Financial Advice for Getting into the Stocks Market
Most major stock indexes racked up some serious losses in 2022. We don’t have a crystal ball on whether that trend will continue in 2023, but investing in financial markets has proven over the years to be a key ingredient to building wealth and retirement planning.
For most newbie investors, the biggest hurdle is the age-old question “what if stocks go down? The answer is they do, and yours may too, but there are ways to mitigate that risk. Whether you win or lose depends greatly on which stocks or funds you are holding, but also on your investing timeline. You have to ask yourself, are you investing for the next 10 minutes or the next 10 years? Historical market returns show that you usually do quite well over a ten-year period.
If you are on the outside wondering how to get started in stocks, here are three of the most common questions we get from would-be investors.
Do I need a financial advisor or stockbroker?
Traditionally, a stockbroker was the only option to facilitate the purchase of shares. Nowadays, there are plenty of online brokerages that anyone can use to set up a trading account and easily purchase individual shares and many types of index funds. Whether you need a stockbroker or some other kind of advisor (we recommend a financial coach) to help you depends on whether you want to take the time an effort to learn how to handle it yourself. Check out this great blog from our Financial Coach Matt Dewey to learn all about your options for getting started with self-directed investing.
Lots of Canadians successfully manage their own investments through online brokerages and save themselves a ton of money in fees and charges. Automated investment platforms (robo-advisors) and all-in-one ETFs are popular options because they don’t require much financial knowledge, allow for easy risk management, and are simple to use with relatively low fees.
