Once you have a plan, open an account.
- While you're opening an account, your provider may ask you to complete a risk appetite questionnaire - it's part of getting to know you as a client. Consider the results, even though you already know what your risk appetite / asset mix are.
Once the account is open, you'll buy units of your index mutual funds in proportions that represent your asset mix.
Own your investments, step-by-step.
Don't stop saving. Follow your budget - you can add money to your account whenever you want. Transfer the money you've saved and place an order to buy additional index mutual fund units, in proportions that maintain your asset mix.
Check your account once a year.
- Are your funds performing well?
- What fees are you paying?
- Is this approach still right for you?
Research and choose a provider. Use our research tables.
Many financial institutions sell index mutual funds. Buy yours directly from banks, like the Big 5 - it's easy and there are no transaction costs.
What is it?
A mutual fund is a basket filled with either equity or fixed income securities.
'Index' means the mutual fund represents an entire fixed income / equity market (like all Canadian bonds or US equities).
- You can't buy an index - it's just a list of securities.
Buying individual securities is risky. Buying a basket of them through mutual funds reduces investment risk. An index fund reduces risk even more because it holds all securities in its market. This is diversification.
You will build your own diversified portfolio that holds 3-5 different index mutual funds, matching
your asset mix.
What's an asset mix?
Choose your own asset mix. Are you a conservative or an aggressive investor?
Are you cashing out / changing providers? Learn to sell your index mutual fund units and close investment accounts.
index mutual funds
What's it like to invest?
Build your portfolio by selecting 3-5 funds offered by your provider that match your asset mix.