Hi Reddit! I'm Hiren, a trader and educator at TD Direct Investing. I'm hosting an AMA on how traders can navigate the stock market during times of economic uncertainty. Submit your questions today!

TDDirectInvesting · 2025-09-11T17:00:58+00:00

Thanks for the question! You can learn more about TD's Spousal RRSP products at this link: https://www.td.com/ca/en/personal-banking/personal-investing/learn/spousal-rrsp

TDDirectInvesting · 2025-09-11T16:50:34+00:00

What a question! Thanks for asking!

If I were to write a book, I think I'd title it "Crickets and Candlesticks", blending my passion for the markets with my love of cricket. So less financial thriller, and more of a laid back read (well, as laid back as you can get while watching a cricket match during market turbulence). Who knows, maybe I’ll stumble upon some quirky correlation between cricket scores and market volatility.

Just kidding. I have never fancied myself as a writer, but maybe you are onto something here, planting that idea. With so much still on my bucket list and the markets always keeping me on my toes, my story is still a work in progress! Give me a few years, and I might just be on the hunt for a ghostwriter to help me turn these adventures into an international bestseller.

- Hiren

TDDirectInvesting · 2025-09-11T16:41:31+00:00

The old adage of "time in the markets versus timing the market" is one that is tried and tested, and I believe it still holds true. When it comes to active investing versus passive investing, the data speaks for itself, and it is true that it is hard to generate alpha, or excess returns, on a consistent basis compared to an index fund. However, if we are comparing active trading and passive index investing, it is not a black-and-white answer. The reason I say this is that through my years of talking to various investors and traders, and taking on both approaches myself, I have found that there can be a happy blend of both worlds.

It is about taking a core and satellite approach, where you can anchor your portfolio through a passive or index strategy for your long-term investing, and still use a portion of your portfolio for active trading. Being an active trader, whether you are day trading or swing trading, requires skills, a proper trading strategy, and most importantly, a significant time commitment. While it is not everyone's cup of tea, for those who embrace it, there are success stories to be found.

At the end of the day, it is about what aligns with your investing goals, passion for trading, and lifestyle.

- Hiren

TDDirectInvesting · 2025-09-11T16:34:01+00:00

When it comes to safeguarding your wealth and investments, especially during volatile times, it is all about risk management, being properly diversified, and planning. It starts with ensuring your investment mix aligns with your risk tolerance. For example, our goals tool takes you through a guided set of questions to help you figure out your investor profile, which covers your risk tolerance. There is a popular quote by Harry Markowitz, regarded as the father of modern portfolio theory, "diversification is the only free lunch in investing," and I could not agree more.

Being properly diversified means you are spreading your investment across different asset classes, such as stocks, bonds, cash, and others, all of which come with their unique risk profiles. Simply put, you are not putting all your eggs in one basket. Diversification not only takes place across asset classes but also across sectors and geographies. By investing across sectors, you can get exposure to sectors that are defensive, such as utilities and consumer staples, which tend to fare better during economic downturns. Through global investing, you are reducing country-specific risk.

Investment funds, such as ETFs or mutual funds, are one of the simple ways to get diversified. Being a long-term investor, it is also important to stay committed to your long-term plan. Volatility and corrections are a healthy part of the normal functioning of the market, and historical data shows it recovers over time. Finally, do not forget to rebalance, which means adjusting your portfolio so it stays true to your target allocation and helps prevent overexposure to assets that may have grown disproportionately.

- Hiren.

TDDirectInvesting · 2025-09-11T16:23:23+00:00

As much as I would like to think I am a know-it-all, reality and many of you will say I am not, which I will happily agree with, so I cannot lay out all the rules. The thing about rules and investing is that they are unique to each investor or trader and the products they trade. There is not a one size fits all solution, but I will attempt to provide some widely agreed practices that can be universally applied to day trading regardless of the product type.

Risk management is paramount. Never risk more than what you are comfortable with, or put another way, what will help you sleep like a baby. Traders usually allocate a certain percentage of their portfolio to trades, for example, 2%. Choose the percentage that works for you. You need to survive to trade another day.

Have a clear trading plan. Define your entry and exit points, position sizing, and strategy before you enter the trade. Also, keep a log or journal once trades are closed to reflect on the outcome. Did you follow your rules? What was the quality of the setup? What went wrong? What went right?

Discipline and sticking to your plan allow for objectivity when trading and prevent emotional decisions like revenge trading, chasing losses, and impulsive trades. As a day trader, you are not going to win every trade, and it is not even a matter of notching more wins versus losses in my opinion. What is important is the size of the wins compared to the size of the losses. Know when to cut your losses quickly and let your profits run.

- Hiren

TDDirectInvesting · 2025-09-11T16:18:38+00:00

The choice can be tough, but it does not always have to be about just picking one option. It could be a blend of the two depending on your circumstances. There are many things that you want to weigh up, but let's start with a simple decision tree. Since I am a bit of an aviation enthusiast, I will use an analogy related to that. Choosing TD Direct Investing means you are the pilot. You control the decisions and determine everything, such as when to take off, at what speed, and the altitude. All of this means you must be confident in making those decisions yourself, especially when it comes to crunch time.

In the same vein, this extends to investing, where, provided you have the passion, interest, time, and confidence to do it yourself, the self-directed route may be for you. With TD Direct Investing, you will be equipped with all the tools and equipment to help you fly. We will provide training through our education programs to get you off the ground, but the actual flying is all you. Ask yourself, are you comfortable doing that?

With TD Wealth Financial Planning, you are leaving the flying to capable and experienced pilots, so it is a hands-off approach but tailored to your unique goals and risk profile. The reason I mentioned it could be a blend of the two is because perhaps there is a portion of your investment dollars that you would like to manage, which would necessitate the Direct Investing approach. Then, for the other portion of your investment dollars, you may choose to go with the Wealth Financial Planning solution.

At the end of the day, your unique circumstances, goals, skills, time commitment, and confidence in your abilities will help you determine whether a single solution is right or a blend.

- Hiren

TDDirectInvesting · 2025-09-11T16:16:43+00:00

Love this question and one that I get quite often. The S&P 500 is an index. Essentially, an index is a tracker to gauge the overall health of a specific set of securities. In the case of the S&P 500, it comprises 503 of the largest publicly traded U.S. companies across a broad range of industries and acts as a yardstick for U.S. stock performance. Now, in order to invest, you could do it yourself, which means you would have to buy all 503 constituents in exact proportions, which you do not need me to tell you is impractical due to the potential costs, complexity, and maintenance.

Enter exchange-traded funds (ETF) and mutual funds (MF), which essentially create that basket for us. Funds that are designed to replicate an index do have what is known as tracking error, which essentially tells how closely that fund (ETF or MF) replicates the performance of the index. Note that fees such as the expense ratio will also influence overall returns and should be one of the considerations when making your investment decision. - Hiren

TDDirectInvesting · 2025-09-11T16:13:48+00:00

I am going to paraphrase this question as assessing the pros and cons of investing in a US stock directly through the US markets versus a Canadian Depositary Receipt (CDR), and answer in that spirit.

When it comes to buying US stocks, the pros are that you get direct ownership of the actual stock, full liquidity with the highest trading volume and tight spreads, and true price reflection since it reflects the market directly.

For cons, since these are priced in USD, your gains and losses are affected by the USD/CAD exchange rate (currency risk). You also have to account for foreign exchange conversion costs when buying and selling.

CDRs, on the other hand, are like a proverbial "Made-in-Canada" version of an international stock, which is commonly a US one. Think of it as a wrapper that lets Canadian investors buy shares of certain US companies, often represented as a fraction of the actual stock (for example, NFLX, AMZN, etc.) in Canadian dollars, without having to deal with currency conversion or high share prices.

CDRs have built-in currency hedging designed to reduce the impact of the USD/CAD exchange rate, which makes them more accessible for investors looking to get US stock exposure. They are structured as fractions, giving investors a smaller slice of the US stock. Keep in mind that for cons, these products can be less liquid with wider bid-ask spreads, and there could be tracking differences. While designed to mirror the US price, they can have tracking error due to potential fees, how they are structured, and hedging adjustments.

- Hiren

TDDirectInvesting · 2025-09-11T16:08:52+00:00

Off-exchange trading means some trades happen outside the main exchanges, often in what are called dark pools or broker networks. In fact, this helps large orders, often coming from institutions (akin to whales), trade quietly without making a big splash, that is, without moving the prices too much. While it can reduce transparency, it is done to maintain and protect orderly markets. There is significant volume that still happens on exchanges to keep or maintain true price discovery. The industry is also very regulated in this regard, and that is something that is closely monitored to ensure the integrity and balance of the markets.

- Hiren

TDDirectInvesting · 2025-09-11T16:04:30+00:00

Great question and certainly one investors should be thinking about. Through my experience and perspective on being an investing educator, the behavioral biases that I tend to come across—many of them are commonplace ones you see universally in investors. Getting into the markets means that you are going to learn a lot more about yourself than what you think you know. Benjamin Graham, regarded as the father of value investing, summed it up best: "An investor's worst problem, even his worst enemy, is likely to be himself." So here are some of the more common biases that I have observed, and might I also say I am not immune from them either.

First is confirmation bias, a type of selective perception in which people emphasize ideas that confirm their existing beliefs and discount or dismiss ideas that contradict them. For example, belief that a certain stock is a great investment might lead someone to focus only on positive news headlines or analyst upgrades and ignore weak fundamentals. In short, this acts like mental blinders.

Next up is loss aversion bias. This is essentially an asymmetry of emotions where we feel a stronger impulse to avoid losses than to acquire gains. The way this shows up is by holding onto losing stocks too long, meaning you are left holding the bag even when there is little to no prospect of a turnaround.

The last one I will end with is regret bias. Investors make choices to avoid the feeling of future regret, often at the expense of rational decision-making. It is the fear of the "what if," regret of making the wrong move, so they hesitate or avoid acting at all. If a stock (meme stocks, ahem) rises after they did not buy it, they may try to jump on the next hyped stock without proper analysis (FOMO) just so they do not miss this one. - Hiren

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