Q: Good day,
I am setting up TFSA and FHSA accounts for an 18-year-old with a 15-25 year investment horizon. The goal is to contribute the maximum annual limit each year, which is $7,000 for the TFSA and $8,000 for the FHSA in 2024, and continuing at those levels in subsequent years. From an aggressive growth perspective, without restricting the investment options to Canadian markets, what would you recommend? Also, do you recommend making an lumpsum investment or spread the purchases over time? If so, how do you suggest I spread the purchases.
Thank you
I am setting up TFSA and FHSA accounts for an 18-year-old with a 15-25 year investment horizon. The goal is to contribute the maximum annual limit each year, which is $7,000 for the TFSA and $8,000 for the FHSA in 2024, and continuing at those levels in subsequent years. From an aggressive growth perspective, without restricting the investment options to Canadian markets, what would you recommend? Also, do you recommend making an lumpsum investment or spread the purchases over time? If so, how do you suggest I spread the purchases.
Thank you
5i Research Answer:
Lump sum purchases have proven to work better over time. We don't mind averaging in, as it helps with investor 'calmness', but considering the timeframe and the fact that more money will be added each year, we would see lumpsum as the way to go. If we look at ETFs first, a lean to growth would include IWO and IUSG. ZSP could be general market exposure. We would hold off on individual securities until assets have grown to a more substantial level.