Raggedly Rich

Canadian Finances, Musings, and Art

How To Overcome Investment Fear and Buy Stocks with the Toe-Dipping Method

Here’s my advice: dip your toe into the market with $1,000 – $3,000, whatever you’re comfortable with. Try it for a year, and re-evaluate how you feel.

Find an index fund that comes highly recommended (there’s resources abound on the internet, my go-to is canadiancouchpotato), and put some money into it. Index funds aim to keep pace with the market, so unless the whole market crashes, you won’t lose money. And unless you withdraw immediately when the market dips, it’ll likely recover in time for your withdrawal 5-30 years down the line. If you don’t want all your eggs in one basket, find a company you like, or another index fund, and invest your test-money 50/50.

The stock market used to quite honestly terrify me.

I’m in awe of people who can understand this stuff

Bonds, stocks, index funds, mutual funds – I tried in earnest to understand them, and went to lengths to try my hand at researching them. For a while I used Google Finance to try to see what any ‘theoretical’ money I would do. I looked up blogs like canadiancouchpotato and had a fake investment account on Kapitall I never got around to using.

My parents, despite providing us some pretty solid financial ground to stand on, don’t have the first idea about stocks, and my brother, the only stock-savvy one of the clan, was filled with very sage advice like: ‘Look them up’ and ‘Just get some index funds, you know’. In early 2015, I opened a trading account with my bank, and after an unpleasant meeting with a pushy ‘financial advisor’ (he thoroughly messed up my credit card and had no idea what he was doing), opened up an TFSA with Questrade to trade through instead.

My indecision and uncertainty continued for the better part of the year, and then in late 2015, I took the plunge – I stuck a small, tidy sum into my Questrade account. I had a fair amount of money saved up in my low-interest generating TFSA, and so the investment money wasn’t something I was necessarily going to miss. It was ‘experimenting’ money, so to speak, and if it disappeared I was probably going to pull all my money out of the bank and keep it in tin cans under my bed.

But then I let it just sit there, for another couple months. And I have no good reason for it.

The reason was, I was scared. Despite all my diligent research, the stock market was still this huge, unfathomable mammoth where bulls and bears ran around eating each other and laughing at people who tried to ‘beat the market’. I left my tidy sum just sitting in an invisible online account, because I didn’t know what to do with it, and I didn’t understand how the buy / sell process worked.

Eventually, in mid-2016, I told myself I was being ridiculous, and bit the bullet. I used about half the money to buy an index fund, and the other half the money to buy a dividend-paying stock of a medium-size company I’d heard good things about. I didn’t realize that trading only happens during trading hours, and had a little panic when nothing happened, but when I signed on the next day, I suddenly had investments. By the following month, I’d promptly put the whole thing to the back of my mind.

About a year later (April 2017), I checked back in and realized that my index fund had made a 12% return, and my dividend-paying stock had made a 4% return. 4% beats the inflation rate (1.43% in 2016, according to inflation Canada), and I’m still trying to figure out this whole dividends thing. My index fund return of 12% is actually really, really good. It didn’t add up to much considering I didn’t stick a lot in there to begin with (most trading platforms require you invest at least $1,000), but it alleviated a lot of the deer-freeze anxiety I’d been experiencing.

The thing I realized is, the way that I wanted to use the stock market was the quiet reading room version of that bull and bear market.

this isn’t me, but it’s how I feel about the stock market

If you have a head for the stock market, by all means, go out and invest. Find a platform that caters to your needs and enjoy the challenge of it. But if you’re like me, and you’re just looking for a vehicle that manages a little better than the typical 2-4% saving account returns, you don’t have to be a hardcore investor. All you need to do is get a handful of index funds, maybe some stocks of companies you like, and forget about it for a year. Check back at the end of the year and see how it’s doing. Re-balance your portfolio every year (for me that means lump-sum purchases), and research the different options available out there – but take action, and don’t let it sit uselessly like I did.

Do you invest your money? How did you first get started?


  1. I think dipping your toes is the best way! I think the easiest entry for me was through a retirement account because most people advise you start saving for retirement and the contribution process makes it seem straightforward.

    The interesting thing thinking back is that I didn’t really “know” the way I do now that I was investing, I just vaguely knew it was supposed to grow my money! How crazy is that! I think another great way is you can use fake money using investopedias simulator to practice and make sure you aren’t doing anything crazy (though I never actually did this for some reason lol)

    • Ms. Raggedly Rich

      July 29, 2017 at 4:59 pm

      Hey Jing!

      I had banks used to hound me to open an RRSP (registered retirement savings plan) but I never made enough ‘consistent’ money to set up auto-deposits. I dream of the day I can open one up and get my employer to match contributions to any degree.

      And yes! Investopedia, and I think it was… Kapitall? are great for simulating. And if I remember correctly, Neopets also had a simulator for the stock market too… 😉 I did try the simulator route, but I got flustered by all the jargon and numbers and ended up hiding from reminder emails. But if someone can get past that initial fear, I think it’d be a great tool!

      Thanks for stopping by : )

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