Stocks

[Brian P]

The Canadian banks are near 52-week highs. (I bought TD on a dip a few weeks ago, but I sold call options against it which were out of the money at that time, but which are now in the money, i.e. it's all going to get called away in a week, unless something changes.)

Stocks are near-term-high-ish ... volatility is high ... means option prices are high ... means buy stuff you don't mind owning (in case it goes down) and sell near-the-money calls against it ...

I'm not brave enough to buy a double-bear energy ETF, but I did just buy some SU and sell at-the-money calls against it. If it goes down, I don't mind owning it. This is just going to replace some previously-bought SU that's pretty likely to also get called away next week. If it goes down far enough for that not to happen, I still don't mind owning it.

 

[backmarkerducati]

How have you done om Cramers tips?

I am not the one the questions was directed to but I was playing some of his recs a few years ago, lost most of that money. Overall he may be positive but he has a lot of turds and I cannot invest in them all to let it average out. I ignore him completely now.

You guys have really got me interested into this thing. I've always been of the old school 'save save save' mentality (European background maybe?) and haven't really focused on building a portfolio for future growth.

I'd be interested in a fairly conservative investment, dividend paying especially.

Recommended reading? Knowledge base to get started on this type of thing? Mid 30s here so probably should start building more than a ING savings/RSP account for future retirement purposes.

If you buy based on dividens (I do a lot of this) make sure you do a DRIP so the growth is compounded! Did I mention DRIP?... do a DRIP. You have to buy enough for it to make sense of course.

Also make sure the company is reinvesting and not just paying out dividens, I run from any that pay dividen and have negative EPS. I walk briskly away from any that pay out more than half earnings. There are many that pay out 3 to 6% without breaking my rules.

That was then. Aside from oil, what's on the horizon?
More banks?
(I have funds heavy in banks - both sides of the border. They've put a smile on my face in the last 10yrs).

Look for ones that are strong in their sector (not all are good to just be buying a sector), I like rail, fast food, telecom. Yoiu have to do your research, many turds and some diamonds.

 

[Gary]

I am not the one the questions was directed to but I was playing some of his recs a few years ago, lost most of that money.

Look for ones that are strong in their sector (not all are good to just be buying a sector)

Best in breed. ;-)

--> Brian. The HOD gave me $.30 today. I expect the long weekend will be enough time for those who slept through this week's inventory news to wake up, and we see the HOD up ~$.80 on Tuesday.

Good trading.

 

[SunnY S]

Please seek assistance from a financial advisor where you do your banking. It's free. It helps you sleep at night.
As you learn (whether by doing your own due diligence, or otherwise) you may want to book 5 -10% of your investment money in stock(s).
Conservative / divi paying mutual funds make a decent footing.
Talk to an advisor - please.

^^ This is actually great advice. As you get a feel for the game over a year or two, your confidence will grow, and you can do whatever the hell you want rather than "experimenting". Listen to this man....

 

[Baggsy]

What's the CSC cost nowadays?

Found it: https://www.csi.ca/student/en_ca/courses/csi/csc_enrol.xhtml

It looks like they have a $500 Investors course now.

 

[kellen]

What's the CSC cost nowadays?

Found it: https://www.csi.ca/student/en_ca/courses/csi/csc_enrol.xhtml

It looks like they have a $500 Investors course now.

Sounds like that course would be a good...investment.

 

[Baggsy]

Sounds like that course would be a good...investment.

It was, way back when I could buy CIBC for ~$20.

 

[raginduck]

^^ This is actually great advice. As you get a feel for the game over a year or two, your confidence will grow, and you can do whatever the hell you want rather than "experimenting". Listen to this man....

The "financial advisors" at the banks pump the products that they are told to pump.... the ones that best suit the banks. They have little concern for your portfolio... most don't actually know anything abut investing except what they are told to sell. When you are there... Look at the certificates they have in their offices... Most, if not all, of them are a joke.

 

[Baggsy]

The "financial advisors" at the banks pump the products that they are told to pump.... the ones that best suit the banks. They have little concern for your portfolio... most don't actually know anything abut investing except what they are told to sell. When you are there... Look at the certificates they have in their offices... Most, if not all, of them are a joke.

Of course they pump what they're told. They don't go out and research individual companies by themselves.
There's a research department, that makes recommendations.
Would you really want each individual "financial advisor" to do all of their own research?

If you're investing in stocks, you might want the people from the Brokerage end, not the Bank.
There's a difference in what they're used to dealing with.

 

[ROGO]

The "financial advisors" at the banks pump the products that they are told to pump.... the ones that best suit the banks. They have little concern for your portfolio... most don't actually know anything abut investing except what they are told to sell. When you are there... Look at the certificates they have in their offices... Most, if not all, of them are a joke.

^^+1 I don't use a banking financial adviser anymore for this reason and handle my own portfolio. However, the point is for anyone who is starting out, free advice from your bank is better than trying to figure it out on GTAM. Especially if your not the type to read up or research these things.

The main thing they can help you do is ensure that you are setting yourself up to review your current financial situation and set goals to achieve financial freedom. Everything from proper budgeting, debt reduction to having a Will.

Once you have a better understanding of what your personal financial situation is and how to set aside money for investments then you'd be in a better situation to look at trying to make your own investment decisions.

If you're already at the point where your frustrated with Mutual funds and MERS and lack of performance from these investments. Then before you start risking your hard earned money do as some have suggested, educate yourself and track a few stocks over a period of time and see how you do. Once you get comfortable and confident with that, take a small position in a few stocks. Preferably reputable companies that you understand with a good history of returns and earning.

If you're not planning to be a trader but rather plan to be an investor then buying can be done at anytime. Simply buy TD for example and when it goes up take some profit, when it goes down buy some more. Learn what a stop loss is and figure out what your risk tolerance is for how much your willing to lose in any given investment. There is so much more but the main thing about investing is patience and research.

If you don't know don't guess. Seek professional advice. Like anything in life this can be fun and rewarding providing you make sure to take the necessary precautions to preserving your hard earned money.

Some personal lessons learned...
1. Budget everything (know where every dollar you spend is going, esp when starting out. You'll be surprised how much you're spending on Tim's coffee per year)
2. Reduce all Credit Card debt (Anything with Very high interest should be eliminated.)
3. Set aside minimum of 10% savings (For investments, RRSP, TFSA whatever)
4. Maximize your RRSP contribution in order to get tax refund for investments or to help reduce debt for Credit/Mortgages etc...
- IMHO if you're in a lower tax bracket don't worry about RRSP's, just go right to TFSA's
5. TFSA no better way to create tax free savings. Setup a brokerage fund and put your investment trades here. Any over contribution should go to stocks.
6. Once you start to invest, look for Companies you understand, that provide good dividend and can be setup as a DRIP and watch your portfolio grow.
7. When you understand all of the above, feel free to gamble with penny stocks or slightly riskier investments.

There's so much more but I'll stop here. Good luck with your research and investing.

 

[Dirty Frank]

Hope none of you invested anything with these a** clowns http://m.theglobeandmail.com/report...ce-application/article23002460?service=mobile

 

[Brian P]

LOL - No!

 

[Matt Rain]

Good stuff ROGO.

 

[ROGO]

Good stuff ROGO.

Np.

First book I ever read was the wealthy barber.

I recommend rich dad poor dad by Robert Kiyosaki to give you a different perspective on what's an asset versus a liability and also how to understand the Cashflow Quadrant.

Another very quick read is The Idiot Millionaire by Derek Foster. Read this book first and I think it will answer many questions of the original poster about investing and DRIPS and why you don't need RRSPs or mutual fund pushers.

Also read up on free finance sections of Yahoo, Google or MSN.

Finally watch BNN Market Call and dial in to ask about stocks you might be interested in.

Take it from me and don't lose $25k by listening to a tip or Mad Money without doing your research. That's what happened many years ago when I first tried investing on my own. Luckily for me it was extra play money.

A tip from Cramer can go to zero just like a tip from Your uncle Bob, especially if you pick a stock to get Rich quick.

Bottom line playing stocks is like anything else in life. Practice makes perfect. Just don't practice with your entire nest egg until you get the hang of things.

 

[Brian P]

With the caveat that everyone has their own opinions ...

You will hear a lot about ETFs (exchange traded funds). There are LOTS of them. They trade on the stock market with a ticker symbol just like an individual company.

Some ETFs consist of a portfolio of stocks that meet the ETF's investment objective (e.g. they may include all of the big-cap energy stocks, or all of the big-cap gold stocks, or small caps, or a broad market average).

Others are structured products that are "derivatives" of some sort - the various "bull" and "bear" products are like this, with the intent of enhancing positive market moves in the event of "bull", or going in the opposite direction of the market in the event of "bear" funds.

Watch out ... understand what you are buying ...

Broad-market ETFs are considered low risk with lots of diversity because they contain lots of different companies. The good thing is that they contain lots of different companies. The bad thing (in my view) is that this means they contain all of the bad along with all of the good ... and this is why, most of the time, I buy individual companies rather than ETFs. BUT ... If you are just starting out and are not in a position to be able to buy five or six or 10 different companies without getting killed by transaction fees, something like this is not a bad place to be. You can buy one broad-market ETF in one transaction and call it good (at least for now). There is something to be said for an ETF being your first purchase in the market. Make sure it has low management fees. My brokerage account (TD) brings up a page with all of this information on it when you look it up in "markets and research".

Now the ones to watch out for ... Beware of the "bull" and "bear" ETFs. Especially beware of the "double bull" and "double bear" funds. These are for short term trading only. These funds work by rolling over futures contracts and leveraging them up, and there is an inherent small loss every time they do that. Look up the 1-year, or worse, the 5-year performance of any of those. You do not want to stay in these in the long term ...

 

[LiNK666]

Finally watch BNN Market Call and dial in to ask about stocks you might be interested in.

Take it from me and don't lose $25k by listening to a tip or Mad Money without doing your research. That's what happened many years ago when I first tried investing on my own. Luckily for me it was extra play money.

A tip from Cramer can go to zero just like a tip from Your uncle Bob, especially if you pick a stock to get Rich quick.

Bottom line playing stocks is like anything else in life. Practice makes perfect. Just don't practice with your entire nest egg until you get the hang of things.

+1 so true. Be careful with these flamboyant shows that will make you rich fast. The best thing you can do is try to research the company you want to invest in. Learn to read financial statements. See how much debt the company has what direction it's going into. The biggest question I ask now is the company still relevant to the evolving consumer needs? Stay away from tech unless if they are THE big players. I'm not as skilled or knowledgeable as a lot of people posting here are, but I really like to read up on the companies I'm investing in. I also have a 15% rule. If I think a company will hit a high of $x I will pull out 15% before it reaches that. It's saved me a few times.

 

[griff2]

I also have a 15% rule. If I think a company will hit a high of $x I will pull out 15% before it reaches that. It's saved me a few times.

My preferred safeguard is the automatic sell on stop price. I set my floor price for a given stock and set an automatic sell to occur if the stock drops to that price. I reevaluate and ratchet up my sell on stop price periodically so I can lock in share price increases as a stock price ratchets up.

Had I used your 15% rule, I would have lost out on $300K of gains last year from a stock that just wouldn't quit rising. Instead, a 15% sell on stop threshold would have made more sense.

 

[inreb]

You'll be surprised how much you're spending on Tim's coffee per year)

?!?!! whoa whoa I can't quibble with any of your other advice but this is beyond the pail! Who cares how much you spend on a daily treat? If life isn't about enjoying the present then what good is a million bucks down the road? That's cutting it a little close, no? I know people who are paralysed from that mentality.

 

[ROGO]

?!?!! whoa whoa I can't quibble with any of your other advice but this is beyond the pail! Who cares how much you spend on a daily treat? If life isn't about enjoying the present then what good is a million bucks down the road? That's cutting it a little close, no? I know people who are paralyzed from that mentality.

LOL. Life is short and you gotta live it. All I'm saying is know where your money is being spent and spend it wisely. For most people they don't really know where there money is being spent especially when it comes to coffee and take out that is purchased with cash.

Reality is if you want to be financially free it takes discipline not luck for most of us. The rich get richer not because they spend frivolously but because they make sure most of what they spend is on things that appreciate. For the average person who isn't born into money, it takes a little bit of sacrifice and understanding the difference between needs and wants.

I've seen enough friends and family who constantly complain about not making enough money and yet they continue to throw money down the drain on silly things that they don't realize are costing them a nice vacation or that little bit of savings for a rainy day.

At the end of the day we all make choices. We are all free to do what we want within reason of course. Some choose vices like coffee, cigarettes or alcohol to feel "happy". So be it. Like so many famous people who commit suicide who were multimillionaires, No amount of money in the world can make every person truly happy.

So for those looking for financial freedom, As I tell my kids...

1. If you make $1 don't spend $2 unless that $2 can make you more
2. If you want to better yourself, find people better than you to learn from
3. Do whatever makes you happy
4. Whether you think you can Or whether you think you can't... You're absolutely right!

No disrespect to anyone here. These are my opinions and my life lessons. I'm in a happy place based on what I've learned financially. I only wish I knew what I know now when I was a teenager. I'm still learning and I'm still frugal even though I can afford more than a coffee.

I just choose to buy or make my coffee at home and take my savings and put it into things I enjoy more... investing, Golf, Vacations, Buying motorcycles etc...

Peace!

 

[ROGO]

My preferred safeguard is the automatic sell on stop price. I set my floor price for a given stock and set an automatic sell to occur if the stock drops to that price. I reevaluate and ratchet up my sell on stop price periodically so I can lock in share price increases as a stock price ratchets up.

Had I used your 15% rule, I would have lost out on $300K of gains last year from a stock that just wouldn't quit rising. Instead, a 15% sell on stop threshold would have made more sense.

Totally agree with you on the Sell on stop strategy. However, everyone has different risk tolerances, therefore for the risk averse among us I also agree with LiNK666 on taking a bit of profit off the top while leaving the base investment to grow with the rising stock. By doing this enough times, you'll have your base investment fully paid off by the gains. With the gains taken from your investment you can buy more stock(s).