If You Have Money To Invest, Do It. Now!

do-it

 

Most people worry about when to invest. 

 

They worry about whether they could be investing at exactly the wrong time.  

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Read the rest of the story at AssetBuilder

 

 





Andrew Hallam

I’m a financial columnist for Canada’s national paper, The Globe and Mail, as well as for AssetBuilder, a financial service firm based in Texas. I’m also the author of Millionaire Teacher: The Nine Rules of Wealth You Should Have Learned in School (2nd Ed. Wiley 2017) and The Global Expatriate’s Guide To Investing: From Millionaire Teacher to Millionaire Expat (Wiley 2015). My mission is to educate, motivate and inspire people on basic retirement planning and best practices for investing, using evidence-based strategies. I’m happy to comment on your questions. However, please read the Terms of Use, Privacy Policy and the Comments Policy.

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19 Responses

  1. Jim Chambers says:

    While I agree with the principle of the story, in your examples I think you made a mistaken assumption regarding the principal. You are conflating saving with timing an investment in a market. You assume Timmy doesn’t start saving until March 2008, not that he just waits until then to invest in the stock market. If he had saved the same $300 a month in a money market until the stock market bottomed out per his crystal ball and then invested it, he would have come out ahead because of his advance knowledge. Which of course none of us have. But I agree with the dollar cost averaging approach during the investment phase. I was newly retired in March 2009 and portfolio theory told me I should have bought more equities to rebalance, but it was pretty scary times, having just quit my job 9 months earlier. I decided to stand pat and have done OK, but it sure would have been nice to have the crystal ball then.

  2. Adam Kagan says:

    Great article as always Andrew!! So true about not trying to time markets.

    Question for you:
    I bought your book, and also read your articles. I took that advice to create an ultra-simple index portfolio 2 years ago. I’m 33 so I got 33% VSB (Short-term canadian bond fund), 33.5% VUN (american total stock fund in CAD dollars) and 33.5% VDU (worldwide stock minus minus America fund).

    I live in Canada, and on closer inspection of your book I maybe should have got a Canadian total stock fund instead of VUN?

    Do you think it’s OK to stay in VUN, or should I move to Canadian fund?

    Any thoughts much appreciated, thank you kindly!

    Adam

  3. Russel Fleming says:

    Hi Andrew, I am an international teacher and I have both of your books. I finally got my forms submitted for a TD Direct account and in August I will be moving to Vietnam. Unfortunately Vietnam is on some list that they can not work with.
    As a Canadian that has been out of Canada for 16 years, do you have any other suggestions for people in my situation?
    I saw “WealthBar” on one of your other posts and I am considering using them but wonder if they are a good fit for a Canadian non-resisident.
    Any advice is appreciated.
    Take care and have a great day.

    • Russell,

      Wealthbar would be a good fit for you.

      Also, DBS Vickers has an office in Saigon. Some Canadian school teacher at South Saigon International opened an account with them. They keep promising to write me a story about that, so others can learn from it. I’m crossing my fingers that they finish it.

      Cheers,
      Andrew

  4. Eldon Nesbitt says:

    Do you, or any of your readers, know of a free online backtest portfolio calculator that includes Canadian ETFs?

    Every one that I have tried has choked when I entered VAB and VCN. I would prefer one that doesn’t require registration because I ‘d like to send the link to a friend who has been sitting on a $200,000 windfall. She has been waiting almost a year for the stock market to go “on sale” and I’d like to be able to show her exactly how much her hesitation has cost her.

    • Eldon,

      You can use portfoliovisualizer.com. You may need to add a .To to the end of the ETF’s name.

      Cheers,
      Andrew

      • Eldon Nesbitt says:

        Thanks for your quick response! Your suggestion worked, and the second one probably would have worked on the other calculators I tried. (And that is great because I like to learn at least one new thing every day.)

  5. Peter Bonner says:

    Hi Andrew,

    My wife and I are just beginning to invest and are considering options. I am Irish and she is American – we both teach overseas. She has a Schwab international account and has started to contribute to that one. Thankfully, after reading your book, we stopped contributing to her Roth IRA account and paid the charges before they got too big.

    My question is: for a US/European couple living abroad, where do we invest? Should we stick with 1 firm like Schwab and put all our savings in there or, as a European, should I open a separate account with an international firm like TD Direct?

  6. Mark A says:

    Hi Andrew,

    I am an Irish Expat based in UAE and will return to Europe in a few years time. I have read your book The Global Expatriates Guide to Investing and loved it and it has encouraged me to have the confidence to now get moving after being frozen for too long with apprehension and non trust of advisors I have kept most savings in cash. I have now opened an account with TD Direct International in LUX which was painless and have transferred a portion of our savings into the account.

    I am working through building my portfolio which I have decided to build in Euro as we will retire in Europe and it is cleaner and most funds are available in Euro. Below I have outlined the portfolio I am proposing which is different to your proposal in Chapter 21 page 274.

    50% Global Large CAP – iShares Core MSCI World – IWDA (Amsterdam Exchange) – TER 0.20%
    20% Small/Mid CAP – SPDR MSCI World Small Cap – ZPRS (German Exchange) – TER 0.45%
    5% Emerging Markets – iShares Core MSCI Emerging Mkts – EMIM (Amsterdam Exchange) – TER 0.25%
    25% Bonds – IBGS but looking for one that is accumulating if possible

    Questions:-
    1. I have chosen not to add a European stocks as the Large Cap global ETF holds 23% European stocks and the Small/Mid Cap ETF holds 21% European weighting.

    Do you think this is okay or would you still advise buying a separate European fund? I don’t particularly want to buy an Irish fund being my home country;

    2. I have added the SPDR MSCI World Small Cap. It states Small Cap but the weighting is half Mid and half Small Cap. The global fund does not have any exposure to Small Cap and very little to Mid Cap. I was hoping this would balance and diversify the portfolio even further and also while adding a bit more risk also increase potential for upside.

    What are your thoughts on small/mid cap funds and does this make sense?

    3. I have also added a small weighting for Emerging Markets for a similar reason to the above, what are your thoughts on this?

    4. Does this look like a balanced long term portfolio to you and one that is manageable to rebalance annually, or do I need to have a rethink?

    Thanks again for your help and for all of your posts. I believe you had a session in UAE and I missed it, hope to catch the next one.

    Cheers
    Anto

    • Hi Anto,

      This portfolio looks great. Well done! No matter what happens, just stick to it. Market winds and “expert forecasts” will try to knock you from this perch. Don’t let them. Keep adding money, rebalance when needed (usually once a year) and you’ll do very well over time. I’m so happy that my book was helpful.

      Cheers,
      Andrew

      • Mark A says:

        Hi Andrew,
        Thanks for the reply Andrew.

        1. Would you choose IBGS or IBGM as a bond one is 1-3 years and one is 7-10 years or will it make a real difference in the long run?
        2. Do you see a far bigger risk with my holding a 20% weighting in Small/Mid Cap?

        Cheers
        Anto

        • Mark,

          As I mentioned in both of my books, always choose shorter duration bond terms whenever possible. And no, I don’t see significantly higher risk in purchasing 20% mid/small cap. Some, yes. Significantly higher, no. With greater risk, in this comes, briings a chance at higher returns.

          Cheers,
          Andrew

        • Mark,

          As I mentioned in both of my books, always choose shorter duration bond terms whenever possible. And no, I don’t see significantly higher risk in purchasing 20% mid/small cap. Some, yes. Significantly higher, no. With greater risk, in this comes, brings a chance at higher returns.

          Cheers,
          Andrew

  7. Index says:

    Hi Andrew,

    I really enjoyed your book and as a result am now running the following couch potato portfolio:

    VWRD – 40%
    VHYD – 15%
    IDWP – 10%
    IGLO – 25%
    CORP – 10%

    I am a 45 year old Brit currently living in UAE married to a 40 year old Lebanese. Not sure where we will retire – UK seems unlikely, somewhere in Europe perhaps more likely but not sure yet.

    What do you think about about my portfolio? In particular, I’d welcome your thoughts about the two bonds – any better options out there? I noted your comments in your book about short dated bonds.

    Regards – Insex

  8. Index says:

    Index October 21, 2016 at 11:53 am
    Hi Andrew,

    I really enjoyed your book and as a result am now running the following couch potato portfolio:

    VWRD – 40%
    VHYD – 15%
    IDWP – 10%
    IGLO – 25%
    CORP – 10%

    I am a 45 year old Brit currently living in UAE married to a 40 year old Lebanese. Not sure where we will retire – UK seems unlikely, somewhere in Europe perhaps more likely but not sure yet.

    What do you think about about my portfolio? In particular, I’d welcome your thoughts about the two bonds – any better options out there? I noted your comments in your book about short dated bonds.

    Regards – Index

    Reply

  9. Linda K says:

    I have a question about what types of money to invest. Obviously I understand saving for retirement. But what if you have a lot of money sitting in a savings account.

    We have quite a bit of money that is in savings – but it’s kind of earmarked for certain things – we’ll need to upgrade the cars soon, upcoming vacations – not to mention the good old 3-6-month emergency fund. Basically, we like having a cushion of money that is available to spend if needed. I get nervous at the thought of just taking this sum & putting into a retirement account because then it feels out of reach. But should it be somehow invested in the market? I go back and forth. Right now it’s earning next to nothing. But in the stock market it’s susceptible to short-term losses. The reality is that a certain amount of this money probably won’t really be touched by us and really is just there as a cushion. Other parts of it will end up getting spent at some point. So I’m not sure how much or if this should be invested.

    Sorry for the long question. But to shorten it: Do you recommend investing emergency funds/savings accounts in the market? Money that you might end up spending but might sit there for 5 years before you do? Or just keeping them at the bank?

    thanks!

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