Best Investment Strategies for Canadians

In this article, we will discuss the best investment strategies for Canadians.

What Is an Investment Strategy?

An investment strategy is your personalized plan for choosing and managing investments to help grow your wealth. It guides decisions like what assets to buy, how much money to invest, and how long to hold those investments—all in alignment with your financial goals. A solid strategy helps you stay focused, avoid impulsive decisions, and maximize long-term returns.

Following are some best investment strategies for Canadians:

Active vs. Passive Investing

Active Investing

Active investing involves frequent buying and selling of assets in an effort to outperform the market. This approach requires close monitoring of market trends, economic news, and individual stock performance. You can either manage your portfolio yourself or hire a professional fund manager to make trades on your behalf. The goal is to take advantage of short-term price movements—but this approach also tends to involve higher fees and more risk.

Passive Investing

In contrast, passive investing is a long-term, low-maintenance approach. Rather than trying to time the market, passive investors hold investments—often index funds or ETFs—over extended periods. They focus on broad market growth instead of short-term gains, trading rarely and accepting market ups and downs as part of the journey.

Common Investment Strategies

Buy-and-Hold Strategy

This strategy is based on purchasing investments and holding them for the long haul. Investors using this approach aren’t concerned with short-term market fluctuations and avoid frequent trading. By minimizing trades, you reduce transaction costs and avoid reacting emotionally to market volatility. While values may rise and fall, history shows that long-term investing can smooth out short-term turbulence.

Dollar-Cost Averaging (DCA)

Dollar-cost averaging involves investing a fixed amount of money at regular intervals, regardless of how the market is performing. This technique can reduce the impact of volatility because you automatically buy more shares when prices are low and fewer when they’re high. Over time, this can result in a lower average cost per share and remove the pressure of trying to time the market.

Dividend Investing

Dividend investing focuses on buying shares in companies that regularly share profits with their shareholders through dividend payments. These companies are often well-established and financially stable. Investors who favor this strategy benefit from a steady stream of income while still participating in the potential growth of their investments.

Index Investing

Index investing involves putting your money into funds that mirror the performance of a market index—like the S&P/TSX, S&P 500, NASDAQ, or Dow Jones. Index funds and ETFs are popular for their simplicity, low fees, and broad diversification. Rather than trying to pick winners, this strategy allows you to track the overall market’s performance.

Bottom Line

While these are best investment strategies for Canadians, each of these strategies has its benefits and is suited to different investor profiles and goals. Whether you’re looking for growth, income, or stability, choosing the right strategy—or a combination—can help you stay on course and build long-term wealth.