garth Turner Economic forecasting

Garth Turner Can Be Wrong, But He?s Mostly Right

Worthwhile Canadian Initiative: Garth Turner bleg

[radioman]

Originally Posted by duc_evo_sp

Exactly, your so lazy to figure it out for yourself. I'm not your mother, I don't want to hold your hand.

It's my line of work. I can't figure out your opinion based off of one sentence.
I'm always up to hear what average folk have to say.

[DaFonz]

Originally Posted by radioman

It's my line of work. I can't figure out your opinion based off of one sentence.
I'm always up to hear what average folk have to say.

I couldn't figure out if you invested in a seg fund from your TSFA from your post, but if you did - why?

1-2% extra drag over already high MERs on mutual funds and all you get a protection from creditors and guaranteed principle (after being locked in for ages). Seems silly if you're young and doing the long play.

[radioman]

You're completely correct DaFonz.
There really isn't any compelling argument for a young person to hold a seg fund as the maturity and death guarantees aren't that useful.
I'm not mutual fund licensed so the only way I can make money on trailers from my investments are through segregated funds.
Hope that answers your question sufficiently!

[SiRV]

Originally Posted by radioman

It's my line of work. I can't figure out your opinion based off of one sentence.
I'm always up to hear what average folk have to say.

Dont even bother entertaining that guy. His post was completely uninformative, and perhaps even dangerous to someone looking accumulate wealth
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[sonick]

Just a few thoughts, pretty much reiterating points made by others but boiling down my thoughts:

* To RRSP or not to RRSP is a whole other discussion altogether since we have no details of your future plans, income levels, etc. But just off the top when you ask 'what would you do', I would put it in some ETFs and diversify under your TFSA. Personally, I contribute to RRSP and put the return towards TFSA in ETFs.

* As mentioned by others, big fan of ETFs due to how easy it is to get a solid balanced and diversified portfolio. I use Questrade where it's free to buy ETFs and only charge commission when you sell (from $4.95 up to max of $9.95 IIRC)

* As for talking to a bank advisor, it is indeed pretty much asking a car salesperson for advice on what car to buy. Most of them are glorified salespeople. Find a CFP, ask around for recommendations, and find one you feel you can trust (luckily in my case my dad is a CFP).

* Garth Turner must be taken with a grain of salt. He is bold and very convincing, but you have to pick and choose advice. Again, a CFP that you trust can provide insight into the other side of the arguments that Garth dishes out.

[Tapioca]

I used to work for a bank and they pay their run-of-the-mill financial advisors 30K a year to sell you products you don't need. You're better off reading from a variety of sources, talking to some colleagues, and figuring out what your financial goals are.

I actually enjoy reading youngandthrifty.ca. It's an all-around finance blog for people under the age of 40. You should also try lurking around RedFlagDeals' finance forum.
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[Wild_Penguin]

Originally Posted by Tapioca

I used to work for a bank and they pay their run-of-the-mill financial advisors 30K a year to sell you products you don't need. You're better off reading from a variety of sources, talking to some colleagues, and figuring out what your financial goals are.

I actually enjoy reading youngandthrifty.ca. It's an all-around finance blog for people under the age of 40. You should also try lurking around RedFlagDeals' finance forum.
Posted via RS Mobile

I also like Canadian Money Forum It's a good place to start reading and a lot of knowledgeable people on there.

[duc_evo_sp]

It looks like people agree about Financial Advisers being sketchy at best when it comes to investing.

But when it comes to RRSP's, most people can't find the flaws.

Even with Real Estate, I can see that there will be a "BIG CORRECTION" aka "COLLAPSE" that will benefit the few and burn the majority.