Investing in mutual funds for your TFSA means that you have access to your money at any time while benefitting from attractive growth potential. By using a PAC plan to do this, you increase the benefits even more.
The stock markets go through periods of strong growth and declines that can be steep. Some investors get caught up emotionally and are tempted to buy when the markets are at a peak or sell their holdings when the markets are bottoming out. This amounts to buying high and selling low, or even at a loss, which goes against investment logic. A PAC plan takes emotion out of the equation: no matter what’s going on in the stock market, you invest the same amount and stay in the game. You no longer have to ask yourself if it’s “the right time” to invest, which is impossible to predict anyway.
In a highly volatile, even bearish, market, a PAC plan can help minimize your portfolio’s exposure to market fluctuations. This is because, with a PAC plan, you buy more units when the stock markets are down, since the price per unit is lower. On the other hand, when the markets rise, you continue to invest, but purchase fewer units each time. So as the markets recover, you benefit from gains on a larger number of units and you reduce your average cost.
The TFSA is undoubtedly an interesting option, and it becomes even more accessible with a PAC plan! Try it with a small amount first, and increase it as you are able. Over time, you will see your plans take shape.
For more information about PAC plans and TFSAs, follow these links:
• Making sense of periodic investing
To set up a PAC plan with Services d’investissement FÉRIQUE, contact our Advisory Services:
514-788-6485 | 1-800-291-0337
You can also send an email to [email protected] for an answer within 24 to 48 hours.
For more information, please contact the Services d’investissement FÉRIQUE Advisory Services team.
Note: Some conditions apply. Investors must comply with TFSA rules.