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After prolonged research on finance and investing I'm about ready to start putting money into actual investment products for a retirement fund down the line. And for a number of reasons I've decided on TD E-Series.

The kicker here is that in about two month's time I'll be able to make an annual payment on my mortgage for up to 20% of it's value (I can put down roughly 7%).

I'm also aware that the stock market seems to be in a bubble these days, and I keep hearing inklings of a recession within the next number of years (although there is obviously no guarantee of this happening).

So my central question is: would it be wise to start setting aside a portion of the money I could invest in E-Series or my mortgage now, and wait until a downturn to enter the market? Or should I start investing in E-Series now. Or alternatively, maybe just put everything into the mortgage until the bubble bursts?

  • What's the interest rate on your mortgage? If you didn't have a mortgage would you borrow money to invest in the market when the hypothetical bubble bursts? – D Stanley Sep 7 '18 at 19:15
  • My mortgage rate is 2.85%. I guess the central question there is whether these investment products are going to out-perform my mortgage rate. I think the answer is yes. But the question is also whether I should just start investing in E-Series now, or wait until later to enter the market – Canadian Coder Sep 7 '18 at 19:20
  • @mcraen - The other central question is what happens if the bubble pops and your investment products under perform your mortgage rate. How will you feel then? The correct "what should I do now" answer will be known at some date in the future :->) – Bob Baerker Sep 8 '18 at 0:30
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the central question there is whether these investment products are going to out-perform my mortgage rate.

Most likely, and the longer your investment horizon the more probability that it will earn more. There will be up years and down-years, but there are very few 5-year down periods and even fewer down 10-year periods.

the question is also whether I should just start investing in E-Series now, or wait until later to enter the market

There's no way to know, but "timing the market" is shown to not be an effective long-term strategy. If you are investing for the long-term (20+ years) and investing periodically over that time then when you start won't make much difference. Simply having a plan and following it (meaning invest regularly) will work no matter when you start.

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