A TOUCH OF FROST #13 – 10 Strategies To Start, Stocks and Football, and Hawaii

10 Strategies To Start

Personal finance is rarely covered in high school. However, it is starting to become more common and acceptable as the world we live in changes quickly. Many individuals who don’t go to post-secondary for a finance degree never really get a starting point or idea about how to actually begin investing or building wealth. As a young person, I see it all around me. People my age often have no idea what a TFSA, RRSP, or FHSA is, but they do have some idea that they need to invest. Most of them either do it at the bank or have a DIY approach, following people on social media. The lack of guidance plays a big role in how they start investing.

Let’s begin with 10 broad strategies to help you have success when investing. This is not meant to be an all-encompassing plan or guidance, because everyone is different and each situation is unique. However, this could spark some ideas and insights on the first steps, and the following ones too.

In your investing journey, there is no one-size-fits-all strategy. However, doing these 10 things can help you avoid common mistakes and set you on the straight path forward.

1. Most people may know this but the best thing you can do is START EARLY. This allows compound interest to really work its magic.
2. SET CLEAR FINANCIAL GOALS – this is a super-important step that leads to your “why.” Are you investing to set yourself up for a good retirement, do you enjoy trading the short-term volatility, or are you looking to create a downpayment? Whatever your goal is, defining it will allow you to see the road ahead more clearly.
3. If you are investing for retirement, make sure you STAY INVESTED AND HAVE A LONG-TERM PERSPECTIVE. Being long-term-oriented means staying invested, no matter how the market moves. You do not fret when markets go down because you know that as the holding period gets longer, the return consistently becomes more positive.
4. Knowing how you react to those short-term fluctuations is also super beneficial. It guides you in UNDERSTANDING YOUR RISK TOLERANCE and helps you stay grounded in investments and choices that you know won’t keep you up at night or begging for more.
5. When you know your risk tolerance, you are able to properly DIVERSIFY. Doing this effectively will mitigate risk and reduce the impact of market volatility. This is why you often hear about the 60/40 portfolio: 60% of money in equities (stocks, mutual funds, ETFs) and 40% in fixed income (bonds, GICs). However, if you are younger, there is a chance that your risk tolerance is higher and you may like something more aggressive. And that is okay! Knowing that is key and that is why we use an RTQ (Risk Tolerance Questionnaire) to help gauge your ability to handle and capacity for risk.
6. INVESTING CONSISTENTLY also helps with the volatility of the markets. When you invest consistently, you smooth out the volatility through dollar cost averaging. This works because you are buying more of the product when the price drops, which then amplifies the return when the price appreciates.
7. Furthermore, when you invest consistently, you can AVOID EMOTIONAL INVESTING. That means resisting the urge to follow the herd, avoiding fear or greed, and instead sticking to your strategy. This allows you to make smart, timely adjustments rather than acting impulsively during market highs and lows.
8. BE MINDFUL OF TAXES AND INFLATION. These can quietly harm your wealth-building capabilities. The three main investment accounts (FHSA, TFSA, RRSP) all have special tax rules: TFSA and FHSA offer tax-free growth while the RRSP is tax-deferred. Know these rules and use them to your advantage. Even though they have “saving” in the name, all three accounts allow you to invest. Simply putting money away without investing could lead to loss of money due to the rate of inflation. Investing allows for growth and, in the cases of these three accounts, that growth can be tax-free.Note: RRSPs are tax-deferred. You only pay tax on what you take out and that withdrawal is taxed as income, not capital gains.
9. Finally, SEEK PROFESSIONAL ADVICE. This may seem biased, but in the world of AI and DIY, having a professional can help you navigate this landscape that is constantly changing and almost never turns off. We can help create plans, whether full-picture financial plans or investment plans, and adjust these as life happens. Seeking help, especially in person, can help set you up with all these strategies to help achieve your financial goals!

What I’m Seeing and Reading

Larry Adams – CIO of Raymond James Financial

10 Things You May Not Know About the Great Depression – Ben Carlson

• Reading this feels like a reality check on everything we think we know about market history. Carlson shows us how even the brightest "experts" can get it completely wrong when things go south. This deep dive into the 1929 crash shifts your perspective on investor psychology and the mess leverage can create. If you want to understand what a financial meltdown actually looks like (beyond the basic stuff you see in textbooks), you really need to check this out. It’s a powerful lesson in staying humble when it comes to the markets.

From Role to Soul: The Four Ingredients for Mastering Meaning – Think Fast Talk Smart

• Instead of overanalyzing your future, "prototype" it by talking to people in roles you admire and mapping out multiple paths. When you trade the "I have to" mindset for "I get to," you move from just playing a role to living from your soul.

No Worries – Jared Dillian

• No Worries by Jared Dillian focuses on reducing financial stress. This book (I haven’t finished it yet) so far has been such an eye-opening read. Not only for my own life, but I’m thinking about taking snippets and relaying them back to clients, family, or friends. Though it is based on the USA, their accounts and ways to do things, there are a plethora of ideas, tips, and tricks to help reduce financial stress.

Chip-Ins From the Week – Hawaii

I just got back from a vacation with my family on the Big Island of Hawaii. What a wonderful place, and very unique compared to the other islands. We did the typical beach days, boogie boarding, snorkeling, and shopping. However, we also did some other touristy things like a coffee farm tasting and tour, hiking, a luau, and go to a macadamia nut farm. It was a wonderful place to visit and got to spend loads of time with the people I love most. With that, here are 10 facts about the Big Island of Hawaii.

1. The Hawaiian Goose or Nēnē (Branta sandvicensis) is a species of goose endemic to the Hawaiian Islands.
2. Mauna Kea on the Big Island houses some of the world’s biggest telescopes and has more scientific observatories in one place than anywhere else in the world.
3. Kilauea is one of the world's most active volcanoes.
4. Since 2012, the eruption zone from Kilauea has produced 499 new acres of land to the island’s coast.
5. Mauna Kea Volcano is the Tallest Mountain from the Sea Floor.
6. Hawaii Island’s unique geography gives rise to an astonishing range of climate zones – 11 out of 13 world climate zones. In just a short drive, you can experience tropical rain, snow-covered peaks, and sun-drenched coastlines.
7. Every year, the Ironman World Championship takes place on the sunny shores of Kailua-Kona on Hawaii Island.
8. Kona coffee, grown on the slopes of Mauna Loa, is celebrated worldwide for its unique and robust flavor.
9. Surfing holds deep cultural significance in Hawaii, and Hawaii Island is considered the birthplace of the sport.
10. Hawaii Island’s geographical isolation has resulted in the evolution of many unique species of flora and fauna found nowhere else on Earth.

Enjoy the weekend,

Jonny

Disclaimer: Information in this article is from sources believed to be reliable; however, we cannot represent that it is accurate or complete. It is provided as a general source of information and should not be considered personal investment advice or solicitation to buy or sell securities. Raymond James advisors are not tax advisors and we recommend that clients seek independent advice from a professional advisor on tax-related matters. The views are those of the author, Jonathan Van Dam, and not necessarily those of Raymond James Ltd. Investors considering any investment should consult with their Investment Advisor to ensure that it is suitable for the investor’s circumstances and risk tolerance before making any investment decision. This provides links to other Internet sites for the convenience of users. Raymond James Ltd. is not responsible for the availability or content of these external sites, nor does Raymond James Ltd endorse, warrant or guarantee the products, services or information described or offered at these other Internet sites. Users cannot assume that the external sites will abide by the same Privacy Policy which Raymond James Ltd adheres to. Raymond James Ltd. is a Member Canadian Investor Protection Fund.