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Investment

Investing as an undergraduate

Published

5 years ago

 on

SKYLAR CHEUNG/THE VARSITY

To most U of T students, the thought of finding unused money to start investing with might seem impossible, but in fact it doesn’t take a lot to get started.

“If you have money lying around in your bank account that you’re not using now, then you should open an account tomorrow,” said Andrew Harrison, the co-president of the Toronto Student Investment Council.

According to Harrison, even if students are not in a position to invest, understanding how investments work is something students should know, given that most retirement savings are in the form of stocks.

“I find that many undergrads are intimidated by investing because it sounds too risky and unknown, but there are plenty of great resources out geared towards beginners,” wrote Caroline Tolton, a second-year majoring in international relations and health studies, in an email to The Varsity.

Joining pre-analyst programs at the Rational Capital Investment Fund (RCIF) or the general membership program at the Toronto Student Investment Counsel can also be useful first steps. As for gaining information, online resources like The Balance, Investopedia, and Khan Academy offer beginner-friendly resources. Tolton noted that she has family and friends with investing experience who are able to answer her questions.

However, Spencer Caul, President of the RCIF, also told The Varsity that investing your own money is the best way to learn.

First steps to investing

For those who lack the confidence or funds to begin investing, Harrison suggested opening a virtual portfolio. Virtual portfolios that are operated through various websites let individuals simulate investing without the financial risk.

“It is really nice to start investing young, as you can build up experience over time. Investing can be a great way for undergraduates to work towards their financial goals—whether they would like to save up for a trip, grad school, or an apartment,” wrote Tolton.

Harrison suggests opening a tax-free savings account (TFSA) as a first step. The government usually taxes investment earnings, but the TFSA allows individuals to save $6,000 per year without it being taxed.

Those over 18 years of age who have a valid Social Insurance Number can open TFSAs with a Canadian financial institution, credit union, or insurance issuer. Otherwise, Caul noted you can also open investment accounts through your local bank, or platforms such as QuestTrade, Wealthsimple, Interactive Brokers, or Robinhood.

Investing smart is a learned experience. When choosing stocks, Caul cautioned against jumping on certain trends or companies. Instead, he suggested discussing your ideas with friends to pinpoint industries that you might have missed or that you disagree upon.

“If you cannot understand technology and computers to save your life, then [investing in a] high tech firm is probably not ideal,” said Caul.

That said, Harrison and Caul recommend investing in index funds, a form of mutual fund that pools various stocks and investments, are recommended for those with little time for research, low risk tolerance, or low funds. Index funds can be bought like a company stock via a TFSA or an investment account.

“It would diversify your money,” Harrison said. “They are typically low cost with low transaction fees, and you are almost guaranteed a very solid return.”

Investing requires time and patience

It is important to recognize your risk tolerance, invest accordingly, and be patient. On potential losses, Harrison added that in the grand scheme of an individual’s lifetime earning, a few hundred dollars might not be a significant loss.

Caul noted that time and compounding will become your friends in investing.

“Don’t be worried if the stocks go down in value from time to time,” Tolton wrote. “When I first started I would check the market every day and would worry if the price went down even a few cents. But it’s generally better to focus on bigger trends over time, and not the everyday fluctuations of the market.”

“Just know that the experience and what you’re learning is much more valuable than the amount of money that you might lose,” said Harrison.

Source: – Varsity

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Economy

S&P/TSX composite down more than 200 points, U.S. stock markets also fall

Published

6 days ago

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September 6, 2024

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TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.

The S&P/TSX composite index was down 239.24 points at 22,749.04.

In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.

The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.

The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.

The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.

This report by The Canadian Press was first published Sept. 6, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

The Canadian Press. All rights reserved.

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Economy

S&P/TSX composite up more than 150 points, U.S. stock markets also higher

Published

2 weeks ago

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August 29, 2024

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TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.

The S&P/TSX composite index was up 171.41 points at 23,298.39.

In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.

The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.

The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.

The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.

This report by The Canadian Press was first published Aug. 29, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

The Canadian Press. All rights reserved.

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Investment

Crypto Market Bloodbath Amid Broader Economic Concerns

Published

1 month ago

 on

August 5, 2024

By

Breaking Business News Canada

The crypto market has recently experienced a significant downturn, mirroring broader risk asset sell-offs. Over the past week, Bitcoin’s price dropped by 24%, reaching $53,000, while Ethereum plummeted nearly a third to $2,340. Major altcoins also suffered, with Cardano down 27.7%, Solana 36.2%, Dogecoin 34.6%, XRP 23.1%, Shiba Inu 30.1%, and BNB 25.7%.

The severe downturn in the crypto market appears to be part of a broader flight to safety, triggered by disappointing economic data. A worse-than-expected unemployment report on Friday marked the beginning of a technical recession, as defined by the Sahm Rule. This rule identifies a recession when the three-month average unemployment rate rises by at least half a percentage point from its lowest point in the past year.

Friday’s figures met this threshold, signaling an abrupt economic downshift. Consequently, investors sought safer assets, leading to declines in major stock indices: the S&P 500 dropped 2%, the Nasdaq 2.5%, and the Dow 1.5%. This trend continued into Monday with further sell-offs overseas.

The crypto market’s rapid decline raises questions about its role as either a speculative asset or a hedge against inflation and recession. Despite hopes that crypto could act as a risk hedge, the recent crash suggests it remains a speculative investment.

Since the downturn, the crypto market has seen its largest three-day sell-off in nearly a year, losing over $500 billion in market value. According to CoinGlass data, this bloodbath wiped out more than $1 billion in leveraged positions within the last 24 hours, including $365 million in Bitcoin and $348 million in Ether.

Khushboo Khullar of Lightning Ventures, speaking to Bloomberg, argued that the crypto sell-off is part of a broader liquidity panic as traders rush to cover margin calls. Khullar views this as a temporary sell-off, presenting a potential buying opportunity.

Josh Gilbert, an eToro market analyst, supports Khullar’s perspective, suggesting that the expected Federal Reserve rate cuts could benefit crypto assets. “Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert told Coindesk.

Despite the recent volatility, crypto continues to make strides toward mainstream acceptance. Notably, Morgan Stanley will allow its advisors to offer Bitcoin ETFs starting Wednesday. This follows more than half a year after the introduction of the first Bitcoin ETF. The investment bank will enable over 15,000 of its financial advisors to sell BlackRock’s IBIT and Fidelity’s FBTC. This move is seen as a significant step toward the “mainstreamization” of crypto, given the lengthy regulatory and company processes in major investment banks.

The recent crypto market downturn highlights its volatility and the broader economic concerns affecting all risk assets. While some analysts see the current situation as a temporary sell-off and a buying opportunity, others caution against the speculative nature of crypto. As the market evolves, its role as a mainstream alternative asset continues to grow, marked by increasing institutional acceptance and new investment opportunities.

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