Investing for beginners: Breaking down some investment funds 

By: Anson Wong 

Published on: February 13 2023

Photo: Towfiqu Barbhuiya (Unsplash)  

At some point in our lives, everyone should consider setting aside a portion of their income for investments. Investing allows your money to grow without extensive involvement, making it an ideal choice for generating revenue well into retirement. 

You could open a Registered Retirement Savings Plan (RRSP) and Tax-Free Savings Account (TFSA), both of which are not taxed in most circumstances. To learn more about this, consider The Newcomer’s guide on how both accounts work. 

There are multiple options to invest which carry their own risks and benefits. A high-risk investment like a fluctuating stock can be a net gain if bought at a low price and sold at a high one, but the opposite can be just as damaging. Similarly, options that are low risk tend to have a slower appreciation but are unlikely to face a deficit. Alternatively, you can choose to keep your stock and enjoy a comparable profit to the number of stocks purchased for each fiscal quarter, or three months. This process is also called a dividend and one of the ways to judge how profitable a stock is. 

Whatever an investment portfolio holds, it should always cover a diverse range of investments for the best sustainability. Below are some examples to help you get started. 


A bond is like a loan except you are the benefactor in this case. Purchasing a bond can be done through banks such as RBC or CIBC and will require the creation of an individual account to start investing. When you purchase a bond, you are giving a corporation or government money that they will pay you back with interest over a select time frame. This can be as short as one year or extend more than 10 years. Bonds are one of the safest options for a return on investment, having a guaranteed repayment except if the company itself goes bankrupt. However, there are still some risks to consider. Inflation can impact the value of your bond, meaning each dollar today will be worth less than 10 years from now. 

Guaranteed Investment Certificates (GIC) 

The Government of Canada offers unique investments called Guaranteed Investment Certificates (GIC). GICs are like bonds in that they are a form of investment guaranteed to have all their principal and interest paid back by the end of the contract. Similarly, to bonds, the best way to purchase a GIC is through a bank like RBC, CIBC or TD Canada Trust. Every bank in Canada has GICs for sale. 

The difference between GICs and bonds is that GICs offer a return that is not affected by inflation. That means in almost all circumstances, you will gain the stated principal and interest agreed upon no matter how inflation has impacted the economy. Despite these benefits, buyers should be aware that the return is often lower than other options and are not as easy to liquefy on short notice.  


A stock is an investment that allows you to own a portion of a company or corporation. Depending on how many you buy you can have a major say in the direction of its future, though this becomes more difficult for major corporations, such as Twitter. While these companies won’t want to cede control, they still offer safe returns. However, stock prices can fluctuate during times of global strife, making them vulnerable to increasing or decreasing in value. 

There is also the option of purchasing a fractional share, meaning you would own a portion of a stock instead of one whole share. For example, a company with $1000 per share can have 20 per cent of that share purchased for $200. A convenient way to purchase stocks is to set up an investment account with your bank like RBC.  

Mutual funds 

A mutual fund is an investment portfolio with multiple investors. One or more managers oversee these funds and make financial decisions based on the current market. There is minimal involvement on the investors end and the responsibility is on the manager to generate a profit. A benefit to these funds is that they tend to be lower than independent investment portfolios as costs are shared with members. More importantly, mutual funds offer access to diverse investments across the globe that are not always available. With lower costs and expert management, mutual funds are perfect for an investor looking to have a low-risk guarantee with minimal involvement. 

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