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Grow your dough challenge (update)

In January I started the “grow your dough challenge”. The challenge consists of investing a thousand dollars into different investment vehicles and at the end of the year to see what has grown the most. In my case I invested as follow and here is the update on how they are doing thus far.


QUESTRADE


Questrade is a low cost investment brokerage, in which you can hold many different types of investment. In my particular case, I have a TFSA in which I am invested in dividend stocks and ETFs, but I also have a non-registered account. The margin non-registered is the account I started with and it is the one that I setup for the challenge. The margin account was funded with CAD 1,000. In that account the mix of holding is made of REIT, ETFs, stocks and some cash that is yet to be reinvested. The current value of the account is CAD 1,047.63, the growth having come from some dividends that were paid and from the increase in value of the equities held within the portfolio. Here below are my holdings and how I track them in my excel sheet.




One thing worth mentioning is for this particular challenge I have decided to invest exclusively in Canadian equities, I may hold non-Canadian because they would be part of an ETF, but I wouldn’t willingly buy and hold for this particular purpose.


LENDING LOOP


Lending loop is a peer to peer lending platform. It allows for companies to seek loans at lesser rate than they would pay at a traditional bank. As for acting as a lender you substitute yourself to the bank and get to reap the rewards of that high interest rate. However, it does come with the risk of the company defaulting on the loan and you losing all the funds that you have invested. This particular account was funded not with a thousand dollar but with six hundred dollars. The reason behind not funding for the full amount is because the availability of companies seeking funds is not that high and I had some mixed feelings in regards to the risk that is involved. The idea was that I would rather not fund it entirely and just use the funds elsewhere (the remaining CAD 400), after all, I am still trying to grow my net worth outside of this challenge. All in all, the account is now worth CAD 610.63. But since seeing how well it is performing and having done much more research and realized the ratio of the defaults, I may start another account with which I would fund with more money.




WEALTHSIMPLE


Wealthsimple is a robo advisor. It can hold registered and non-registered account, in this particular case, I also went with a non-registered account, which in hindsight was very shortsighted (such are some of the errors that were made as a new investor) but I will certainly look for ways to transfer into a registered account. In order to setup a portfolio with them, you have to go through a questionnaire that will get to know you as an investor meaning understanding your risk level, and what you expect in general out of your investment (fixed income, growth,etc..). For the challenge I wanted to take the most risk and hope for aggressive returns. It rated my risk level to an 8, which meant I was set up with ETFs that would have a ratio of 80% equity and 20% fixed income; there are also some bonds in the mix. The portfolio is up 4.7% and is worth CAD 1,043.47 from a starting point of CAD 1,000.



However, in all fairness this latter account was not started at the same time as the other, though the return may look on par with that of my margin account in Questrade this one was started later, a month later to be exact, which in my opinion would give it a better performing average (or does it??).


CONCLUSION

From what I have seen online with some of the other participants in the challenge, it does look like that my strategy is working and I am well within the median. Let us see how it grows. Next update will be in a couple months.


#growyourdoughchallenge #personalfinace #CanadianFI

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