Stocks - The Best Buys 2

[Slava]

Originally Posted by moncton golden flames

read 'the intelligent investor' by benjamin graham.

it's not rocket science, it just doesn't follow 'efficient market theory' which most financial investment people follow.

good businesses do go on sale from time to time because the market is emotional and sometimes irrational and does not always price stocks appropriately.

I agree and I'm a huge proponent of that strategy and have read that book a number of times. That said, it's hardly an edge. There are millions of people investing that way, and that erodes the return. I also note that for the past number of years value underperformed growth (the difference is a little debatable in my opinion). The tide could be turning now, particularly in the small cap space, but we'll see what happens going forward.

And as far as EMH, I don't think "most financial investment people" follow it. I think it's increasingly discredited and most people see inefficiency in a number of spaces in the markets.

[TorqueDog]

The most recent book I've been reading -- on the subject of emotional and irrational markets, among other things -- is The New Trading for a Living: Psychology, Trading Tactics, Risk Management, and Record-Keeping by Dr. Alexander Elder. Great read, hits a lot of great points and the irrationality of the market is one that must be understood if you're to win out against your own irrationality and emotions when trading.

[jmac98]

Good morning all.

I have $5k of play money that is (literally) sitting in my fire safe.

I know nothing of investing. Is there any preferred option for how to utilize these funds, or should I simply place it in to tfsa as it’s not a large amount of money on the big picture.

[OMG!WTF!]

Alternate proposal. Spend it on education?

[jmac98]

Originally Posted by OMG!WTF!

Alternate proposal. Spend it on education?

I have accounts for my kids that I contribute to for their education. Their grandparents as well contribute so they’re doing well in that respect. I could certainly just add to that I suppose.

[OMG!WTF!]

I mean like on your own education. Learn about the stock market or investing. It could pay greater dividends down the road. But if you haven't maxed the government contributions available for an resp contribution that's a good plan too. Good spot to be in though.

[jmac98]

Originally Posted by OMG!WTF!

I mean like on your own education. Learn about the stock market or investing. It could pay greater dividends down the road. But if you haven't maxed the government contributions available for an resp contribution that's a good plan too. Good spot to be in though.

That’s where I was leaning, the tfsa. It used to be maxed a few years ago, but had to clean it out to pay the ex who had $140k of debt as was living a double life for years and not leaving to go to work as she led me to believe. I got saddled with half of that problem. Bliss. So I had to sort that mess out and now trying to recover and build my future back up. Wondered if it made any sense by opinion to invest or just rebuild resp

[OMG!WTF!]

Check with your bank too. Sometimes they offer you a decent package of freebies if you open a tfsa with them. If you can make a little return plus save some fees it actually makes for an ok return. Sucks about the ex debt. What a drag.

[jmac98]

I have a good amount in a locked in RSP with my bank as well so perhaps they’ll accommodate as you noted. I will check it out. Thanks for your time and info.

[TorqueDog]

Originally Posted by OMG!WTF!

I mean like on your own education. Learn about the stock market or investing.

For the stock market (not specifically 'investing'), there is honestly a ton of good information on YouTube if you can sift through the garbage self-promoters. TastyTrade and SMB Capital both put out really good content that explain quite a bit about the market and -- particularly with TastyTrade -- how derivatives like options work.

I consumed an ungodly amount of their content, along with the content of a few other channels, before I decided how I wanted to direct my capital within the markets. If you hear an approach that you like, investigate it. Look for contrarian viewpoints on it (I promise there will be some) and see whose justifications square with your own research.

Personally, the second I had built-up $5k of capital in my QT margin account, I started trading option credit spreads. You can't do that in a TFSA, but frankly if I'm making enough money that I need to worry about the tax implications of my gains, I'm happy to pay it. It means I'm successful at it.

[jmac98]

Thanks Torquedog.

I honestly can’t see me spending a lot of time educating or sifting through vids to get me to a better position to confidently invest. It’s just not my thing. I more so wondered if it made more sense to place the money into something like Questrade with one their managed portfolio options to allow them to run it, or just pick a single steady stock w/dividends on my own, or just place it into tfsa. Wondered if there was any value to go with any particular option that I could benefit from more than others amidst not really being terribly engaged in the process.

[jeffporfirio]

Originally Posted by jmac98

Thanks Torquedog.

I honestly can’t see me spending a lot of time educating or sifting through vids to get me to a better position to confidently invest. It’s just not my thing. I more so wondered if it made more sense to place the money into something like Questrade with one their managed portfolio options to allow them to run it, or just pick a single steady stock w/dividends on my own, or just place it into tfsa. Wondered if there was any value to go with any particular option that I could benefit from more than others amidst not really being terribly engaged in the process.

Both

[Fuzz]

I was interested in seeing how well a Questrade account would do. I put it in last year on Jan 28 and am up about 12%. Will be interesting to see how it performs in a down market. But if you aren't interested in doing research and picking stocks, that's probably a good way to go.

[TorqueDog]

Originally Posted by jmac98

Thanks Torquedog.

I honestly can’t see me spending a lot of time educating or sifting through vids to get me to a better position to confidently invest. It’s just not my thing. I more so wondered if it made more sense to place the money into something like Questrade with one their managed portfolio options to allow them to run it, or just pick a single steady stock w/dividends on my own, or just place it into tfsa. Wondered if there was any value to go with any particular option that I could benefit from more than others amidst not really being terribly engaged in the process.

If you want to be more active in your portfolio management, then pick a self-directed TFSA. But self-directed is just fancy gambling if you don't want to learn the fundamentals (buy low, sell high is not enough ). It sounds like a managed portfolio is more your thing.

Questrade's Questwealth and Wealthsimple are both good options, but Questwealth has a lower overall fee structure on first blush; .38% versus Wealthsimple's .5%. Might be a good idea to look at both and do a little research into people's experiences with them.

[Enoch Root]

Originally Posted by Fuzz

I was interested in seeing how well a Questrade account would do. I put it in last year on Jan 28 and am up about 12%. Will be interesting to see how it performs in a down market. But if you aren't interested in doing research and picking stocks, that's probably a good way to go.

The TSX is up 12.8% and the S&P500 is up 24.2% since Jan 28th.

[Enoch Root]

Originally Posted by moncton golden flames

read 'the intelligent investor' by benjamin graham.

it's not rocket science, it just doesn't follow 'efficient market theory' which most financial investment people follow.

good businesses do go on sale from time to time because the market is emotional and sometimes irrational and does not always price stocks appropriately.

I have.

Yes, investors are emotional. Yes, businesses (or the entire market) go on sale sometimes. Yes, stocks are not always priced appropriately.

None of that supports the notion that you can consistently outperform. If you believe in value investing, then buy a value index. Your chances of outperforming that, net of costs, over time, are very, very low.

The vast majority of investors who 'beat the market' over any period of time, did so by simply taking on more risk. Which isn't beating the market, it is simply moving out the efficient frontier to a point with a higher expected return (because risk and return are related).

[DoubleK]

Anyone know how to set up a recurring ETF purchase in QuestTrade? Is that even a thing or do I need to go a put in an order semi monthly.

[TorqueDog]

Originally Posted by DoubleK

Anyone know how to set up a recurring ETF purchase in QuestTrade? Is that even a thing or do I need to go a put in an order semi monthly.

You can do that, you'll just need to set it up ahead of time for as many purchases as you want; one for the 15th and 30th of each month, for example. Unfortunately you can't make automated recurring orders, at least not that I'm aware of. You may be able to call the trade desk and have them set it up for you, I'm not sure.

Caveat: I'm assuming you're using the Edge IQ desktop app.

Open a new Order entry window and enter the symbol of the ETF you want to buy. Enter the desired quantity and set the Order type to Market. Duration should be fine as Day because any liquid ETF will get you filled at the market price when the condition below is met (hence why setting Order type is important).

Click Add conditions near the Buy / Sell button, and click the X beside the first line of conditions; we don't want any except for when to place our order. Check the box beside Place order on and set your day and time in ET. Click OK, and click the green Buy button to review the order confirmation before submission.

Repeat until you have as many recurring ETF purchases as you want. Set a calendar reminder to create more orders when the last one fires.

Personally, I am active enough in Edge IQ that I would just set a calendar reminder for myself to buy my usual lot of ETF X every month.

[DoubleK]

Originally Posted by TorqueDog

For the stock market (not specifically 'investing'), there is honestly a ton of good information on YouTube if you can sift through the garbage self-promoters. TastyTrade and SMB Capital both put out really good content that explain quite a bit about the market and -- particularly with TastyTrade -- how derivatives like options work.

I consumed an ungodly amount of their content, along with the content of a few other channels, before I decided how I wanted to direct my capital within the markets. If you hear an approach that you like, investigate it. Look for contrarian viewpoints on it (I promise there will be some) and see whose justifications square with your own research

Along this same vein, what are people's thoughts on Motley Fool? Comes across as clickbaity garbage to me.

[TorqueDog]

Originally Posted by DoubleK

Along this same vein, what are people's thoughts on Motley Fool? Comes across as clickbaity garbage to me.

I do think some of those articles have value when discussing the fundamentals of a company being traded, pointing out things like what stocks tend to have high dividends relative to their stock price, how their price has moved over time, etc. More 'starting points' for research, food for thought.

But I wouldn't outright take buying advice from them. Websites like that owe readers no fiduciary duty. With that in mind, Motley Fool Canada will state whether or not they hold positions in any of the securities they are writing about, and have an easy-to-understand disclosure policy: https://www.fool.ca/fool-disclosure-policy/

Examine a lot of different sources before making your investment decisions. Caveat emptor.