Invest in long-term quality, not market blips

Both Warrent Buffett and Charlie Munger were strong advocates for value investing — finding investments where there is room for the asset, or company, to grow. This advice has steered many an investor to stay afloat, even during tough economic times. However, for new investors or those looking for a step up from putting your money in a high-interest savings account, the best way to invest — according to Buffett and Munger — is to match the market.

Rather than look for stock with the potential for fast and furious growth, these investing gurus espoused the value of index funds or passive investing through diversified holdings. For many, this is as simple as opening a discount brokerage account and buying shares in a balanced exchange-traded fund (ETF). Good options include:

  • BMO Balanced ETF (ZBAL): 60% in stocks / 40% in bonds
  • iShares Core Balanced (XBAL): 60% in stocks / 40% in bonds
  • Vanguard Balanced ETF (VBAL): 60% in stocks / 40% in bonds

Read more about all-in-one ETFs.

For as little as $100 per month, these all-in-one ETFs can grow into tidy nest egg in just a few years. The key is to keep trading costs low and select investments with low management expense ratios (MERs) — the fees charged to maintain the fund. If you plan to use ETFs to build your nest egg, consider opening an account with discount brokerage Qtrade. Customers get free trades on hundreds of ETFs, including passive index funds and all-in-one ETFs, while stock trades are as low as $6.95, for elite account-holders. The best part that new accounts get up to $150 cashback. Open a Qtrade account, today.

Another good option is Questrade. where ETF investors won't pay a trading fee. Open a Questrade account today and get $50 in free trades.

If you're not quite ready to plunge into ETF trades and want a bit more oversight, ease yourself into online brokerage accounts using Wealthsimple. This online brokerage offers free trades on stocks and ETFs — plus you get the option of using their pre-constructed portfolios that give you access to active management without the exorbitant fees. Open an account today and get a $50 bonus.

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Invest outside the stock market, as well

The stock market isn't the only place to find value and the possibility for asset appreciation. One of the best known alternative investments — that also works on a different economic cycle to stocks — is real property.

Alternative investments, like real estate, were traditionally only available to high-net-worth individuals — people with large sums of cash that could snap up high-value assets when value was suppressed by other market events. However, new platforms — such as crowdfunding and real estate investment trusts (REITs) — have make alternative investments, like real estate and gold, far more accessible to the Main Street investor.

If you’re looking for a new investment opportunity that can hedge the violent swings of the markets, you’ve got a few options.

Real estate is one investment that demonstrated resilience during recent tough economic times, including the global credit crunch (in 2008) and the COVID health crisis (in 2019). Many investors consider REITs attractive in 2024, as property owners try to find ways to increase the value of commercial space, after being battered during the pandemic lockdowns.

Like stock, REIT shares can be bought and sold using a discount brokerage account — with the added safety of being a publicly-traded company and, as a result, responsible for reporting expenditures and earnings.

To get a diversified basket of exposure to real estate, the best option is to buy shares in the S&P/TSX REIT Index (SPTSRE:IND). However, with a trading price a little over $300 per share (as of April 2024) this makes this real estate index fund a bit expensive for most investors. Another option is create your own basket using a number of REITs listed on the Toronto Stock Exchange (TSX), such as:

  • Allied Properties REIT (AP-U:CT)
  • Boardwalk REIT (BEI-U:CT)
  • Can Apartment Prop REIT (CAR-U:CT)
  • Choice Properites REIT (CHP-U:CT)
  • Colliers International GR-SUB (CIGI:CT)
  • Crombie REIT (CRR-U:CT)
  • CT REIT (CRT-U:CT)

For Canadian investors looking for crowdfunded real estate investments, you may be out of luck. In Canada, a handful of crowdfunding sites set up shop more than a decade ago and only a few remain. The biggest hurdle is that these private equity firms require investors to be accredited — in general, a person or household with assets worth more than $5 million and a net income of $200,000 or more.

Instead, investors can consider other tangible assets, such a gold and silver. To learn how to invest in gold or silver, check out the Money.ca guides or consider opening a CIBC Investor's Edge account. This traditional bank is putting time and money behind providing tools to investors to learn more about the basics of investing and how to grow your skill and knowledge. For a limited time, new account holders can get 100 free trades and as much as $4,500 in a cashback promo.

Don't underestimate the power of pocket change

Building small, positive financial habits can have a huge impact in the long run.

With Moka — an investing and savings tool — you can save for the future using your spare change.

Signing up for Moka takes less than five minutes and it costs $15 per month to access professionally managed funds that include financial coaching, targetted portfolios and easy-to-use grow your portfolio tools.

Once you’ve signed up you can select to save using registered savings accounts, such as Tax-Free Savings Account (TFSA), a registered retirement savings plan (RRSP) or a non-registered account.

The easy-to-use app lets you keep a close eye on your portfolio and see just how far your small change grows. Amidst economic uncertainty, you can’t go wrong with having extra funds to fall back on.

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Romana King Senior Editor, Money.ca

Romana King is the Senior Editor at Money.ca. She writes for various publications, and her book -- House Poor No More: 9 Steps That Grow the Value of Your Home and Net Worth -- continues to be an Amazon bestseller. Since its publication in November 2021, this book has won five awards, including the New York CPA Society's Excellence in Financial Journalism (EFJ) Book Award in 2022.

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