How To Maximize Your Investments As A Canadian In 2021

by Darwin on November 3, 2021

Investing has become much more accessible today for everybody, with easy-to-use apps, and countless guides on how to begin investing. With so much investing information out there and plenty of contradictory tips and advice, it can actually be quite counterproductive to your success to have to sort through this wealth of information. Ultimately, the more information that becomes available to you, the higher the chance that you’ll find some bad advice. It’s therefore so important for you to use your wit and intuition to root out the best advice possible and the best way to do this is, first of all, by following trusted sources. Find professional sites and businesses that specialize in delivering the best quality information on investing and trading and study their advice.

While it’s all well and good to jump straight into investing, and you might even start turning a profit, you’ll find that without proper education on this industry, you can find yourself overwhelmed, confused, and at a much higher risk of making mistakes. Assuming you’ve got the basic education you need and have comfortably gotten started in the investment game, it’s time to start thinking about the best ways in which you can get the best returns on those investments. Today, there are some phenomenal benefits to investing as a Canadian, including tax-advantaged accounts for Canadian residents, and having access to the Toronto Stock Exchange. Follow this guide to help you find the best possible opportunities for investment in this wonderful country.

Be Conscious Of Your Choice In Investment Provider
When purchasing stock, you’ll know that it’s not as simple as doing so yourself. To buy stocks and shares, we must do so through the use of a brokerage. These are registered people and companies that are legally permitted to buy securities. For clarity, a security is any financial asset that is able to be traded. There are a number of different types of brokerages for you to choose from and deciding on the right one for you in an important choice. If you pick one that has little synergy with the way you operate as a trader or has extortionate charges on their services, you may find that you’re wasting your money.

Investing Through Banks
These are generally trusted and recommended investment providers and should be a top consideration when selecting someone to help manage your investments. Of course, it’s important to remember that no two banks are the same and each will have their own perks and drawbacks for those looking to invest through them. Many offer online trading services and platforms for you to quickly and easily manage your investments, and you’ll find that many offer you access to in-house advisors to provide you with guidance on your investments. However, it’s important to remember that banks are still businesses, and they will likely focus of getting you to invest in their own affiliated funds and products, although some Canadian bank stocks can be a great choice for investment due to them being stable and offering quality dividends. However, it’s very important that you read the small print when investing through a bank as you could be pumping money into high-commission and fee-ridden stock, when the money that pays off those fees can be better used elsewhere. That being said, banks are still a very secure and safe way to invest your money, just be conscious of where your money is going to be going.

Choosing A Financial Advisor
If you’d rather get a more dedicated service for managing your investments, it may be worth hiring the services of an expert financial advisor. They will identify what your aims are for your wealth generation and will help you to make decisions on where to put your money. Ultimately, having this sort of expertise behind you is ideal, especially if you’re fairly inexperienced in the world of trading and stocks. One of the downsides to operating with a financial advisor, is that they tend to prefer working with the big shots as they generally get a cut of the money you give them to manage so it behoofs them to make smart and profitable investments. However, you should be wary that as a small-time investor, the chances are you’ll be charged significantly more than wealthier ones, as these advisors need it to be worthwhile in helping you. Having the skill and cunning of a professional financial advisor behind you is only going to benefit you in the long run, but it’s important to remain conscious of their goals from working with you too.

Low-Risk Investments
It’s important to note that, even with investments that are lower risk, there is still a chance that things can go wrong, and you can lose money. However, this is why it’s very important to diversify your investments across multiple different industries and companies. One of the best ideas for investors is to put some money into investments that pay out dividends. Dividend stocks are essentially shares from prestigious businesses that have proven to be successful and profitable. To incentivise investors to hold onto their shareholder status. This tends to bolster the stability of the company significantly and helps to increase the value of their stocks. Finding the best dividend stocks in Canada is important for you to find a trustworthy and low-risk company to put your money into. The regular dividends that this company will then pay out can be a respectable source of income when combined with other types of investments, so make sure you add one or two of these to your investment portfolio.

Diversification Of Investments
As mentioned above, it’s very important for you to spread your investments out, better known as diversifying. A common phrase used in investment is the one about not putting all of your eggs in one basket. If you tunnel vision on one particular company, you’re opening yourself up to a multitude of disappointments. At best, you’re reducing your chances of making a great profit from other smart investments and at worst, you’re going to lose all of your investment if that company goes bust. Not only is it smart to invest in lots of different stocks, it’s also a good idea to use your money for different types of investments too, including savings accounts and real estate. The larger your portfolio of investment, the better chance you have of landing on an investment that’s going to make you a small, or preferably a large fortune.

Know Your Limits
Following on from that, it’s important to keep one thing in mind when investing in anything. Know what you can afford to lose before putting any amount into an investment. Set your budget and your investment plan and stick to it. It’s always important to reassess these things regularly as the market can shift greatly in a short space of time, but don’t let yourself get carried away, forgetting to consult your plan. It’s also wise to not be too cautious as it’s much more difficult to make money by leaving money around that isn’t invested. Find that balance of what you can afford and throw that money into a mixture of high and low risk stocks and shares to maximize those gains.

Be Wary Of High-Attention Investments
There’s going to be plenty of investment opportunities that you’ll see via forums and social media, that begin to get a lot of attention and start sky-rocketing in price. There’s a lot of risk to be had from trying to ride these waves, and while there’s the possibility for you to make a lot of money, like those that invested in cryptocurrency or even the GameStop short squeeze, putting all of your money into these exciting opportunities can lead to some huge disappointment if they end up crashing and burning. By all means, take a shot at these types of anomalies in the marketplaces, but be wary of investing more than you can afford on the mere chance of making a quick buck.

Buy Low, Sell High
It seems like an obvious suggestion but making sure you buy stock when it’s dropped in value can be very smart. Selling at a peak is also a great idea, especially if you believe that stock is going to drop in value. However, this is much more complex than you might think. Just because a stock has dropped significantly in price, doesn’t mean you should just jump at the opportunity and buy it. If you’re interested in a particular low-cost stock, identify exactly why it’s plummeted in value to see whether it appears as though it’ll bounce back. The chances are it will as this is a common occurrence with stocks and shares, but a stock that has steadily reduced in value over a few years and hasn’t shown and sign of heading back up might be a bad investment, unless you’ve got some foresight into the industry that stock is in and believe that it’s only a matter of time before it bounces back. When it comes to stocks that drop suddenly, this may actually be the best time to buy, as they’ll have a strong chance of stabilizing and rising back to their original heights, making you a significant amount of profit.

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