Hands-off Investing

You don't need to do everything, unless you want to.

Disclosure! I am not a financial adviser, the contents of this blog are based on my personal experiences only. Before making any investment decisions consult with your financial advisor.

So, you may have read my post on investing, where I briefly write about stock market investing and exchange-traded funds (ETFs).

You can revert back to my blog post here: https://www.bogitsblog.com/post/start-investing

After conducting your own research, you are not alone if you've felt overwhelmed. I did too, and sometimes I still do.

While I personally like to self-direct invest, there are other options. I highly recommend reading Andrew Hallam's book, "Balance - How to invest and Spend for Happiness, Health, and Wealth."

Hallam is also a best-selling author for the book "Millionaire Teacher." Another fantastic book I recommend.

The take-away from my research into investing is that mutual funds are not the way to go.

Financial institutions push these actively managed funds because they come with large commissions and other reasons that do not serve you, but cost you money.

A portfolio of ETFs or index funds is low-cost, diversified and have low management fees. For long-term investing, this portfolio beats mutual funds.

Getting into the weeds of this statement is beyond the scope of this post. Still, Hallam's book, "Balance," explains, very well, why a portfolio of index funds or ETFs is a better investment than mutual funds. His explanations are simple to understand with straightforward comparisons and actual data.

Again, I highly recommend reading his books, and you can decide for yourself.

I finished chapter 8, "Set it and Forget it," and I ran to the computer with excitement to write this post.

Even after one and a half years, I am still a newbie! I have no problem stating that and no problem opening the discussion on investing. Talking about money can be considered taboo or tacky. Still, so much can be gained from a good conversation with no judgement.

One of the lessons I am learning from Hallam's latest book, "Balance," is that thinking too hard about money can dampen your happiness.

I have spent hours researching and trying to build the "best" portfolio of ETFs. Trying to understand the difference between one and another and what asset allocation to go with.

It can also have you second-guessing yourself and wondering if you've made the "right" decisions. You may even try to "time the market" to get the best deal or sell at the best price.

This can be emotionally and mentally draining. But it doesn't need to be.

Robo-firms offer a hands-off approach with pre-built portfolios comprised of ETFs or index funds, with lower management fees than full-service investment firms. You don't have to know everything or do it all by yourself, and they will rebalance your portfolio for you.

Costs to reduce the mental load can be worth it.

While I am invested into self-directed investing (see what I did there?), you may want to consider investing with a robo-advisor and sticking to a low-cost, diversified portfolio of ETF's or index funds they offer.

Here is a list of Canadian robo-advisors you can check out to see if this hands-off approach is right for you!

• Questrade

• BMO Smartfolio

• CI Direct Investing

• Wealthsimple

• Justwealth

• Nest Wealth

For those on the journey of self-direct investing, stay tuned. I will continue to post my experiences and lessons learned. There are accessible pre-built portfolios that helped me determine an asset allocation that best suits my goals and comfort level.

Vanguard offers all-in-one diversified portfolios. You can purchase a portfolio under one ticker symbol as advertised on their website. I include the link below for reference:)

https://www.vanguard.ca/content/dam/intl/americas/canada/en/documents/investing-made-simple_en.pdf

Your funds are automatically allocated to a set of underlying ETFs. The management fees are also easily viewed alongside each portfolio.

You are responsible for your financial education, and the information is out there to help. Just keep it simple.

The more you know, the more you grow!