Investing in 2021: A Guide to Getting Started
Saving for a rainy day is something we’ve been taught as kids, and with the pandemic hitting us hard last year, we all realized how important it is to have emergency funds in place. However, while having a substantial amount of savings is ideal, not many of us realize that letting our savings merely sit in the bank is akin to keeping our hard-earned cash under our mattress. Nothing happens to it, and in turn, we are allowing it to lose its value due to inflation and low-interest rates.
- A smarter alternative is to make those savings work for you, and you can do that through investments. You’ve probably heard from your parents or grandparents a lot about the traditional methods, and most likely they have worked with them. Traditional methods of investments, like stock investments, mutual funds, index funds, bonds, mortgage-backed securities, and real estate, are tried and true ways, and they’re reliable investment options.
However, if you’re digital savvy, it will be worthwhile to look into investment options you can do online which can deliver results similar to the traditional methods of investments.
Online investment platforms provide an efficient way to manage and implement market positions through sophisticated and well-designed software systems. They come in various formats, and it helps to take the time to do an extensive research to identify the most ideal option for you.
How Do They Work?
First things first, with a digital platform, you can open, close, and manage market positions by way of a financial go-between such as an online broker. These systems boast features that show how your investments are performing, including real-time quotes and charting tools, so no guesswork is required. It’s your money, after all, so transparency is key.
Invest Safely and Smartly
Investing is a great tool for your financial health and future, but it comes at different levels of risk. Be sure to consult with experts and do plenty of research before starting your investment journey.
Making Your Choice
When it comes choosing among tech-savvy investment options, remember it’s not about which outperforms the others, but which will meet your financial objectives and personal preferences the best. Let’s see below.
If you’re after foreign exchange or the forex market, then this option will work the most wonders for you. MetaTrader interfaces with multiple brokers, and it’s your best bet to navigate the forex financial market.
Its best feature, however, is also its downside. If you’re not looking into automating trading in currencies, then this platform may not give you the same benefits as when trading stocks and futures.
- Robo Advisors
Robo advisors have come a long way. From its inception following the 2008 financial crash, robo advisor companies continue to sprout globally, and one of the most noteworthy ones started right here in Canada in 2014. Toronto-based Michael Katchen’s Wealthsimple is a standout with its user-friendly interface and a digitally engaged communication channel that’s evident of social media savviness.
A downside to robo advisors is that you give it full control and you’re basically a spectator. When you want to take a more proactive approach to your investments, a robo advisor may not be for you.
- Online Brokerage
Online brokers are the way to go if you are more of the hands-on type. With these, it’s completely up to you to build your portfolio.
The drawback with an online brokerage is a minor one. If your digital savviness is sub-par, then you may have some issues navigating their systems. However, an online brokerage company considers customer experience as a priority, so they must continuously make the effort to make their applications as user-friendly as possible for everyone to use.
Which Brokerage Should You Choose?
Here are three options that have won investors’ hearts:
It’s easy to see why Questrade should be among your top choices. This company opened its doors in 1999 and has had an impressive streak. It boasts of 50,000 new accounts yearly, $9 billion in assets under administration, and is a nine-time winner of Canada’s Best Managed Companies. They also prove they have a customer-service mindset as they charge no annual fees and you get to purchase ETFs at no cost. In addition, RRSP or TFSA transfers don’t incur any fees either.
For young investors, Qtrade may be the most fitting choice available since it gives them the power to take charge of their financial future. Operating since 2001, Qtrade is known for its low commissions, no opening or closing fees, and no annual RRSP or TFSA account fees. Plus, you can buy ETFs commission-free and there’s no charge to transfer your account.
- TD Direct Investing
It wouldn’t be a complete list without any major financial institutions. TD Direct Investing is way ahead of its counterparts such as iTrade (from Scotiabank), Investor’s Edge (CIBC), Direct Investing (RBC) and InvestorLine (BMO). After all, TD got here first when TD Green Line Investor Services opened for business in 1984 and became the first bank-owned self-directed brokerage in Canada. With this option though, you’d have to be mindful of trading fees of $9.99 per trade.
What It All Comes Down To
We all have our own investment needs, so it all boils down to evaluating your needs and goals to figure out which is the best choice for your online investments!