Author: Elle Caruso Fitzgerald

Many investors are currently sitting on the sidelines in cash, missing out on compelling opportunities.

A lack of understanding of investing fundamentals or general fear of losing money may hold investors back. However, investors may be relieved to learn that it could be easier and safer than they think to get started with online investing. 

This article will step through several ways investors can help mitigate anxiety around getting started with investing.

Start Small

Many investors think they must put all their money in the market at once. However, that’s not the case. Even investing a small amount may help investors meet their savings goals faster than if the money were not invested.

One solution is dollar cost averaging, which involves regularly contributing a predetermined amount to an investment rather than sporadically or in one large lump sum. This could be done at any regular interval, such as weekly, biweekly, or monthly.

Regularly investing a predetermined amount spreads out the average cost per unit purchased over time, helping manage the effect of market volatility. By spreading out purchases over time, an investor’s chances of buying when the price is too high may be reduced.

Dollar-cost averaging can be made easy with regular automatic contributions. Smaller, regular contributions may be less overwhelming and easier for an investor to keep up with, rather than setting aside funds to make one large contribution at a future date. Additionally, regular contributions should begin earning returns immediately.

The alternative is lump sum investing, which is the process of contributing a large portion of investable cash all at once. The lump sum can be any large amount of investable cash, possibly a year-end bonus or inheritance, among other possible money-related life events. 

Stay Diversified & Avoid Big Bets

Choosing which individual securities to buy is another common stressor for investors. Therefore, ETFs may be an appealing solution for investors looking to enter the market while staying diversified, effectively avoiding making large bets on individual securities.

ETFs tend to hold multiple securities, potentially offering diversification benefits to investors (compared to investing in individual securities). ETFs trade like individual stocks on major exchanges. They can be bought or sold anytime during trading.

Passive ETFs are designed to closely track the performance of a specific index. Therefore, a passive fund’s risk/return profile is specific to that of the index it tracks. Passive ETFs may be a good fit for investors looking to gain exposure to the broader market. 

The iShares S&P/TSX 60 Index ETF (XIU) and the Global X S&P/TSX 60 ETF (HXT) are two funds that provide access to the S&P/TSX 60 Index, a stock market index comprising 60 large companies listed on the Toronto Stock Exchange. XIU and HXT may provide broad equity exposure to Canada’s large-cap companies.

For fixed income exposure, the Vanguard Canadian Corporate Bond Index ETF (VCB) and the Global X CDN Select Universe Bond ETF (HBB) each seek to provide diversified exposure to Canada’s bond market.

See more: How to Analyze Total Cost of Ownership of an ETF

Scotia iTRADE ® (Order-Execution Only) is a division of Scotia Capital Inc. (“SCI”). SCI is regulated by the Canadian Investment Regulatory Organization and is a member of the Canadian Investor Protection Fund. Scotia iTRADE does not provide investment advice or recommendations and investors are responsible for their own investment decisions.

®Registered trademark of The Bank of Nova Scotia, used under license.

For more news, information, and strategy, visit the ETFs in Canada Channel.

Many investors wonder if now is the right time to invest their cash. However, generally, the sooner one starts investing, the further ahead they have the opportunity to be.

Equity markets have tended to gradually rise over time, despite occasional market volatility. This may be reassuring for investors to learn, particularly as uncertainty has been a key theme in equity markets in recent years, making it challenging to try to time the market.

See more: How to Read a Stock Quote

Instead of making bets on individual securities, which may be unpredictable, investors might consider buying a product that tracks a major index. Index-based products have tended to drift upward over time. 

Index ETFs closely track the performance of a specific index. This means a passive fund’s risk/return profile is specific to that of the index it tracks.

See more: Understanding the Different Investment Vehicles Available in Canada

The iShares S&P/TSX 60 Index ETF (XIU) serves as an example of this upward drift commonly seen in equity markets over long periods of time. 

The iShares ETF seeks to provide exposure to the S&P/TSX 60 Index, which comprises 60 large companies listed on Toronto Stock Exchange. The index is designed to measure the large-cap segment of Canada’s equity market.

XIU has climbed 24.16% in the past year, as of January 28, 2025. Furthermore, the ETF is up 33.59% over a three-year period and 71.20% over a five-year period. XIU is up 142.5% in the past 10 years, according to data from YCharts.1

See more: What Are Investor Biases and How Can They Impact Portfolio Returns?

To be clear, XIU and the broader market have experienced periods of volatility. However, the upward trend showcased by XIU’s performance highlights that investors may be able to meet their financial goals earlier by investing sooner rather than later.

For more news, information, and analysis, visit the ETFs in Canada Channel. 

Scotia iTRADE ® (Order-Execution Only) is a division of Scotia Capital Inc. (“SCI”). SCI is regulated by the Canadian Investment Regulatory Organization and is a member of the Canadian Investor Protection Fund. Scotia iTRADE does not provide investment advice or recommendations and investors are responsible for their own investment decisions.

1. YCharts, January 28, 2025, https://ycharts.com/companies/XIU.TO