I’m new to investing in stocks but looking at your Foundation Stocks ….should I start here?

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I’m 50 and will start off with $2500, I see you have 10 Foundation stocks so would you recommend to purchase approx. $250 in each one of these? Thanks

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Asked on August 14, 2020 10:17 am
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Hey there! It all depends what you'd like to do. If your total portfolio size is $2500, to reduce commission costs it may be wise to take positions in only a few stocks and add more as your portfolio grows.

We like commissions to remain around 1% of the total investment. So for me at Questrade, I don't make any purchases of $500 or less as my commissions are $4.95. If you're with something like Wealthsimple trade though, you could hypothetically buy $250 of each. However, we feel it's important to not put all your eggs in one basket economy wise, and equity wise.

You really need to figure out if you can handle an all stock portfolio. During the COVID-19 crash, my portfolio was down over 40% in a very, very short amount of time. Under 3 weeks. I hold all equities (stocks). Is this the kind of volatility you'd be willing to handle without selling off your holdings at a loss? Lots of variables to consider.

Also, buying 100% Canadian stocks exposes you heavily to the Canadian economy. You may want to have a look at some ETF's that track stock indexes in the United States or even globally.

However, to answer your question if our foundational stocks are a great place to start, we feel they are the BEST place to start. Just maybe not for the whole amount of your portfolio.

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Posted by Dan Kent
Answered on August 15, 2020 4:35 pm