# RRSP investment:10,000$



## kv123 (Aug 5, 2009)

Hi

I have 10,000$ sitting in an RRSP account with TD. It has not been invested in anything yet (I put it in in March 09 for tax benefits). I was wondering whats the best investment strategy for it? I have no constraints as of now (I would like to keep it growing long-term). Do you think buying some stocks would be a good idea?

Thanks

A new-inexperienced-investor


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## MoneyMaker (Jun 1, 2009)

google the couch potatoe porfolio


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## Rickson9 (Apr 9, 2009)

kv123 said:


> Hi
> 
> I have 10,000$ sitting in an RRSP account with TD. It has not been invested in anything yet (I put it in in March 09 for tax benefits). I was wondering whats the best investment strategy for it? I have no constraints as of now (I would like to keep it growing long-term). Do you think buying some stocks would be a good idea?
> 
> ...


Low fee index fund.


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## investnoob (Jun 29, 2009)

kv123. I find there is a lot of information out there regarding investment strategies. You can refer to this website for more information on investing, and it is geared towards canadians: http://www.financialwebring.org/

Also, here is a primer on investing in Canada: http://www.shakesprimer.com/

And, here is a link to low cost index funds that might interest you:http://www.bylo.org/idxfunds.html

One frustration I've encountered when trying to figure out my investment strategy is how to actually buy the products I want, once I've determined how my portfolio will be structured. From what I can tell, and this can take on many forms, you may end up with several accounts. One brokerage account with a bank to buy low cost index funds, and a brokerage account with a discount broker to buy etfs or other equities.

For buying td e-series funds you can refer to Canadian Capitalist's posts here: http://www.canadiancapitalist.com/investing-in-td-e-series-funds-for-your-resp/ 

and here: http://www.canadiancapitalist.com/sleepy-mini-portfolio/

Also, you can find a comparison of discount brokers, written on milliondollarjourney, here: http://www.milliondollarjourney.com/review-canadian-discount-brokerages.htm

Hope this helps.


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## kv123 (Aug 5, 2009)

Thanks so much for all the inputs. I will look into them and get back if I have any questions.


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## OhGreatGuru (May 24, 2009)

With only $10K you could start with one of TD's CDN Balanced Funds. If you expect to be adding to your RRSP every year, you should read up creating your own portfolio with mutual funds. If you like the couch potato, TD has e-index funds that have low MERs. If you like the couch potato, but don't want to be bothered with periodic rebalancing, ING has Streetwise funds, that are basically made up index funds similar to the couch potato. But you would have to have your RRSP transferred to ING. $10K is too ittle to create a diversified stock portfolio.


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## Sampson (Apr 3, 2009)

OhGreatGuru said:


> $10K is too little to create a diversified stock portfolio.


I've got to disagree with you here.

$2500 - TSX 60
$2500 - S&P 500
$2500 - EAFE
$2500 - Short-term bonds

Very well diversified, fees are extremely low if the OP goes with the TD e-series. Even opening up a brokerage account, there may or may not be any annual account fees (depending on other investments). With ETFs, transaction costs would only be about 1%.


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## Rickson9 (Apr 9, 2009)

OhGreatGuru said:


> $10K is too ittle to create a diversified stock portfolio.


Don't underestimate the individual's ability to diversify their returns to sub-mediocrity regardless of the amount of money involved.


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## OhGreatGuru (May 24, 2009)

Sampson said:


> I've got to disagree with you here.
> 
> $2500 - TSX 60
> $2500 - S&P 500
> ...


I was referring to OP's apparent wish to purchase stocks, not mutual funds or ETFs.


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## sprocket1200 (Aug 21, 2009)

whatever you do, dollar cost average it in...


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## Robillard (Apr 11, 2009)

sprocket1200 said:


> whatever you do, dollar cost average it in...


I disagree with sprocket1200 in this case. Dollar cost averaging is a good idea if you are making frequent small contributions, particularly to mutual funds. If you have a lump sum to invest, you should invest it all at once rather than leaving much of your cash idle earning nothing as you dollar-cost-average into a position. Cash that is invested in something at least has the potential to earn market returns, where cash held as cash can only earn you the interest rate your broker is willing to offer (on $10k this is typically 0%).


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## sprocket1200 (Aug 21, 2009)

don't get me wrong, I am not saying to DCA $100 per month for 100 months. it all depends on your appetite for risk. no one knows where the market is going in the next six months. 

next 10 years we hope we all know, and this is where people will say, ah, just dump it in, it will grow over time.

but I say 1% can make a difference, why not try to get it. if this investment would have started Jan 1, the case is clear. you could do $1,500 or 2,000 monthly (or divided up weekly). 

if there are US stock purchases in your future, then the CAD$ may have implications. has it finished going up? are you smart enough to make the entire bet?


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