How much cash do you put in your portfolio at a time?

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Hey Dan/Mat,
What would be good amounts of cash to invest at a time? Typically I try to accumulate $1000 (through bi-weekly transactions in TFSA – Questrade) and then throw it in a stock or something. It helps me feel like I’m mitigating any risk here, especially if I’m looking into more volatile, small cap stocks.
However, sometimes when I get cash from dividends (especially ETFs that pay monthly) or capital gains, I feel like if I don’t reinvest it, I’d be losing out. Yet at the same time, I feel like this isn’t enough for most stocks (solid dividend stocks) to make a dent anywhere.

Thanks!

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Asked on November 27, 2020 11:01 am
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Hey there. I have weekly deposits that go from my chequing account to my investing accounts, and then I will typically make a purchase when I hit at minimum $1000. This just reduces the overall impact of commissions.

Keep in mind, at least with Questrade, ETFs are often commission free (but not all, so verify if you do use the platform). So, the dividends you receive from your ETFs can often just be used to purchase more units for free. Also, you can see if the fund has a DRIP style program.

In terms of your stocks, see if they DRIP as well. If not, there's nothing wrong with just letting the cash accumulate until you have enough to justify a purchase.

Prior to COVID-19, I typically ran anywhere from 3-5% cash, just to deploy once I see an opportunity. There was way too many of them after the markets crashed, so right now I hold almost no cash. As soon as I hit $1000 in my accounts, I'm buying shares.

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Posted by Dan Kent
Answered on November 27, 2020 12:22 pm
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