The best advice for young investors looking to own stocks and exchange traded funds is to open an account with a trading app that offers trading for free.
Two names to note: Wealthsimple and TD Easy Trade, which offer 50 free trades per year and unlimited free trading on TD-branded ETFs. For those who prefer trading with a more conventional digital broker, here are five offerings to consider:
CIBC Investor’s Edge: Free online stock trading for clients under 25 who have a Smart Start bank account.
CI direct trade: Under the Kick-Start Investing Program, students and those who have graduated within the past two years can set up a free investing plan that withdraws money from a checking account each month and gives them shares in up to five Canadian or US stocks buys or ETFs. No commissions and no annual fees. If you do not meet the age requirements, you will pay $50 per year for this service.
Desjardins online agency: No minimum balance/inactivity/management fees for investors aged 18-30 and transfer fees up to $150 will be refunded; This broker does not charge any fees for trading stocks and ETFs, as does the National Bank Direct Brokerage.
Qtrade direct investment: Investors aged 18-30 pay a flat fee of $7.75 to trade, excluding quarterly management fees; The usual commission at Qtrade is $8.75.
Scotland iTrade: Young investors with a Student Advantage bank account pay $4.99 per trade, less than the usual $9.99, and 10 free trades are available per year through a program where you get one free trade for every trade placed receive that you transact in the iTrade app; 20 free trades for new customers in the first year; It also waives annual fees of up to $200 for investors under the age of 25.
The advantages of using a traditional digital broker over an app include a better class of tools for managing your portfolio and selecting investments. When you invest through your bank’s own digital brokerage department, transferring funds to and from your account is quick and easy.
For more information on all brokers and apps, see the 2023 Globe and Mail Digital Brokerage Ranking.
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Rob’s Personal Finance Reading List
Diet myths that can cost you money
At the top of this list of nutritional myths is the belief that fresh fruits and vegetables are always healthier than canned, frozen, or dried varieties. Buying frozen, canned, or dried foods can sometimes save you money.
Eight ways retirees can save on taxes
A financial planner highlights some overlooked tax-saving strategies. Another reminder of how single seniors are at a disadvantage compared to couples when it comes to minimizing taxes.
Home sales on the rebound
Could a fall in interest rates later this year or early next year revitalize the housing market? Some economists think so. They cite increasing immigration and a tight labor market as reasons why housing construction could soon pick up again.
A deep dive into dividend funds
If you’re wondering whether dividend funds outperform more broadly diversified stock funds, here are some answers. Useful perspective for those who insist on the superiority of dividend investing.
Ask Rob
Q: I’m wondering what you think about principal protected notes where they might fit into a retirement portfolio. Are they very different from the index-linked GICs that banks sometimes promote?
A: I can’t say I’m a fan of investments that try to fulfill so many people’s dream of investing in stocks without the risk of loss. The general idea is to offer returns based on the performance of a specific index, sector or group of companies, with limited or no risk of losing money – hence the main protection. The catch is that protecting your client doesn’t come for free. You may not receive the full returns on the underlying stocks and you may not be able to easily sell them before maturity. There are also embedded fees – make sure you understand the cost before you buy. Regular GICs can still be found with returns of 5 percent or a little more at best, with no fine print and no doubts about how much you’ll actually make.
Do you have a question for me? Send it to me. Sorry I can’t answer everyone personally. Questions and answers are edited for length and clarity.
Today’s financial tool
How returns for 12 different types of investments have compared year over year since 1985.
callout alert
The Globe is seeking young Canadians to participate in our Paycheque Profile series, an unbiased look at how young workers spend, save, allocate and invest. To see if you are eligible to participate in a profile, please email Globe Personal Finance Editor Roma Luciw at [email protected] Here are some recent examples of profiles:
- The 26-year-old film worker earns $73,000 but worries about his future
- The 32-year-old Calgary engineer wants to pay off a $150,000 loan debt, money he previously invested
- BC woman, 29, earns $50,600, owes $55,000 from college years: ‘How can we afford to get married, buy a house and have kids?’
The money free zone
Burt Bacharach’s death reminded me how much I love the song Go ahead, which has been recorded by a variety of artists. Here are a few of my favorite versions:
Dionne Warwick, of course. The song was written for her
Isaac Hayes, on the big one Hot buttered soul album
The Stranglers, in a six minute version with a long, guitar-heavy instrumental interlude that you’ll either like or really hate.
look at that
CIBC helmsman Jamie Golombeck says in this interview that there are no downsides to the tax-free plan for first-time home buyers, which is expected to roll out in April.
what I wrote about
More Rob Carrick and money cover
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Source: www.theglobeandmail.com
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