How to pick the right investments for you
Holding an investment account, especially when you don’t have a finance background or people in your circle who have helped you understand its importance, is a big and important step. And if you’re reading this and are still uncertain about taking that plunge, this is for you.
We’ve discussed the basics of investing earlier, but this is more about understanding what your financial landscape is and what types of investments suit you as a result. You can be the same age as someone else and be in a different financial stage of your life. You need to be able to keep it 100 with yourself and make decisions accordingly.
After assessing your own tolerance for risk, tax brackets, debt, and even marital status can all be major factors in determining how you should invest your money. Your outlook of what needs to be achieved can be used to align your investments.
In simple terms, equities are stocks. You can buy them from both public and private corporations through your trading account and the level of risk you incur depends on the industry within which the company operates as well as the profile of the company itself. You can invest in bank stocks as safer options or go in on electric vehicles if you see them as the future but take on the risks that come with that as well.
How thorough you want to be with your research is crucial here, as understanding how a smaller firm is looking to expand, who’s at the head of the table in making these decisions, and what terms like price-to-earnings ratio mean can go a long way.
The higher the risk, the higher the reward, but also very possibly the loss. It’s good to target growth with a certain portion of your portfolio, although how much once again depends on where you’re at in life and your general risk tolerance.
If equities are the hare of your portfolio, fixed income options are the tortoise. Products like treasury bills and corporate bonds are definitely getting more outdated as we go, but fixed-income ETFs/mutual funds are still options for those looking to minimize investment risk and primarily focus on protecting the money they stash away (also known as principal).
Want something you can touch and feel, go get yourself some bullion bars or coins of gold or silver. Of course, you can choose to buy stocks or ETFs of companies producing either precious metal, but then you don’t actually own it, you just own shares of the company producing.
Silver is traditionally the cheaper option and coins are generally considered much easier to trade than bars. The key to getting fair deals on these purchases are scouting out different dealers whether it be online merchants or physical shops selling and figure out where you can get the best bang for your buck. There are costs they have to account for on top of the actual price of the metal and so that can lead to notable differences in price at different places.
Are you ready to deal with crazy fluctuations at a moment’s notice for no rhyme or reason? This is a hot market for many but definitely not where you want all your eggs to be. If you’ve set up a pretty diversified portfolio to this point and are trying to make sure you don’t miss out on the crypto buzz, it’s totally understandable.
Between Bitcoin and Ethereum and the latest hype on Dogecoin, you have to know that this is the riskiest part of your portfolio if you wish to get in and be prepared for all that comes with it. One Elon Musk tweet is all it takes to send your investment soaring or crashing and burning. The most comfortable way to cope with those fluctuations may be to average out your costs by consistently purchasing a specific amount once a month/week/day.
Wealthsimple has expanded its options to provide Dogecoin on its platform recently while other options include Coinbase and Binance.
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*The New Client 2.10% Interest Rate and $150 Cash Bonus Bundle Offer (the "Offer") is available to new Tangerine Clients who: (a) have a Client Number created between November 24, 2020 and July 31, 2021, (b) become a Tangerine Client using the Promo Code “EARNMORE”, (c) open an Applicable Savings Account within 30 days of the date their Client Number was created, and (d) open a Tangerine Chequing Account within 30 days of the date their Client Number was created (collectively the “Offer Qualifying Conditions”). The 2.10% Promotional Rate will apply to deposits made to an Eligible Client’s Applicable Savings Account(s) for 153 days (5 months) beginning on the date all Offer Qualifying Conditions have been met, to a maximum of $1,000,000 (in the currency of the Applicable Account) per Applicable Savings Account Type (for deposits to registered Applicable Savings Accounts made through a T2033 form, please see the full Offer Terms and Conditions). The Promotional Rate is an annualized rate, calculated daily and paid monthly. To be eligible for the $150 Cash Bonus, in addition to meeting all Offer Qualifying Conditions, an Eligible Client must switch their eligible payroll direct deposit for at least 3 consecutive months and must have the first payroll direct deposit received in their Tangerine Chequing Account within 60 days of Chequing Account opening. Limit of one (1) Cash Bonus per Primary Account Holder. The Offer is only applicable to Accounts where the Eligible Client is the Primary Account Holder. Offer is not transferable and can’t be combined with other promotional savings rate offers or chequing cash bonus offers. Full Offer Terms and Conditions, including definitions of any capitalized terms and a list of eligible payroll direct deposits, are available here. Offer may be changed, extended or cancelled without notice.