Newbie investor with very basic questions - Page 2
Page 2 of 6 FirstFirst 1234 ... LastLast
Results 11 to 20 of 57

Thread: Newbie investor with very basic questions

  1. #11
    Senior Member
    Join Date
    Jun 2009
    Location
    Okanagan Valley
    Posts
    3,800
    Quote Originally Posted by Oldroe View Post
    If you buy at the top of the market and a crash happens it's gut wrenching.

    On the other hand if you can buy on a dip or correction and it recovers the next dip or correction will not likely put you in a loss situation. This makes staying in the market easy.

    If you can discipline your self to buy on corrections.

    I would spread your money over a year and buy steady every month and if you get lucky and hit a correction buy hard.
    Buying monthly works with mutual funds with zero commissions, but this is not practical with $10 commissions buying ETFs. The OP has sufficient funds to be in 2-3 ETFs for a couch potato portfolio and if the OP goes the ETF route, the OP is probably can probably only divide the $100k into 2 separate purchases... one now (or soon if waiting for a dip) and one later (potentially at another market dip). The issue is whether that dip happens soon... or in 2018 and in the meantime the market goes up. It's a 50/50 gamble.

    I also agree with CalgaryPotato that sustained 10% returns is over-optimistic on a 5 or 10 year rolling average basis. A balanced 60/40 portfolio might be in the 4-5% return range with a 75/25 perhaps 1 percentage point more. The outsized returns since the depth of the 2008/2009 financial crisis are unsustainable. Global GDP growth just isn't high enough to keep aggregate corporate earning increasing at double digit numbers.


  2. #12
    Senior Member Beaver101's Avatar
    Join Date
    Nov 2011
    Posts
    2,947
    Quote Originally Posted by AltaRed View Post
    ...

    If you are buying for the long haul, e.g. 10-20-30 years, to retirement, it does not make much sense to try and time the market. Five years from now, you won't even remember if you bought high, or in the middle, or in a market pullback. Some people (and I can subscribe to it) will suggest that you invest 50% now and 50% in 3-6 months just in case there is a big market dip within the next 6 months. This helps alleviate buyer's regret of having bought 'high' now, and buyer's regret can sometimes cause heartburn, despondency, sleepless nights and unnatural behaviour. The odds are perhaps 50/50 that the market will be higher 6 months from now, rather than lower...but it seems people have more angst over buying high than missing an opportunity to have bought earlier, i.e. now. You have to decide what your own temperment is.
    ... +1 ... LOL on "unnatural behaviour" ... such as?
    Everyone should be respected as an individual, but no one idolized.-A. Einstein

  3. #13
    Senior Member
    Join Date
    Jun 2009
    Location
    Okanagan Valley
    Posts
    3,800
    Quote Originally Posted by Beaver101 View Post
    ... +1 ... LOL on "unnatural behaviour" ... such as?
    Purposely meant to stimulate your imagination......

  4. Remove Advertisements
    CanadianMoneyForum.com
    Advertisements
     

  5. #14
    Junior Member
    Join Date
    May 2017
    Posts
    4

    Question newbie help

    As another very newbie(VERY) I have another question that I'll piggyback on this thread.

    I was looking at a statement of mine(TFSAs) and my returns are listed cumulatively. Why are they added up instead of averaged out?

    ex.
    Jan | Feb | Mar | Apr | May | June | July | Aug | Sept | Oct | Nov | Dec
    -1.46 | -2.39 | +2.76 | -1.69 | +3.66 | +0.78 | +2.96 | -0.22 | +0.14 | +0.28 | +0.86 | +1.82
    1st quarter |2nd quarter |3rd quarter |4th quarter
    -1.13 |+2.73 |+2.85 |+2.99
    Year
    +7.74

    A cumulative return is 7.74 but an averaged is 0.645. Would really appreciate an explanation or link to one.

  6. #15
    Senior Member
    Join Date
    Mar 2012
    Posts
    3,660
    There are 12 months in a year, you averaged .645% per month, multiply by 12 months and you get 7.74% over the year.
    I'm not JustAGuy (without spaces), or Donald, or <insert name here>.

  7. #16
    Senior Member
    Join Date
    Sep 2009
    Location
    Ont.
    Posts
    1,037
    The OP could buy thru Share Owner all positions for cheap. And drip to 4 digits.

  8. #17
    Senior Member My Own Advisor's Avatar
    Join Date
    Sep 2012
    Location
    Ottawa
    Posts
    4,928
    I agree with many comments....

    Another thing to keep in mind...further to AR's point, you're not just investing to retirement, you're investing beyond retirement...in retirement. So, if your time horizon is 20-odd years then likely today's price, certainly if you're an indexer, is the best price available.

    That said, nothing wrong with limping-in now...50% now; 50% in 3-6 months; 25% over a year, etc. Really the choice is yours.

    Honestly, if we could predict the future, we'd all be super wealthy.
    Hidden Content - Working on a $1 million portfolio and $30k per year from it.

  9. #18
    Junior Member
    Join Date
    May 2017
    Posts
    4

    Question

    Quote Originally Posted by Just a Guy View Post
    There are 12 months in a year, you averaged .645% per month, multiply by 12 months and you get 7.74% over the year.
    Sorry, was late and I don't think I made my confusion evident. There's a discrepancy between what I'm shown as a yearly return versus if I actually applied each % to the month. For example, if I started with 1000 and then applied each month as it came to that amount it'd end up at 1086.39. If I used the reported percent which just appears to be a sum of the year's returns the same 1000 would be 1077.40. Extrapolated to larger sums and this is quite a difference.

  10. #19
    Junior Member
    Join Date
    May 2017
    Posts
    11
    AltaRed, MyOwnAdvisor, OldRoe, Potatoe, thank you, learned alot from your replies and makes sense. I will aim for a short term correction and limping in type strategy, even if since it's retirement/long term growth goal, it should grow with ETFs, I'll feel better as per the temperament comment

    So today (I dont normally follow financial news and frankly I won't really end up in future after I watch for my purchases, that's the type of investor I truly am), they are saying

    "Dow plummets more than 370 points, TSX tumbles"
    "North American stock indexes fall into the red after strong start"

    1. Is this considered a dip? Guessing not, I'd be too lucky timing-wise lol.
    2. What type of news headline or keywords should I look out for to know if we're in a Dip?
    3. When was the last dip please? I will look for articles from that time and get a feel for how dips are reported, to be able to understand when there's a dip in future.

    Thank you!!
    Last edited by sunshine88; 2017-05-17 at 10:14 PM.

  11. #20
    Senior Member
    Join Date
    Jun 2009
    Location
    Okanagan Valley
    Posts
    3,800
    Today was a dip, albeit only about 1-1.5% or so. You have to define what kind of dip you are looking for. A soup ladle? A tablespoon? Or a pitcher sized dip? That is the challenge of the market. Will the market go down some more tomorrow? Friday? Next week? Will May end another 2-3% lower? No one knows. Maybe today was it and it is all upslope from here.

    News headlines, talking heads and all that stuff is simply financial pornography. None of them know any better cause they'd not be flogging themselves in the media trying to get attention for themselves. None of it means much.

    As for defining a dip, take a look at the TSX Composite and the S&P500 indices over the last 1-5 years.

    Let's try the TSX Composite as an example https://web.tmxmoney.com/charting.php?qm_symbol=^TSX and click on the 1 year chart. I can see 2-3 dips per month....or I can see one in June 2016, one in Sept 2016, one in Nov 2016, a not so bad one in March of 2017 and maybe one now, but we won't know that until its gone.

    Now re-set that to a 5 year chart.... And wow... we had a darn nice one circa Feb 2016. That would be a real nice dip in which a lot of CMF folk probably were doing some buying at that time. Are you prepared to wait perhaps a year or two pr three for another one of those to happen? What if it takes 5 years to happen? How will you know if it is a 'big' one or a small one? How would you know when to buy? July 2015? Aug 2015? Sept 2015? How do you know when it has 'bottomed'? The point is that you don't, so you pick your spot, roll the dice and buy. You cannot beat yourself up if you try to time it and call it wrong.


Page 2 of 6 FirstFirst 1234 ... LastLast

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •