Investing - Where should I start?
 

I've built up some money in my savings now that is just sitting there now and I think it would be a good idea to start to invest my money. I'm just lost in the total process of where to start and what to do.

Can anyone here shed some light and give me a little push on what to do? I'm looking to do more short-term investments and gain some sort of income from it.

The stock market is looking like it's entered a bear market. You have to be a good stock picker to make any money there. Gold is showing strength. There are mortgage investment products that pay dividends that I like. Not a whole lot of places to go, I'd stay away from most mutual funds/ conventional stock market funds for now until the market has better outlook.

if you want to pick stocks would recommend min 50k to start (of which you would be comfortable losing)

You need to do more research if you want to do it your own. Takes a long time to be a successful investor. Could takes years and years to learn and blow up many accounts to learn. I have blown up multiple accounts (small 5-10k) before it gets decent for me.

To earn a regular income out of it steadily is even harder. Long term (10, 20 years +) is more straight forward. Invest in companies whose products you love to use.

There is no getting rich quick and most investors lose their money looking for that.

trade stocks that are under/over valued based on their prospectus and learn to evaluate spreadsheets and ratios ie ROE, EV, book value, P/E, debt-equity etc like its nobody's business

learn how the market has reacted historically in different market scenarios which may help you identify trends

From Buffet:

read that a couple nights ago. a good eye opener into the circus that is like any other coverage (think sports for example. how many times do you see things get over analyzed or people blatantly stating the obvious just so they have something to say on air). Like any industry, there is fluff all around.

invest in something you understand but also at a price that makes sense! doing one or the other will straight up screw you over.

keep in mind, if you ask 10 different people, you will get 10 different investment philosophies. listen to each and evaluate against your own criteria.. no copy and paste shit.

keep investing boring. because boring works.

guyz iphone 7 is coming out we should buy aapl according to Nlkko

You have to be extremely patient and diligent at times when things seem to bounce around. Build this up and I cannot stress how much patience you need and how you have to have a steady hand.

I'll tell you now that I've gone in with the mindset that I may very well, lose everything I put in but everything comes with research and everyone's risk tolerance is very different.

Even the best hedge fund managers make mistakes. There are very subtle clues for every stock out there that determines movement in the stock price. Some less subtle than others. Sometimes changes can come at a sudden announcement. Sometimes you kinda get the idea a company isn't gonna put out some good news like a company releases a quarterly earnings report that missed targets. Suddenly stocks plummet.

There are simulators for download to get you familiar with all the ins and outs and terminology with trading. I would seriously start there just to get familiar with how to make moves. Research a company very diligently before investing. Take a look at their financial statements and what their competitors are doing. You want to find out absolutely everything about a company if you want make any money investing on your own.

http://3.bp.blogspot.com/_fXbqZxk67W...Psychology.JPG

Don't go into doing something like this. I somewhat agree that you should pick a stock that sells products you like. If you are already familiar with their product, you know at least a little about the company who built it. I started with conservative investments in insurance companies as they offer some type of safety net like dividends. I made a few grand and I moved onto banks made a few thousand more, I'm simply building my experience. I go into investing simply to make a few extra bucks not to get rich fast.

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Pretty much sums up my experience trading oil last year :(

Here's a personal story of mine that involves CIBC stock. I bought at around 96 last year near the tail end and it was heading up to the 100s. After the new year and the oil crash, I was sweating balls and shitting brix. from 96 to 94, from 94 to 90 from 90 to 87 and finally ended up at an 83 low.

you can bet on it that I was hurting after my account saw a 13.5% decrease in money. But then I had to wait it out and collect dividend in the meantime. Dividends still paid 1.15 per share at the end of last year and 1.18 in the most current ex-dividend date. But knowing that Big banks don't fold over night and the fact that the financials are not too shabby with a dividend hike almost every quarter for the past 4 quarters I had a feeling it would be ok to hold. Today CM.TO is worth 100.50 again. So the wait paid off and I sold. The worst investors are the ones who are short sighted and trigger happy.

I learned from my mistakes and the click of a button is very easy that may end up costing you dearly. Be very cautious when you enter that mouse click for that option whether it be simply buying a stock or whether you long or short it (put or call) (I've been paying attention to American terminology now and it's getting jumbled in my head).

trading fees, commisions, MER's are how brokerages kill you softly ;)

Just open a TFSA for the meantime, and sit down with someone whose a specialist and build a portfolio of them, of what it is you want to achieve or gain with your monies.

2016 contribution is $5,500 / max for the year
$46,500 maximum contribution room

[i am ETF low MER biased at the moment, so reader beware]

^Regarding specialists, i am sure there are a couple out there who would genuinely help, but these are also the car salesman of the Financial world. I believe their profits are directly related to what things they can sell you (such as their Bank's mutual fund) and this mutual fund will fuck you with about 2%+ of management expenses. Tough to say if, on average, a mutual fund with such high fees can out perform some security that just tracks an index (s&p, barclays) with minimal fees. But right now I lean to no.

Regardless of the product, you want to minimize your fees on the security as well as the platform you are using (TD, RBC GAM, Tangerine, Vanguard, e-trade, fidelity)

Regarding TSFA
- probably not a wise idea in most peoples circumstances to place conservative securities in there. as it again is a tax shelter, you want to put your highest earning securities in here

[usa rant]
I miss the TSFA (i moved to the US for work. If i try to contribute anything to my TSFA, i will be taxed at 1% each month). Also, USA would not respect that it is a TSFA anyways and tax the damn account.
Although there are retirement funds (analgous to the RRSP in Canada) there exists no TSFA equivalent.

to OP:
- I would just open a Vanguard account (low fees and i think ETF trading is free in Canada too). ETFs are like bundles of securities that are traded (so its like a mutual fund + stock) so you get instant diversification.
- Since you mentioned you wanted short term investments (you want liquid money in the short term future), I would put at least 75% of your current cash into short term bonds ETF or some equivalent.
- Take this opportunity to also start investing long term with a small portion of your money. Since you are new to this, see "Dollar cost averaging" as this would slowly ease you into it. When going longterm, you can pick something that is more volatile (like the s&p500 indexes) but over the long term (5-10+ years) they make money
- Pick one with low fees (IIRC, the lowest fee for any Vanguard is 0.06 MER. But this that was for their S&P index.) IIRC I see some bonds with 0.3 MER.
-stick your investments in your TSFA. like the previous poster said, you have 46,500 of room (damn you lucky Canadians)

https://upload.wikimedia.org/wikiped...f_a_bubble.png


all the advice above is good, but what you should really be doing is training to control your impulse and emotions. If you can do that, the rest is easy.

if you can't control your impulse or emotions, it doesn't matter what you think you know. you'll just keep doing that picture ZN6 posted.

learn to plan the trade, plan all outcomes, and all reactions to all outcomes, and then execute based exactly on that plan, and if something happens you didn't plan for, you just get out.

You cannot plan while in a position, you're biased and delusional while holding a position, all the planning has to be done beforehand... and like i said, executed exactly as planned.

that's really all there is to trading, a kid could do it. but most people turn crazy like ZN6's pic.

it's quick money yeah... no one said it was easy money.

Your advice for a new guy who is asking on investing is trade. 99% traders lose money. That is a fact. Many successful traders was in that 99% crowd, blowing up multiple accounts before they can make money consistently, that is a fact. Perhaps if you have been trading anything other than paper you would know this.

For a new guy learning to invest, he should not look to trade. Your P/E ratio and other maths does not mean dick. Trading is a game of psychology and math. Math is easy even a monkey can do TA. The psychology part can only be learned through pain. Yes, that means losing real money. You see a lot of valid advice like master your psychology, have a plan, etc. All valid but for a new guy, the moment you execute that trade and that P&L start flashing, your blood will rush and you will not remember any of that stuffs.

Investing is the long game. And the most amount of money is made by sitting (investing), not trading. Got it? Any monkey can trade, only real men can sit tight.

And yes, INVEST in stuffs you love to use. My parent's port have stuffs like DIS, M, KO, MSFT, FDX, even a small chunk of TSLA. All from IPO. Have not sold a single shares through many many years.

I could go on but I think in a few months/years, you will blow up your child college account and you can learn that way too. I have blown up multiple small 5k, 10k accounts before things got decent for me.

you are making a lot speculative assumptions
re-read my post and swap trade for the word invest
principles remain unchanged and valid

sound advice you are giving - blow up accounts, buy into product marketing and IPO hype
forget about the balance sheets

I guess only real men stick with a buy&hold strategy as the only way to make money
but hey I am just paper trading my college tuition

Tip is to NOT read the revscene stock market thread (especially posts by Nikko). Instead, a much better investing forum exists here:

Investing

ZN6 : is that how it really works in the market lol.

For the majority of 'do-it-yourself at home traders', yes.

There's gotta be a loser for every winner in trading stock. Usually it's the retail guys that go through the slaughter house first.

I put a small amount of money away in my TFSA via td using their e series index funds-- pre authorized every month. I am by no means a finance pro but low MER seems like the way to go. My goals are for long term savings. TD advised against it, but I'm not sure if they were just trying to sell me or what :lol I've read the wealthy barber and some stuff on the internet..

Open for comments and criticism :)

TSFA is one of the best things about being a Canadian. Use it!

As for e series, im not sure what the MER (Management expense ratio) is on that. If its over 1%, i would really doubt its efficacy.

You could always open up a TSFA account under questrade.com or virtualbrokers and pick up a lower MER index fund ETF. S&P60 for Canada or S&P500 for USA stocks . The S&P500 for eg has a MER of 0.08% (or 0.06%, i forget)

Those financial advisors are sharks man. Car salesman of the finance world. Why trust in their advice when their commissions are directly related to what they can sell you.

E-series MER's are like .30% or something tiny like that. It's so small, it's not worth remembering like 2.59% on some funds.


The only financial advisor I will trust is, someone who gets paid based on asset value. His incentive to make your assets grow is his meal ticket to feed his family.

"Mutual funds are for uneducated people, sold by uneducated people acting like educated people." - odlum brown advisor