One of the smartest money habits I’ve built over the years is making monthly contributions to my investments. Think of it as paying your future self — especially when it comes to retirement.
If your investment timeline is 10+ years (and it should be), you’re in the perfect position to benefit from compound growth and reinvested dividends. When you invest for the long term, you care a lot less about short-term market swings — because you’re not planning to sell anytime soon.
Why long term investment?
1. You Build a Saving Habit (and Plan for Retirement)
Whether it’s $50 or $500 a month, consistently setting money aside creates discipline. Over time, it becomes a habit — automatic, stress-free, and a powerful way to grow your wealth without constantly thinking about the market.
2. It Reduces Stress (and Guesswork)
Trying to “time the market” is one of the biggest mistakes beginners (and even professionals) make. With monthly contributions, you stay consistent — investing when the market is up or down.
This strategy is called dollar-cost averaging – It means you invest a fixed amount regularly, regardless of whether the market is up or down. Over time, this helps average out your purchase cost and reduces the impact of market volatility.
3. History Favors the Long-Term Investor
Historically, the market has returned around 7–10% per year . If inflation averages around 2–3%, that still gives you a real return of roughly 4–7% per year — better than letting your cash sit in a savings account.
Simply put: if your money isn’t growing, it’s losing value to inflation. Keeping it invested is one of the best ways to protect and grow your net worth.
Mutual Funds vs. ETFs: What’s the difference?
Both mutual funds and ETFs are popular ways to invest in a diversified basket of stocks or bonds — but they work in different ways.
Mutual Fund
Mutual funds are typically bought through a bank or financial advisor, like at TD, RBC, BMO, or Scotiabank. When you meet with an advisor, they’ll help you choose from a selection of investment products that match your financial goals — especially if you’re just getting started in your 20s or 30s.
Most beginners are introduced to mutual funds investing through registered accounts like a TFSA, RRSP, or RESP. Once you invest, a group of fund manager decides which stocks or bonds to include in the fund based on its objective — whether it’s growth, income, or something else.
The trade-off? Mutual funds usually come with higher management fees, called MERs (Management Expense Ratios), which can range from 0.5% to 2.5% depending on the fund. And just because you’re paying more doesn’t mean you’ll earn more — higher fees don’t guarantee better returns.
ETF (Exchange-Traded Fund)
ETFs are like mutual funds, but they trade on the stock market just like individual stocks. Instead of investing in one company, you’re buying a slice of a whole portfolio — giving you instant diversification.
Popular ETF providers include Vanguard, iShares, Invesco, and Fidelity. These funds track a variety of markets and sectors, such as the S&P 500, tech, healthcare, or even entire countries.
You can hold ETFs in your TFSA, RRSP, or other accounts, just like mutual funds — but they usually come with lower fees. That’s because most ETFs are passively managed, which means they simply follow an index rather than trying to beat it.
In the long run, lower costs mean more of your money stays invested — which can make a big difference in your overall returns.
Vanguard
In this blog post, I want to highlight Vanguard, one of the largest investment management companies in Canada.
I personally found Vanguard’s website is beginner-friendly and well-organized, offering a wide range of ETFs (Exchange-Traded Funds) tailored to various investor needs. Whether you’re looking for exposure to different regions (like the U.S., Canada, or international markets), specific industries (such as technology, healthcare, or finance), or choosing between aggressive growth strategies and more passive, steady portfolios — Vanguard provides clear options with transparency.
Understanding the Vanguard ETF Fact Sheet
Each ETF includes a fact sheet — a simple yet powerful document that gives you a snapshot of what you’re investing in. It outlines the fund’s investment objective, the types of companies it holds, and the index it aims to track. This is one of the best tools to help you decide whether an ETF fits your long-term goals.
When reviewing an ETF, here are the key things I always look for:
Average Return: The fund’s average annual return since inception offers a quick snapshot of how it has grown over time. However, it’s important to remember that past performance is not a guarantee of future results.
Management Expense Ratio (MER): This is the annual fee charged by the fund. Lower MERs mean fewer fees eating into your returns over time — which is especially important for long-term investing.
Index Tracked: Whether it mirrors the S&P 500, Nasdaq-100, or a dividend-focused index, knowing what market the ETF is following helps you understand its focus and potential.
Investment Mix (Sector Allocation): This shows how the fund is divided among industries like technology, healthcare, financials, etc. A well-diversified mix can help spread risk.
Performance History: Reviewing how the ETF has performed since its launch gives you a sense of its long-term consistency, although past performance is not a guarantee of future results.
Risk Rating: Each fund includes a risk level — from low to high — to help you match investments to your personal comfort level.
Why Focus on U.S. Markets?
While there are great options in Canada and globally, I currently focus my long-term investments on the U.S. stock market. Here’s why:
1. Home to the World’s Leading Companies
The U.S. is home to some of the most dominant and innovative companies on the planet — including Apple, Microsoft, Coca-Cola, JP Morgan, and Eli Lilly. These companies are not only leaders in their industries but also operate at a global scale, which makes them resilient and consistently profitable over time. In both the short to medium term, these companies are highly resilient, with no clear challengers capable of replacing them
2. Strong Economic Foundation
Barring major geopolitical events, the U.S. economy is one of the most stable and well-regulated in the world. For long-term investors, this provides a relatively safe and reliable environment to grow wealth over time. When a country imposes excessive regulations on foreign investors, it can drive them away due to uncertainty about future policy changes and potential barriers to accessing their invested capital.
3. Easy Access for Canadian Investors
As a Canadian investor, it is easy to access both U.S. and Canadian ETFs through major trading platforms or registered accounts like TFSA and RRSP. This accessibility allows me to diversify globally while keeping fees and complexity low.
4. Industry Innovation and Leadership
Whether it’s technology, healthcare, consumer goods, or financial services, U.S. companies often set the global standard. Their ongoing investment in research, development, and expansion drives market performance and positions them for long-term profitability.
