Investing For Canadians All-in-One For Dummies (eBook)

Andrew Dagys (Autor)

eBook Download: EPUB

2024 | 2. Auflage
761 Seiten
For Dummies (Verlag)
978-1-394-29464-0 (ISBN)

Infos

Make smart financial decisions with the simplified science of investing

Investing For Canadians All-in-One For Dummies helps take the confusion and worry out of growing your money with investments. Investing can be complicated, but it doesn't have to be. This book helps you put your finances in order and get ready to become an investor. It also shows you how to step into the world of stocks and bonds, in the Canadian marketplace and beyond. Discover the benefits of investing in ETFs, precious metals, cryptocurrency, and real estate. You'll even learn how to make money in day trading. Whatever your financial situation and goals, this Canada-specific guide has the jargon-free information you need to move forward. Use your newfound investing knowledge to make your money work for you!

• Understand how investing works and explore your investment choices
• Grow your wealth with stocks, bonds, real estate, and other investment types
• Learn the basic rules, regulations, and tax codes for investing in Canada
• Get a primer on cryptocurrency, day trading, and other hot topics

For Canadians who want to get started with investing or learn more about ways to invest, this Dummies All-in-One is a clear and valuable resource.

This All-in-One gathers the expertise of the leading For Dummies authors in the world of investing, including Andrew Dagys, Bryan Borzykowski, Andrew Bell, Russell Wild, Paul ­Mladjenovic, Kiana Danial, Annie Logue, Douglas Gray, Peter Mitham, Tony Martin, and Eric Tyson.

Textauszug

Chapter 1

Grasping the Fundamentals of Investing

IN THIS CHAPTER

Understanding what investing is

Setting your sights on your financial future

Checking out your investment options

Distinguishing between growth and income investing

Protecting your assets with diversification

Gauging your tolerance for risk

In many parts of the world, life’s basic necessities — food, clothing, shelter, and taxes — consume the entirety of people’s meagre earnings. Although some Canadians do truly struggle for basic necessities, the bigger problem for other Canadians is that they consider just about everything — eating out, driving new cars, hopping on airplanes for vacation — to be a necessity. However, you should recognize that investing — that is, putting your money to work for you — is a necessity. With today’s inflationary environment, careful and risk-aware investing is a necessity to just keep up with inflation. If you want to accomplish important personal and financial goals, such as owning a home, starting your own business, helping your kids through university or college (and spending more time with them when they’re young), retiring comfortably, beating inflation, and so on, you must know how to invest well.

It’s been said, and too often quoted, that the only certainties in life are death and taxes. To these two certainties you can add one more: being confused by and ignorant about investing. Because investing is a confounding activity, you may be tempted to look with envious eyes at those people in the world who appear to be savvy with money and investing. Note that everyone starts with the same level of financial knowledge: none! No one was born knowing this stuff! The only difference between those who know and those who don’t is that those who know have devoted their time and energy to acquiring useful knowledge about the investment world. In this chapter, you begin to build your understanding of investing on a firm foundation of the fundamentals.

Getting Started with Investing

Before this chapter discusses the major investing alternatives, consider a question that’s quite basic yet important. What exactly does “investing” mean? Simply stated, investing means you have money put away for future use.

You can choose from tens of thousands of stocks, bonds, mutual funds, exchange-traded funds, and other more exotic investments. To help you on this journey, this book takes you through your options, explains those options to you, and provides you with tips, warnings, and reminders of key points and more. Even after you’ve read this book, in whole or piecemeal, you’ll have only touched the tip of the investing knowledge iceberg. In the meantime, congratulations on the start of your journey and desire to figure out even more about investing than you already do!

If you wanted to and had the ability to quit your day job, you could make a full-time endeavour out of analysing economic trends and financial statements and talking to business employees, customers, suppliers, and so on. However, you shouldn’t be scared away from investing just because some people do it on a full-time basis. Making wise investments need not take a lot of your time. If you know where to get high-quality information and you purchase well-managed investments, you can leave the investment management to the best experts. Then you can do the work that you’re best at and have more free time for the things you really enjoy doing.

An important part of making wise investments is knowing when you have enough information to do things well on your own versus when you should hire others. For example, foreign stock markets are generally more difficult to research and understand than domestic markets. Thus, when investing overseas, investing in a mutual fund where a good money manager decides what stocks to hold is often a wise move.

In most cases, you can reap competitive returns while only paying minimal fees by investing in exchange-traded funds, or ETFs. ETFs are what’s known as index funds. They’re designed to give investors the same return as a particular stock market index, such as the Toronto Stock Exchange. (A stock market index is a measurement of the overall performance of a basket of stocks. The S&P/TSE Composite Index, for example, measures the overall performance of about 250 large companies in a variety of different industries.) If an index rises by 8.5 percent in 12 months, investors in an ETF that tracks that particular index will see their investment gain by a similar amount, minus a fraction of a percent for the fees paid to the fund’s managers.

This book gives you the information you need to make your way through the complex investment world. The rest of this chapter helps you identify the major investments and understand the strengths and weaknesses of each.

Setting Financial Goals

You need to set your personal financial goals for a variety of reasons. The overall reason is that a goal represents a North Star for you to follow when economic and corporate events get choppy and unpredictable. Goals stabilize your emotions which in turn can help you avoid poor investment decisions, such as selling an investment vehicle too soon at an unfavourably low price or buying something at too high of a price. Here are other reasons why goal setting is critical:

• Goals help you define your investment objectives and what you want to achieve with your investments in terms of returns (profits). This also in turn lets you figure out the appropriate amount to invest and the timeline needed to reach your goals, whether that’s saving for a car, a down payment on a house, or retirement or for saving for retirement.
• Specific, realistic, and measurable goals within preset timelines let you better track your progress (and the performance of your investment portfolio) and help you make necessary course corrections to your investment strategy. This could involve reevaluating your risk tolerance or asset allocation if market conditions take a turn for the worse. Goals keep you on track to meet your targets.
• Setting investment goals motivate you to stick to your plan and therefore help you avoid impulsive and ill-timed decisions. Aligning your investments to defined objectives also gives you a sense of financial purpose.

Exploring Your Investment Choices

Investments come in a variety of shapes, sizes, and colours. Yup, shape and colour too! Think precious metals like gold and silver or real estate. In some cases, investments have no shape at all because they don’t physically exist. Bitcoin, Ethereum, or Solana anyone? The list of financial instruments and other investable assets is endless. This book presents the most common five, six, or seven investment types. You get the picture. We start here with only a snapshot. Detailed discussion of each of these is unpacked in great detail in various other chapters.

Stocks

Stocks represent ownership (a piece of the action and slice of the ownership pie) in publicly traded companies. Stocks provide the potential for high returns, but they also come with significant volatility and a real risk of losing all or a part of the money you originally put in. Investing in stocks lets you take part in the growth and profitability of businesses, though stock prices can fluctuate greatly based on market sentiment and company performance. Book 2 is all about stocks.

ETFs and mutual funds

An exchange-traded fund (ETF) is a pooled financial instrument (a basket of stocks, bonds, commodities, and more) that can be bought and sold like an individual stock. ETFs can be designed to track anything, including a specific investment strategy (for instance a basket of investments that grow fast but are risky or investments that earn income but are safer).

Mutual funds are similar to ETFs. Mutual fund companies pool money collected from investors like you and invest those funds in a diversified portfolio of securities. As with ETFs, they provide diversification. Mutual funds also come in various styles and risk levels, making them a popular choice for both beginner and experienced investors alike.

Book 3 discusses both of these funds in detail, including contrasting the differences and teasing out the similarities between each other and among other investment types.

Precious metals

Precious metals like gold and silver are often considered a hedge against inflation and protection during uncertain economic times. Metals don’t generate regular income. However, precious metals are expected to act as a store of value and are relied upon to provide stability to an investment portfolio, especially during times of turbulence, volatility, and inflation. Book 4 discusses precious metals in greater detail.

Real estate

Real estate investment allows you to build wealth through ownership of residential, commercial, industrial, and other property types. This asset class can provide rental income; and if you were lucky enough to own residential property early on, give you capital gains (when proceeds exceeds your cost). However, real estate also requires significant upfront capital, loads of ongoing maintenance, and types of management responsibilities and headaches that stocks and mutual funds don’t...

Produkt-Details

• Erscheint lt. Verlag: 25.10.2024
• Sprache: englisch
• Themenwelt: Sachbuch/Ratgeber ► Beruf / Finanzen / Recht / Wirtschaft ► Geld / Bank / Börse
• Themenwelt: Recht / Steuern ► Wirtschaftsrecht
• Themenwelt: Wirtschaft ► Betriebswirtschaft / Management
• Schlagworte: Andrew Bell • Annie Logue • Bryan Borzykowski • Canada bonds • Canada cryptocurrency • Canada etf • Canada investing book • Canada investment tax • Canada Real Estate • Canada stock market • Canadian economics • Canadian investing • Canadian stocks • Douglas Gray • Eric Tyson • how to invest Canada • investing book Canada • Kiana Danial • Paul Mladjenovic • Peter Mitham • Russell Wild • tony martin
• ISBN-10: 1-394-29464-6 / 1394294646
• ISBN-13: 978-1-394-29464-0 / 9781394294640