# How to begin investing in the stock market?



## alexasmith (Sep 30, 2014)

Hello everyone,

I've built a decent amount of savings over the years and I'm ready to start investing some of it. When it comes to personal finance and creating wealth, there is no better long-term investing strategy than the stock market. But how do I start investing? What do I need to know? Please help me.

Thanks,
alexasmith.


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## james4beach (Nov 15, 2012)

The simple answer is: index funds. They are the easiest way to start getting some stock exposure and index funds are readily available everywhere. The TD e-series index funds for example are some of the lowest fee index funds around and suitable for investing any amount.



alexasmith said:


> When it comes to personal finance and creating wealth, there is no better long-term investing strategy than the stock market.


You might be starting off with a somewhat incorrect assumption. Most of us around here acknowledge that stocks are an important part of a long-term investment philosophy, but stocks are usually not the only thing that someone holds as an investment mix. Mathematically, there is not even a significant advantage to holding 100% stocks versus say 60% stocks.

So I would correct your statement by saying that *the best known long-term investment strategy is a diversified portfolio that includes both stocks and fixed income*. Therefore, fixed income such as bonds and GICs are also a key part of long-term investing.

A mix of 50% stock and 50% bond exposure is a traditional portfolio that has been shown to generate excellent returns. As is 60% stocks 40% bonds. There are many ways to achieve this, but the simplest is to use a couple index funds such as the TD e-series.

One way to start investing would be to:


 Figure out how much money you want to invest (which locks the money away and makes it unavailable)
 Put 1/4 of the money into TD Canadian Index Fund e-series
 Put 1/4 of the money into TD Canadian Bond Index Fund e-series
 Keep reading and learning throughout the year
 A year later, put another 1/4 each into both index funds


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## indexxx (Oct 31, 2011)

Agree with James.

I would highly recommend getting a copy of The Wealthy Barber Returns (the new version that came out a few years ago, updated from the original.) If you don't want to buy it (but it's WELL worth having), then the library will have it.

*and- stay away from penny stocks!!!


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## lonewolf (Jun 12, 2012)

alexasmith said:


> Hello everyone,
> 
> When it comes to personal finance and creating wealth, there is no better long-term investing strategy than the stock market. But how do I start investing?
> 
> ...


 Creating wealth for who ? The average investor ? I do not think so.


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## nwmea (Sep 10, 2015)

One of the biggest considerations for investors with a minimal amount of funds is not only what to invest in but also how to go about investing. Not long into your investment journey you may find yourself bombarded with minimum deposit restrictions, commissions and the need for diversification, among a myriad of other considerations.


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## lost in space (Aug 31, 2015)

Another good book would be Millionaire Teacer by Andrew Hallam, recommended it many times


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## Newby1983 (Apr 9, 2015)

I'm on similar path as OP. Read Millionaire Teacher (good concepts which could be condensed into 50 pages). Research information on this forum. You may end up agreeing with everyone who has posted about strategy. 

Word of caution, TD makes life difficult when trying to move money into e-funds because they are not money makers for them (low MER). I've spent the past 3 weeks trying to do this, met 3 times with TD advisors, countless phone calls, and still have 75% of my portfolio in crappy mutual funds waiting to be converted over. 

My mix once TD gets its act together: 
Stocks (TD, RY) - 10%
TDB900 (Toronto index)- 25%
TDB902 (us index) - 20%
TDB909 (Cdn bonds) - 25%
TDB911 (intl index) - 20%


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## Just a Guy (Mar 27, 2012)

Well, the first thing to do is probably get started with one of the more traditional, conservative approaches like the couch potato or index investing. Getting started is key, don't suffer from analyse paralysis.

Once you get started, start reading, and read a lot. Especially the different investment strategies out there. There are thousands of them. The purpose of this research is to discover what kind of investor you are. Don't try to emulate someone else,,it won't work. You need to find what kind of investing matches your personality. For example, if your lazy, and don't like following the market, day trading is not for you. Don't fall for the "this strategy doesn't work" arguement. Many people write things like "buy and hold doesn't work in today's market". That's not true (I'm a successful buy and hold investor), it just doesn't work for the person writing the article (just as day trading doesn't work for me...but I know successful day traders). The trick is finding what matches your personality, because nothing works if your fighting yourself.

Finally, I'll tell you there are many long term investment strategies that can work better than stocks. Running a business or investing in real estate can also make you a lot of money...if that matches your personality. If not, it can lose you a fortune just like stocks.

These are all just tools, knowing how they work and wanting to work with them every day are two different things. To be successful, you need to want to work with them.


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## tygrus (Mar 13, 2012)

If you guys think the 1% buy index funds, boy I have some oceanfront property in sask to sell you.


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## Just a Guy (Mar 27, 2012)

It's not a bad way to get started, better than doing nothing. For someone starting out, I wouldn't recommend jumping into day trading, options, margin accounts, etc.

Also, they are restricted from investing like the 1% because they don't have the assets to legally invest in those things. You need to be a qualified investor. 

However, I agree with tygrus that these methods yield pretty poor returns and, as you gain experience, will seem like a waste of time.

Better to get started slow than get burned and be forever scared.


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## 4n2t0 (Dec 8, 2015)

tygrus said:


> If you guys think the 1% buy index funds, boy I have some oceanfront property in sask to sell you.


If you believe that investing like the 1% is the only way to go then what are you doing wasting your time on this forum? Aren't you a billionaire by now? Forums like these should be beneath you!

To the OP...

You should read a few books, gather information, formulate a plan and execute YOUR plan.

P.S. I too enjoyed the Millionaire Teacher. It's a great book which is fairly simple to understand. Also, look into the couch potato portfolio with TD e-Series funds or ETF's.


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## james4beach (Nov 15, 2012)

tygrus said:


> If you guys think the 1% buy index funds, boy I have some oceanfront property in sask to sell you.


Are you alluding to ETFs? Wealthy people certainly do use index ETFs and index mutual funds.


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## Flash (Nov 25, 2014)

Mawer are great for MF's with solid history of past performances.

I would also advise to stay away from MF/Index MF bonds as none can really beat the general market in bonds, so go for the cheapest solution, bond ETF's (ex. VAB).


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## GreatLaker (Mar 23, 2014)

tygrus said:


> If you guys think the 1% buy index funds, boy I have some oceanfront property in sask to sell you.


[SARCASM] Yes, ultra-high net worth individuals can buy "exclusive" investments like hedge funds and private equity funds sold only through offer memorandums, that the 99% don't have access to. Such exclusivity seeking individuals are referred to as "whales" by wealth management professionals.[/SARCASM]


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## tygrus (Mar 13, 2012)

I am anti index cause I used to own the nasdaq index.

Much prefer gathering a few sector targeted ETFs.


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## Eclectic12 (Oct 20, 2010)

Depends on whether it provides info one needs. If you can post the topics, it would give a better idea of what the course covers, which would allow comments on the info.

The mechanics of buying/sell with today's web based discount brokers lead me to believe you won't need it ... at least I never did.
Then too, one can signup with several brokers now to have a practice account to learn the mechanics.


The hard part is figuring out what to buy/sell and when to do it.



Cheers


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## mf4361 (Apr 11, 2015)

tygrus said:


> If you guys think the 1% buy index funds, boy I have some oceanfront property in sask to sell you.


Like Warren Buffet wrote in his will that he will put 90% of the cash in S&P500? (He prefers Vanguard)


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## Beaver101 (Nov 14, 2011)

Newby1983 said:


> ...
> *Word of caution, TD makes life difficult when trying to move money into e-funds because they are not money makers for them (low MER). *I've spent the past 3 weeks trying to do this, met 3 times with TD advisors, countless phone calls, and still have 75% of my portfolio in crappy mutual funds waiting to be converted over.
> 
> ...


 ... hmmm? ... interesting ... if these funds are not closed, why make it difficult to purchase these funds or is it strictly a doing of these "TD" advisors?


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## Eclectic12 (Oct 20, 2010)

mf4361 said:


> Like Warren Buffet wrote in his will that he will put 90% of the cash in S&P500? (He prefers Vanguard)


True ... but I believe that is based on his wife not having his skills. If he though index investing was for *everyone* instead of the majority, he would be doing it as well.


Cheers


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## Barbara100 (Feb 20, 2016)

Before start investing,Outlining what you want your investments to accomplish will help guide you in the right direction, investors and experts say.


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## Eclectic12 (Oct 20, 2010)

Beaver101 said:


> Newby1983 said:
> 
> 
> > Word of caution, TD makes life difficult when trying to move money into e-funds because they are not money makers for them (low MER). I've spent the past 3 weeks trying to do this, met 3 times with TD advisors, countless phone calls, and still have 75% of my portfolio in crappy mutual funds waiting to be converted over.
> ...


The lack of training/simple procedures or advisors preferring MFs they make money off of seems to be what has been posted in the past for opening the eSeries account. 

This is the first I have heard of transfers being an issue, beyond the advisor trying to talk one out of indexing.

I wonder why the person having problems hasn't directed the advisors to sell the 75%, deliver the proceeds to an account tied to the eSeries then used the online system to re-deploy the cash into the eSeries? 

Posts in the past have reported this as relatively smooth ... other than the "don't sell now". Probably skipping to answer where it is going would also skip the "index funds are bad" discussions.


Cheers


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## humble_pie (Jun 7, 2009)

Newby1983 said:


> Word of caution, TD makes life difficult when trying to move money into e-funds because they are not money makers for them (low MER). I've spent the past 3 weeks trying to do this, met 3 times with TD advisors, countless phone calls, and still have 75% of my portfolio in crappy mutual funds waiting to be converted over.
> 
> My mix once TD gets its act together:
> Stocks (TD, RY) - 10%
> ...




word of caution: some TD branch personnel are more cooperative with a client who is determined to go to e-funds. It's too bad you met up with one who is non-cooperative, hope the situation improves soon.

the usual strategy for getting past a retentive branch seller of mutual funds at the big green is to insist that all of the funding monies be immediately put into one or 2 TD money market funds, the canadian MMF plus the US MMF if US funds are to be involved in the eventual e-portfolio. Insist on this. If necessary, declare that one is an ultra ultra conservative investor who fears possible global financial collapse.

once set up, then from home the client can then easily change the investment(s) from MMF(s) to the ultimate e-funds of his choice.

one last mention, if i may. It's not entirely a situation where the TD is trying to grab as many mutual fund investors as possible from the incoming new clients. It's also because all the provincial securities commissions insist that the know-your-client rules be followed. Financial institutions are required to obtain an accurate client profile for every client opening a new investment account.


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## Beaver101 (Nov 14, 2011)

Eclectic12 said:


> *The lack of training*/simple procedures or advisors preferring MFs they make money off of seems to be what has been posted in the past for opening the eSeries account.


 ... funny, doesn't seem to be a lack of training or procedures on advisors with non-eSeries funds or is there something else more to the popularity of these eSeries funds that every TD accountholder/investor wants to get into?


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## LongShorts (Feb 18, 2016)

To the OP, I just began my adventure into the world of "savvy investing" as well. If I can offer you some Newbie advice: RESEARCH. Everything I've learned and done so far has been backed with countless hours of research. I've been "in the game" now for about 4 weeks. My portfolio has grown 0.8% so far......but I can't express enough what most everyone else is saying. You need to remember to diversify. Stocks, bonds, GICs are all great investment tools. Stay away from junk bonds (high risk, low rating), volatile stocks and penny stocks. They're not for the rookies. Also stay out of options...they take a lot of pretty advanced analysis skills which I know I don't personally possess. My personal trading platform right now is Scotia iTrade. I took advantage of a current promo for 0% commission trades for the first couple of months....you need to have at least $25,000 to invest for this though. Most of all, good luck to you! It's an exciting world.


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## Eclectic12 (Oct 20, 2010)

Beaver101 said:


> ... funny, doesn't seem to be a lack of training or procedures on advisors with non-eSeries funds.


YMMV ... when I asked about the index linked GIC for my RRSP, I have a blank look from the advisor until I produced the TD logo emblazoned brochure. I seem to recall similar happening for one of the newer MF's as well when adjusting my RRSP holdings.

Or the advisor when tasked with setting up a LIRA, said "let me get person A ... I don't know the procedures or forms".




Beaver101 said:


> ... or is there something else more to the popularity of these eSeries funds that every TD accountholder/investor wants to get into?


Interesting ... so what you are saying is that despite "every TD accountholder/investor" asking, TD is willing to risk them pulling their accounts to go with say BMO's or start buying ETFs with commission free buys at Questrade?


I personally think it isn't top priority is partly driven by protecting the higher fee MFs as well as the individual advisor's bottom line. I also think that if demand was sky high like you describe, clients leaving in frustration would change this situation in a heart beat. Obviously, TD has figured out that losses experienced are worth keeping the barrier in place.


Cheers


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## humble_pie (Jun 7, 2009)

LongShorts said:


> To the OP, I just began my adventure into the world of "savvy investing" as well. If I can offer you some Newbie advice: RESEARCH. Everything I've learned and done so far has been backed with countless hours of research. I've been "in the game" now for about 4 weeks. My portfolio has grown 0.8% so far......but I can't express enough what most everyone else is saying. You need to remember to diversify. Stocks, bonds, GICs are all great investment tools. Stay away from junk bonds (high risk, low rating), volatile stocks and penny stocks. They're not for the rookies. Also stay out of options...they take a lot of pretty advanced analysis skills which I know I don't personally possess. My personal trading platform right now is Scotia iTrade. I took advantage of a current promo for 0% commission trades for the first couple of months....you need to have at least $25,000 to invest for this though. Most of all, good luck to you! It's an exciting world.



4 weeks & you're already writing stuff like this? awesome. gold star. ye'll go far, laddie.


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## LongShorts (Feb 18, 2016)

humble_pie said:


> 4 weeks & you're already writing stuff like this? awesome. gold star. ye'll go far, laddie.


each: Awe shucks, thanks.


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## Beaver101 (Nov 14, 2011)

Eclectic12 said:


> ...
> 
> Interesting ... so what you are saying is that despite "every TD accountholder/investor" asking, TD is willing to risk them pulling their accounts to go with say BMO's or start buying ETFs with commission free buys at Questrade?
> 
> ...


 ... nope, not saying that. I question exactly how good these eSeries funds (don't own) are as popular as they made out to be ... would need to scrutinize the prospectus, et al.


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## donald (Apr 18, 2011)

e-series buyers always seemed to advertise(reading here over the years)
That it was 'inclusive' and funny enough people seemed to buy it because it was the answer to 'smart/non active investing that gives the best return'
aka the advisors didn't like to let 'joe' blow 'in'
while I guess the 'exist' shows otherwise lmao
IF ITS TOUGH TO BUY ITS TOUGH TO SELL
THE INCLUSIVENESS FU&KS YOU WHEN YOU WANT OUT EH
lack of liquidity duh
homer simpson yo lol


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## My Own Advisor (Sep 24, 2012)

indexxx said:


> Agree with James.
> 
> I would highly recommend getting a copy of The Wealthy Barber Returns (the new version that came out a few years ago, updated from the original.) If you don't want to buy it (but it's WELL worth having), then the library will have it.
> 
> *and- stay away from penny stocks!!!


Totally agree. Penny stocks are like candy. Good at first but over the years, you get huge cavities (in your portfolio).

Here are some good and FREE resources, including ebooks:
http://www.myownadvisor.ca/reader-question-just-starting-help-needed/


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## james4beach (Nov 15, 2012)

wow, yeah that really _was_ subtle! Tsk tsk.

The posts seem dishonest now. Is she learning to trade? Or does she work for that web site?


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## LongShorts (Feb 18, 2016)

Welp....the internet dupes us again I suppose


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## My Own Advisor (Sep 24, 2012)

tygrus said:


> If you guys think the 1% buy index funds, boy I have some oceanfront property in sask to sell you.


+1


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## My Own Advisor (Sep 24, 2012)

I wonder if she works for the site... Likely a pumpster as HP puts it. Trading, bad. Investing, good.


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