Investing in “unprecedented times”


This year’s unprecedented combination of pandemic panic and election uncertainty may have you side-eyeing the stock market. But even now, for Canadians who are in a financial position to do so, investing is still one of the best ways to grow your wealth. And while you can’t eliminate risk, you can work to help mitigate it by taking the time to educate yourself on the ins and outs of investing, understand your own risk tolerance, your investing goals and which investing options will help you get there. 

What does an investment goal look like?

Investing is the act of acquiring an asset with the goal of generating wealth. Ideally, you gain a return that’s larger than what you originally used to invest. 

One thing to consider is getting more granular with your investing goals than “making money.” 

“It could be simple, like, ‘I want to have saved enough to replace my car in 10 years,’ or more complex, like, ‘I want to save enough so that I can retire at age 65 with $2,500 per month, after taxes, from my investments, for as long as I’m alive,’” says independent Certified Financial Planner Alexandra Macqueen. 

She explains that the first goal is simple because it involves a smaller amount of money and a shorter time frame. The second is more complex because it involves several moving pieces: a longer time frame, a tax consideration and an uncertain end date.  

Most people will have multiple investment goals, and to keep track of them, independent Certified Financial Planner Shannon Lee Simmons says, “I like to name accounts to make them goals-based. Usually this works well for short-term savings accounts that aren’t invested. For example, travel, or home repair. 

“But you could use the same type of mental compartmentalization for long-term investment accounts as well,” Simmons continues. For example, maybe one portion of your RRSP is invested specifically for your retirement, which you will not touch until you are 65; and another portion is invested with money earmarked for a future down payment using the Home Buyer’s Plan. 

Make your goals SMART

Another way to help set yourself up for success is by using the SMART format, which gives you five steps to take when setting up a goal. 

  • Specific: make each goal clear and specific
  • Measurable: frame each goal so that you know when you have achieved it
  • Actionable/Achievable: you need to be able to take practical actions to achieve a goal
  • Realistic: goals must be relevant and realistic
  • Timely: assign a timeframe to each goal (short- and long-term) so you can track progress and achievement

Now that you know how to create investing goals, the next step is figuring how to pick investments that are appropriate to those goals and track their performance.

Building your investment portfolio and tracking performance

Unless you really enjoy spreadsheets, you may want to make use of a tool that helps you build an investment portfolio and track your progress towards each of your goals, whether that’s buying a home, saving towards a small business, planning for retirement, or all of the above. Launched in October 2020, TD GoalAssist is a mobile app that provides a new, simplified way to invest, whether you’re new to DIY investing, or an experienced investor looking to amp your game.

You can build a goals-based investment plan and select investments to help you towards achieving those goals. You can choose to build your own portfolio of individual stocks or TD ETFs or build an investment portfolio that aligns to your goal and self-selected investor profile using a TD One-Click ETF Portfolio. The TD One-Click ETF Portfolios are an all-in-one ETF solution with a low-cost management fee of 0.25%. TD ETFs, including TD One-Click ETF Portfolios can be traded commission-free.

TD GoalAssist also helps you stay on track by monitoring and adjusting your investment mix on the go.

“A lot of other investing apps encourage investors to ‘set it and forget it’ when it comes to managing their investments,” says Tony Ierullo, Vice-President of Digital Innovation at TD Wealth. “When building TD GoalAssist, it was important that we created a service that empowers investors to take control of their own financial wellbeing and build financial confidence.”

For those that are just getting started with their investing journey, the app offers plain language and a simplified, guided experience. You can tap into TD GoalAssist’s free educational tools, including curated investing how-to videos, which can help to build foundational investing knowledge and help you get started on creating your personal goals-based investment plan.

We are living through interesting times and that’s reflected in the market. That doesn’t mean you have to keep your money in a savings account, waiting for calm to prevail while your cash earns next to nothing. With  investment knowledge resources and tracking help from tools like those offered through TD GoalAssist, you can feel confident enough to continue investing towards meeting your goals. 

 

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