Lifestyle / We Tell You Why Now Is The Perfect Time To Invest

We Tell You Why Now Is The Perfect Time To Invest

Lifestyle Feb 20, 2023

by Devika Goberdhan | Features Editor - Fashion

It comes as no surprise that we are all facing various economic challenges. And with our tight budgets, putting money aside right now in investments may not be the first priority. However, that may be a mistake. We take a closer look at why now actually may be just the right time to take a closer look at starting (or bumping up) your investment portfolio.

The beginning of a new year (though we’re already in February) is often when people have the desire to focus on organizing their personal finances and goal setting. After the last few years of general unpredictability and financial uncertainty, more and more people had the time to start thinking about investing. In fact, throughout the pandemic investing became very popular. According to research by the Ontario Securities Commission that sought the opinions of 2,000 people, it was noted that “10% of self-directed investors opened their… account[s] during the pandemic” and “16% of self-directed investors started investing through an advisor due to the COVID-19 pandemic.” It’s important to understand that investing is not a get-rich-quick scheme, instead, it is a useful tool to work toward achieving your financial goals, such as planning for retirement, building generational wealth, or saving for a down payment.

Investing can seem very confusing, but there are tons of resources available to help you on your journey, including financial advisors. To this end, I sat down for an exclusive chat with Dilys D’Cruz, RIS, Senior Vice President of Wealth & Financial Planning at Meridian Credit Union about why investing can be a useful tool, some key resources to refer to, and how to stay on track when investing.

Is Now The Right Time To Invest?

As previously mentioned, the last few years have created unpredictability and volatility in the markets. This can often create fear for investors (regardless of where you live) especially for individuals who are curious about getting their feet wet for the first time. According to Yahoo! Finance, “since early 2022… the market seems to be having lots of difficulty deciding which direction it plans to head in. In defence of investors, the Canadian economy hasn’t exactly been doing a great job of providing direction. All of the uncertainty in the short-term future of the Canadian economy has been a key reason for the amount of volatility investors have experienced over the past 12 months.”

**We Tell You Why Now Is The Perfect Time To Invest: Investing is a great way to help you achieve your financial goals.** Photo Credit: www.tipranks.com

That said, D’Cruz shares what to consider when investing, especially for the first time: “As you probably know, if stocks are down now, that’s when you want to get in because things will come back. However, people have to look at their individual circumstances. What is their time horizon? What is their financial situation? What is their risk tolerance? But assuming they’re younger and they have the money, absolutely, now is the time to get in, because things will turn around and you want to get in when it’s lower versus when it’s higher.”

As well, D’Cruz has some tips to keep in mind if you’re considering investing:

“Rather than entering into the market [in a big way]. Just invest in small amounts. What I love to suggest to people, [especially] anybody starting out is to just tie it into your payroll. If you get paid biweekly, just take out $25 and invest it. Investing regularly and consistently, [helps make] it easy and painless.”
“If your employer has a savings plan or an investment plan, [such as an] RRSP program you can have the money deducted right from your pay. You never feel it and you just get used to that cash flow.”
“A lot of millennials want to ‘do it yourself’ and do the online brokerage approach, and that’s fine, [if] you actively follow the markets and actively follow stock. But, for the majority of people who are just entering into the market you should talk to a financial advisor. Go to your financial institution and [let your advisor know that you] want to enter the market and then [they will walk you through] the whole risk questionnaire and profile questionnaire to recommend [how to proceed].”
“Do your research and use credible sources because there are a lot of self-professed experts on social media who may not have the credentials or the background to give you the advice that’s suitable for you.”

**We Tell You Why Now Is The Perfect Time To Invest: It’s highly recommended that you do your own research to give yourself some basic knowledge about what investing entails.** Photo Credit: www.monday.com

Let’s Talk About Building Generational Wealth:

According to Fortune, “generational wealth is essentially any kind of asset that is passed down from one generation to the next. This might include cash, investment funds, stocks and bonds, real estate properties, or even businesses.”

Building generational wealth doesn’t mean you should be squirrelling away every penny you earn. Instead, it means that you should be thinking about the long-term strategy when it comes to investing, as opposed to seeing it as a short-term tool.

D’Cruz explains that “people will gain their wealth through the stock market, through real estate, through building a successful business through inheritance. Then it’s about what you do with that. So, if you know that you’re building for your family’s future, and once you pass away, I think some good tips are to bring the younger generation into learning about money sooner rather than later, along with [teaching them] how to manage money. As well, I’m a huge proponent, with my advisors, to always make sure the spouse, in the case of women who may not be actively involved in the finances, [is brought into these conversations] so they can learn too.”

In addition, estate planning is very important in these scenarios (and, in general). D’Cruz highlights that it’s important “…you have a Will to prevent any problems, which we know can happen when [someone] passes away, especially when it comes to money, any beneficiaries, and tax implications. [In this instance, it’s really important to work with a financial planner] to manage your estate and plan how the money or assets will be passed on.”

What’s also crucial in this scenario is ensuring you have the right people on your team, such as a financial planner to help you bring your goals to life and then maintain them. Having an estate lawyer is also incredibly important on this journey.

**We Tell You Why Now Is The Perfect Time To Invest: Is building generational wealth on your mind? It’s important to sit down with the right individuals to discuss making your plans.** Photo Credit: www.hdfcsales.com

Is It Ever Too Late To Start Investing?

Some people, as we can see with the slowdown in the global real estate market, can be hesitant to get involved with investing. However, D’Cruz emphasizes that it’s never too late to get started. “If you’re 50 and you haven’t started saving for your retirement yet, don’t hit the panic button. That’s very relevant in this day and age, people go through divorces, and people lose jobs. Maybe you had savings, maybe you didn’t, or maybe you’re wiped out. [That said,] I don’t think it’s as ever too late. For example, if you’re 50, you still probably have another 30 years ahead of you, right? You don’t even have to start drawing down on your RRSPs until 71, so even if you started investing at age 50, that’s 21 years.”

In this case, D’Cruz would recommend seeking out professional advice to get you on the right path that’s comfortable for you. “You might be able to restructure some of your finances to make it a little easier to invest and. I don’t think it’s ever too late. However, the older you are. your risk tolerance is going to be lower because you don’t lose money, right?”

In this instance, it’s also important to set yourself up for success and plan for how to stay on track with your investments, such as by automating your deductions, taking advantage of your company’s investment or saving programs, seeking out a financial advisor, and review your plan annually, at minimum to ensure you’re still on track.

We Tell You Why Now Is The Perfect Time To Invest: A financial advisor or financial planner will be crucial to your investment journey. Don’t be afraid to shop around to find someone who fits your needs best. Photo Credit: www.forbes.com

Therefore, if you’re hesitant, your first step is NOT to take advice from TikTok, a blog or your aunt’s brother’s cousin. Instead, engage in some self-learning using reputable sources and seek out a financial advisor who will be able to provide a holistic review of your financial situation and provide recommendations based on the path you’d like to go down.

Most importantly, when it comes to investing or building for the future, you need to understand that this isn’t a short-term venture, so be ready to strap in!

Main Image Photo Credit: www.unsplash.com

Devika Goberdhan | Features Editor - Fashion

Author

Devika (@goberdhan.devika) is an MA graduate who specialized in Political Science at York University. Her passion and research throughout her graduate studies pushed her to learn about and unpack hot button issues. Thus, since starting at ANOKHI in 2016, she has written extensively about many challe...

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We Tell You Why Now Is The Perfect Time To Invest

by Devika Goberdhan | Features Editor - Fashion

Devika Goberdhan | Features Editor - Fashion

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