The Sooner You Start Investing, the Further Ahead You Could Be
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.
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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.
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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
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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.
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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.
- YCharts, January 28, 2025, https://ycharts.com/companies/XIU.TO