Here’s expert advice to help young Canadians get comfortable with investing
With interest rates rising and inflation affecting prices everywhere, using your money to invest might seem like the last thing young Canadians are thinking about.
Market conditions for investing may feel a little rocky or like a “risky time” to do anything with your money other than save. But, you’ll actually be able to reach your financial goals faster and make better use of your money when you invest it.
If it seems a bit overwhelming or inaccessible, getting started on your investment journey is actually a lot easier than you think — especially with a solid financial institution like Coast Capital having your back.
Investment-curious, but don’t know where to start? Daily Hive spoke with Certified Financial Planner at Coast Capital Tammie L’Heureux about how you can best combat any fears or concerns you may have about investing as a young person in BC.
Analysis paralysis
L’Heureux notes that investing today is different than in previous generations, whether you’re looking for self-serve investment platforms, want to work with a financial advisor, or want to find out what types of investments are best for your portfolio.
While all this choice and information has made investing more accessible, L’Heureux says that it’s also led to an investing landscape that can feel overwhelming without knowing how to effectively start investing.
“With all of [the] options and information, it can often lead to something we call ‘analysis paralysis,’ which means that when an individual has too many choices, they often choose to do nothing,” L’Heureux tells Daily Hive.
On top of all these choices, too many sources of information can feel inaccessible, with fear-provoking or negative headlines, which leads to potential investors internalizing all that negativity and simply opting out.
Investing in a modern landscape
To gain some clarity, a lot of young Canadians turn to their elders when they’re feeling pressured or confused. But, the advice of those who came before you may be marred by a jaded sensibility surrounding investing.
“The previous generations certainly recall the early 1980s when inflation was rampant and interest rates were extreme,” says L’Heureux. “So there can be some negative emotions that this experience could be repeated.”
While it may sound like contradictory advice, a tumultuous market presents a lot of opportunities to expand your portfolio — as investments are running cheaper than during a thriving market.
“If you are already invested, it’s a great time to consider increasing your regular contributions or perhaps adding a lump sum if you can. This will allow you to buy more of your investments when the price is lower. When the market eventually recovers, your portfolio value will as well.”
Stepping into the market
If you’re brand new to investing, L’Heureux suggests you speak with a trusted financial professional to have a conversation — and do some research beforehand to feel more empowered during that conversation.
Thankfully, Coast Capital is a financial cooperative that is member-owned, with plenty of tools to help you get comfortable with complex financial topics, like investing, through its blog. For its members, the Money Chat is a free online tool that helps you connect with your financial goals and how you can achieve them in as little as five minutes.
With strong ties to the communities it’s based in, Coast Capital provides honest, trustworthy and valuable advice that customers deserve.
“I always consider a client’s financial values and goals first when engaging in investment conversations,” says L’Heureux. “Connecting a goal to your investment is a way to ensure you create a path to follow and that you can stay true to the path during both positive and negative events.”
How to invest in a fluctuating market
Your investment journey is bound to hit a few bumpy paths, and it’s important to not let those bumps scare you away. It’s normal that, when the market is at a low, your emotions are at a high!
L’Heureux emphasizes that your investments will indeed fluctuate, and those changes shouldn’t deter you or scare you off. During these periods, it’s important to revisit your goals, remember why you made specific investment decisions, and how your choices will help you achieve those goals.
“I also like to use the ‘road trip’ analogy. When planning a road trip, most of us (with the help of Google Maps) plan the route before we depart,” says L’Heureux. “Along the way, there may be unexpected detours, however, we keep going because we would like to arrive at our destination.”
“Sometimes we get lucky and have no detours, other times we may experience large detours. However, any detour alone shouldn’t prompt us to turn the car around and go home, otherwise, we’d never get to where we want to go.”
Start your investment journey today
Making the first step in your investment journey starts with working out a budget to measure your income and expenses to determine the realistic excess funds you have every month to put into an investment account.
Whether that excess is $50 or $5,000, there is no perfect amount, or perfect time, to get started. The key is to start building the habit so you’re able to take advantage of the time you spend in the market and the interest you’ll accumulate on your investment.
If you’re still nervous about those inevitable bumps in the road or are losing sleep over your investment concerns, reaching out to a financial advisor who has your best interest will help you feel more confident in your financial future.
“[Coast Capital] offers genuine compassion and excels at building trust with our members. We understand not only their financial circumstances but also who they are as individuals, their families, loved ones, worries, successes, and challenges.”
Get empowered to start investing now by visiting Coast Capital to speak with a financial advisor to open an account and get solid, holistic financial advice. As the saying goes: there’s no time like the present!
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