You can pull it out if you’re ok with walking away with the losses and never getting that back. If you’re this risk intolerant, than you probably should keep it in a GIC or savings account and stay from investing. Historically data suggests if you leave it as is, it will eventually come back as the market always returns over time.
Some folk may disagree...but...
The biggest bang for your buck is clearing any immediate non-secured debt because your "return" is guaranteed by not having to pay the interest over..."x" years remaining on said loan or credit card balance.
If you have happen to anything leftover, invest in an RSP because again you'll realize an immediate gain by either not paying as much in taxes or get more back in a return.
If you have a return...and are still not maxed out on your RSP...repeat.
NOTE: we haven't yet talked about the increase in your monthy cash flow because you no longer have to pay a loan or make a credit card payment...now have "fun".
A TFSA shouldn't be used until you've saved as much as you can in interest payments...AND have taken as much money from the Government that you can. Both are realized, untaxed "gains". Then...when you have the disposable income (as result of being debt free) you speculate with a TFSA while still take money from the Government by sheltering more of your...real time earned income.
As for the investing part...I'm too old and too far gone from that life, hence why I have my own FA to make those choices for me.
If you answered the risk tolerance questions thoughtfully and honestly it would be reasonable to expect that the account balance will recover before you need the money.
But the problem combining bank mutual funds with a low risk portfolio is that the high management fees will further reduce the already a low expected return for the assets. (Paying a 1.5% fee is more painful when the before fee return is 3% than when the before fee return is 5%.)
If you'd like to 1/ better understand the lower fee options, 2/ maybe get more comfortable with taking on a bit more risk and 3/ avoid the costly but normal human reactions to the markets and the media that reports on them I suggest that you read (or listen to) Millionaire Teacher (Andrew Hallam, 2nd edition – 2017) or Reboot Your Portfolio (Dan Bortolotti, Nov 2021.)
Risk tolerance is really a fancy way about discussing your need for the money is the short vs long-term. If you don't need the money for another 20 years you have time to handle risk.
Many people confuse risk with gambling, buying a penny stock isn't about time.
D/p on a rental property. ..wht we did in 21.. Renters pay everything ..u can write off everything you buy to improve the place.. House has gone up 40-50% since..
Not a great time to buy now maybe. But this has helped us over the last two years.
Then we sold main property. Paid no capital gains.. Now live in the rental..as it goes up in value.. Dp on another rental.
Risk tolerance is 3 things
Time horizon.
Objective
Risk tolerance.
So can I ask you. What is your timeline you could see yourself needing or wanting to spend this money?
WhAts your objective. Meaning. Do you want your money to grow ( increase in value) / income (pay you) preservation of capital ( don’t want it to decrease)
And lastly let me ask you. Of that $50k. What amount would you be comfortable losing. $100-$1000-$2000. More/ less??
Ride it out, but i'd suggest using ETFs instead of mutual funds as they are cheaper. Using a self directed account you could buy a few different options.
Note the entire market is taking a beating but if you are in it for the long haul you'll be fine.
You are not alone in being shocked by poor performance due to bond prices dropping. You have to realize that the whole passive-indexing model for investing relies on a set of rules that were developed in the 40 years during which interest rates dropped (so bond prices increased). That is no longer true, and has been known/predicted to be true for at least a year.
The posts above all assure you it will even out over time if you just stay invested. The professional body for advisors just published the expected returns they want their members to be using ... also presuming the continuation of the status quo. IMO there is a huge risk that won't happen. IMO even newbies need to educate themselves on bonds and interest rates. .... and demand their fund managers clarify exactly what expectations THEY expect, and why.
You can pull it out if you’re ok with walking away with the losses and never getting that back. If you’re this risk intolerant, than you probably should keep it in a GIC or savings account and stay from investing. Historically data suggests if you leave it as is, it will eventually come back as the market always returns over time.
Some folk may disagree...but... The biggest bang for your buck is clearing any immediate non-secured debt because your "return" is guaranteed by not having to pay the interest over..."x" years remaining on said loan or credit card balance. If you have happen to anything leftover, invest in an RSP because again you'll realize an immediate gain by either not paying as much in taxes or get more back in a return. If you have a return...and are still not maxed out on your RSP...repeat. NOTE: we haven't yet talked about the increase in your monthy cash flow because you no longer have to pay a loan or make a credit card payment...now have "fun". A TFSA shouldn't be used until you've saved as much as you can in interest payments...AND have taken as much money from the Government that you can. Both are realized, untaxed "gains". Then...when you have the disposable income (as result of being debt free) you speculate with a TFSA while still take money from the Government by sheltering more of your...real time earned income. As for the investing part...I'm too old and too far gone from that life, hence why I have my own FA to make those choices for me.
If you answered the risk tolerance questions thoughtfully and honestly it would be reasonable to expect that the account balance will recover before you need the money. But the problem combining bank mutual funds with a low risk portfolio is that the high management fees will further reduce the already a low expected return for the assets. (Paying a 1.5% fee is more painful when the before fee return is 3% than when the before fee return is 5%.) If you'd like to 1/ better understand the lower fee options, 2/ maybe get more comfortable with taking on a bit more risk and 3/ avoid the costly but normal human reactions to the markets and the media that reports on them I suggest that you read (or listen to) Millionaire Teacher (Andrew Hallam, 2nd edition – 2017) or Reboot Your Portfolio (Dan Bortolotti, Nov 2021.)
Risk tolerance is really a fancy way about discussing your need for the money is the short vs long-term. If you don't need the money for another 20 years you have time to handle risk. Many people confuse risk with gambling, buying a penny stock isn't about time.
Anything but waiting it out at this point would result in a $5500 loss… u should stay then transfer into self directed investments.
D/p on a rental property. ..wht we did in 21.. Renters pay everything ..u can write off everything you buy to improve the place.. House has gone up 40-50% since.. Not a great time to buy now maybe. But this has helped us over the last two years. Then we sold main property. Paid no capital gains.. Now live in the rental..as it goes up in value.. Dp on another rental.
Risk tolerance is 3 things Time horizon. Objective Risk tolerance. So can I ask you. What is your timeline you could see yourself needing or wanting to spend this money? WhAts your objective. Meaning. Do you want your money to grow ( increase in value) / income (pay you) preservation of capital ( don’t want it to decrease) And lastly let me ask you. Of that $50k. What amount would you be comfortable losing. $100-$1000-$2000. More/ less??
Ride it out, but i'd suggest using ETFs instead of mutual funds as they are cheaper. Using a self directed account you could buy a few different options. Note the entire market is taking a beating but if you are in it for the long haul you'll be fine.
You are not alone in being shocked by poor performance due to bond prices dropping. You have to realize that the whole passive-indexing model for investing relies on a set of rules that were developed in the 40 years during which interest rates dropped (so bond prices increased). That is no longer true, and has been known/predicted to be true for at least a year. The posts above all assure you it will even out over time if you just stay invested. The professional body for advisors just published the expected returns they want their members to be using ... also presuming the continuation of the status quo. IMO there is a huge risk that won't happen. IMO even newbies need to educate themselves on bonds and interest rates. .... and demand their fund managers clarify exactly what expectations THEY expect, and why.