noob question about market
 

if the market collapses or is going down hill, will it affect investments like RRSP and mutual funds?

short answer: RRSP (maybe) , mutual funds (yes)

long answer: Anything that is not a GIC will go down. So if you hold stocks, mutual funds, etf's they will likely go down unless they are gold related.

I really hope someone didn't just push investments on you to make a buck because that is what it sounds like based on your Q.

why is your answer to RRSP maybe?

RRSPs are not an investment, they are an investment vehicle (i know you know this, tiger - i guess that's why you said maybe)

there is fear around, all of a sudden, but we should have all seen it coming.

to the OP, can you actually ask a real question, what you have asked it too stupid and broad to actually answer.

Market will not crash, if anything this is a correction, maybe 10-15%, and a much needed one at that, how can you invest when you're at best case scenario ratios?

Also, we're in a funny world. US is doing good, rest of world sucking, it's been a little bit reverse for last 5 years.

I know this is kind of an old debate here... but the best way to hedge against "Crashes" is to dollar cost average. If you have it set up that every week you automatically have X deducted from your pay and into your portfolio, whatever it may be, one of mine is the s&p500, than you will go up and down with the flux of the market. so when it takes a hit, you get it at a better price and when it goes up you still buy etc. the markets seem to be consistent in getting returns year over year, and by dollar cost averaging you hedge yourself against bit hits losses for the consistent growth.
market crashing opens up great opportunities to make some scrilla.

Depends on what you're dollar cost averaging. If you're buying index funds they're still equities. The answer really should be diversification.

yes agreed. also stay away from cars :)

Diversification is not always good.

Why are people failing him? It's a fair question, and he even said he was clueless about the topic.

Chill out man jeez

nice way to flame the guy down 4444. he's just trying to learn. no need to call him stupid.

it sounds like all your investments are through RRSP and mutual funds. if you're wanting something more stable, i would suggest making an appointment with a financial advisor and ask. you will get way better answer in laymen terms than the folks at rs.

that's what google is for.

google rrsp, read what an rrsp is. don't ask a question like OP did.

if we don't make ppl learn for themselves (initially, at least, for the super simple things), then we should all just give up and carry the idiots through life on the backs of those of us that actually work hard, investigate for ourselves, etc.

maybe you'll understand one day when you are in a position of power surrounded by idiots (my life these days)

if thats what google is for, then there is no need for any consultants of any sort.

google doesn't provide the 1 on 1 experience nor do they cater to specific questions that is relevant to the client.

it just sounds like you are power tripping and looking down on people. what is deemed simple for you is may not be simple to another person.

its like bringing in your car to the dealership/mechanic to fix something that is wrong with your car and they just tell you to go google it and get out of their shop.

go google what an RRSP is, look on the link to the CRA website which I'm sure is there. understanding that an RRSP is a vehicle and not an investment is fundamental.

car analogy is bunk, cars are quite complex to most ppl, an RRSP as a income tax deferral vehicle is not. A TFSA as a vehicle to invest with gains not being taxed is not complex.

not power tripping, just fed up of lazy ppl being lazy in all walks of life.

it's ok, people like you are the majority, hence why society is getting split, the rich are getting richer, the poor are growing in size (supported by government weakness (assistance)), the middle class suffer.

ha, people like me are the majority. you don't even know me nor know what i know. to assume like that, just furthers my point.

cars are complex to some people, just as finance are complex to some people. just because you have the hindsight now knowing what you know, doesn't mean others do. just like how a mechanic knows a car, doesn't mean others (or you) do.

I would love to hear the justification for this statement.

Diversification is key, beyond that, the best piece of investment advice you will ever get is to invest in YOURSELF first. (Assuming you are young, you are after all.. on RS)

Don't cheap out on your education/training/personal development… you will earn far more investing in yourself than you will ever earn on the markets unless you are a genius or an asian kid born on like 7/7/77 etc.

I believe what RickyTan3 is trying to say is that one should not over-diversify their portfolio because not all risks can be eliminated through diversification (ie market risk). Many investors think that risk is proportionately reduced with each additional stock in their portfolio but this is not the case. In reality you can only reduce your overall portfolio to a certain point/threshold at which there would be no further benefit from diversification.

For example you can purchase balanced funds which diversifies into over 100 stocks. Yes, your risk is reduced because balanced funds hold stocks in various industries but at the same time, since it is so overly diversified it hinders the growth potential.

There are also a very large risk differences between mutual funds and mutual funds that are sector specific but for arguments sake I'm assuming everyone on here is talking about a balance mutual fund.

The right level of diversification will ultimately depend on your personal risk level. If you would like to know more info on this feel free to look up the term "efficient frontier".

this isn't a 'finance' issue. it is an issue of "what is an RRSP, what is a TFSA?"

These vehicles are made to be used by the layperson, they are explained in simple language on government websites.

"people like you" was not a personal comment, it is a general comment regarding people who are willing to accept mediocrity (such as pandering to OP here). If you accept less, people will continue giving less.

not a genius but born 8/8/88 even better.

the smartest thing to do is to short the market when it's crashing. duh.

or at the very least, pull your money out and let it sit in cash if you're uncertain (in fact that's the best thing to do if you're ever uncertain, making 0 is better than losing money).

diversification is more for if you're buying and holding long term and not trading in and out.

if you're skilled enough to trade in and out based on the ups and downs of the market, there's no need to diversify. but i doubt many people have that skill. or the time and money to develop those skills.



but to answer your question...

the only thing that can't go down is GIC or term deposit or some shit like that.

everything else can go down.

Way to complicate things. This thread is for high schoolers learning about RRSPs for the first time.

Brings me back to the good ole days when they had Business Ed. They would tell you about investing and GICs, which were god damn viable back then yielding at 6% or something. Nowadays, the mere mention of it will likely get you beaten with a stick. Returns are shit. And if people can't even be bothered to educate themselves about simple things like finance, they really deserve that kind of return.

mr chin ain't no high schooler yo.