The Money Mustache Community
Learning, Sharing, and Teaching => Investor Alley => Topic started by: bowsy51 on April 12, 2016, 09:01:46 AM
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Hello all,
I am a 25-year old Canadian currently teaching English in South Korea. I have approximately $50k CAD that I'm looking to invest, but am not particularly sure what to invest in. I have narrowed it down to three options (although I am certainly open to others).
1. TD E-Series Funds
http://canadiancouchpotato.com/wp-content/uploads/2016/01/CCP-Model-Portfolios-TD-e-Series-2015.pdf
2. Investing through Questrade
But then not sure regarding which funds to invest in and how to split them.
3. Investing through Vanguard
But then not sure regarding which funds to invest in and how to split them.
Maybe 25% or less VAB, 25% VCN, 50% VXC.
Anyways, I am really hoping that some seasoned investors can point me in the right direction regarding where to invest, as I'm still not totally sure what to do!
Can anyone give me any thoughts on this?
Thanks, it is much appreciated!
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I don't know how living in S. Korea affects your situation, but we can't invest in Vanguard directly in Canada. So I'm just buying Vanguard ETFs via Questrade as the buys are free so I can add money each month and when I get dividends without paying or waiting to collect a larger sum.
Your 25%/25%/50% asset allocation is the CCP Assertive model portfolio. It would be a reasonable choice. I can't tell you which asset allocation is right for you, but I can say it's not a crazy choice.
You can always start with this and as you learn more about investing if you decide a different asset allocation is what you want you can change at a later date. You don't have to make the "Perfect" choice today.
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I do the TD e-Series and am happy with it. I think ALL those things you mentioned will get you to the exact same place. It's like you're looking at different brands of cream corn on the shelf and debating pros and cons. At a certain point you just have to say, "Fuck it," and grab one. Remember, this money is malleable and if you don't like the service you're getting you can always move it later. No big deal. Don't suffer from analysis paralysis (http://www.canadianbusiness.com/investing/moneysense-week-6-ways-investors-sabotage-themselves/).
Good for you on getting started at 25!! Wish I had.
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I highly recommend buying Vanguard funds through Questrade. I've heard that setting up the TD e-series funds can be a pain.
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If I had to do it all over again I would probably set up a Questrade account.
There are lots of good reviews here.
I do self directed with RBC and purchase Vangaurd ETFs, roughly following the couch potato.
I went with RBC because I already had some shares with them. (Long story but a few years back I literally had a paper share certificate and they were the only competent bank that knew what to do with it.) I have continued to be happy with the service.
The fee is $9.99 per trade so I usually only invest $3000+ at a time. Setting up your $50K into VAB, VCN and VXC would only cost $30.
TD, Scotia, CIBC etc all have online trading brokers so you may want to pick one you already do banking with. I tried to set up an online broker with CIBC and the "advisor" wasn't helpful once she knew I just wanted to invest myself and wouldn't be buying their mutual fund products. I hope you have better luck with your bank.
I think most are around the $10 per trade mark. Double check for annual fees too.
Fees will matter more to you it you want to invest in small chunks. I think I only did 4 big purchases last year.
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Thanks everyone for all the help! It is greatly appreciated!
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I've heard that setting up the TD e-series funds can be a pain.
I inquired about this recently and here's the deal with e-Series:
- The day you request a sell, the funds will be liquidated using the closing price for that day
- If you are using the proceeds to purchase other investments in the same account, the full balance is available at the start of the next trading session (ie - the next business day)
- If you are moving the proceeds out of the account, it takes 3 business days to become available.
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I guess I meant more the process of opening the trading account. I've heard that most of their employees don't even know about it because the big push is towards managed accounts where they invest in expensive mutual funds for you.
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I've heard that setting up the TD e-series funds can be a pain.
I inquired about this recently and here's the deal with e-Series:
- The day you request a sell, the funds will be liquidated using the closing price for that day
- If you are using the proceeds to purchase other investments in the same account, the full balance is available at the start of the next trading session (ie - the next business day)
- If you are moving the proceeds out of the account, it takes 3 business days to become available.
Yep, that's if you have it in just a regular mutual fund account (like I do.) However, buying these through a TD Direct Investing account, they work the same as any ETF. (Instant buy/sell.) At this point (and maybe the posters?) it shouldn't matter whether the transaction is instant and Jack Bogle often shows how ETFs deliver worse returns. People are too prone to act spontaneously with ETFs, trade too often, and thus trail returns more than if they'd done nothing at all.
At $400K it will be worth it for me to move the bulk of it to Direct Investing--just because the MER is a tiny bit lower. But at this point it's negligible.
And I have sold from my non-registered mutual fund eSeries in order to move it to the TFSA. It didn't take 3 days--it happened overnight.
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To set up I just made an appointment at a branch (not a client) and they set up an account, then I waited for some paperwork in the mail to log in. I don't remember the specifics but it wasn't hard at all. I still get in-branch support once in awhile if I need it, even though I only have self-directed.