Author Topic: Beginning investing in Canada  (Read 4022 times)

SilverSails

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Beginning investing in Canada
« on: June 15, 2015, 10:15:07 AM »
Hi all,

I'm 22 and in Canada. I just began my journey into mustachianism, and am very happy to be here. Problem is, I am also a bleeding idiot and have no idea what I'm doing with investing. I've looked into Canadian Couch Potato, but that's left me with more questions. I have 2.5k saved and ready to go, and am able to save 6k/month to invest. The more I read about investing, though, the more confused I get. I just opened an account with Questrade and I know I should open and RRSP and TFSA but I don't even know what type of RRSP and TFSA I should be going for.

I'll tell you a bit more about me I guess:

I'm looking to do monthly contributions into investing. If I keep on saving at the level I'm at, I can be FI in 7 years, though I will probably shoot for 10 just to be sure. I currently keep all of my money in a checking account with TD. I don't have any other accounts. I have no debt. I know I only have a small amount to invest right now, but that will grow. I want something simple and easy that focuses on FI.

Please help, I am drowning in questions and confusion. I don't even know what questions I should be asking!

Retire-Canada

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Re: Beginning investing in Canada
« Reply #1 on: June 15, 2015, 10:38:53 AM »
Just follow the CPP model portfolio of your choice.

Your asset allocation across both your RRSP and TFSA should end up looking close the CPP portfolio you have selected.

Use each month's additions to adjust things as they go out of balance. Once you have maxed out those accounts open a non-reg account and start investing there.

That's the basics.

Keep reading and as you learn more you can tweak your investments to optimize them better, but don't worry too much about it at this point. Just get your money working for you. You have a long long time to learn and adjust your investment strategy.

SilverSails

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Re: Beginning investing in Canada
« Reply #2 on: June 15, 2015, 12:51:08 PM »
Okay, I'm trying to open up a TFSA and its asking me about Long Calls and Covered Calls. What the hell does this mean:



Long calls and long puts
A call is an option contract giving the owner the right to buy a specified amount of an underlying security at a specified price within a specified time.
A put is an option contract giving the owner the right to sell a specified amount of an underlying asset at a specified price within a specified time.

Covered calls and covered puts
Covered calls are an option strategy whereby an investor holds a long position in an asset and writes (sells) call options on the same asset.
Covered puts are a strategy whereby an investor holds a short position, and writes (sells) put options on the same asset.

Spreads
A spread is an options position established by purchasing one option and selling another option on the same security. To qualify as a spread, the options bought and sold must both be calls or puts.

Uncovered options
A written (sold) call or put is uncovered (naked) when the option is not a part of a covered call, covered put, spread, short straddle, strangle, or combination.
Short straddles, strangles and combinations occur when selling both calls and puts on the same security.

None
You will not receive access to free options data if you select no options.
You are not required to trade options, however you can receive free data if you select an option level.





Spudd

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Re: Beginning investing in Canada
« Reply #3 on: June 15, 2015, 12:58:37 PM »
Just select none.

fb132

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Re: Beginning investing in Canada
« Reply #4 on: June 15, 2015, 01:07:35 PM »
https://www.youtube.com/watch?v=7Okw7S1h2cE

Tutorial on how to open an account, select what he selects.

SilverSails

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Re: Beginning investing in Canada
« Reply #5 on: June 15, 2015, 02:48:23 PM »
https://www.youtube.com/watch?v=7Okw7S1h2cE

Tutorial on how to open an account, select what he selects.

That was immensely helpful! Thank you so much

fb132

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Re: Beginning investing in Canada
« Reply #6 on: June 15, 2015, 02:58:20 PM »
When you need help with questrade, I had help with people on this website, but youtube also explain alot of stuff that you can do on questrade.

RichMoose

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Re: Beginning investing in Canada
« Reply #7 on: June 17, 2015, 10:39:20 AM »
When you open your QT accounts, just go with the basic self-directed accounts. I would recommend you skip the Margin TFSA, all the Options trading stuff, etc. Unless you are highly educated in financial instruments, having the these available is just a temptation to make unwise choices.

Team_Questrade

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Re: Beginning investing in Canada
« Reply #8 on: June 24, 2015, 11:33:17 AM »
Hi SilverSnails,

Iím glad that youíve decided to make Questrade your brokerage of choice.
Were you able to finish opening your new account?

Please let me know if you have any questions about navigating the IQ platforms, redeeming your promotions, or anything else that might have come up during the process.
Iím here to help.

Thanks,
Carl from Team Questrade

fb132

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Re: Beginning investing in Canada
« Reply #9 on: June 24, 2015, 11:36:07 AM »
When you open your QT accounts, just go with the basic self-directed accounts. I would recommend you skip the Margin TFSA, all the Options trading stuff, etc. Unless you are highly educated in financial instruments, having the these available is just a temptation to make unwise choices.
If your RRSP and TFSA are maxed out, isn't it better to use the margin trading account simply by invest the same ETF's as canadian couch potato or is there something I am missing when it comes to margin account with questrade??

RichMoose

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Re: Beginning investing in Canada
« Reply #10 on: June 24, 2015, 04:20:44 PM »
When you open your QT accounts, just go with the basic self-directed accounts. I would recommend you skip the Margin TFSA, all the Options trading stuff, etc. Unless you are highly educated in financial instruments, having the these available is just a temptation to make unwise choices.
If your RRSP and TFSA are maxed out, isn't it better to use the margin trading account simply by invest the same ETF's as canadian couch potato or is there something I am missing when it comes to margin account with questrade??

It's better to use a cash trading account with no margin. Using margin is leveraging your investments, making everything much more risky.

fb132

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Re: Beginning investing in Canada
« Reply #11 on: June 24, 2015, 05:30:48 PM »
I still don't understand, what would it do to my investment? And where do you see that option on questrade?

nobodyspecial

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Re: Beginning investing in Canada
« Reply #12 on: June 24, 2015, 09:56:37 PM »
Cash option is the default. You put cash in your account by doing a bill pay to quest from your bank (just like paying a utility bill)
You then buy the shares you want, enter the Vanguard (or whoever) symbol - click buy and enter the number of shares.
With an ETF you can't buy fractions of a share so you need to work out how many you can afford with $x, enter that in the box, it tells you the cost and you click buy. In theory you are setting a minimum and maximum price you will pay and they go and try and find a buyer in this range, but since ETFs are traded so frequently that you almost always pay within a cent of listed price.

A margin account means you can buy as many shares as you want without paying for them, if they go up you get the profit, if they go down Quest will ask you for the loss. This means you can buy a $M of shares, but if they go down 10% you owe $100K !
Essentially you are borrowing the money to buy the shares in the hope that they go up before you need to pay it back - this is the classic Wall St banker jumping off the ledge story.

 I imagine they limit how much you can buy based on some credit rating, and charge a bunch of fees and interest - but since I didn't want this I didn't ask.


« Last Edit: June 24, 2015, 10:16:25 PM by nobodyspecial »

Goldielocks

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Re: Beginning investing in Canada
« Reply #13 on: June 24, 2015, 10:17:14 PM »
A margin account is like taking out a loan to buy more shares than you have the ready cash for.

The one nice feature of them, is that you can rebalance your portfolio and BUY shares in the new investment in the morning, and then delay selling the shares you already own by a few hours (or longer), to hit a target price. The sale of the other shares will "pay off" the amount you borrowed on margin.  Bridge financing.

Right now my TD TFSA will not let me have a margin account on registered accounts, so I have to sell shares, wait for it to go through, then buy the new shares.   This makes my "human nature" procrastination about re-balancing amplify.

fb132

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Re: Beginning investing in Canada
« Reply #14 on: June 25, 2015, 04:34:25 AM »
Oh ok, but let's say I put in 500$ in my cash account...if I use the margin account and let's say I purchase 500$ worth of ETF's in my margin account, I wouldn't basically owe anything since I already have the 500$ to cover the loss,right?

martin

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Re: Beginning investing in Canada
« Reply #15 on: June 25, 2015, 06:41:01 AM »
Yes but then that's a cash purchase, not on-margin