A Beginners Guide on How to Start Investing
Starting your investment journey in Canada can be exciting, especially with the variety of options available—from stocks and bonds to mortgage investments and beyond. Each type of investment offers unique benefits and risks, so choosing the right strategy is essential to make the most of your money.
If you’re ready to dive in, here’s a simple guide to help you get started on the right foot.
Advanced MIC offers an alternative investment option that helps mitigate risk through minimal correlation to public markets, delivering genuine diversification to your portfolio. Reach out to us today to explore if Advanced MIC is the right fit for your investment goals.
Key Takeaways
Anyone can start investing: With the right research, you can find investments that align with your financial goals, timeline, and comfort with risk.
Diverse investment options in Canada: Stocks, bonds, mutual funds, and mortgage investments are just a few of the choices available. Creating a solid strategy can simplify your decisions.
Consider mortgage investments: A streamlined option like Advanced MIC provides a path for growth with the stability of real estate-backed investments.
What is Investing?
Investing means putting your money into assets like stocks, bonds, or funds to grow its value over time. Unlike saving, where the goal is preservation, investing aims to achieve long-term growth by embracing a bit of risk to capture greater returns. The key is making informed decisions based on your financial goals, risk tolerance, and investment timeline.
Investing vs. Saving
Saving and investing are complementary but serve different purposes. Savings accounts offer low interest rates with minimal risk, but inflation can eat away at purchasing power if returns don’t keep up with rising prices. Investing, on the other hand, provides a way to outpace inflation through compound growth. While investments come with greater risk, they can also lead to faster wealth accumulation.
Factors to Consider Before Investing
Before jumping in, consider the following:
- Investment Goals: Define your reasons for investing. Whether it’s saving for a home, retirement, or a college fund, having clear goals guides your strategy.
- Time Horizon: The length of time you plan to keep your investments can affect the types of assets you choose. A longer horizon allows more room for growth and recovery from market fluctuations.
- Risk Tolerance: Assess how comfortable you are with potential losses. Younger investors may have a higher tolerance for risk, while those closer to retirement might prefer safer assets.
- Investment Approach: Decide if you want a hands-on or hands-off approach. Online brokerages allow for DIY investing, while robo-advisors and financial planners can automate the process, providing convenience at varying cost levels.
- Investment Account Type: Different accounts offer unique tax advantages. A Tax-Free Savings Account (TFSA) and Registered Retirement Savings Plan (RRSP) allow your investments to grow tax-free, while non-registered accounts offer flexibility.
Main Types of Investments in Canada
Let’s break down some of the popular types of investments available in Canada:
- Bonds: Low-risk investments where you loan money to a company or government. Investors earn interest over time and get their principal back when the bond matures.
- Stocks: Purchasing stock means buying a piece of a company, giving you a stake in its success and potential dividends. Stocks can offer high growth potential but come with higher risk.
- Mutual Funds: These professionally managed funds pool money from multiple investors to purchase a mix of stocks, bonds, and other assets.
- Exchange-Traded Funds (ETFs): Similar to mutual funds, but they trade like stocks on exchanges and can be bought or sold throughout the trading day.
- Guaranteed Investment Certificates (GICs): Safe and stable, GICs offer guaranteed returns, usually at a lower rate. They’re often insured up to $100,000, making them ideal for conservative investors.
- Real Estate: A tangible investment that can involve direct property ownership or investing in Real Estate Investment Trusts (REITs), which allow for real estate exposure without hands-on management.
- Mortgage Investment Corporations (MICs): Investing in MICs like Advanced MIC provides a stable income stream through pooled mortgage investments without directly managing properties.
Steps to Start Investing in Canada
Ready to start? Here are the steps to guide you through the process:
- Set an Investment Plan: Create a detailed roadmap that outlines your financial goals, preferred timeline, and risk level.
- Understand Your Options: Research the different investment types available in Canada to understand their characteristics and potential for growth.
- Choose an Investment Account: Decide on the right account—TFSA, RRSP, or a non-registered account—to manage taxes and maximize returns.
- Diversify: Spread your money across different assets to reduce risk. A balanced portfolio might include a mix of stocks, bonds, and alternative assets like mortgage investments.
- Start Small and Regular: Begin with what you can afford and make consistent contributions. Over time, compound growth will help your money grow faster.
- Review Regularly: Financial needs and market conditions evolve, so monitor your investments and adjust as needed to stay on track.
Investment Terms to Know
Familiarize yourself with key terms:
- Assets: Resources you own that hold value.
- Dividend: A portion of company earnings distributed to shareholders.
- Portfolio: A collection of investments across various asset classes.
- Volatility: The degree of fluctuation in an asset’s price.
- Return: The gain or loss from an investment.
Starting Your Investment Journey with Advanced MIC
Investing with Advanced MIC is straightforward. Our mortgage investment provide a stable income stream, largely sheltered from market volatility, making them an appealing option for beginners and seasoned investors alike.
Embarking on your investment journey doesn’t have to be overwhelming. With a bit of planning and the right resources, you’ll be on the path toward achieving your financial goals. Ready to start? Contact Advanced MIC today and explore the potential for stable, rewarding returns.
Contact us to invest.
This document does not constitute an offering of securities. The securities are offered exclusively through an Offering Memorandum provided by Advanced Capital Corporation, a registered dealer, in compliance with applicable securities laws. The information contained in this summary is incomplete and is provided for informational purposes only. The financial returns discussed herein are target projections and may not accurately predict future performance. Investors are encouraged to review the full Offering Memorandum and consult with a financial advisor before making any investment decisions.
