I sold all my RRSP mutual funds a couple of weeks ago and began my research on how to invest wisely. It has been an exciting learning process but the more I read the more I realize that I've got a long way to go before I can begin to understand many of the investing ideas and research methods.
I am starting to feel the effects of information overload. I am currently holding money in cash and know I do not possess the knowledge to proceed with any but a simple approach as per couch potato portfolio, which I hear is a fine.
I have decided on a 60/40 split that includes 5 or 6 ETF's but before I jump in I would like your advice:
Given its recent downward trend would you buy now or wait to see what happens with the Canadian market?
Would you wait to for the reaction of the US markets to the upcoming stimulus package (I assume the US will print more money)?
I would do some of it now -- but just wait for the rest.
You dont want to lump some all of your money, then have the US post bad news and have investor confidence get slammed into the ground. That would be BAD.
Half now, Half later.
Or do it in thirds. put 33% now, if markets start to go up, do another 33% quickly. Then wait on US data.
If you do 33% now and markets keep sliding, do not contribute anymore until they stop, or until US posts good data.
Also, how old are you?
If you are on the younger scale, then it shouldnt matter too much when you get in.
Agree with KaeJS, if you are bullish on Canadian banks -> go for XIU, if you already have big % of Can banks as individual stocks -> go for XIC.
IMO both are very cheap now
XIC was 12.07 March 2009 now is around 21. What makes you think it such a good buy. If i'd bought in March 2009 i'd be think this would the time to sell. Buy low sell high, this is the golden rule, no?
XIC was 12.07 March 2009 now is around 21. What makes you think it such a good by. If i'd bought in March 2009 i'd be think this would the time to sell. Buy low sell high, this is the golden rule, no?
My target portfolio Canadian equity allocation is 20 percent---12 percent in value equities via XCV and 8 percent in smallcaps via XCS. This is a long term buy and hold strategy to be rebalanced annually.
Note that smallcaps add potential volatility to a portfolio and, while they have had a good run until recently, largecaps may outperform in the foreseeable future.
The general theory for this allocation is that value stocks and smallcap stocks will outperform over the longer term and I just like to invest once and only trade subsequently for rebalancing purposes.
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