Stock market thread.

[forumname]

Meh, not my style of trading. I think investing is riskier than day trading.

Haven't heard that one very often. I'm sure you'll explain?

[Big Ev]

Axeman, I was in the same place you are 4 years ago... I took a year to learn all the terms, types of investing, what there is to invest in, how to do it ect... then started making lists of what I liked... then jumped in... and ****ed up a bunch and learned more...

I now have put in $63,000 into the markets approx $8K in US, $41K in TFSA and $14K in a taxable account... I'm down about $9K due to putting lots into oil companies (TBE, CPG, BNE long term plays) at 60-50 per barrel... but I also own BCE, MKP and VSN where I am up good amounts $1-3K each... I use Finvis, Seeking Alpha and BNN TV and a few other things here and there... My preference is towards dividend players above 5% yield and I currently earn about $350/month in dividends for doing NOTHING. I'm just starting to have enough to notice compounding happening in my accounts which is awesome!

its actually alotta of fun and is much like playing fantasy hockey, doing research, short lists, looking for what stats you want, you learn a bunch of things about stuff you dont know about the world...

But yes I'm an investor not a trader...

Index Funds are like a wife, Stock Picking is like going to the strippers!

Index funds are too hands off and all encompassing... Stock picking is more exciting and you pick what you like...

Stock picking is gambling and trying to beat the experts. Extremely extremely tough to do.

[blayze]

Guru, your philosophy on this is all wrong, and you will likely lose money. Maybe not tomorrow, maybe not next year, but you will lose it eventually. Having said that, maybe it's not the worst thing in the world to lose money at a young age when the stakes are low. Sometimes that's the best thing that can happen and for some people they've gotta experience something for it to really sink in.


Only two types of people can consistently outperform ETFs:
1) The Prodigies - the Warren Buffets and Peter Lynch's of the world, who by virtue of their success also have access to a wealth of information that you will never have access to.
2) Insider traders - unfortunately very prevalent in today's market because it's so easy, but I wouldn't personally recommend this unless you're willing to risk going to jail (and I doubt many of you have access to quality info anyway).

Unless you fall into one of those two buckets, you are much better off betting on the long-term health of the market (in other words, buying ETFs).

There are a bazillion studies that have demonstrated ETFs consistently outperforming billionaire hedge fund managers, nobel prize winners and genius mathematicians. I somehow doubt any of you are smarter than these people, who ALL got their asses handed to them by passive ETF strategies.

The easiest way to get into ETFs is to simply buy ishares, which are widely traded, and generally have low expenses. Don't buy the exotic fancy ETFs... those are a ripoff in terms of expenses. Buy the standard, large cap stuff... S&P 500, NASDAQ, Emerging Markets and TSX. Weigh your portfolio based on your risk appetite... if you want safe steady growth but capital preservation is important because you might need the money some day, then put most of it indices that track developed nations (S&P, TSX). If you're younger and have a longer time horizon, or have a lot of $$$ and know you won't need to tap into it to buy a house anytime soon, then you can afford to be more heavily weighted in emerging markets and NASDAQ which should generate superior returns over time, but with higher risk.

By investing in ETFs, you've got the entire market covered. And guess what... in the long run (and by that I mean 20+ years) you will NOT lose money... because as a species, we should be advancing man kind (and growing our economy in the process).

It's not sexy or exciting, but it's by far the best investment strategy in terms of risk/reward ratio.

If any of you are interested, I suggest reading Benjamin Graham's "Intelligent Investor". It was written in 1949, and to this day is still considered the bible when it comes to investing. It's longevity should tell you something about how well this strategy has played out over time.

[forumname]

Guru, your philosophy on this is all wrong, and you will likely lose money. Maybe not tomorrow, maybe not next year, but you will lose it eventually. Having said that, maybe it's not the worst thing in the world to lose money at a young age when the stakes are low. Sometimes that's the best thing that can happen and for some people they've gotta experience something for it to really sink in.


Only two types of people can consistently outperform ETFs:
1) The Prodigies - the Warren Buffets and Peter Lynch's of the world, who by virtue of their success also have access to a wealth of information that you will never have access to.
2) Insider traders - unfortunately very prevalent in today's market because it's so easy, but I wouldn't personally recommend this unless you're willing to risk going to jail (and I doubt many of you have access to quality info anyway).

Unless you fall into one of those two buckets, you are much better off betting on the long-term health of the market (in other words, buying ETFs).

There are a bazillion studies that have demonstrated ETFs consistently outperforming billionaire hedge fund managers, nobel prize winners and genius mathematicians. I somehow doubt any of you are smarter than these people, who ALL got their asses handed to them by passive ETF strategies.

The easiest way to get into ETFs is to simply buy ishares, which are widely traded, and generally have low expenses. Don't buy the exotic fancy ETFs... those are a ripoff in terms of expenses. Buy the standard, large cap stuff... S&P 500, NASDAQ, Emerging Markets and TSX. Weigh your portfolio based on your risk appetite... if you want safe steady growth but capital preservation is important because you might need the money some day, then put most of it indices that track developed nations (S&P, TSX). If you're younger and have a longer time horizon, or have a lot of $$$ and know you won't need to tap into it to buy a house anytime soon, then you can afford to be more heavily weighted in emerging markets and NASDAQ which should generate superior returns over time, but with higher risk.

By investing in ETFs, you've got the entire market covered. And guess what... in the long run (and by that I mean 20+ years) you will NOT lose money... because as a species, we should be advancing man kind (and growing our economy in the process).

It's not sexy or exciting, but it's by far the best investment strategy in terms of risk/reward ratio.

If any of you are interested, I suggest reading Benjamin Graham's "Intelligent Investor". It was written in 1949, and to this day is still considered the bible when it comes to investing. It's longevity should tell you something about how well this strategy has played out over time.

I pretty much agree with all of this, but as someone so staunchly opposed to the gamble, you sure are falling hard for the gamblers fallacy. Some bold statements here about what WILL or WILL NOT happen... all predicated on samples from the past... Better slow down your sureness or you might get bit.

[forumname]

If any of you are interested, I suggest reading Benjamin Graham's "Intelligent Investor". It was written in 1949, and to this day is still considered the bible when it comes to investing. It's longevity should tell you something about how well this strategy has played out over time.

That's the problem inherent in people who believe in the bible - they haven't read enough other books! It's easy to believe the only thing you've ever heard. Sure, this is a good book. How many have you read on opposing strategies?

[blayze]

I pretty much agree with all of this, but as someone so staunchly opposed to the gamble, you sure are falling hard for the gamblers fallacy. Some bold statements here about what WILL or WILL NOT happen... all predicated on samples from the past... Better slow down your sureness or you might get bit.

That's the problem inherent in people who believe in the bible - they haven't read enough other books! It's easy to believe the only thing you've ever heard. Sure, this is a good book. How many have you read on opposing strategies?

I've probably read well over 100 books on investing, finance theory and capital markets. I also happen to invest hundreds of millions in funds for a living. Thanks for the advice though.

[forumname]

I've probably read well over 100 books on investing, finance theory and capital markets. I also happen to invest hundreds of millions in funds for a living. Thanks for the advice though.

Well, then you should be able to admit that past performance has no influence on future results.

[blayze]

Well, then you should be able to admit that past performance has no influence on future results.

Good point... let's throw everyone's track record out the window since none of that matters and consult our crystal balls instead.

[forumname]

Good point... let's throw everyone's track record out the window since none of that matters and consult our crystal balls instead.

Yeesh, not what I'm saying at all. Just be responsible with your knowledge and stop telling people index funds are 100% safe...

Sure, they have never lost money over any 20 year period. That does not prove that they never will. The worst 20 year period of all time could be starting right now.

[blayze]

Yeesh, not what I'm saying at all. Just be responsible with your knowledge and stop telling people index funds are 100% safe...

Sure, they have never lost money over any 20 year period. That does not prove that they never will. The worst 20 year period of all time could be starting right now.

You've been spending too much time reading the fine print on those mutual fund brochures dude... better put those pamphlets down before you ruin your eyes.

Jeez, this is exactly why I usually avoid giving any free advice on these forums. The trolls always come out...

[forumname]

You've been spending too much time reading the fine print on those mutual fund brochures dude... better put those pamphlets down before you ruin your eyes.

Jeez, this is exactly why I usually avoid giving any free advice on these forums. The trolls always come out...

???

Care to explain, oh wise master? Index funds are now guaranteed, 100% safe investments? First I've heard of this.

You're making yourself look like a fool, regardless of how much you spent on your degree.

[chuckcouples]

I just read 24 forum posts about investing and the only two investments options that were mentioned were stocks and ETFs. What happened to mutual funds? Have they fallen that fall out of favor that people do not use them anymore?

The problem with starting out with picking stocks is that it takes a lot of money to be properly diversified. Unless you are a high net worth investor or a gambler, the ease of diversification that comes with an ETF or a mutual fund are worth the relatively low fees. The other problem is that it is fairly difficult to buy any fixed income product from a trading account and the majority of investors should have some portion of their portfolio in fixed income.

The problem with ETFs is that they ALWAYS have a worse performance than the index they track. This is because index - fees = < index. There are countless articles written on a regular basis about how the index beats the majority of mutual funds. This is true but that's mostly because there are a lot of terrible mutual funds out there. These articles also fail to mention that indexes beats 100% of the ETFs that they track.

In my case, I have my retirement savings and my children's education savings in mutual funds but I have a bit of play money inside a stock trading account in my TFSA. I look at that portion of my TFSA as a chance to play the stock market while still knowing that when I lose all of that money it won't affect my long term financial position. As a financial advisor, I have 98% of my clients money in mutual funds with the other 2% being in exempt market products available only to high net worth investors.

[Mr. Guru]

Guru, your philosophy on this is all wrong, and you will likely lose money. Maybe not tomorrow, maybe not next year, but you will lose it eventually. Having said that, maybe it's not the worst thing in the world to lose money at a young age when the stakes are low. Sometimes that's the best thing that can happen and for some people they've gotta experience something for it to really sink in.


Only two types of people can consistently outperform ETFs:
1) The Prodigies - the Warren Buffets and Peter Lynch's of the world, who by virtue of their success also have access to a wealth of information that you will never have access to.
2) Insider traders - unfortunately very prevalent in today's market because it's so easy, but I wouldn't personally recommend this unless you're willing to risk going to jail (and I doubt many of you have access to quality info anyway).

Unless you fall into one of those two buckets, you are much better off betting on the long-term health of the market (in other words, buying ETFs).

There are a bazillion studies that have demonstrated ETFs consistently outperforming billionaire hedge fund managers, nobel prize winners and genius mathematicians. I somehow doubt any of you are smarter than these people, who ALL got their asses handed to them by passive ETF strategies.

The easiest way to get into ETFs is to simply buy ishares, which are widely traded, and generally have low expenses. Don't buy the exotic fancy ETFs... those are a ripoff in terms of expenses. Buy the standard, large cap stuff... S&P 500, NASDAQ, Emerging Markets and TSX. Weigh your portfolio based on your risk appetite... if you want safe steady growth but capital preservation is important because you might need the money some day, then put most of it indices that track developed nations (S&P, TSX). If you're younger and have a longer time horizon, or have a lot of $$$ and know you won't need to tap into it to buy a house anytime soon, then you can afford to be more heavily weighted in emerging markets and NASDAQ which should generate superior returns over time, but with higher risk.

By investing in ETFs, you've got the entire market covered. And guess what... in the long run (and by that I mean 20+ years) you will NOT lose money... because as a species, we should be advancing man kind (and growing our economy in the process).

It's not sexy or exciting, but it's by far the best investment strategy in terms of risk/reward ratio.

If any of you are interested, I suggest reading Benjamin Graham's "Intelligent Investor". It was written in 1949, and to this day is still considered the bible when it comes to investing. It's longevity should tell you something about how well this strategy has played out over time.

I agree with everything except the bolded part.

Also, you don't need to consistently beat the ETF's to be successful. Beating an ETF or index fund for a couple years can set you up for a lifetime, no? Capital preservation and greed would be and is the hardest part in trading IMO.

[Big Ev]

I just read 24 forum posts about investing and the only two investments options that were mentioned were stocks and ETFs. What happened to mutual funds? Have they fallen that fall out of favor that people do not use them anymore?

The problem with starting out with picking stocks is that it takes a lot of money to be properly diversified. Unless you are a high net worth investor or a gambler, the ease of diversification that comes with an ETF or a mutual fund are worth the relatively low fees. The other problem is that it is fairly difficult to buy any fixed income product from a trading account and the majority of investors should have some portion of their portfolio in fixed income.

The problem with ETFs is that they ALWAYS have a worse performance than the index they track. This is because index - fees = < index. There are countless articles written on a regular basis about how the index beats the majority of mutual funds. This is true but that's mostly because there are a lot of terrible mutual funds out there. These articles also fail to mention that indexes beats 100% of the ETFs that they track.

In my case, I have my retirement savings and my children's education savings in mutual funds but I have a bit of play money inside a stock trading account in my TFSA. I look at that portion of my TFSA as a chance to play the stock market while still knowing that when I lose all of that money it won't affect my long term financial position. As a financial advisor, I have 98% of my clients money in mutual funds with the other 2% being in exempt market products available only to high net worth investors.

Mutual funds from banks are always too expensive MER-wise and I would always suggest people to avoid them unless they are older and don't want to put forth even the smallest effort. The best mutual fund out there if you just want to set it and forget it is Tangerine's investment fund (four risk options to choose from). 1.07% MER. The second best is TD-Eseries which allows you to build your own mutual fund. MER of around 0.4% max.

[blayze]

The entire mutual fund industry is a huge scam and wouldn't exist without banks pushing these shitty products on their unsuspecting clients.