written by reader A Young Canadian Investor’s Question

By mross12, October 20, 2013

Hey everyone!
I’m a 19 year old Canadian who just recently became deeply interested in investing.
Though I do have PLENTY of questions about the actual analytics of investing, I have more of a technical question for you veterans. I have set up an investing account through my bank (RBC), but am somewhat confused as to how my purchasing or selling of stocks works. Are the shares in MY name, or in a broker of the bank’s name? Do I have potential counter-party risk here?
My reason for asking is because I am quite weary of the potential for the collapse of my bank, among other Canadian banks, in the event of the next crisis. The Canadian government has already written Cyprus-esque bail-in legislation, so if my investments are at risk, what can I do to protect them?

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October 20, 2013 11:44 pm

You don’t really have to worry about counter-party risk.
I do suggest however you look into opening an account at discount brokerage such as questrade.com
trading commission is one of the cheapest in Canada.
But, if you are 19 years old, I am assuming you would have small amount of investment money. (below $50000.00)

In that case, I would suggest opening an account with TD and use their index mutual fund and have monthly contributions until it grows into a sizable investment and you can learn more about stock investing during that period.

I suggest:
Canadian Equity 20% TD Canadian Index – e (TDB900)
U.S. equity 20% TD US Index – e (TDB092)
International equity 20% TD International index – e (TDB911)
Canadian bonds 20% TD Canadian Bond Index – e (TDB909)

I started to have interest in investing in my early ages as well and it’s very good to see someone taking initiative 🙂

The key here is to save money! Instead of buying coffee everyday at starbucks or buy expensive gym membership each month, save that ghost money and invest.

Good luck!

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