Canadian Investors losing faith!?
Ohh hey there fellow Canadian Investors!
(and non Canadian investors alike! but this post is geared slightly more towards the Canadians. Sorry!)
Hope I haven’t kept you waiting too long! I’ve been under a rock these last few months hiding from the falling Canadian stock market. I haven’t been hiding by myself either, according to the Financial Post Canadian investors haven’t been feeling this worried since the financial crisis in 2008.
Of course since my main source of income is directly tied to the price of oil, I was burying my head in the sand hoping this nightmare was going to stop as soon as possible.
But now here I am again, out from under the rock and trying to forget about the thousands of dollars I’ve lost in the markets. Why now? Well because it’s a pretty exciting time of the year! All of my fellow Canadians have their RRSP contribution deadline coming up just around the corner on February 29th, 2016!
Uhh…Your RRSP deadline is an exciting time of the year?
Yes it most certainly is bold text! It’s especially exciting this year because we’re coming off a year where our markets have fallen almost 20% in the last 12 months! That just means anything you contribute now has the potential to make you more tax free(until withdrawal) money then everything you’ve contributed this year. Of course there’s always the risk of the markets falling even further but then it will just have the potential to lose you less money then everything you’ve contributed in the last 12 months! See there’s no downside to topping up your contributions so get to it! You’ve got 2 weeks left!
Of course if you haven’t filled your TFSA up yet that’s also a great choice to hold your investments in. If you’re earning less than $50,000/year it’s probably the best choice and depending on your situation you may want to split your contributions 50/50 with RRSPs and a TFSA. Knowing absolutely nothing about you (fix that here and tell me about yourself!) there are just too many options to go through to tell you the proper path to take so I’d suggest doing a bit of reading yourself and decide which path to take. Here’s two of my favourite Canadian personal finance bloggers with some more information on the topic:
- Should you contribute to An RRSP or TFSA – Money After Graduation
- RRSP vs TFSA for tax efficiency – Freedom 35 Blog
I’m confused…are you saying we should invest now? In a down market?
I’m not saying you should, but I did. I filled up my TFSA in January when the cap was raised and just this past week I maximized my RRSP contribution for the year. Personally I’m keeping my investments for another 25-30 years, so I don’t see a downside to investing while everyone is worried. After all it does follow the advice of the most successful investor of our time: