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Let us count the many ways that investing in stocks is a nasty experience.

Stocks fall, sometimes hard, for reasons that no one can precisely pin down. That's basically what's happened this month on the stock markets. Stocks are supposed to reward long-term patience, but they don't always. My colleague Tim Shufelt wrote last Saturday about how the Canadian stock market was trading below its 2008 peak before the financial crisis, with dividends not included.

Even supposedly "safe" stocks can bite. The dividend-growth icon Enbridge Inc. was down 24 per cent for the 12 months to mid-month. When you look at a list of the worst one-year performers on the TSX, there's blue-chip Enbridge wedged in there with speculative resource companies.

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Yet, we all need stocks to build our retirement savings – especially the young adults of the millennial generation. With all their nastiness, stocks remain the everyday Canadian's best hope of growing money over the long term.

Millennials have to be savvier about this than any other demographic. Because of a changing work force, they are less likely to be part of company pensions than previous generations. The Canada Pension Plan has been tweaked so it will pay more to today's young adults when they retire, but personal savings will be vital for people retiring in the 2050s and beyond.

The deadline for making a contribution to a registered retirement savings plan that counts for the 2017 tax year is March 1. Whether they're investing in RRSPs or tax-free savings accounts, young adults in their 20s and early 30s should probably be putting $80 to $90 of every $100 they invest for retirement in the stock markets, with the rest in bonds and cash.

This applies even with stock markets seemingly in free-fall for a time last week and still unsettled in recent days. In fact, the recent dip is an ideal time for young investors saving for retirement to put money into stocks and the exchange-traded funds or mutual funds that hold them (equity funds, in other words).

It's human nature to jump on a bandwagon, which in investing terms means throwing money into a hot sector or market. And yet, the best investment opportunities come when stock prices are falling, although we tend to think just the opposite. When retail merchandise goes on sale, we see it as a great time to buy what we've been wanting. When stocks go on sale, however, we see it a repudiation of the whole idea of investing in the stock market. Suddenly, stocks are for losers.

Falling stocks are painful when you're an investor, but there has never been a decline from which stocks didn't recover. Ten years would normally be enough for the ups to more than offset the downs on the stock market, but we've not seen that in Canada. Low resource prices have kept a lid on our market, which is 30-per-cent weighted to energy and mining stocks.

What this tells you is that while stocks in general have gone on sale, the Canadian market is a particular bargain. In a column for our Globe Unlimited subscribers, economist David Rosenberg said earlier this week that "Canada right now offers up some of the most alluring valuations in the world."

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An ideal approach for millennials to start investing in stocks for retirement:

  • Diversify: An index-tracking exchange-traded fund or mutual fund (ahead of picking individual stocks).
  • Keep costs low: Minimal fees to buy and sell, and low ownership costs.
  • Know your expertise level: Novice investors and those who want someone to manage their startup retirement portfolios for a reasonable fee should check out The Globe and Mail robo-adviser guide for more information (, or try a low-cost balanced mutual fund or ETF.

Young adults have every right to regard the stock market suspiciously. Beyond the recent declines, older millennials will recall the market plunges of 2001 and 2008-09. Stocks crash, stocks rebound. You'll probably be sick of all this after three of four decades of investing in stocks, but you'll also have the savings you'll need to retire in comfort without the benefit of a company pension.

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