Investing can be terrifying…seriously! And investing for beginners even more so. I’ve been working in finance for a while, and the actual picking and choosing of investments has never been (and likely will never be) my thing. Need to know the ins and outs of RRSP’s, TFSA’s, pensions, whatever….I’m your girl. But want to chat analyst reports and company fundamentals, and you can keep on walking past my office door.

Here comes the but though….investing is important, and if you really want to hit your long-term saving goals then you better go and make it your bff (or at least an acquaintance). Saving up your hard earned dollars is amazing but leaving it sitting in a bank account (even a high interest one) is not help you hit your goals. You need to get those funds in the market and working for you. The longer your time frame, the more you can take advantage of investing and compound interest will be working in your favour.

Whether you decide to go it on your own or enlist the help of a financial advisor, it’s important that you at least know the basics of investing. It’s crazy to me that we go through twelve years of school and never take one class on managing money. It really should be a requirement for all high school students. Investing, building credit, student loans, staying out of debt…these are essential skills for being an adult. You know what isn’t? Advanced algebra, studying poetry, and knowing the date Archduke Franz Ferdinand was shot.

Back to my real point! Investing – like it, love it, or hate it….you need to know how to do it.

Where do you start?

Probably the hardest part about investing is actually getting started.

You can’t pick some random company, invest all your savings in their stock and hope for the best. Jumping into stocks before you know what you’re doing can be costly. But there’s no harm practising. One of the best ways to get a feel for your risk tolerance, learn about the volatility of the markets and the characteristics to look for in a stock is to build a fake portfolio and watch what happens.

This won’t cost you anything. There are free services available where you can build a mock portfolio and track the results. I like Google Finance but Yahoo Finance will also fit your needs, and if you want access to additional research and tracking software you can look into paying for Globe Investor Unlimited or Morningstar.

Google Finance Directions

To get started you’ll need to set up a Google account (but really, who doesn’t have Gmail at this point) and then go to Google Finance. Click on ‘Portfolio’ on the right-hand side of the page and you’ll be able to start adding holdings to your mock portfolio. Stocks are an easy place to start as you can begin with adding companies you know. Maybe you’re a coffee addict? Add Starbucks. Have a cell phone plan? Buy Rogers, Bell or Telus. Like to travel? Go for Westjet. You get the point. With Google Finance you aren’t limited to just adding stocks. They also have mutual funds and ETF’s in their database so you can watch in real time how they compare.

Here’s a look at a quick fake portfolio I created using some popular Canadian stocks:

To get this data, I added each company to my portfolio and used the same purchase date (February 1, 2016) and bought 100 shares of each. I looked up the historical price (search for the company using the main search bar, then click on ‘company’ and ‘historical prices’ on the right-hand menu) for that particular date so that I could see a full year of performance. You can absolutely skip this step and use the current date and price to track going forward; adding the historical data gives you instant results.

There’s also a graph you can look at to track performance. It’s nothing special but does give you an idea of how your fake portfolio has done. Check off the S&P/TSX option so you can compare it to the market returns over the same time period. As you can see below, my portfolio has tracked the S&P/TSX Composited Index pretty closely but is currently lagging behind. That makes sense because almost all of the companies I chose are on the index.

Train Your Emotions

You’ve probably heard people talk about how investing is emotional and to be successful you need to keep your emotions in check. It’s not easy to watch a stock you own drop in price day after day but, as long as the company is still stable, that’s the last time you want to sell. A loss isn’t actually a loss (and a gain isn’t actually a gain) until you push the sell button. The same thing goes for if you’ve had your eye on a stock that just had a big jump in price and is trading at record high levels. Probably not the best time to buy-in.

By tracking a mock portfolio and watching your investments go up and down day after day, you will be training your brain to not over-react when you’ve got real dollars at stake.

Determining Your Risk Tolerance

You’ll also get some insight into how much risk you’ll be willing to take.

For your first mock portfolio, I suggest adding a diverse range of investments. I wrote about some of the most common types of investments here if you need a quick refresher. Pick a few big Canadian companies from different sectors (think energy, banks, communications, retail, etc), a couple of mutual funds with different risk levels (aggressive growth, income, balanced, etc.), some ETF’s (iShares, Vanguard, and BMO all have offerings), and top it off with random stock picks you think might hit the jackpot. Maybe a friend of a friend was raving about a stock (marijuana is all the rage in Canada right now).

You’ve got nothing to lose at this stage (except maybe your ego) so try everything. What you want to focus on is how you feel when one of your holdings loses a bunch of money…you are NEVER going to be right on all your picks. You need to know how much loss you can cope with. If it makes you feel sick and you’re losing sleep then that sector is not for you. Figuring out what sort of volatility you can handle in your accounts is half the battle and will really narrow down your investment choices.

Start NOW!

The best part about building a mock portfolio is there is no reason you can’t do it right this second. Google Finance is free, and you don’t need any of your own money until you are ready. Even if you are focusing on debt repayment you can start practising. Then you’ll be better prepared when you actually do have the money to invest. It might even help to motivate you to save faster.

What do you guys think? Do you find mock portfolios helpful when you’re just getting started with investing? 

Interested about investing but scared to lose money or or don't have any saved up? Try a practice run!
This post was proofread by Grammarly.


  1. I definitely agree with your view that the Canadian education system is not offering any money management courses at the high school level. I think the government should make it a mandatory course. Great job with the encouragement for young people to start investing early.

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