Where to Invest $10,000 in April 2023

This globally diversified stock ETF is great for a lump-sum investment.

| More on:
stock research, analyze data

Image source: Getty Images

Do you have $10,000 sitting around in cash these days? If you have a six-month emergency fund stashed, bills paid, and spending accounted for, consider socking it away for the future by investing it.

Now, investment options are numerous, and the advice available online can be overwhelming and potentially biased in some cases, so take everything you see with a grain of salt.

Hence, it is crucial to base your investment decisions on your risk tolerance and financial objectives, considering both potential losses and the intended use of the investment returns.

I can’t tell you what to do, but I can walk you through how I would personally invest $10,000 lying around. Spoiler: it involves high diversification and a low-cost exchange-traded fund, or ETF.

My guidelines

Personally, when I invest big lump sums, I have a few rules I strictly adhere to:

  1. Diversify as much as possible across market cap sizes, sectors, and geographies.
  2. Keep fees and expenses as low as possible.
  3. Invest it all at once; don’t try and time the market.

That’s it. These simple rules keep me from making dumb mistakes, going all-in on a poor stock pick, or causing drags on my future expected returns.

$10,000 is not chump change. Invested properly, that money can compound potently over time. Therefore, keeping these controllable sources of risk in check is paramount.

My ETF pick

With this in mind, I’d be most inclined to invest a $10,000 lump sum in an instrument that tracks the total market cap-weighted global stock market. Why? Well, I personally want to avoid betting on individual stocks, industries, market cap sizes, styles, or countries completely.

Therefore, my ETF of choice would be something along the lines of iShares Core MSCI All Country World ex Canada Index ETF (TSX:XAW), which offers exposure to thousands of stocks across all global markets, excluding Canada, at a relatively low expense ratio of 0.22%.

XAW provides a high level of diversification, with approximately 60% of its holdings in the U.S., reflecting the country’s strong recent performance. If the composition of the global stock market evolves, XAW will adjust accordingly, making it an efficient, low-cost, passive approach to indexing the world at all times.

I like XAW because it excludes Canadian stocks. To scratch that stock-picking urge, I can bet on a few select Canadian stocks without worrying about my overall returns differing too much from the world. For some great Canadian dividend stock picks, take a look at the Fool’s suggestions below!

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Tony Dong has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

More on Stocks for Beginners

Stocks for Beginners

Invest in These Stocks to Make the Most of Your TFSA

If you are unable to find fundamentally strong stocks for your TFSA in 2023, here are two great stock picks…

Read more »

Stocks for Beginners

2 TSX Stocks to Smooth Over the Market’s Bumps

Here are two of the safest TSX stocks you can buy in June 2023 without worrying about high stock market…

Read more »

healthcare pharma
Stocks for Beginners

3 Undervalued Canadian Healthcare Stocks to Watch in 2023

These three healthcare stocks remain down during this market, making them all great opportunities for those seeking long-term gains.

Read more »

tsx today
Stocks for Beginners

TSX Today: What to Watch for in Stocks on Thursday, June 1

An early morning recovery in oil and base metals prices could help the commodity-heavy TSX index start the new month…

Read more »

Woman has an idea
Stocks for Beginners

My Top 5 Stock Picks for June 2023

June is the time to buy seasonal stocks. But with fears of recession looming, my stock picks are resilient growth…

Read more »

analyze data
Dividend Stocks

How to Build a Diversified Portfolio With These Top TSX Stocks

Looking to diversify your portfolio? The market is full of stellar options to consider, including these top TSX stocks to…

Read more »

potted green plant grows up in arrow shape
Stocks for Beginners

Why 2023 Will Be a Stellar Year for Growth Stock Investors

There are plenty of options for growth stock investors to consider. Here are two options outperforming the market right now.

Read more »

funds, money, nest egg
Stocks for Beginners

I’d Aim for $1 Million Buying Just 5 To 10 TSX Stocks

Are you looking to build a $1 million portfolio? Then focus your investments on 5 to 10 stocks instead of…

Read more »