Investing is a complex process that requires knowledge and experience. If you have no experience, it does not matter.
A novice investor can choose the most optimal option from several investment solutions available to him.
With the right approach to investing, a person can become a millionaire without much effort.
But most people who want to achieve financial independence make a big mistake by investing their money in dubious projects.
On our site you can find a lot of interesting information that will help you avoid the mistakes of a novice investor.
Investing means using your money for the purpose of making a profit.
Our Scotia Advisor Farah El-Masri talks through the fundamentals of investing.
Step 2 What are your investment goals?
Through investments, the following tasks can be solved:
Increase in the cost of capital.
The cost of capital refers to its return, expressed as a percentage.
Getting additional income.
When investing, the investor receives additional income from capital gains, i.e. increase in its value.
An investment strategy is essential to reach your financial goals. That is why it is so important to choose the right investment tool.
Investment instruments allow us to profit from the difference between the purchase price and the sale price of an asset.
For example, you bought shares of a company that has grown in price by 20% in two years.
You have received 20% profit and it is already 20% of your initial investment.
In this example, we see that investing in stocks is one of the most profitable tools for making a profit.
Investment goals can be obtained, but most people have a steady income from capital in order to gain their financial freedom.
When developing an investment strategy, it is necessary to use the following elements:
In order to accomplish your financial goals, an investment strategy is essential.
Goals.
What are you planning to do?
How much do you want to receive within a certain time?
If your answer is more than just "a lot of money", then you should think about what you will do with incredible power.
Financial plan.
A financial plan is only part of a serious serious business plan, and it is he who sets himself the task of drawing attention to the beginning.
Registered Education Savings Plan (RESP)
A Registered Education Savings Plan (RESP) is a special savings account for parents who want to save for their child's education after high school.
Diversification
A diversified portfolio means having a variety of financial instruments in the portfolio that differ in terms of risk, return and liquidity.
The choice of one or another type of securities is determined by the objectives of the investor and other factors.
Portfolio
An investment portfolio is a collection of all your assets that you store in one place, in one portfolio.
Registered Retirement Savings Plan (RRSP)
RRSP is a government regulated investment account that you can open. This account can be used to invest in securities such as stocks and bonds
and other assets that are considered "safe" for investment.
Guaranteed Investment Certificate (GIC)
A GIC offers its clients a guaranteed return on investment that is protected from inflation.
Pre-authorized Contribution (PAC)
A PAC is your personal contribution to the future, which allows you to become the owner of the securities that you own.
Tax-Free Savings Account (TFSA)
A TFSA is a registered account that lets you grow your investments tax free. You don’t even pay tax when
you withdraw funds.
Tax-Free Savings Account (TFSA)
A TFSA is a registered account that allows you to increase your capital and save on taxes, even if you do not earn enough.
High-Interest Savings Account (HISA)
This is the type of savings account that earns you more interest.
compared to other types of accounts such as certificates of deposit and bank accounts.
This means that if you invest in these types of accounts and keep them for a certain period of time, their returns will be significantly higher than other types of accounts.
Step 3
Some of the tools you will use with your advisor
At the beginning of your investment, your advisor will help you put together an investment plan for your money based on trends.
Here are some examples of what might happen
ARIA
If you are planning to use your investments to retire, your advisor may use our Aria Retirement
Program to see how long your predicted investments may last. In this example, a customer’s target
investments are shown with different monthly withdrawals over 10, 20, and 30 years.**
Your advisor will talk with you about your attitudes to investing, and help you understand some key
topics using our Investing Essentials tool. This page helps you see how different asset classes
perform very differently over the years, and how a diversified portfolio helps you benefit from each
year’s top performers
If you have an existing portfolio held elsewhere, it’s often good to get a second opinion. Your
advisor will use our Portfolio Analyzer to determine if you currently have a suitable risk profile,
sector weighting and regional exposure for your timeline, objective and risk profile.
The risk of investing in a business is always present, but the profitability of this type of investment cannot be accurately predicted either.
How to navigate market volatility
Your Scotia advisor will help you you manage risk by working through some key
questions:
What’s your attitude to risk in your personal finance?
Which types of investments match your risk profile?
How does your investing timeline affect your risk tolerance?
How do you balance your portfolio to get the right blend of risk and security?
How much time do you have to invest?
These charts show that long-term investing is a solid strategy for your business.
The big picture
This chart shows how $1,000 invested in various asset classes over the past 84 years would have grown.
Having a diversified portfolio across various asset classes and a long-term perspective has
historically worked to the investor’s advantage
Investing lets you grow your money beyond inflation. If you only keep your money in cash and savings,
the impact of inflation could mean you’ll actually lose value in the long term.
Investing on a regular basis through regular Pre-Authorized Contributions can help you build your
savings easily and automatically. This example shows how saving $100 every two weeks, and increasing
that amount of money only 10% per year, leads to a huge growth in your savings if you stick with it
for 20 years.
Canadian stocks have consistently bounced back after major stock market downturns. While it’s normal
to worry about market fluctuations, investors should be reassured that a balanced portfolio created by
you with your advisor will balance risk and growth according to your risk tolerance.
Your financial plan can start with a simple conversation.
Give us a call at 1-866-698-5927 and book a meeting with one of our advisors.
Common investing questions
I have debt. Should I still be investing?
Before investing, it is better to pay off debts associated with the collection of interest or fees. This does not include the mortgage, which is considered good debt.
How much should I be investing each month?
The answer depends on your life situation and what is comfortable for you.
For a better understanding, you can use our Budget Planner tool before you start working with a consultant.
You can start small, even automatic contributions as low as $25 a month can make a big difference over time.
When should I speak with an advisor about investing?
If any of this applies to you, it’s worth having a chat with a Scotia advisor :
You have money saved up that isn’t already invested or generating much join
You have an existing portfolio and need a second opinion to make sure it’s performing well
You want to start a regular savings plan
You have questions and want to learn more
How do I know if my investments are working for me?
An advisor can help you figure out if your plan is on track to meet your needs. Depending on the length
of time you want to investing, your needs may vary. If you’re investing for a
short-term goal or planning on retiring soon, your advisor will adjust your plan to limit your exposure
to risk. If you can invest for a longer period of time, you can likely handle more risk in exchange for
greater profit in the future. If your life situation changes at any time, an advisor can help you
adjust.
Why is it important to diversify your investments?
Why is it important to diversify investments and how to do it?
In fact, investors have different ways to diversify.
The main types of investment diversification Diversification is the process of distributing investments between different investment objects in order to reduce investment risk. Check out our Weather the unexpected through diversification
video for more
What can I expect in a first meeting with a Scotia advisor?
Meeting with an advisor means building a relationship. Your first meeting will most likely be in an hour already! Your advisor will be able to ask you questions, review your financial status, view investments you already have, and learn about your goals. It may take 2-3 meetings to get off to a good start.
After the first meeting, you will feel, you will know that you are in the best position to achieve your financial goals.
How should I prepare for a meeting with a Scotia advisor?
Asking yourself these questions will also be helpful:
How much money do I have to invest?
What investments do I already have?
When did I last speak to an advisor?
How much can I spare each month for investing?
Do I have a financial plan and when was it last reviewed?
What are my financial goals?
How long before I need to reach these targets?
How comfortable am I with risk?
Do I have an emergency fund?
What if I already have an investment portfolio?
Even if you have investments in another bank or institution, a Scotia advisor can still give you
a second opinion and help you save your portfolio and use it more efficiently. You do not need to transfer all your money to
Scotiabank take advantage of our advice.
**
For illustrative purposes only. This example uses a hypothetical rate of return of 4% for Conservative
Portfolios. 5% for Moderate Portfolios, 6% for Progressive Portfolios and 7% for Equity Portfolios. Rates of
return are compounded annually and include a management expense ratio (MER) of 1.50% for all Portfolios and an
assumed rate of inflation of 2%. The MER of each Scotia Aria Portfolio may differ. Transaction costs and taxes
are not included. Cash flow simulations assume the portfolio is fully depleted to zero in the indicated year.
The example does not reflect actual results or the returns or future value of an actual investment. Values are
rounded to the nearest $100.
***
Source: Morningstar. Priced in Canadian currency, as at December 31, 2019. Assumes reinvestment of all income
and no transaction costs or taxes. Annual returns compounded monthly. The asset classes are represented by their
indicated indices and the balanced portfolio is hypothetical in nature. This information is for illustrative
purposes only. It is not possible to invest directly in an index.
This website uses cookies and processes the personal data (IP addresses) of visitors. If you continue to use the site, we will accept your consent.
