Good beginner investment strategy?

[Joe Camel(Toe)]

In the new year - I will open up a basic Scotiabank investment account and purchase ETF's like XIC (tsx comp), XSP (s&p 500) and XGB (government bond)

Once the upswing occurs, would it be wise to move profits from XIC & XSP to the safer XGB?

Would this be a wise beginner strategy?

Any thoughts and comments.

Thanks for reading.

[i6s1]

In the new year - I will open up a basic Scotiabank investment account and purchase ETF's like XIC (tsx comp), XSP (s&p 500) and XGB (government bond)

Once the upswing occurs, would it be wise to move profits from XIC & XSP to the safer XGB?

Would this be a wise beginner strategy?

Any thoughts and comments.

Thanks for reading.

It's wise to rebalance your portfolio from time to time. If you, for example, buy 75% stocks and 25% bonds. If the stock market goes up, your ratio of stocks to bonds will rise. So from time to time, you should definitely rebalance to 3:1 if that's your risk tolerance.

But overall, the beginner and advanced goal is to make as much money as possible, at the lowest risk, over your time frame. "Advanced" strategies usually don't work over the long term. It's like blackjack. The average person, over the long term, is best off when they use basic strategy.

Also, open the account NOW. These things can sometimes take a while to get ready, and banks get really busy in the runnup to RRSP season.

[alanbrenton]

In the new year - I will open up a basic Scotiabank investment account and purchase ETF's like XIC (tsx comp), XSP (s&p 500) and XGB (government bond)

Once the upswing occurs, would it be wise to move profits from XIC & XSP to the safer XGB?

Would this be a wise beginner strategy?

Any thoughts and comments.

Thanks for reading.

When the stock market is up, interest rates (close to historic lows) will eventually go up because BOC tries to stick to the 2% core inflation target rate, unlike the Federal Reserve of the US, which has no inflation target or band. If you shift to bonds at the time, then your portfolio might take a beating as bond prices move inversely with interest rate increases.

[phomp]

I believe that you have to decide what your risk level is and how much you can tolerate in the risk department. Prehaps you have already done this.

Also, how have you decided on XIC and XSP? Lets say you get on this ride in the new year and it takes you on the bull and up you go (for the record, I do not think it will rise right at the beginning of the new year). Now with the market up, interest rates rise and bond prices fall. I think you may be better suited looking to take the capital gain and go elsewhere than an government bond. Prehaps at that time you may decide to look elsewhere. It appears you are looking to make a pretty fast capital gain and then lower your risk by protecting the money in a government bond.

Your strategy will rest on what you have planned with the money in the short and long term, and your risk tolerance. I think you may be jumping on the ride a bit early if you jump on in the new year but if you can ride it for a while it may prove to be profitable but if you are expecting capital gains in the very short term, IDK if I would be getting on.

Cheers and happy investing.

[Joe Camel(Toe)]

When the stock market is up, interest rates (close to historic lows) will eventually go up because BOC tries to stick to the 2% core inflation target rate, unlike the Federal Reserve of the US, which has no inflation target or band. If you shift to bonds at the time, then your portfolio might take a beating as bond prices move inversely with interest rate increases.

so would it be wiser to put into money market?

[Joe Camel(Toe)]

I believe that you have to decide what your risk level is and how much you can tolerate in the risk department. Prehaps you have already done this.

Also, how have you decided on XIC and XSP? Lets say you get on this ride in the new year and it takes you on the bull and up you go (for the record, I do not think it will rise right at the beginning of the new year). Now with the market up, interest rates rise and bond prices fall. I think you may be better suited looking to take the capital gain and go elsewhere than an government bond. Prehaps at that time you may decide to look elsewhere. It appears you are looking to make a pretty fast capital gain and then lower your risk by protecting the money in a government bond.

Your strategy will rest on what you have planned with the money in the short and long term, and your risk tolerance. I think you may be jumping on the ride a bit early if you jump on in the new year but if you can ride it for a while it may prove to be profitable but if you are expecting capital gains in the very short term, IDK if I would be getting on.

Cheers and happy investing.

This is not for the short term nor do I want quick captial gains. But allocated gains and moving them into safer vehicles is my goal say every quarter/6 months.

[sexpuppet6000]

dollar cost average in a low cost index fund

[Ryan5459]

I would suggest using TDeFunds to set up a Couch Potateo Portfolio.

[phomp]

This is not for the short term nor do I want quick captial gains. But allocated gains and moving them into safer vehicles is my goal say every quarter/6 months.

Excellent, I just wanted to be clear on that.

I believe that taking your gains and moving them into safer vehicles is an idea, but who knows what we are going to be at in 6 months time. Assuming you come up with capital gains I believe when that time comes you should evaluate the options as at the time a government bond may not be the best sheltered option, or maybe it will be.

IDK what your financial situation is like but at that time you may want to consider using gains to put towards your mortgage or use tax sheltered options. Also, IDK what your RRSP contribution limit is and if it has been hit.

Just curious what made you decide on XIC and XSP? or have you decided on them?