Investing...in stock

[Miss T]

Hello Smart Canucks,

Anyone doing business in the stock market? I know it's a scary place and not the best time for taking long positions but I must say I'm getting anxious sitting on the sidelines and want to do something with my savings - 3/4 is sheltered 1/4 is not so I was thinking of investing the latter in my TFSA.

honestly, I don't know anyone who's in the market would be nice to have a buddy.

tia
Miss T in toronto.

[tjthemanto]

Hello Smart Canucks,

Anyone doing business in the stock market? I know it's a scary place and not the best time for taking long positions but I must say I'm getting anxious sitting on the sidelines and want to do something with my savings - 3/4 is sheltered 1/4 is not so I was thinking of investing the latter in my TFSA.

honestly, I don't know anyone who's in the market would be nice to have a buddy.

tia
Miss T in toronto.

Check out www.financialwebring.org ..some smart posters there..click on their stocks tab.

[tjthemanto]

http://www.financialwebring.org/foru...forum.php?f=33

The above link is for their stocks discussions.

[tjthemanto]

Be careful about what you hear on the internet though..lot of rumours, pump and dump scams .

If you know who is a pumper and who is a basher you should be fine. Do your own due deligence at the end of the day ..as they all have their own agendas and vested interests when it comes to stocks..especially when it omes to forums like www.stockhouse.com

[Miss T]

Wonderful links and tips TJ!
I appreciate you sharing them and I love the fact
Financialwebring.org is predominantly Canadian
thats perfect.
I'll definitely keep an eye out for the "smart" folk...and yeah
I'll totally take all the pump and dump jabber with a grain of salt (like I did 2-3 yrs. ago when I hovered on yahoo finance boards)
again, thanks a bunch man!

[blueeyetea]

I know it's a scary place and not the best time for taking long positions but I must say I'm getting anxious sitting on the sidelines

You might want to read these two books by Derek Foster entitled "Stop Working Now" and "The Lazy Investor". Derek Foster is an Ottawa resident who retired at 34 because he started investing in the stock market in the early 1990 while still a student. Contrary to popular belief, he relied on buying blue chip stocks that paid dividends to build his nest egg (instead of selling high, buying low, which is impossible to do, even for experts.) On top of that, he never held high paying jobs.

In "Stop Working Now" he explains how the financial industry isn't always your friend when it comes to investing, as well as how to start buying shares.

In "The Lazy Investor" he discusses how to start buying shares on as little as $50 a month without paying hefty fees levied by the financial industry.

[Gsxrboy]

You might want to read these two books by Derek Foster entitled "Stop Working Now" and "The Lazy Investor". Derek Foster is an Ottawa resident who retired at 34 because he started investing in the stock market in the early 1990 while still a student. Contrary to popular belief, he relied on buying blue chip stocks that paid dividends to build his nest egg (instead of selling high, buying low, which is impossible to do, even for experts.) On top of that, he never held high paying jobs.

In "Stop Working Now" he explains how the financial industry isn't always your friend when it comes to investing, as well as how to start buying shares.

In "The Lazy Investor" he discusses how to start buying shares on as little as $50 a month without paying hefty fees levied by the financial industry.

I second that recommendation. That is why I started dripping because of the book. Enbridge had a two for 1 split, so I double my shares and made double the money.

Check out the google drip club based in Toronto, you can buy shares directly from people, they also have a monthly get together to discuss the shares.

http://groups.google.com/group/toronto-drp-club?hl=en

[isthia]

Dripping?

[blueeyetea]

DRIP: Dividend Re-Investment Plan.

It's win-win for both the company and the investor. A lot of company have DRIPs and SPPs (Share Purchasing Plans). If a shoreholder signs up to these plans, instead of receiving a dividend cheque, the company keeps the money and gives shares instead. The value of the investment goes up over time even though you didn't spend extra money on it.

SPP (Share Purchasing Plans) gives the advantage of buying extra shares without paying brokerage fees and often at a discount, but only if you're a shareholder first.

Having said all that, in most cases, you only need one share of a company to start both programs.

[ashedfc]

DRIP & SPP are good strategies, but one tends to get married to the company. They do not change companies, & tend to stay there for ever..
Problem is :Over a longer time frame, same companies do not do well consistently. The flavor changes from time from time.
Like AAPL is the stock right now. If you dont own AAPL, you are just not invested. (reports are AAPL can lead to $1000 in the future).

Manulife (MFC) was a choice of DRIP/SPP for several decades; what happened to this one, its just wipe out several long term investors. Now they have no hope of recovery.
There are several similar examples, where wealth is destroyed..

DRIP/SPP reduces your buying cost & carrying cost; but its doesn't gives you the advantage of picking the winners & avoiding the losers.

[isthia]

So if I'm confident I want to stick with a company long term, it could be a good plan. Otherwise no?

[ashedfc]

So if I'm confident I want to stick with a company long term, it could be a good plan. Otherwise no?

True...
Now, Look at Long term. People normally tend to look at the winners of the past & reach a conclusion very quickly.
But the reality is "No One has a Clue of predicting that the current winners will stay as winners over the long term, say 10yrs, 20yrs, 30yrs, 40yrs or so"

Example: to name a few AIG, C, BAC, Nortel, Manulife, GM, Ford, the list of winners which lost a lot of wealth.

Time to time its also advisable to change your company (or move to another sector altogether) depending upon the markets. If you don't do that, normally you are left holding the bag of looses & you tend to miss out on opportunities.

Example: Canadian banks are fine now; but will they remain fine over the next decade remains to be seen (as Canadians at present are exactly at the same situation where Americans were before their housing bust in 2008: there is too much euphoria about housing as investment & a substantial amount of wealth is already tied up in housing; there's a limit of how high it can go!!). So if/when a housing correction starts in Canada, it will bite on the profitability of Canadian banks.
.

[Gsxrboy]

I couldn't agree more with ashedfc. However, on the flip side of things, DRIPS/SPP have done extremely well, but only when you do your homework and select companies that have proven to do well regardless of the economy.

Here is some of the companies that I currently have:
Enbridge
RioCan REIT
Scotiabank

These companies have proven themselves to continue paying out dividends even during the horrible 2008 events. Like I said before, I got a two for one split on Enbridge.

There are of course risks with investing this way, but if you purchase solid companies like I have above, then you are reducing your risk. For me, I just love seeing the money being accumulated each month as I make money off of the shares.
I suggest you read a ton about it, lean what you can and ask a ton of questions. DRIPS are not for everyone, but they are great for those who wish to own a real share of a company. These shares can also be in trust for kids as well, so imagine giving a child a tim hortons share in their name.

[isthia]

So where/how do you buy them?

[Fever]

With the DRIPs, I heard that you have to have enough to by one share with your dividend. So If the dividend is 0.05 a share and it costs $50 dont you need alot of shares to do the DRIP? This is confusing does anyone know the answer?