Where to Invest $1,000 Right Now

Here are some easy investment options for low- and high-risk investors alike.

Tony Dong, MSc, CETF®

Author Bio Tony turned a series of marijuana stock losses in 2017 into a self-employment venture, focused on helping retail investors build better portfolios with exchange-traded funds (ETFs). He is the founder of ETF Portfolio Blueprint and the Lead ETF Analyst for ETF Central, a partnership between Trackinsight and the New York Stock Exchange. He also currently writes freelance for MoneySense, U.S. News & World Report, Kiplinger, and 24/7 Wall St., and runs an investing-focused newsletter called The Dumb Money Dispatch with 3,300+ subscribers. Outside of finance, Tony owns a small ranch in rural British Columbia, raising goats and chickens, and also volunteers as a wildland firefighter in his local community. His background includes service in the Canadian Armed Forces as a reservist and stints in corporate security. Education Master of Science (MSc) in Enterprise Risk Management, Columbia University Bachelor of Arts (BA) in Criminology, Simon Fraser University Certified ETF Advisor (CETF®), The ETF Institute Securities Industry Essentials (SIE), FINRA Canadian Securities Course (CSC), Canadian Securities Institute Areas of Expertise ETFs, mutual funds, Berkshire Hathaway, indexing, dividend stocks, royalty trusts, REITs, infrastructure, aerospace & defence, passive income investing, portfolio construction, risk management, RRSPs & TFSAs. Social Media Profiles https://www.linkedin.com/in/tzld96/ https://www.youtube.com/@okanaganhomesteader Favorite Investment Quote "Rule No. 1: Never lose money. Rule No. 2: Never forget Rule No. 1." - Warren Buffett

Published December 13, 2022 9:00 am EST

A good practice is to invest any disposable income you find yourself left with after your monthly budget is accounted for. Upping your savings rate is the best way to grow your portfolio faster.

However, the question of “what should I invest in” should be answered based on your risk tolerance. That is, how much volatility or unrealized losses are you able to cope with without panic-selling?

Today, I have two exchange-traded fund, or ETF, picks suitable for low-risk and high-risk investors alike. One offers safety and decent yields, while the other offers strong growth potential.

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Horizons High Interest Savings ETF

Horizons High Interest Savings ETF (TSX:CASH) is a great way to keep your money safe in a brokerage account while earning a competitive yield. Compared to Guaranteed Investment Certificates (GICs), CASH has much better liquidity, meaning you can buy and sell it throughout the trading day as you deem fit.

CASH also has virtually no market risk. This is because the ETF simply holds its capital in deposits with various high-interest savings accounts at Canadian banks. If the market crashes, CASH won’t lose any value given that it isn’t exposed to any stocks or bonds.

Currently, CASH pays an annualized gross yield of 4.79%. If the Bank of Canada hikes interest rates further, the yield on CASH will rise again accordingly. In terms of fees, CASH costs a management expense ratio of 0.13%. For a $1,000 investment, that’s around $1.30 in annual fees.

Horizons S&P 500 ETF

Risky investors looking for a high-growth solution can opt for Horizons S&P 500 ETF (TSX: HXS), which tracks the legendary S&P 500 Index. The S&P 500 is very hard to beat over the long run and has returned an annualized 10% since 1957, which is a fantastic rate of return.

What’s cool about HXS is its lack of a dividend. This is actually a good thing. With HXS, the dividend payments are already reflected in its total return thanks to the ETF’s use of swap derivatives. This means that investors who hold HXS in a taxable account can avoid paying taxes on distributions.

In terms of fees, HXS charges a management fee of 0.10% and a swap fee of 0.10% for a combined 0.20%. If you invested $1,000 in HXS, you could expect to pay around $2.00 in fees annually. For maximum savings, consider using HXS in a taxable account.