# How to invest when you have almost no risk tolerence? Anything out side HISA?



## emperor (Jul 24, 2011)

Since I was 10 years old I've been investing, it started with comics and coins then when I turned 18 I got mutual funds in a rrsp. I've bought individual stocks, market linked GIC's, locked in GIC, HISA etc. Over the last 20 years I've had some big gains and big loses and when I added it all up I have gotten a very bad return. If I would have just stayed in HISA the whole time I would have been better off. Right now I have around 250K I was going to put 100K into EQ bank for the 3%. The rest is in tangerine at 2%. I would like to invest my TFSA room but I'm to the point I think I just need to invest and capitalize on something safe and ignore the fact that I could make lots of money if I just picked the right things.

What would you guys consider a good low risk investment with a decent potential of return. I was thinking maybe a market linked GIC, that way you can't lose your principle but have a chance at a better return. I've also been debating TD e series because everyone says it's pretty good. I just don't know what to do. :neglected:


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## lonewolf (Jun 12, 2012)

GICs have huge potential for return. Deflation dollars will be worth more.


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## james4beach (Nov 15, 2012)

> What would you guys consider a good low risk investment with a decent potential of return


Purchasing 5 year "plain old" GICs from different issuers, including credit unions, and using a GIC ladder approach is a good investment strategy and gives good long term returns.

Looking back over the last 10 years for example, the returns from such a GIC portfolio (or a bond fund) are very comparable to investing in the Canadian stock index. And with much less risk! So if a hypothetical someone (like me) just did GIC investing for the last decade, they would not have "missed out" on any stock market returns.

You sound like you feel, somehow, that you need stock exposure. Why do you feel that? Just look at the performance figures... stock returns don't necessarily exceed fixed income.

I don't recommend stock index GICs. Instead, balance your investment mix to a level you're comfortable with. You could hold a stock index fund separately, but just make it a small proportion versus your GIC investments.


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## NorthernRaven (Aug 4, 2010)

It really depends on timelines and what level of return one is looking for, but assume this is retirement-ish money and won't be touched for timeframes of a decade or two at least. The OP sounds like they are 40-ish?

It looks like Canadian government bonds have had around a 3.3% return over the last 10 years; presumably a 5-year GIC ladder from high-end issuers might have been a touch higher? While its true the 10-year TSX yield shows at only 4.4%, there's a couple of things to note. 2015 was a down year; if you took the 10 year return one year earlier, it is 7.5%, similar to the 20-year return. Also, GIC income is taxed at your full rate, while Canadian equity returns would be taxed at dividend and capital gains rates (up to 50% less, depending on one's exact marginal rate situation), so in non-registered accounts Canadian equities have an additional oomph in after-tax terms.

Another point with equities would be diversification - both US and international equities have outperformed Canadian ones over those longer time periods, and mixing in an appropriate exposure would have increased one's return. There's a range of index model portfolios over at Canadian Couch Potato, for instance. 

My own rule of thumb is that anything like a market-linked GIC has been designed to give the company a big chunk of the upside. If you want GICs and market exposure, get them separately and cheaper. For larger sums, ETFs will be a little cheaper than the TD e-series funds. The best thing is to do some research, have a clear idea for your goals and timelines, etc.


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## tygrus (Mar 13, 2012)

emperor said:


> Since I was 10 years old I've been investing, it started with comics and coins then when I turned 18 I got mutual funds in a rrsp. I've bought individual stocks, market linked GIC's, locked in GIC, HISA etc. Over the last 20 years I've had some big gains and big loses and when I added it all up I have gotten a very bad return.



You are missing one key asset class. Real estate. Should have been the first thing you bought.


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## Just a Guy (Mar 27, 2012)

Depends what you consider risk, and if you are still willing to work for your money. If you just want to put money away, and collect a huge return sometime down the road, you're probably dreaming. However, if you're willing to do some work, but just want to avoid risk, Tygrus is right real estate is probably your best bet...if you are willing to do it right.

First, this is not a great time to find good properties, the market is generally overpriced. That doesn't mean there aren't any properties out there that are investment worthy, just there aren't many so you have to be patient.

Once you find a property, you'll probably have to do some work to it. In this climate, the best investments usually look terrible because the owner just wants out. A little paint, some flooring, maybe upgrade the cabinets and you'd probably be pretty close. Again, you need to pick a place that is structurally good, and this takes some patience. 

Then you need to screen your tenants properly. Also some work. Then there is the ongoing maintenance and getting involved in the condo board if there is one...more work.

Of course, if you do this, the return on investment is usually in the high double digits at least. Done correctly, you can leverage the property 100% (you put in no money of your own), you can write off most, if not all of the profits, and you have a fairly steady income each month, all with very low risk. 

Of course, the more you own, the lower your risk. That's because the more you own, the more you have generating income which can cover the occasional vacancy. If you only own one, and it's vacant, you are suffering a loss until you rent it again.

You don't need to worry about the market going down, which it probably will, as long as you bought for a price where the rent will cash flow and you plan to hold on for years. In fact, if you leverage it 100% and keep it rented at break even for the life of your 20 year mortgage, making all your payments, in 20 years it's completely paid off by someone else. You may have taken a 50% loss on paper but, in reality you created money for yourself out of nothing. Let's say you bought for $100k, sold 20 years later for $50k you still made $50k (minus expenses) from nothing; all the money came from the tenants not from your pocket. If the market goes up, you do even better.

Real estate also has built in inflation protection as the price of houses usually remains constant to the buying power of the dollar. If we hit hyperinflation, real estate is a bonus as we lock in the loans at the low dollar and can pay it off with the new dollars for significantly less. 

Best place to start would be www.easysafemoney.com and read the book there...then there's a good book on how to be a landlord at http://www.nolo.com/products/every-landlords-guide-to-finding-great-tenants-find.html


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## emperor (Jul 24, 2011)

Is there a GIC that is considered better than the rest? I noticed some pay interest annually some semi annually and some at the end of term. I'm not sure if there is a good website that compares the different plans or not.

@NorthernRaven This will be long term savings and it will be in TFSA so there won't be any taxes. Also I thought the same about market linked GIC, all the ones I looked at seemed like garbage but my grandma got a 5 yr market linked GIC and make 7 K off a 30K investment. I was just wondering if there was any other good ones kicking around where you can make good cash with no chance of losing principle.

@Tygrus I've always planned to buy real estate. The value just wasn't there for me so I've been waiting. Now that Alberta is crashing I'm hoping things go down 20-30% if not I'll probably never own. My girlfriend owns the condo I live in so I'm not throwing my money away I'm just building her equity is all.

My goal isn't to get rich, I know I don't have the skill or luck to pick the right stocks. All I'm looking to do is make as much safe money as possible. I want to work less since I hate my job and eventually be able to take a low paying job that I like or even work for myself. I'm not having kids so building up a large amount of money to pass down doesn't matter.


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## emperor (Jul 24, 2011)

@just a guy, thanks Ill look into that I only know two people that got into rentals they both lost money that why I never really considered it. Maybe I could do it better


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## AltaRed (Jun 8, 2009)

emperor said:


> @just a guy, thanks Ill look into that I only know two people that got into rentals they both lost money that why I never really considered it. Maybe I could do it better


RE is not for everyone. Indeed, I would never hold investment RE directly. Only through a REIT. With the exception of some nosebleed cities where prices (net of operating costs) have exceeded inflation, even owning RE as a principal residence is questionable. Few people calculate the true cost of owning RE (insurance, taxes, maintenance, renos, upgradees, etc, etc). It is also highly illiquid, i.e. not easy to get out of in times of crisis.

I agree with others that if one is risk advserse, consider a 'balanced' approach to investing. Put 50-70% into a conventional vanilla GIC ladder with a discount brokerage and the rest into potentially 2 broad based equity ETFs ilke XIC and XAW.


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## Just a Guy (Mar 27, 2012)

AltaRed is right, real estate is not for everyone. You need to keep your emotions in check, treat it like a business and have patience. 

If done correctly, it's hard to lose money...most people however think real estate just means buying a place, any place, and it'll make money. Many people also think owning a home is an investment, it isn't in most cases.

The problem with real estate is it's got an easy point of entry, so anyone can enter the "market". Entering a market doesn't make you an investor any more than owning a stock certificate does.

If you learn how to do it, there is no better conservative investment out there...and you'll also learn why REITs are a bad investment (since you'll wonder where all the real profits have gone compared to the pennies they pay out). Of course, REITs are a lot less work, but they are also prone to fraud.


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## NorthernRaven (Aug 4, 2010)

emperor said:


> Is there a GIC that is considered better than the rest? I noticed some pay interest annually some semi annually and some at the end of term. I'm not sure if there is a good website that compares the different plans or not.
> 
> @NorthernRaven This will be long term savings and it will be in TFSA so there won't be any taxes. Also I thought the same about market linked GIC, all the ones I looked at seemed like garbage but my grandma got a 5 yr market linked GIC and make 7 K off a 30K investment. I was just wondering if there was any other good ones kicking around where you can make good cash with no chance of losing principle.


If you have $250K now, plus future additions, that won't all be in TFSA anytime soon! If some is in RRSPs that's fine, but don't forget to account for taxes on withdrawal - you owe the taxman a big chunk of your RRSP funds. EQBank only has regular non-registered, so I assume if you are thinking of $100K there you've got a big chunk in taxable status. 3% after tax will be under 2% after-tax for most people, depending on your tax bracket.

For GICs, some people want immediate income and want frequent payments, others are investing and annual or maturity payment is fine. Generally for any particular term of GICs from the same issuer, the various monthly/semi/annual/maturity versions they offer will have slightly different rates, but would probably tend to all work out the same as if you reinvested (compounded) the payments. Note that even for "pay at maturity", I'm pretty sure the annual interest earned is reported and taxable, even if the cash hasn't been distributed.

You might want to try going back and figuring out what might have happened if you had put a big chunk of money into vanilla index equity funds at the height of the market just before the dotcom bust in 2000, and what sort of cumulative return you'd be looking at now. I suspect even a worst case "buy in 2000, sell in 2008" would have returned one's principal, and diversifying out of Canada likely better than that. Time and some flexibility in when you have to sell are your friends with equities, and you have both with retirement funds.


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## AltaRed (Jun 8, 2009)

Just a Guy said:


> ...and you'll also learn why REITs are a bad investment (since you'll wonder where all the real profits have gone compared to the pennies they pay out). Of course, REITs are a lot less work, but they are also prone to fraud.


That is just plain fearmongering and misleading....and biased. Private REITs have the potential for slimy polyester suited snake oil salesmen and I don't trust REITs with external managements that pay themselves huge fees. However, the vast majority of pulbic traded REITs of size (not microcaps) with internal mangement can probably manage properties more cost effectively and smartly than an individual relying on property managers and/or contracting out most O&M.


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## emperor (Jul 24, 2011)

Thanks for the replies, I got a lot of good suggestions. I will check into all of them. Personally I feel lots of the suggestions like REIT and real estate and the stock market are more of a medium risk investment because there is a chance you can lose your principle. I'm looking at pretty low risk. All I'm really willing to risk is the potential to get no return. I don't want to lose any of my principle. I've done a little research and I guess there is GIC brokers and they can usually get around 1% more than the major banks. I guess they also have specials sometimes when a institute needs extra cash for mortgages. 

Has anyone done this kind of thing before? I know it's not exciting and you won't get rich but I have 25 years for my money to grow even if it's just a little bit each year it will add up.


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## Rusty O'Toole (Feb 1, 2012)

Interest rates are too low and the stock market too shakey. The only decent risk free return I can think of is investing in private mortgages. You can get 8%-10% with practically no risk. The main thing is to be sure the value of the property is greater than the value of the mortgage, and enough greater to give a suitable margin of safety. This is a little more work than buying GICs and mutual funds but the risk/reward is better.


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## james4beach (Nov 15, 2012)

> I guess there is GIC brokers and they can usually get around 1% more than the major banks


It's pretty easy. The discount brokerages from the big banks let you do this. For example, Scotia iTrade (and others here can recommend others). You'll get access to their inventory of GICs from many issuers ... for example browse GICs from all big banks and many smaller banks ... and you will see rates that are much better than what's available through the regular bank. These discount brokerages are the same place you can also buy low fee index ETFs or any stock for that matter.



Rusty O'Toole said:


> The only decent risk free return I can think of is investing in private mortgages. You can get 8%-10% with practically no risk.


NO WAY. I strongly discourage the original poster from following this advice. These are exotic types of investments, which means lots of pitfalls, and something I've never even heard of as a retail investment for regular people.


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## donald (Apr 18, 2011)

Rusty lol
what about scraping that idea
shouldn't the op
investigate the home owner(his statements)
Op just buy a common stock than

When you were trading comics and cards as a kid
did break even or lose?
Were you trading them off to your friends or were you stuck selling back to the metal head who owned a shop in that 3 yr window?
You should tell us how you made out


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## Just a Guy (Mar 27, 2012)

emperor said:


> All I'm really willing to risk is the potential to get no return. I don't want to lose any of my principle.


You realize that, with inflation being between 2-3% and interest income being taxed at the highest rates (upwards of 50% depending on your province and tax bracket), that you need a return of 4-6% to not lose any of your principle's buying power.

If you don't get that minimum return, you are losing your principle.


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## tygrus (Mar 13, 2012)

The only safe investment above cash or GICs would be AAA rated corporate bonds. These can sometimes pay in the 4-5% range. 

Those private mortgages are usually second mortgages people are taking out so they are risky.

I always profess owning some sort of real estate because you have control over it. It can be improved or re-purposed as you see fit. You cant do that with a stock.


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## Just a Guy (Mar 27, 2012)

<sarcasm>don't carry any cash or credit cards, you may have a hole in your pocket or get mugged</sarcasm>

I think your best investment may be to hire a psychologist to help you overcome your fears. Single digit returns, especially low single digit returns, are basically pointless, you'll never get ahead and probably actually go backwards as I pointed out above.

Your fears are holding you back, as they do for many people...if you want to be different, you have to act different. Otherwise you'll be in the same financial shape as the majority. It's your choice.

Of course, you need to find a psychologist who doesn't share the same fears, which could be tough...not everyone was cut out to be rich/debt free/whatever.


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## Pluto (Sep 12, 2013)

emperor said:


> Since I was 10 years old I've been investing, it started with comics and coins then when I turned 18 I got mutual funds in a rrsp. I've bought individual stocks, market linked GIC's, locked in GIC, HISA etc. Over the last 20 years I've had some big gains and big loses and when I added it all up I have gotten a very bad return. If I would have just stayed in HISA the whole time I would have been better off. Right now I have around 250K I was going to put 100K into EQ bank for the 3%. The rest is in tangerine at 2%. I would like to invest my TFSA room but I'm to the point I think I just need to invest and capitalize on something safe and ignore the fact that I could make lots of money if I just picked the right things.
> 
> What would you guys consider a good low risk investment with a decent potential of return. I was thinking maybe a market linked GIC, that way you can't lose your principle but have a chance at a better return. I've also been debating TD e series because everyone says it's pretty good. I just don't know what to do. :neglected:


I think you are asking the impossible. As others have pointed out, if you get bank interest, gics and the like, taxes and inflation will erode your buying power, so although the numbers go up a bit, what you can buy goes down, so you would lose principle. It would be a fairly slow erosion. In many years your 250000 may for example "grow" to 300,000, but you would get the strange feeling when paying bills and buying food, that you aren't as rich as when you only had 250,000. 

You are obviously stung after doing your analysis of performance over 20 years, and it has made you risk avoidant. Now you are asking for the impossible. 

The least risk, is in taking some risk. My opinion is if you can buy some ZWB, for example, one or two telecoms, such as T, and BCE, and one or two pipelines, such as ENB in 5 to 10 years you will be a happy camper.


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## RBull (Jan 20, 2013)

tygrus said:


> *The only safe investment above cash or GICs would be AAA rated corporate bonds. These can sometimes pay in the 4-5% range.
> *
> Those private mortgages are usually second mortgages people are taking out so they are risky.
> 
> I always profess owning some sort of real estate because you have control over it. It can be improved or re-purposed as you see fit. You cant do that with a stock.


Let me know of ones that currently do.


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## MrMatt (Dec 21, 2011)

emperor said:


> Since I was 10 years old I've been investing, it started with comics and coins then when I turned 18 I got mutual funds in a rrsp. I've bought individual stocks, market linked GIC's, locked in GIC, HISA etc. Over the last 20 years I've had some big gains and big loses and when I added it all up I have gotten a very bad return. If I would have just stayed in HISA the whole time I would have been better off. Right now I have around 250K I was going to put 100K into EQ bank for the 3%. The rest is in tangerine at 2%. I would like to invest my TFSA room but I'm to the point I think I just need to invest and capitalize on something safe and ignore the fact that I could make lots of money if I just picked the right things.
> 
> What would you guys consider a good low risk investment with a decent potential of return. I was thinking maybe a market linked GIC, that way you can't lose your principle but have a chance at a better return. I've also been debating TD e series because everyone says it's pretty good. I just don't know what to do. :neglected:


Low risk, HISA, GIC, or Canadian Government Bonds.

Maybe some crown corporation bonds, or stable foreign governments, but they could have issues, or foreign exchange risk.

For equities, I like the Brookfield trusts, but even that has a shaky history for a no risk tolerance person.
Most people overestimate their risk tolerance, if you're saying "no risk", don't be talked into anything risky.


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## emperor (Jul 24, 2011)

@Donald I had comics, coins and cards. I found the things I bought that were very expensive when I was a kid.. 20-50 dollar cards etc they went up lots, some to 500, which is really big returns. All the cheaper cards and comics lost lots of value, I bought comics for 1.75 put them in bags and boxes and I couldn't even get 10 cents an issue for them. So overall I made some cash but again if I would have put all that money for all those years in a HISA I would have been better off.

@Just a Guy Yeah that's what I'd need, unfortunately I've never even got 3% consistently let alone 4 or 6%. 

@Tygrus How do I buy corporate bonds? Would I need to get a brokerage account again? I just closed my Qtrade recently, I'd have to open a new one.


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## tygrus (Mar 13, 2012)

Emperor, things like card and coins (even your home) are speculation, not investments and they are such a small group of people to buy and sell from, so very illiquid. An investment is something that pays you a return as you hold it or upon maturity. Rent, business income, dividends, interest are investments. I don't buy anything that doesn't pay me.

You will need an actual broker to buy corporate bonds. I am sure you can get a point or two over a gic. My parents had a GM one a decade ago and it paid 7%. Just make sure the underlying company wont go broke.


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## Just a Guy (Mar 27, 2012)

Collectibles are not investments...the only ones who consistently make money off of those things are the dealers. Perhaps if you learned about real investing, as opposed to gambling, your fears may go away. 

When I really started investing, I was injured, couldn't work and couldn't afford to gamble. I had to invest conservatively, but in things that could support me. I chose real estate, and stocks in good companies I knew and understood. My business was hit hard because I couldn't work, but I became more diversified by going into stocks and real estate.

Real estate had the biggest bang for the buck, and provided immediate returns which I needed, but my stocks also did well in the longer term and my business recovered as I did. I've now got multiple companies to cover my butt into the future as well as the stocks and real estate. 

Would never have survived on GICs and such...


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## james4beach (Nov 15, 2012)

Just a Guy said:


> Single digit returns, especially *low single digit returns*, are basically pointless, you'll never get ahead


The 10 year annualized return of the TSX index is 3.44% (see ishares page with total return)


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## Just a Guy (Mar 27, 2012)

One of the reasons I don't buy the index.


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## NorthernRaven (Aug 4, 2010)

For taxable accounts, you'd want to make a small adjustment as the dividends would be taxed at the Canadian dividend rate, not as income like foreign dividends. If both were paying 2% dividend, and you were at 40% marginal, that's an extra 40 basis points for the TSX.

Also, that 3.44% return is based on January 2016, and is timing dependent. If you roll it back even one month to Dec 2015, it jumps to 4.17%, and was at 6.76 as of Jun 30. Unless you are going to be forced to get out at a specific time period, long term investors with more flexible exit strategies would be more interested in broader rolling return numbers.


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## hboy43 (May 10, 2009)

james4beach said:


> Just a Guy said:
> 
> 
> > Single digit returns, especially *low single digit returns*, are basically pointless, you'll never get ahead
> ...


You must have long ago ground away the axe head and are now well down the handle. Watch that you don't run the grinding wheel into your hands. As you frequently note, some times it takes 20, no 40 years for stocks to have a positive return, so it is unclear to me why a 10 year figure is now of major interest. One might think you were talking out of both sides of your mouth.

I also want to meet just one of these people that invested all their money at this unfortunate time 10 years ago, never to invest a dime again. Maybe sensible people back up the truck around events like 2008/09.

Somehow my long term number is still about double that even though as reported elsewhere have likely the worst 2 year return of anyone on this board.

It is unfortunate that some people have a bad investing experience and that forever biases their thinking. I could have blamed the market for my 5 positions held to bankruptcy, never to return to stocks like some, but fortunately I am a rational being, see the truth of the situation, and have gone on to do really well.


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## donald (Apr 18, 2011)

You were greedy emperor
The metal at the shop(your friends told you he was a bad guy right?)
Much safer for you to put them in the high shelf in your closet
That how it played out
did you also buy those books that rated cards like stock prices
with a picture of Gretzky on it(beckett or something)


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## emperor (Jul 24, 2011)

Something a little off topic. Lots of people say stocks out perform over the long run, you just buy and wait long enough then you will make money. People also seem to be going to Qtrade and other low fee brokers. If people are buying and holding that doesn't make sense to me. If I sign up to scotia I trade I can get 500 free trades. How would I need anything near that if the plan is to buy stocks and hold them for 20 years? To me it seems like people say buy and hold but really they are buying and selling all the time making it more of a chance game than anything else.


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## NorthernRaven (Aug 4, 2010)

Oddly enough, not everyone does the same thing. Google "day traders".


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## Eclectic12 (Oct 20, 2010)

emperor said:


> Something a little off topic ...
> To me it seems like people say buy and hold but really they are buying and selling all the time making it more of a chance game than anything else.


Without some sort of break down ... why would you think people liking a low commission broker or being given free trades means more trading is happening?

Don't forget that without enough assets, once the free trades have been used or expire in ninety days - trades will be $24.99 at Scotia I trade. Someone starting out may decide that Qtrade or other low commission brokers make sense, simply based on how long it would take to build up enough assets to qualify for lower commissions. In the old days, one did not have this choice so one had to use other methods (ex. MFs) to build up enough assets. 

Today, an all the time low commission broker has two sources of clients ... the traders and a starting investor who won't qualify for big brokerage cheaper fees for years to come.


As for "no risk, non-HISA", IMO it is pretty much HISA or GIC. One may choose to dabble in a bit of equity exposure but one can do that with far more control on one's own versus an index linked GIC that forces to in/out of the market at set times.


Cheers


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## donald (Apr 18, 2011)

Lower barriers of entry
They are hoping the mass market of diy's(be interesting to see the stats over how many diy's quit/fail and than return to bank manged products)
That want incentives so you have more odd's of failure?
Joe blow blows up in the itrade casino game(or at best breaks even)

See...stay away
make life easy just come back to 'chuck' at your local branch
he knows best
besides chuck is smarter than you could ever be
please don't try again.thanks
signed:Bank
'we value you and you come first'
the number one rated bank in a complex system


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## tygrus (Mar 13, 2012)

Some people have done well holding blue chips forever, some have not, some have been disrupted out of existence, some have eventually eaten themselves. Lots of companies that use to be strong are no longer even listed on the exchange anymore. Apple is often compared with RCA if you remember that company. Doesn't exist anymore. Sony used to pump out personal electronics in a similar way, now its a shell of itself.

If you buy an index you will capture all these changes but be in the sub 5% growth rate. Sector ETFs have more upside. Instead of the index I would buy 3 or 4 of them. I have one thats just REITS, One thats just financials and banks. I believe funds like these can be held forever. After that I own a fund that broad based (energy, financials, consumer, health etc) but its more focused than the index and actively managed.


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## Eclectic12 (Oct 20, 2010)

The failed DIY types is one way to look at it.

Another is "what will cost of almost nothing where on one side, it will be of interest to traders and on the other side, can bring in higher commission rates for those not paying attention?"


Cheers


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## donald (Apr 18, 2011)

Gus-your using tech though as a example
obviously one is going to monitor that part of the portf
what that
less than 10%
I've only held appl stock in tech
made 175% in the last couple yrs
sold out mid jan
fng ok still


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## LBCfan (Jan 13, 2011)

There is no such thing as a "no risk" investment. The degree of risk is something YOU have to decide. Investing in any 'product' based on advice from anonymous people on an Internet site is High Risk whatever the suggestion may be. It's your money, it's your decision and the consequences fall on you. Do your own research and be prepared to swallow the results.


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## Just a Guy (Mar 27, 2012)

Banks make money on people who trade, not the buy and hold investors. If they give out a lot of free trades, and you use them, chances are you'll continue to trade in the long term, making them lots of money. 

I'm a buy and hold, value investor. I only buy companies I know and understand when they go on sale during a crisis. I've never sold my stocks and they've done quite well, but I started at a low point. I rarely look at the performance of the stocks, maybe once every month or two, I can't be bothered to look more often, so I'd make a lousy day trader.

It's an investment strategy which fits my personality, it's the same one I use in real estate (buy at a low price and hold forever). It's vitally important to discover what style matches your personality, otherwise you're fighting yourself and it'll cause huge issues long term.

Banks are not in the business of making you money. They will tell you things like "buy and hold" don't work, because it's not in their best interest. They want you to trade. People went to discount brokers because most don't see the value in paying high fees for no benefit...most bank advisors had lousy advice and their returns were terrible. Better for the banks to encourage diy investing and make moe y off of trades for mutual funds, GICs, etc. Than pay a staff member to do it for you in branch. They make a fee and don't have to pay wages or training. It's a win-win for the banks.


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## Rusty O'Toole (Feb 1, 2012)

emperor said:


> Something a little off topic. Lots of people say stocks out perform over the long run, you just buy and wait long enough then you will make money. People also seem to be going to Qtrade and other low fee brokers. If people are buying and holding that doesn't make sense to me. If I sign up to scotia I trade I can get 500 free trades. How would I need anything near that if the plan is to buy stocks and hold them for 20 years? To me it seems like people say buy and hold but really they are buying and selling all the time making it more of a chance game than anything else.


No two people trade or invest the same. There are traders who can't sleep if they hold a trade overnight. Then there are guys like Buffet whose favorite holding period is 'forever'.

Recently I read an interesting book by Van Tharp. A psychologist who has made a study of successful traders over the past 20 or 25 years. What he found out was, no two trade alike yet all make money. It turns out, the secret of success is 1)you must have a trading plan or set of rules you go by with a proven edge or positive expectation. This plan or set of rules must make sense to you and mesh with your worldview.This is 10% of success. 2) you must practice good money management and position sizing. This is 30% of success. 3) you must be psychologically fit. That means you stick to your plan and don't go nuts. This is 60% of success.

Interesting that being able to predict what the market is going to do next doesn't appear on the list at all. And that trading rules are only 10% of success, the rest being money management and psychology.


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## gibor365 (Apr 1, 2011)

> How to invest when you have almost no risk tolerence? Anything out side HISA?


 No, nothing ...just HISA and GIC...forget about casino called stockmarket


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## Eclectic12 (Oct 20, 2010)

Just a Guy said:


> Banks make money on people who trade, not the buy and hold investors.


I can go with "make more money on people who trade" but with requiring minimum asset levels as well as inactivity fees where one is not trading, I doubt the banks are breaking even or losing money. Then there's the "have cash? only over $# will a tiny amount of interest be paid.

Add in that once the forms are filled out ... it's all on computers where the costs are spread thinly.


Cheers


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## Just a Guy (Mar 27, 2012)

I was talking relatively here...


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## Eclectic12 (Oct 20, 2010)

Fair enough ... the wording made it sound to me like the banks were breaking even or losing on the buy & hold types.

I have great confidence they would find a way to get blood from a stone. :biggrin:

Cheers


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## NorthernRaven (Aug 4, 2010)

Eclectic12 said:


> I can go with "make more money on people who trade" but with requiring minimum asset levels as well as inactivity fees where one is not trading, I doubt the banks are breaking even or losing money. Then there's the "have cash? only over $# will a tiny amount of interest be paid.
> 
> Add in that once the forms are filled out ... it's all on computers where the costs are spread thinly.


They also get a pool of shares that they can (at least for margin accounts) lend to short-sellers.


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## kcowan (Jul 1, 2010)

emporer
I think you got your answer.

Namely that there is none. Keep on speculating with collectibles. You have learned that profit is not guaranteed. But you have also gained valuable experience on what not to do. That experience is worth something to you if you capitalize on it.

Anything else will be the start of a new learning curve! Which means less than optimal returns while you learn.


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## lonewolf (Jun 12, 2012)

Never invest in the market with almost no risk tolerance. herding will result by taking comfort with the herd. Need to be a bit of an adrenaline junky to take risk & go against the herd. Not to big of a junky though that proper money management will not be used no more then 2% on table.


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## jdc (Feb 1, 2016)

If you are young(ish), the best no-risk investment is to invest in yourself. Learn a new skill, take some courses, think about starting your own business. The upside is huge, and most of the cost is the effort that you put into it.


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## Eclectic12 (Oct 20, 2010)

NorthernRaven said:


> They also get a pool of shares that they can (at least for margin accounts) lend to short-sellers.


Not to mention that if they recourse the trading platforms correctly ... other parts of the empire can ensure the costs are already taken care of.
Sort of like a coffee shop or oil change place saying "we have an internet connection already, let's leverage that advertise free wifi".

Bottom line is that if the buy/hold investors were the only game going for sharing the costs, I'm sure the asset requirements would be much higher, inactivity fees triggered earlier and other cost recouping fees would be much higher.

Of course, I'm sure they'd prefer the higher margin days when phone orders were $40+ and the cheap online orders were $29. :biggrin:


The full service brokers OTOH would fondly remember when they were the main game in town at $200 or so a trade.


Cheers


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