Basket of Assets: What to Buy
You've paid off your debt and opened your TFSA or RRSP. Now comes the big question: "What do I actually buy inside the account?" For most Canadians, the answer is broad-market ETFs.
The "Everything in One" Solution
An ETF (Exchange-Traded Fund) allows you to buy thousands of companies (like Apple, Royal Bank, and Nestlé) in a single click. Instead of picking winners, you are betting on the entire global economy.
iShares Core Equity ETF
100% Equities
Long-term growth (15+ years). Maximum growth, maximum volatility.
iShares Core Growth ETF
80% Equities / 20% Bonds
Growth with a small safety net. Suitable for a 10-15 year horizon.
iShares Core Balanced ETF
60% Equities / 40% Bonds
Moderate growth with less 'swing'. Good for a 5-10 year horizon.
The Short-Term vs. Long-Term Reality
Investing in equities (stocks) is like a roller coaster. In any given week, month, or even year, the value of your portfolio could drop by 20% or more.
Short-Term Risk
If you need your money in less than 5 years (e.g., for a wedding or car), the risk of a market crash is too high. You might have to sell at the bottom.
Better for short term
Consider fixed income ETFs like CBIL (0-3 Month T-Bill ETF) which provide a yield with almost zero price volatility.
Long-Term Benefit
Over 10-20 years, the global stock market has historically always recovered and reached new highs, providing compound growth that outpaces inflation.
How to select your "Mix"
Your Risk Tolerance is your emotional and financial ability to handle these swings. If a 10% drop in your account balance would make you lose sleep or sell in a panic, you should choose a more balanced mix (more bonds/XBAL) rather than 100% equity (XEQT).
Module 3 Takeaway
Don't try to time the market or pick the next hot stock. Pick a broad ETF that matches your time horizon and risk tolerance, and contribute to it consistently through the ups and downs.