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First Brexit… then Trump… Now, it’s time for Pro

Is your portfolio really prepared for what’s coming next?

To help investors like you navigate this historically uncertain — yet high-flying — market and prepare for an inevitable downturn, we’re re-opening our Motley Fool Pro Canada service to a select few new members for a short time.

To discover how Pro Canada could help you to increase your upside potential… reduce your downside risk… and earn paycheque-like income in the process, simply click here — before the small number of spots we have left are all gone!

How the Path to Wealth Runs Through the $100,000 Mark

With the annual TFSA (Tax-Free Savings Account) and RSP (Retirement Savings Plan) busy seasons behind us, certain investors are feeling very encouraged, whereas others are feeling despair. The goal of reaching the $1 million mark seems too aggressive a mark for many to achieve.

As planning out the next 40 years is a little too daunting for many, we have the opportunity to break up the 40-year plan and start with smaller goals. If you understand the miracles of compounding, you know the road is not equally weighted throughout each period.

If we break up the long-term goal and set the first checkpoint at $100,000, investors have a lot to feel encouraged about. For investors saving money in a tax-deferred account, either a TFSA or an RSP account, the returns will be able to compound tax free over time. Setting aside $500 per month will help an investor save $6,000 per year. Without any returns at all, an investor is able to save $100,000 in fewer than 17 years.

Investing, of course, leads to positive returns and a diminished timeline. For a conservative investor saving $500 per month and achieving a return of 5%, the time it will take to hit the $100,000 mark is diminished to approximately 12 years.

Investors willing to take a little more risk and obtain a 7.5% return have the opportunity to hit the mark in under 11 years. The most aggressive investor averaging a 10% return will achieve the first milestone in just under 10 years, having put aside only $60,000 of their own money. Compounding is pretty cool.

While not looking to take on additional risk than necessary, the tortoise-like consistent returns will often do the job. Let’s look at shares of Crescent Point Energy Corp. (TSX:CPG)(NYSE:CPG), which now offer investors a yield close to 2.5%. For the medium-risk investor, we are already a third of the way to the 7.5% average return needed.

For investors investing with the checkpoint in mind, the important thing to realize is that no security is required to be held for any minimum period of time. Given what is at least a 10-year period, the standard will be to hold at least three securities throughout that period or, in most cases, even more.

For investors not wanting to wait out the 10-year period of consistent returns, there are other options. As market observers are aware, shares of marijuana company Canopy Growth Corp. (TSX:WEED) have risen approximately 235% over the past year. Although this was a very exciting opportunity, it is highly probable that that growth won’t be repeated in the next year.

Another point to consider is that volatility is offered on both sides: a share price which can increase significantly can also decrease significantly. Investors of “hot” securities have the opportunity to experience large losses, but they also run the risk of taking large losses.

When the dividend train rolls through town, it may be a good idea to get on board.

Six "pro" strategies for today's highly uncertain market

Motley Fool Canada's $250,000-real-money-portfolio service, Motley Fool Pro, is currently closed to new members. But lead advisor Jim Gilles is doing something special for investors who are worried about the market and where it will head in 2017.

He's revealing the six strategies he uses in Pro to help members guardrail their portfolios and make money in up, down, and sideways markets.

For a limited time you can download this "Pro 2017 Survival Guide" free of charge by simply clicking here.

Fool contributor Ryan Goldsman has no position in any stocks mentioned.

NEW! This Stock Could Be Like Buying Amazon In 1997

For only the 5th time in over 14 years, Motley Fool co-founder David Gardner just issued a Buy Recommendation on this recent Canadian IPO.

Stock Advisor Canada’s Chief Investment Adviser, Iain Butler, also recommended this company back in March – and it’s already up a whopping 57%!

Enter your email address below to claim your copy of this brand new report, “Breakthrough IPO Receives Rare Endorsement.”

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