Investment
How to start investing in stocks in Canada
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Stock investing in Canada can help you build wealth by putting your money to work for you. And you don’t need to be a financial whiz to do it. While you can eventually deep-dive into complex strategies if you like, getting started just takes some time, thought, and knowledge of basic concepts.
In this article, we guide you through the step-by-step process to begin investing in stocks, including defining some key terms you should know.
How to start investing in stocks
Investing in stocks doesn’t have to be hard. Follow these steps to get started today.
1. Choose an investment approach
The first step is deciding how you want your investment to be managed. How much time do you want to spend on investing? How hands-on do you want to be? You have three options to choose from:
- Managing your own portfolio: Also known as active investing, managing your own portfolio leaves all of the choices up to you. You decide which stocks to buy and when to trade them. This method is best suited for experienced investors willing to devote significant time to their investments, so beginners are better off choosing one of the two options below.
- Using a broker: This is a form of passive investing. You rely on an experienced portfolio manager who chooses the best investments for your goals, monitors your portfolio and adjusts it as needed. If you’re new to investing, a broker can be a great way to get started.
- Using a robo-advisor: Robo-advisors are another form of passive investing. You identify your investing goals and risk tolerance, and the service automatically manages your portfolio for you. Robo-advisors tend to be less expensive than human advisors and are a great option if you’d like to “set it and forget it.”
2. Create an investment budget
The next step is to decide how much you want — and can afford — to spend on investing. Review your monthly budget to make sure you have enough to spend on day-to-day expenses, putting money toward savings and investing. You don’t need to invest a huge amount. The important thing is just getting started so your investments have more time to grow.
Once you’ve identified your investing budget, you also want to consider asset allocation. It’s important to include a mix of asset classes (such as stocks, bonds and gold) in your portfolio to reduce risk. When it comes to what percentage of your portfolio you keep in stocks, the rule of thumb is to aim for 100 minus your age. So, if you’re 40, stocks should make up 60% of your portfolio.
Whatever amount you decide to invest, you have plenty of options, from individual stocks (which can cost anywhere from a few dollars to a few thousand dollars) to exchange-traded funds (ETFs) (which can cost less than $100).
3. Open an investing account
Next, it’s time to open an investing account. If you want to actively manage your portfolio, an online brokerage account will allow you to hand-pick your investments. If you want to use a broker, a managed broker account will let you leave the work to an investment advisor.
A robo-advisor is a more affordable alternative to a human investment manager. Like traditional brokers, robo-advisors collect information from you to identify your needs and goals, then create and adjust your portfolio. Because their services are automated, their fees are lower than human brokers, and they don’t charge commissions. However, if you prefer speaking to someone for more nuanced advice, a broker might be worth the cost for you.
4. Choose what to invest in
Note: This step is only for DIY investors who choose to actively manage their portfolios.
If you’re going the hands-on route, you’ll need to know the different investment types available to you:
- Individual stocks: When you buy individual stock shares, you’re investing in the success of the company in question. Your success depends directly on the company’s success. For this reason, it’s essential to research each company you’re considering investing in. This is better left to experienced investors.
- Mutual funds: Mutual funds are pooled investment funds that allow you to invest in a collection of stocks, diversifying your portfolio across industries, regions and more. Mutual funds are usually actively managed by a professional manager who buys and sells stocks based on their expertise.
- Exchange-traded funds (ETFs): ETFs work similarly to mutual funds but are typically managed passively by tracking a major stock index. They can be a great way for beginners to get involved in the stock market because they’re usually less expensive and more tax-efficient than mutual funds.
5. Review your portfolio periodically
Whether you’re actively managing your portfolio or using a broker or robo-advisor, it’s important to keep an eye on your investments to ensure you’re on track to reach your goals. For example, you might decide you want to invest more, diversify into a new industry or sector or transition to more conservative investments as you near retirement. So, periodically review your portfolio’s performance to make sure it’s achieving what you want it to.
The bottom line
Stock investing doesn’t have to be intimidating. Start slow, continue educating yourself and don’t be afraid to ask questions as you go. There are plenty of resources to tap into to build your knowledge. Consult a financial professional for customized guidance on building a portfolio that meets your needs.
Investment
Governments are continuing to push investment into clean energy amid the global energy crisis – News – IEA
The amount of money allocated by governments to support clean energy investment since 2020 has risen to USD 1.34 trillion, according to the latest update of the IEA’s Government Energy Spending Tracker. Around USD 130 billion of new spending was announced in the last six months – among the slowest periods for new allocations since the start of the Covid-19 pandemic.
This slowdown may be short-lived, however, as a number of additional policy packages are being considered in Australia, Brazil, Canada, the European Union and Japan. Already, government spending is playing a central role in the rapid growth of clean energy investment and expanding clean technology supply chains, and is set to drive both to set to drive both to new heights in the years ahead. Notably, direct incentives for manufacturers aimed at bolstering domestic manufacturing of clean energy technologies now total around USD 90 billion.
At the same time, governments continue to increase spending on managing the immediate energy price shocks for consumers. Since the start of the global energy crisis in early 2022, governments have allocated USD 900 billion to short-term consumer affordability measures in addition to pre-existing support programmes and subsidies. Around 30% of this affordability spending has been announced in the past six months.
These measures have had a major role in moderating price increases for end users, but the energy crisis nonetheless took a toll on many people’s budgets. According to the IEA’s latest data on end-user prices across 12 countries, which together represent nearly 60% of the global population, the average household spent a higher share of its income on energy in 2022 as energy prices outpaced nominal wage growth. On average, households in major economies spend between 3% and 7% of their incomes to heat and cool their homes, to power appliances and to cook – though shares are higher for low-income households. In most major economies, the share of income spent on energy moved up by less than 1% thanks to government interventions.
At the pump, consumers felt the impact more acutely, especially in emerging markets and developing economies, where transport fuels accounted for the joint largest increase in household spending in 2022 alongside food. Without government intervention, this would have been much higher. This was the case in Indonesia, where the average household total energy expenditure would have tripled in 2022 were it not for affordability support.
Early numbers for 2023 show that wholesale energy prices are easing. However, retail prices are unlikely to fall as quickly. High prices are already making clean energy technologies more cost competitive, notably electric vehicles and heat pumps, which saw record sales in 2022. As high prices persist, the uptake of clean energy technologies is set to accelerate further, hastening the emergence of the new energy economy.
The UK attracted the highest amount of inward direct investment in 2022, extending its lion’s share of the European market to more than a quarter.
Releasing figures sure to infuriate pro-EU activists, the annual Ernst & Young (EY) attractiveness survey found foreign investors flocked to the City to fund 46 financial services projects last year, up from 39 in 2021.
By comparison, second place Paris enticed foreign investment for 35 finance proposals, sliding from 38 in 2021, while Madrid secured 22 foreign investment projects compared to 29 in 2021.
Anna Anthony, UK financial services managing partner at EY, said: “Investors recognise the strength, gold-standard governance and resilience of the UK’s financial system and see it as the preferred destination for growth, innovation and access to top talent.”
The Square Mile continues to be a beacon of prosperity
PA
Overall, the UK attracted foreign investment to 76 financial services projects in 2022, a 17 per cent rise on the 63 projects in 2021.
It puts clear blue water between the UK and France, which recorded 45 projects in total, down 15 on 2021 figures.
Andrew Griffith, economic secretary to the Treasury, told City AM: “We have a tremendous track record of attracting the brightest and best companies in the world built on the long standing competitive advantages of the UK and its attractiveness as a place to do business.”
The UK has topped EY consultancy’s finance foreign direct investment table every year since the research started, including every year since the 2016 Brexit vote.
Andrew Griffith pictured second to the right
PA
Likewise, London has led the European city table since it was first recorded in 1986.
America was the biggest source of foreign investment in financial services in Europe last year, accounting for 21 of the UK’s 76 projects in 2022.
Financial services investment projects created 2,603 jobs in the UK last year, a rise of four per cent on 2021.
Across Europe, 10,700 new jobs were created in financial services, of which 1,700 were recorded in France.
EY’s home in Canary Wharf at 25 Churchill Place
Cushman and Wakefield
Chris Hayward, policy chairman at the City of London Corporation, said: “London continues to lead Europe in attracting foreign direct investment in financial services, and the sector is proving resilient despite the global challenges facing the UK economy.”
Hayward added: “That is good news for every household, because a strong City creates the wealth and jobs that support the economy and fund our public services.”
EY has undergone a UK leadership shake up recently following a collapse in the consultancy firm’s plan to break up its audit and consulting operations globally.
The break up blueprint, coined ‘Project Everest’, attracted fierce internal criticism and was eventually abandoned but not before it had cost the firm £480million worth of internal work.
On the back of ditching the radical overhaul, EY has shrunk the UK executive committee from 13 to eight and announced that it will cut 3,000 jobs in the US.
The big four consultancy firm reported record levels of growth for its UK business in November 2022, with UK revenues up 17.2 per cent and UK fee income increasing to £3.23billion from £2.75billion.
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The local property market stands to reap significant benefits, both short-term and long-term, from a likely credit rating upgrade to investment level for Greece.
Industry executives say that would be a very positive development, as, after 14 years, the Greek real estate market will return to the “elite” of investment destinations and it will become easier to attract foreign investment groups and funds.
“There is an objective problem right now regarding the implementation of investments by a number of institutional investors, as there are rules that prohibit the placement of funds in countries below investment grade. In other words, even if there was an investment opportunity and they were willing to take the risk, such an investment would be cut off by the investment committee of the respective group, because it is not allowed to invest in countries that do not have a positive credit rating,” Tassos Kotzanastassis, ULI global management committee executive and CEO of international real estate investment management company 8G Group, tells Kathimerini.
Securing investment grade means the Greek property market will get back on the “radar” of large institutional investors and state groups that have a long-term investment horizon. This is a development that contradicts speculative moves by a portion of institutions that have been placed in Greece, with a purely short-term horizon, aiming to secure a quick profit and exit from the country.
However, as Kotzanastassis warns, new investments from large foreign funds should not be expected, at least not immediately. “In this period, at the international level, there is significant uncertainty and investors appear restrained. Many are looking for investment opportunities in the form of distressed assets,” he emphasizes.
One of the market’s perennial problems is it is shallow, so it is difficult to create economies of scale that maximize the return on an investment. Another key point is that all foreign investors of this scope are looking for properties with green characteristics, in the context of the ESG policy they follow. Such properties are still rare in this market, constituting a very small minority in relation to the total stock.
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