It’s not too late – to invest like a pro this year

It’s not too late – to invest like a pro this year

Bad behaviour gets in the way of the best laid plans.  Time evaporates on all of us.  You also certainly don’t know what you don’t know. Just know it’s really never too late to invest.

In my case, I used to tinker with investments in my Registered Retirement Savings Plan (RRSP) during my 20s.  Chase this hot mutual fund; chase that one.

Since I started this blog things have changed.  I’m older, wiser (?) and I’ve learned more about myself.  In doing so I’ve learned to hold myself to a higher financial standard by writing things down.  I now track what I’m doing (or not doing) via this blog.  I’ve got a deeper connection about what keeps me motivated, engaged and on track when it comes to money management.  Thankfully my wife and I are wealthier for it.

Over the years I’ve been able to rid myself of many poor investing habits.  Knowing your tendencies is just one way to build a modest portfolio.  There are other things you need to do year after year as well.

With the year fading away, it’s now fall, just know it’s not too late to invest like a pro this year. 

Here are my tips to recover this investing year.

Not too late

  1. Remember to keep it simple

You don’t need dozens of mutual funds or exotic Exchange Traded Funds (ETFs) in your TFSA or RRSP or RESP – as you save for your child’s higher education.   Maybe four (4) low-cost, diversified funds at the most:

  • A Canadian equity fund
  • A U.S. equity fund
  • An International equity fund
  • A Canadian bond fund.

I’ve provided my list of favourite ETFs for you to own here.

  1. Keep it big picture

You should not look at your investing accounts in isolation.  Consider looking at all your assets as one big portfolio.  This way, you can be more tax savvy when it comes to your asset location as you optimize various accounts.

My general rule of thumb for investing is as follows:

Non-Registered = Canadian dividend paying stocks; take advantage of the dividend tax credit.

TFSAs = Canadian dividend paying stocks and Canadian REITs; no dividend tax credit but at least tax-free income and growth with time.

RRSPs = U.S. dividend paying stocks and U.S.-listed ETFs; no withholding taxes, USD dividends and long-term growth via low-cost equity ETFs.

  1. Ignore financial noise

What is Trump going to Tweet next to scare the markets?  Will oil prices continue to stay low?  What is going to happen with interest-rate sensitive stocks like utilities? The real estate market in Canada is bound to crash eventually, right?

Who knows.  I mean really.  So don’t kid yourself.  Don’t put any faith nor heavy time commitment into the financial future.

Tough love – yes.

Why on earth would I say such things?

Because you have no control over those things above.

Focus on what you can control:

  • Maintaining a decent savings rate for investing purposes
  • Knowing what you’re invested in and why
  • The ongoing costs of what you invest in and how they affect your prospective returns
  • Staying invested
  • Minimizing your taxes
  • Maintaining a decent emergency fund
  • Killing your debt obligations
  • Going out and travelling and living your life
  • Enjoying precious time with your family and friends
  • Ignoring almost everything else in the financial sector (except this blog of course)!

I can almost guarantee sometimes you’ll invest when you shouldn’t and you’ll avoid investing when you should.  It will all work out over time.

Spare yourself the anguish over short-term market gyrations covered by thousands of financial stories abroad because you have virtually no hope whatsoever in catching the market on the way up or buying more assets when prices bottom out.  Like a shockwave by the time you hear it the event already happened.  Don’t waste your precious time.

  1. Don’t raid the nest

Investing is not a race.  It’s not a fad.  The very definition of an investment is an asset purchased with the hope it will generate income or appreciate in value in the future.  So when you invest it’s for long-term.

Need money short-term?  Put it into a savings account.  Have the aforementioned emergency fund.  Saving and investing are not the same things.

Over long-term periods of investing, such as many years, stocks will likely generate higher returns than bonds and bonds should generate slightly higher returns than cash under your mattress.  You’ve probably already witnessed this from our recent multi-year market run.  People who thought the sky was going to fall a couple of years ago have missed out on some great (and higher) equity returns.

Should you borrow monies from your portfolio, such as your RRSP today, this is a reminder you are borrowing from your future self and the government loan they gave you.  So, to make up any financial shortfall you’ll either need to work longer, spend less or a combination of both.  Choose wisely.


Time flies when we’re having fun.  We’re far from perfect on this site – trust me.  However getting the financial basics right more often than not is all you really need to do.  I believe the same applies to most things in life…

To get caught up in the last few months of this year, I suggest you keep things simple:  think long-term but act short-term.  Don’t waste your time reading too much financial media noise; avoid raiding any money already invested.  With these tips in mind it’s not too late to invest like a pro this year.

My name is Mark Seed - the founder, editor and owner of My Own Advisor. As my own DIY financial advisor, I'm looking to start semi-retirement soon, sooner than most. Find out how, what I did, and what you can learn to tailor your own financial independence path. Join the newsletter read by thousands each day, always FREE.

20 Responses to "It’s not too late – to invest like a pro this year"

  1. I think that investment is more like a habit. Once you get into it and consistently work on it, it will become second nature to you.

    It’s not a timing thing. You can start anytime. The earlier you start, the better. Our ultimate goal is to have our money working, so at one point in the future, we don’t have to.

    Passive income rules.

    1. Absolutely. I think like most things in life, once you develop some good habits, although hard to start sometimes – they can be hard to break. That’s a good thing.

  2. Dividends on the Prairie · Edit

    Great post as usual Mark. Is there any particular reason that you’ve slated Canadian REITs in TFSAs? Is there any reason why they shouldn’t belong in RRSP accounts? I’ve seen other bloggers say the same thing and I’ve always wondered if I’m missing something.

    1. No particular reason DOTP but I tend to keep my RRSP full of mostly U.S. equities so the next best home for my CDN REITs is inside my TFSA (other than RRSP). This way I keep distributions shelted, interest and return of capital tax-free sheltered and I also don’t have to worry about my adjusted cost base 🙂

  3. Mark, All good advice. I think your opening comments say a lot and I can relate. I’m a better investor now than when I was younger. A little maturity helps one know their tendencies, stay the course, stay invested and not chase the hot investment. Tom

  4. In my situation I am totally invested in Cdn stocks invested in non registered account and TFSA’s. I am 68 years old and have actually been winding down my RRSP.
    I would still like some further diversification into US or International equities or ETFs but I worry about the tax consequences. I would appreciate any suggestions

    1. Interesting Rob…no U.S. or international assets eh? We own about 10 U.S. dividend paying stocks and some VYM and VXUS as ETFs. Those assets are in our RRSP. Did you check out this page about withholding taxes in particular?

      What in particular are you worried about when it comes to tax consequences? The RRSP as an account or the investments themselves? Are you thinking of owning some U.S. assets in a TFSA or non-reg. account then? You could consider some Canadian-listed ETFs that hold U.S. assets for extra diversification.


  5. Hey Mark, when you’re investing in US based ETFs are you using Norbert’s Gambit to do the currency exchange or do you just go through the broker? If you do Norbert’s Gambit do you find you do it less often due to the extra work involved?

    I’m considering switching some of my Canadian listed US ETFs to US listed versions. I’m wondering how you manage ongoing contributions.

    1. Great question. I use interlisted stocks to do my gambits; to get my USD money into the RRSP-side. I try to avoid just moving CDN to USD directly to avoid extra brokerage exchange fees.

  6. If I were you I’d omit the word ‘pro’ in the title. Since perhaps only ~10% of financial professionals beat “the market” both short and long term…that means ~90% of pros fail. I don’t want to invest like a pro.

    1. Interesting take. I was more referring to a ‘pro’ being savvy; engaged and having some level of subject matter expertise. Not that their performance must always be stellar 🙂

  7. I saw the headline and thought there was going to be some kind of revelation that had to do with year end. Sure there are a few time constraints and deadlines but really, saving/investing ought not to be based on a calendar. Having said that, knowing when a possible or existing investment is going ex-dividend is worth knowing. I’m stuck with a couple of what I call orphaned investments. Investments that I sold but received a dividend re-investment after selling. Too small to sell due to the cost and not worth having anymore. Just sits there like congealed gravy on the side of the plate.

    1. Nope, but I’ll have some year end tax tips and investing tips that I follow and ones folks could consider in another month or so Lloyd.

      You strike me to be very on top of things so I’m sure you know when your dividends will be paid out 🙂 I have a couple of duds in my portfolio still…one is CPG for some capital losses to offset some significant gains in the coming years. The other is a penny stock to remind me never to speculate on those again!

  8. One of your best investment over-views Mark!
    The only thing I’s add to your list is:
    Add the word “Growth” to your dividend stocks
    RRSP’s: add Cdn Dividend Growth stocks as well


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