Investment Opportunities?

[Mr. Guru]

Great call!

trading at 63x sales......i wouldn't mind buying some puts a couple months out lol

ridiculous valuation right now

[blayze]

trading at 63x sales......i wouldn't mind buying some puts a couple months out lol

ridiculous valuation right now

It'll come down once the lockdowns are lifted

What's funny is there's another company called Zoom Technologies which a lot of people were investing in, thinking it was this one. It went up even more than the real company, so the SEC had to halt trading on it until April to give new investors some time to do proper due diligence instead of investing in the first "Zoom" company they see lol

[saucelife90]

With the market being where it's at, I figure now's the time I should dip my feet into investing.. Coincidentally, I just had a Financial Advisor come from Edward Jones and knock on my door to pass out his business card & let my wife and I know they're opening a new branch in our area..

Just a couple things I'm still unsure of...

1) Fees... Am I getting charged a fee every time I buy, AND sell an ETF? Am I getting charged a "maintenance" or "monthly" fee by my bank/site just for having shares?

2) It seems like saving a "sizable" amount is the route to go, instead of putting $50/week in. What is considered a "sizable" amount when it comes to investing!?

3) From what I understand, you pay taxes on capital gains from stocks, but not from ETF's. Is that correct & if so, would it make a big enough of a difference to make a person shy away from a single stock vs a ETF?

4) Is it worth even setting up a meeting with this financial advisor, or am I wasting my time? Seem's like the solo route is where 95% of you have gone, so I guess I answered my own question

Thanks in advance for any feedback, and sorry if any of these questions have already been answered previously in the thread!

[forumname]

With the market being where it's at, I figure now's the time I should dip my feet into investing.. Coincidentally, I just had a Financial Advisor come from Edward Jones and knock on my door to pass out his business card & let my wife and I know they're opening a new branch in our area..

Just a couple things I'm still unsure of...

1) Fees... Am I getting charged a fee every time I buy, AND sell an ETF? Am I getting charged a "maintenance" or "monthly" fee by my bank/site just for having shares?

2) It seems like saving a "sizable" amount is the route to go, instead of putting $50/week in. What is considered a "sizable" amount when it comes to investing!?

3) From what I understand, you pay taxes on capital gains from stocks, but not from ETF's. Is that correct & if so, would it make a big enough of a difference to make a person shy away from a single stock vs a ETF?

4) Is it worth even setting up a meeting with this financial advisor, or am I wasting my time? Seem's like the solo route is where 95% of you have gone, so I guess I answered my own question

Thanks in advance for any feedback, and sorry if any of these questions have already been answered previously in the thread!

1 - Depends who you go through. I'm really only familiar with self-directed accounts through online brokerages (I use Questrade, and have plugged it here already). ETF's are FREE to buy with them, and they have the same fees as individual stocks when you sell ($5 minimum and $10 maximum per trade, depending on the # of shares)

2 - This can be true when there are fees to buy, but if you're not paying a fee to buy then you can buy shares as frequently as you want. I think there may be a minimum amount to start an account, but after that you can buy single shares at a time if you want. I started out with a small amount and buy shares every month.

3 - Capital gains on ETF's will be no different than stocks. The specifics of how you're taxed will vary based on the type of account you invest in (TFSA, RRSP, etc), and the asset class (Canadian stocks are taxed differently than US stocks, etc).

4 - I'm firmly in the do-it-yourself camp, unless the person is just flat-out not interested in knowing anything about it. If you're open to some hours of research and education, it's totally doable yourself. Especially if you're starting out small.

I'm really happy to see so many people showing an interest in investing! It's something everybody should be taking advantage of, and I only wish I started sooner myself.

[chuckcouples]

With the market being where it's at, I figure now's the time I should dip my feet into investing.. Coincidentally, I just had a Financial Advisor come from Edward Jones and knock on my door to pass out his business card & let my wife and I know they're opening a new branch in our area..

Just a couple things I'm still unsure of...

1) Fees... Am I getting charged a fee every time I buy, AND sell an ETF? Am I getting charged a "maintenance" or "monthly" fee by my bank/site just for having shares?

2) It seems like saving a "sizable" amount is the route to go, instead of putting $50/week in. What is considered a "sizable" amount when it comes to investing!?

3) From what I understand, you pay taxes on capital gains from stocks, but not from ETF's. Is that correct & if so, would it make a big enough of a difference to make a person shy away from a single stock vs a ETF?

4) Is it worth even setting up a meeting with this financial advisor, or am I wasting my time? Seem's like the solo route is where 95% of you have gone, so I guess I answered my own question

Thanks in advance for any feedback, and sorry if any of these questions have already been answered previously in the thread!

1) Depends on where you set up an account and what type of account you open. Most self-direct accounts have both "maintenance/monthly" fees and transaction costs. These fees can be lowered or waived if you have enough transactions. Most mutual fund accounts have neither maintenance/monthly fees nor transaction fees.

2) I recommend people do regular small contributions instead of savings a "sizable" amount and then trying to time the market. This is a big advantage of mutual funds over ETFs as there are no transaction costs with a mutual fund account. To answer the actual question, a "sizable" amount would be an amount that is big enough to make the transaction cost negligible. If buys are free, then $25 would be a sizable amount but if buys cost you $10 per trade, then at $500 you are paying 2% of your investment to fees plus another 2% when you sell it. I would not want to have the transaction fee be more than about 1% of the amount invested.

3) Capital gains are payable on the sale of anything you sell for more than you pay for it; whether it's an ETF, an individual stock, an expensive painting or a used toothbrush. If you sell something for more than you bought it for, you are supposed to report the difference as a capital gain on your tax return in Canada. With that said, capital gains are not taxable when they occur inside a Tax-Free Savings Account or in an RRSP (and a few other registered investment accounts).

4) I would recommend setting up a meeting with multiple financial advisors before making a decision on how you want to proceed. This is assuming that the advisors are not charging you for their time. Investing is like pretty much anything else out there in that you can learn to do it yourself but it may be "cheaper" and more efficient for you to hire a professional to help you make informed decisions. Be aware, that there are bad financial advisors out there who are not going to help you as they are only offering advice that puts the most money in their pockets but this is also true of many other industries. (this is a very biased opinion as I am a full-time financial advisor)

[Axeman33]

So one EFT that has been thrown out here a few times is Vanguard. I've noticed a few different ones when I go looking. I see VFV on the TSE. I see VEQT on the TSE as well. There's quite a price difference between the two different Vanguard EFTs. What exactly is the difference? I realize EFT is a collection of investments into one so does that mean the VFV has better, more valuable stocks or is there more of them in there?

[blayze]

So one EFT that has been thrown out here a few times is Vanguard. I've noticed a few different ones when I go looking. I see VFV on the TSE. I see VEQT on the TSE as well. There's quite a price difference between the two different Vanguard EFTs. What exactly is the difference? I realize EFT is a collection of investments into one so does that mean the VFV has better, more valuable stocks or is there more of them in there?

Stick to VFV. The world will rise & fall with the US economy.

The global portfolio will have higher fees (requires more active management) and lag behind the US in performance coming out of this.

The actual "price" of a stock is really just symbolic and doesn't mean anything (other than setting practical limitations on how much a smaller retail investor can buy). What matters is the valuation multiple (value of the underlying securities as a multiple of the collective earnings of those companies).

[LawMan]

So one EFT that has been thrown out here a few times is Vanguard. I've noticed a few different ones when I go looking. I see VFV on the TSE. I see VEQT on the TSE as well. There's quite a price difference between the two different Vanguard EFTs. What exactly is the difference? I realize EFT is a collection of investments into one so does that mean the VFV has better, more valuable stocks or is there more of them in there?

Vanguard is not an ETF, it is a company that sell a lot of different ETFs. Some ETFs are actually a combination of Other ETFs.....
https://www.vanguardcanada.ca/adviso...n/overview/etf
There's about 100 or so here to choose from.

Each ETF is a slightly different mix of stocks and bonds, both the actual items held and the percentage of same. By varying the mix of the products you can focus on: a geographic sector (USA, Canada, Europe, China, Emerging markets), a industry (banking, construction, manufacturing,) or any other focus. There are incredibly broad ETFs: Invest in the largest 3,000 companies in the USA. And incredibly specific ETFs: invest in Marijuana stocks.

The reason ETFs were created is to give the average investor a simple way to get broad exposure to an entire geographic market. i.e. the largest 3,000 companies in the USA in one purchase. For that reason, highly specific ETFs are counter-productive IMO and are more a marketing gimmick then a wise investment. Perfect example: the Marijuana ETF; it allows you "broad exposure" to the marijuana market but really that is a teeny tiny piece of the world economy and investing any significant percentage of your assets in same is just gambling.

I see VFV on the TSE. I see VEQT on the TSE as well

VFV is the S&P 500. By buying this you buy the Standards & Poor 500, which is a list of the 500 largest companies in the USA according to S&P. So all stocks, all US companies.
VEQT is 100% Equity with worldwide exposure. Broken down you buy stock in companies with 40% USA based, 30% Canadian based, 22% "developed non-north america" and 8% "emerging markets".

So they are both a ETF of thousands of companies. Buying VFV gives you only USA exposure, VEQT gets you world exposure. Whether you want worldwide exposure or not is a very lengthy and heated argument.
The couch potato writer will tell you you need some exposure to the Canadian market (if you're Canadian). This is one area where I disagree with him.
The reality is that if you buy only USA stocks you still get worldwide exposure because all of the biggest USA based companies are international in sales and the S&P 500 gets around 50% of its business from outside the USA.

Anyways both of VFV and VEQT are great options. They provide a huge diversification to a wide array of companies. VEQT is even more diversified then VFV, some will tell you you need worldwide exposure, others will agree with blayze that the world economy lives and dies with the USA economy.

[Mr. Guru]

others will agree with blayze that the world economy lives and dies with the USA economy.

Count me as 'others who agree with Blayze'

The US economy is doing OK, for now, but the rest of the world is imploding.

If you look at the capital flows, everything’s been moving into the United States.

If you just look at France and Germany’s stock markets, where were the peaks? Back in 2000. They still have not exceeded their 2000 Dotcom bubble highs. The markets are telling you something.

It’s more than people really understand. The capital flows have been moving into the United States from Europe dramatically and also from Asia/China (Bitcoin).

[Axeman33]

Count me as 'others who agree with Blayze'

The US economy is doing OK, for now, but the rest of the world is imploding.

If you look at the capital flows, everything’s been moving into the United States.

If you just look at France and Germany’s stock markets, where were the peaks? Back in 2000. They still have not exceeded their 2000 Dotcom bubble highs. The markets are telling you something.

It’s more than people really understand. The capital flows have been moving into the United States from Europe dramatically and also from Asia/China (Bitcoin).

I think he means in general, not right now, but I could be wrong.

None the less, I appreciate the replies.

[blayze]

The couch potato writer will tell you you need some exposure to the Canadian market (if you're Canadian). This is one area where I disagree with him.

Couch potato is usually a decent resource, especially for newbies, but the writer is dead wrong here.

The Canadian economy historically has been a safe haven, but going forward it will suck... for a LONG time. We have too much tied into natural resources and energy. Oil prices will be deflated for a long time. Alberta is dead. Our dollar will weaken. Canada's got nothing going for it (from an investing perspective - still the best place in the world to live).

Nothing wrong with a global portfolio, but if you wanna maximize returns over the next decade, you wanna be long on the US. They are strong in the growth industries going forward. Health care, tech, communications, etc.

[StuntMan12]

Just a quick question here. Do you need to convert your Canadian dollars to American dollars when buying a U.S stock? Or is everything done automatically for you? And on TD Direct investing are you able to buy silver certificates or how would one go abouts buying some?

[The Comish]

Had a supposedly smart (I couldn't verify his financial history) guy tell me to get into BitCoin. I think cryptocurrencies are dicey as far as investments go, but I am admittedly leaning hard to the "safe" side of investing. Anyone here a big fan of cryptocurrencies?

[blayze]

Just a quick question here. Do you need to convert your Canadian dollars to American dollars when buying a U.S stock? Or is everything done automatically for you? And on TD Direct investing are you able to buy silver certificates or how would one go abouts buying some?

Yes - need to convert.

Generally speaking, it is a bad idea to invest in US stocks as a Canadian. You'll get whacked on the FX spread and then if it's a dividend stock, a portion of the dividend is withheld for taxes. If you ever need to convert back to Canadian you'll get whacked on the FX spread again. Canadian dividend stocks on the other hand have tax advantages. Economically speaking, the return on a Canadian vs US dividend paying stock after taxes is massively different.

It is unfortunate because there are some top tier blue chip US companies out there. If you really wanna do it, then wait for an opportunistic time to convert (which may not happen for another 10 yrs the way the loonie's going). The only US stock I own personally is Amazon. Lots of others I'd love to own by the currency conversion and taxes eliminate the upside.

The best way to get US exposure is to buy an S&P 500 ETF (ishares or Vanguard) on the TSX.

[The Comish]

Yes - need to convert.

Generally speaking, it is a bad idea to invest in US stocks as a Canadian. You'll get whacked on the FX spread and then if it's a dividend stock, a portion of the dividend is withheld for taxes. If you ever need to convert back to Canadian you'll get whacked on the FX spread again. Canadian dividend stocks on the other hand have tax advantages. Economically speaking, the return on a Canadian vs US dividend paying stock after taxes is massively different.

It is unfortunate because there are some top tier blue chip US companies out there. If you really wanna do it, then wait for an opportunistic time to convert (which may not happen for another 10 yrs the way the loonie's going). The only US stock I own personally is Amazon. Lots of others I'd love to own by the currency conversion and taxes eliminate the upside.

The best way to get US exposure is to buy an S&P 500 ETF (ishares or Vanguard) on the TSX.

I have some experience investing in US stocks. As blayze says, the currency conversions have to be taken into consideration for your bottom line. I sold stocks at a higher price than what I paid, but ended up on the negative side of the ledger when all was said and done. I will stick to Canadian stocks in order not to have to deal with currency conversion losses.