Mutual Funds

Mutual Funds have their place in investment plans. This would be for people just starting out investing or for people with no interest in this subject. For someone starting out you can buy a low cost bank mutual fund and start a savings plan. Often banks let you put in money automatically from your chequing account.

I am with the TD Bank. With them you can open a Mutual Fund Trading Account. Get a low fee Mutual Fund that has a title like Canadian Dividend. When I was starting out I got a number of Mutual Funds. Most of these Mutual Funds were touted as the latest, newest and best ever. I made no money on them. The only Mutual Fund I did make money on was a RBC Canadian Dividend fund.

The beauty of these bank mutual funds is that you can ignore them for years and they will do nothing much. Yes they will go down in a bear market, but they will also recover. As an investor you should just ignore the market gyrations. They do not count in the long run.

If you feel you must diversity, buy a US dividend fund. I would stay away from foreign funds as they are much more volatile and you can lose money on them over the long term. If you have no interest in learning about investing you need not go any further.

The thing with buying low cost mutual funds rather than ETFs is that it can be a lot cheaper. Most banks let you invest say $100 a month. ETFs are sold as stocks so you must have a trading account and have a few thousand to invest. If you use Robo Advisers you could pay a lot in fees with small amounts to invest.

Possible TD Funds are TD Dividend Growth – D (TDB3088) with MER of 1.19% or TD Canadian Blue Chip Dividend D (TDB3105) with a MER of 1.18% or TD Canadian Index – e (TDB900) with a MER of just 0.33%. You do not want a balanced fund or any other fund that contains bonds. Bonds a very easy to invest in on your own and it is safer and better way that bonds in an index fund or Mutual Fund.

If you want to learn and do more in investing, once you have built up some money in the Mutual Fund you can withdraw money and buy stocks. A good place to start is the top 10 stocks of your mutual fund. Learn about some of these stocks and if you think one is suitable for you, buy it.

On my other blog I wrote yesterday about Hammond Power Solutions Inc. (TSX-HPS, OTC-HMDPF)... learn more. Next, I will write about Mullen Group Ltd (TSX-MTL, OTC-MLLGF)... learn more on Wednesday, May 16, 2018 around 5 pm.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

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