Image source: Getty Images
Investing in specific TSX stocks can be a great way to grow your wealth for retirement. The TSX Index has only earned a 6.7% compounded annual return over the past five years and a 4.5% annual return over the past 10 years.
Don’t invest in the TSX Index if you want $1 million
If you want a shot at $1 million in 20 years or less, you are going to have to do better than that. That is why a stock-picking approach might be more appropriate. The TSX Index has not performed very well, but Canada does have several stocks that could really deliver for shareholders.
Say you are starting out with $50,000 of cash to invest. If you could earn an average portfolio rate of return of 16%, you could reach about $1 million in 20 years. That is a rate of return that many top fund managers won’t even reach.
10% and $1,000/month will get you to $1 million in 20 years
A 10% average rate of return might be more realistic…
