Many newcomers to Edmonton hear about the importance of investing, but when they try to get started, they encounter a wall of unfamiliar information. Terms like “ETF,” “broker,” “liquidity,” and “dividends” seem complicated and inaccessible. In reality, the process of investing in stocks and funds for a beginner in Edmonton is much simpler than it seems. Today, you can start investing with any amount, even $50, and pay no commissions. The main thing is to understand the basic principles and choose the right tool for your situation.
Why investing in Edmonton makes sense right now
Edmonton is located in Alberta, a province with one of the most favorable tax systems in Canada. But that's not the only argument in favor of investing. Over the past two years, interest rates in Canada have risen, which means that traditional savings accounts yield about 4.5-5% per annum. That sounds good, but inflation in Canada is around 2-3%, which means that the real return on savings is negative. When you invest in funds and stocks, you have a chance to achieve a 6-8% annual return in the long term, which really outweighs inflation and builds wealth.
For newcomers who are still establishing themselves in Edmonton, investing allows you not only to protect your money from inflation, but also to take advantage of one of the most powerful laws of economics—compound interest. If you invest $5,000 per year starting at age 25, with an average annual return of 6%, you will accumulate approximately $800,000 by age 55. It's not magic — it's just time and consistency.
The difference between investing in stocks and funds
Before you get started, you need to understand the difference between the two main ways to invest: buying individual stocks and buying mutual funds.
When you buy an individual stock, you become the owner of a small piece of a particular company. Let's say you buy a share of Apple. Now you own a piece of Apple. If the company does well, the value of your stock goes up. If the company does poorly, the value of the stock falls. It's a simple principle, but it carries a lot of risk. If you put all your money into one company and that company fails, you could lose everything. What's more, choosing the right stock requires a lot of time spent researching, understanding financial reports, analyzing competitors, and the company's future prospects. This is extremely difficult for a beginner.
Funds, on the other hand, are a basket or portfolio of stocks and bonds. Instead of buying a single stock, you buy a share in a fund that may contain 100, 500, or even 1,000 different stocks from different industries and countries. If one company in the fund performs poorly, its impact is spread across the entire fund and minimized. This is called diversification, and it is one of the least risky strategies for long-term investments.
In Canada, there are two main types of funds: mutual funds and exchange-traded funds (ETFs). Both types are portfolios of stocks and bonds, but they differ in several important ways.
ETFs vs. Mutual Funds: Which Should a Beginner Choose?
For newcomers to Edmonton who are just starting to invest, ETFs are almost always the better choice. Here's why.
First of all, there's the cost. Mutual funds, especially actively managed ones (where a team of professional managers constantly tries to “beat the market” by buying and selling stocks), have annual fees called MERs (Management Expense Ratios) that range from 1.5% to 3% per year. This means that for every $10,000 you put into such a fund, you will have to pay $150-300 per year just for management. ETFs, on the other hand, have average fees of around 0.5-0.7% per year. For a mutual fund, this could be 2%, and for an ETF, only 0.2-0.3%. This difference may not sound like much, but over 30 years, it means the difference between a million dollars and half a million.
The second aspect is flexibility. ETFs are traded on the stock exchange like regular stocks, meaning you can buy or sell them at any time during the exchange's business hours. Mutual funds are traded only once a day, after the market closes. If you want quick access to your money, ETFs give you that flexibility.
The third aspect is transparency. ETFs disclose their full portfolios every day, meaning you always know what stocks they hold. Mutual funds report their portfolios only once a month or quarterly. For a beginner who wants to understand where their money is going, ETFs are more transparent.
Finally, there is the question of taxes. In Canada, unlike in the US, ETFs and mutual funds have the same tax treatment. However, actively managed mutual funds often pay out more dividends and capital gains, which leads to higher tax payments for you. ETFs, especially those that passively track an index, generate far fewer taxable events.
Conclusion for beginners: choose ETFs. They are cheaper, more flexible, more transparent, and always perform better for long-term investing.
Which ETFs are best for beginners in Edmonton
When you start looking for ETFs to invest in, you will find a lot of options. But for a beginner just starting out, the recommendation is simple: buy so-called “all-in-one” or “asset allocation” ETFs. These are funds that contain a diversified mix of Canadian stocks, US stocks, international stocks, and bonds in a single portfolio. The basic idea is that you don't need to buy five different ETFs to achieve diversification—one all-in-one ETF does it for you.
The two most popular ETFs of this type in Canada are XEQT and VEQT. Both have the same structure: they contain approximately 40% Canadian and American stocks, 20% international stocks, and 40% bonds. This is a balanced approach that suits most newcomers. If you are under 35 and have a long time horizon until retirement, you may want to consider VGRO or XGRO, which have a more aggressive structure with a higher proportion of stocks (about 80%) and a lower proportion of bonds (20%). If you are more conservative, you may want to consider VCNS or XCNS, which are lighter on stocks.
The annual fees on XEQT are only 0.20%, meaning that for $10,000, you pay $20 per year. Compare that to the $150-300 you would pay for a mutual fund. VEQT is also very inexpensive. Both of these funds automatically rebalance for you, meaning they constantly maintain your target diversification without your intervention.
In addition, there are also cheaper index ETFs if you want to build your own portfolio. For example, VFV tracks the S&P 500 (the 500 largest US companies) with a commission of 0.08%. VAB tracks the Canadian bond market with a commission of 0.10%. But for a beginner, this can be too complicated. Stick with all-in-one ETFs until you start to understand what you are doing.
Choosing a broker: Wealthsimple Trade vs. Questrade
Now you need to choose which bank or online broker you will use to buy your ETFs. In Edmonton, you have three main options: the big banks (RBC, TD, BMO, Scotia, CIBC), Wealthsimple Trade, and Questrade.
The big banks have always been an option, but their trading fees are higher than those of specialized brokers. Therefore, I do not recommend them for beginners.
Wealthsimple Trade is a mobile-first broker designed to make investing extremely easy. In 2025, they introduced zero commissions on stocks and ETFs, meaning you don't have to pay any commissions on purchases or sales. There is no minimum deposit, the interface is extremely simple, and the mobile app is very convenient. If you are the type of person who hates complexity and just wants to press the “buy” button, Wealthsimple Trade is ideal. The downside is that their quotes are delayed by 15 minutes (paid plans get real-time quotes), and the selection of investments is less extensive than Questrade.
Questrade is an established online broker that has been in Canada since 1999. In 2025, they also introduced zero commissions on trades. Unlike Wealthsimple, Questrade is more suitable for people who want more control and advanced tools. Their platform has real-time quotes, advanced charts for analysis, and more assets to choose from. However, their interface is a bit more complex and is best suited for experienced investors. For a beginner, Wealthsimple Trade is probably better.
For both brokers, the FX (foreign exchange) commission is 1.5%, which means that if you want to buy US stocks or ETFs, you pay 1.5% to exchange Canadian dollars for US dollars. This is not a devastatingly high commission, but it is important to know.
Recommendation for beginners: start with Wealthsimple Trade. Its simplicity and transparency make it ideal for your first investment.
How to open a brokerage account in Edmonton for newcomers
The process of opening a brokerage account in Edmonton is really simple. If you decide to use Wealthsimple Trade, download their mobile app from the App Store or Google Play. Tap “Get Started” or “Sign Up,” and you'll be asked to provide a few details.
First, you'll need a Social Insurance Number (SIN). If you are a newcomer who has just received permanent resident status, you can obtain a SIN from Service Canada. If you have a job, your employer can help you obtain one. If you are still waiting for your SIN, some brokers allow you to open an account before you receive your SIN, but you will not be able to deposit funds until you provide your SIN.
Second, you need a Canadian piece of identification. This can be a passport, a Canadian driver's license, or an Alberta health card. If you only have a foreign passport, that works too.
Third, you need a Canadian address. If you have just arrived in Edmonton and are staying at a hotel or with a friend, that is also acceptable. Just enter the address where you are currently living.
You will then be asked to select an account type: TFSA, RRSP, or Non-Registered Account. As we discussed earlier in a previous article, for a newcomer, the recommendation is simple: start with a TFSA. This allows you to contribute up to $7,000 per year without any income tax. If you still don't have any income in Canada or this is your first year, you will have accumulated contribution room.
Once you open an account, you need to fund it with money. This is called “funding” your account. The easiest way is to link your Canadian bank account. On Wealthsimple Trade, you can connect to your bank, select “Deposit,” choose the amount, and complete the authentication process through your bank's online banking. The money usually transfers in one or two business days. After that, the money will be ready to invest.
Buying your first ETF: step by step
Now you're ready to buy your first ETF. Let's do it on Wealthsimple Trade for simplicity's sake.
Step one — open the Wealthsimple Trade app and look at the home screen. You should see a “Search” button or search icon. Click on it.
Step two: In the search field, enter the ticker symbol of the ETF you want to buy. Let's say you've decided to buy XEQT. Just type in “XEQT” and the app will show you the ETF. Click on it to open the page with detailed information.
Step three: click on the “Buy” button. You will be asked to specify how many shares you want to buy. Let's say you want to invest $500. Note that one XEQT share costs about $45 (the price changes daily). This means that with $500, you can buy approximately 11 shares. Enter the number 11 (or the number of shares you want) and click “Check.” The app will show you exactly how much it will cost, including any fees.
Step four — review the amount and click “Confirm” or “Allow.” Depending on the time of day, your transaction will be processed instantly or the next morning when the exchange opens.
That's it. You've just purchased your first ETF. You now own a share in a portfolio containing hundreds of companies from around the world. Congratulations!
Common mistakes made by beginners and how to avoid them
Once you've made your first investment, you'll be tempted to check your account every day, even every hour. This is the first big mistake. The market fluctuates every day. Some days your account will be up 2%, some days it will be down 2%. If you start to get nervous about these fluctuations and sell your investments at the first dip, you are simply locking in losses. Long-term investors who can ignore daily fluctuations and remain calm always win.
The second mistake is trying to “beat the market” by buying hot stocks that you've heard about in the news or on Reddit. Let's say you hear that a certain startup company is going to be “the next Apple.” You're tempted to invest 50% of your money in this one stock, thinking you'll become rich. In practice, the vast majority of people who try to do this lose. Research by Broadridge Investment Management shows that 96% of active investors cannot beat the S&P 500 over 5 years. A diversified ETF that simply tracks the entire market consistently outperforms people who pick individual stocks.
The third mistake is the temptation to invest your money in cryptocurrency, small-cap stocks, or other “fringe” investments, thinking that it's more exciting than boring ETFs. Remember that the goal of investing is to build wealth over time, not to speculate cleverly. The smartest people in the world, like Warren Buffett, invest primarily in cheap index funds. They don't chase hot stocks.
The fourth mistake is investing a large amount all at once, instead of doing it slowly. If you have $10,000 to invest, it's tempting to invest all $10,000 on the first day. The problem is that if the market drops 20% the next day, you'll feel terrible. Instead, consider dollar-cost averaging. Invest $500 every month for 20 months. That way, when the market falls, you will be buying stocks at a lower price, which will work in your favor.
Automate your investments
One of the most powerful aspects of investing is automation. Instead of remembering to deposit money into your investment account every month, you can set up an automatic transfer from your checking account. On Wealthsimple Trade, you can do this by going to your settings, selecting “Automatic Contributions,” and specifying the amount and date. For example, you can set up an automatic transfer of $500 on the 15th of each month. The money will be automatically transferred from your bank to your investment account.
Then, your first account can automatically buy ETFs for you. On Wealthsimple Invest (their robo-advisor), this is done automatically. On Wealthsimple Trade, you have to do it manually, but since your account is replenished every month, it's not difficult. Just click “Buy” once a month and select your favorite ETF.
Automation takes half the work out of investing. Instead of actively managing your portfolio, you simply let compound interest do its job.
What to do when the market falls?
Inevitably, the market will fall. Maybe tomorrow, maybe in a year, but it will happen. When that happens, newbies panic. They look at their account, see that it's down 10%, and are tempted to sell everything. Don't do it. That's the biggest mistake you can make.
The least significant physical event was in 2008, when the global market fell by more than 50%. People who panicked and sold all their investments locked in a big loss. People who held on to their money and even continued to invest when prices were low ended up with record returns by 2012. The fact is that every time the market has fallen by 10% or more in history, it has always recovered and reached new highs.
For example, from 1970 to today, the US S&P 500 has had more than 100 declines of 10% or more. But over the same period, it has grown from around 100 to 6,000. If you had simply left your money in an index fund all that time, you would be richer regardless of how many times the market fell.
As a newcomer to Edmonton who plans to stay in Canada for decades, market declines are actually in your favor. It means a lower price to buy. So instead of panicking, laugh and buy more if you have the money.
Taxes and Investing in Canada
When you start investing, you need to understand the basics of taxation. If you invest in a TFSA, as we recommended, you don't pay any taxes on the income from your investments. This means that when your ETF pays dividends or when the value of your ETF increases, you don't pay taxes on any of it. This cannot be overstated. It means your wealth grows much faster than if you were in a regular non-tax-advantaged account.
If you invest in a non-registered account, the situation is more complicated. You pay taxes on dividends received from investments and on capital gains if you sell an investment at a profit. In Canada, only 50% of capital gains are taxed. That is, if you bought an ETF for $1,000 and sold it for $2,000, you have a capital gain of $1,000. But only $500 is added to your taxable income. This is better than in the US, where all capital gains are taxed, but it still means you pay taxes.
Over the years, when you hold an investment in a Non-Registered Account, you don't pay taxes until you sell. This means that compound interest works best for you if you leave your investments alone and don't sell often. If you trade constantly, you pay a lot more tax. So that's another argument for holding on to your investments and investing over time.
Where to learn more
As a newcomer to Edmonton, when you're just starting to invest, you need to keep learning. You can read about investing on some websites:
Bankrate Canada and RatHub.ca have good guides for beginners. Canadian Couch Potato is all about passive investing in Canada. MoneySense and Canadian Money Forum have communities where you can ask questions. YouTube channels like The Solutions Desk and canadianinvestor have expert content specifically for Canadians.
The most important thing is to get started. Don't wait until you're “ready” and know everything. First of all, no one knows everything before they start. All knowledge comes with experience. Start with $50 or $100 in a TFSA through Wealthsimple Trade, buy one all-in-one ETF like XEQT, and let time and compound interest do their work. In 20-30 years, you'll be amazed at how much wealth you've accumulated with minimal effort and stress.