4. THE STOCK MARKET
At a time when ‘safe’ investments like T-Bills are offering rates barely above the current inflation rate, many people are looking for more worthwhile, profitable assets to grow their hard-earned cash. Stocks are the cream of the crop in the investing world; they can be extremely profitable but they can also lead to major losses. But with a long timeline and diversifying with good solid companies, we can heavily reduce the risk.
4.1 First Some Basic Terms
- Stocks and shares- what are they, and what’s the difference?
It seems to me that these days the words ‘stock’ and ‘share’ are used pretty well interchangeably. But if we want to get picky, I’d say the word “share” is used more to relate to a specific company, namely the one you work for. People seem to say “I own shares in my company or in company X,” but when discussing general investing I hear more of “I have 20% of my investments in stocks.”
But as far as we’re concerned here, they’re the same thing.
What is a stock/share?
When you purchase a share or stock in a company, you now hold part ownership of a company. This is a really cool concept when you think about it, with around $50 you can be a part-owner of Coca-Cola or Walt Disney Corp. Though when I say part-ownership, it’s about 1 millionth of a huge corporation like that. Once you are a part owner you then have the right to see all financial reports as well as vote on choices and proposals that the company presents (but if you only own 1 millionth of the company you also have only 1 millionth of the say.)
Why do companies issue stocks in the first place?
Well let’s suppose you want to start a custom T-shirt company but you have only $100 in your pocket and a T-shirt printing machine is $500. Your options here are to either take a loan from the bank (debt financing) or to issue stocks (equity financing) which in this simple case would be to ask your four best friends to invest $100 each. They now have ownership in 1/5th of the company. In return for giving you the money, they’ll hope that you’re company will grow and make profit and their $100 will increase in value. On top of that they now have 1/5th of the influence in company decisions. If the company grows, you could issue out more shares to rent out a warehouse and some office space or a company Ferrari (good business decision).
How do I buy stocks in small, private companies?
Most small companies allow only private investors and personal contacts to buy shares in their company. For example Facebook was 100% privately owned and operated until they released their “IPO” or Initial Public Offering. Facebook was then put on the marketplace for anyone to buy up a piece of the Facebook pie.
- The Stock Market or Stock Exchange
Everyone has heard of Wall Street and knows the image of the frantic stock market floor chalk full of people screaming and cursing at a big board of numbers (how do they accomplish anything!?). Just like you buy fruits and veggies at a farmers’ market, you buy stocks at the stock market. Obviously though you don’t need to travel to Toronto or New York to buy your stocks, you can pay a stock broker to buy your stocks at the exchange for you or you can simply buy them online through an online brokerage. And with so many people buying and selling, the transaction is almost instant.
The biggest stock exchange in Canada is the Toronto Stock Exchange (TSE) and in the States the three biggest are the New York Stock Exchange (NYSE), the American Stock Exchange (AMEX) and the NASDAQ (National Association of Security Dealers).
More basics on The Stock Market:
HowStuffWorks.com on stocks and the stock market: http://money.howstuffworks.com/personal-finance/financial-planning/stocks.htm
The biggest stock exchange in Canada is the Toronto Stock Exchange (TSE) and in the States the three biggest are the New York Stock Exchange (NYSE), the American Stock Exchange (AMEX) and the NASDAQ (National Association of Security Dealers).
More basics on The Stock Market:
HowStuffWorks.com on stocks and the stock market: http://money.howstuffworks.com/personal-finance/financial-planning/stocks.htm
- Bear and Bull Market
Bear and Bull markets can either represent the current trend in the stock market or the overall emotions of investors toward the market. A Bull market is regarded as a generally upward moving market, with optimistic and confident investors buying more than selling. If an investor is “bullish” towards a specific company, he or she believes that company’s stock value will increase in the near future.
Bear markets are the opposite, representing a general pessimistic and fearful outlook on the future of the market or a specific company (an investor can be “bearish” towards a company).
A good way to remember these terms (and the reason they are given the names “bull” and “bear) is the way these animals attack their opponents. A bull attacks by thrusting his horns upwards at its opponents, while a bear swipes its paws downward: just as a bull market and bear market swing up and down, respectively. That would be an AWESOME fight by the way.
5.1 Investing in Stocks
Just like the fixed income investments we saw in the first section, we have a huge range of stocks to choose from which span from conservative to extremely risky. Keep in mind though the most conservative stock is still considered riskier than any fixed income investment. It’s absolutely great if you can start investing as early as possible in your life; being young allows you to accept riskier ventures. This is because nothing brings down risk quite like lots of time.
Before you start your stock adventures, do some soul searching and decide how you think you cope with risk; if the market took a huge tumble tomorrow could you still sleep soundly knowing they will most likely go back up over time? You have to be able to stay calm knowing ebbs and flows and peaks and valleys in the stock market are completely natural and guaranteed to happen.
I also want to mention, Investopedia.com has an investing simulator that gives you $100,000 play money to invest in companies and track their performance. This gives you a great idea of what it's like to own and follow stocks without risking a single penny.
Find it here: http://www.investopedia.com/simulator/#axzz2KQvjJJMv
Stocks at a Glance:
Minimum investment required: Penny stocks cost, well pennies. But brokerages usually require minimum $250 to keep your account in good standing
Cost to buy: ~$5 per stock with discount broker, ~$30 per stock with full-service broker
Current return: Historical averages ~8 to 10%
Risk (out of 10): 5/10 to 10/10
Liquidity: Can only sell when markets are open
Length of term: No time restrictions
Where to buy: Stock Brokers at a bank or online broker
Income: Either as capital gain (increase in value) or in dividends
Cost to buy: ~$5 per stock with discount broker, ~$30 per stock with full-service broker
Current return: Historical averages ~8 to 10%
Risk (out of 10): 5/10 to 10/10
Liquidity: Can only sell when markets are open
Length of term: No time restrictions
Where to buy: Stock Brokers at a bank or online broker
Income: Either as capital gain (increase in value) or in dividends
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1. Focus on the Long Term - Short Term Can be Hazardous!
The recession in 2008/2009 is still fresh in some people’s minds. Many saw huge chunks of their hard-earned savings disappear into the unknown. On average over these two years, stocks lost a whopping 37% of their value. A lot of people sold at the bottom, thinking their money would go to zero if they didn’t sell right away. But sure enough, just as it has in history time and time again, the market bounced back. Since the stock market was established, stocks have provided the highest average return (roughly 10%) of all investment types, much better than the next highest: a 5% annual return with long-term bonds. The key though to consistently high returns, as any seasoned investor would tell you, is to buy shares in a company with good fundamental values (like good management, solid business plan, stable historical performance) then hold those stocks for at least five years in order to absorb those ups and downs in the market. You might get a lucky streak in the short-term but investing is not gambling, this isn’t the casino! As Motley Fool.com states, “Hop off the emotional roller coaster,’ and the world’s most successful investor Warren Buffett says having a “cool temperament” is key to his success. Buying stocks at a high price and selling at a low price seems like a pretty poor decision, don’t you agree? Then why do so many people do it? They are in the completely wrong mindset, they see a stock increase significantly and decide to jump in hoping for continued profits. Then it starts going down and they sell thinking they must sell now before it tanks completely. This is a surefire money losing strategy! Think of the stock market at the bargain bin at your favorite clothing store. You wouldn’t go running for the hills when a shirt you’ve wanted is on sale for half price, you snatch it up as quick as possible! So instead of getting worried and selling when your stocks go down, think of it as a great opportunity to pick up a great bargain and buy more. |
2. The Difference Between Trading and Investing
There is a big difference between trading and long-term investing. Traders purchase stocks and, using a variety of techniques, try and predict when the stock will rise in order to sell the stocks minutes, hours, or a few days later at a higher price. There are some ‘professionals’ who claim to make heaps of cash doing this, but in the end it’s usually long-term investors who cash in the most consistently. In my opinion, be an investor, not a speculator. Timing the market is very difficult, if not impossible, so it’s not recommended! As Motley Fool.com states: “Traders look for that one great inning, while investors wait for the grand slam.”
I believe the "buy and hold" investment strategy is can be very effective when used properly. Unlike day trading, buy and hold investing often involves much less risk and often proves to be more helpful in long-term saving. Not only that, but it allows you more time to spend doing other things rather than spending your day in front of a computer buying and selling stocks within a matter of minutes. Look for companies with excellent long term potential.
3. Building a Portfolio - Are You Conservative, Moderate or Aggressive?
Most people overestimate their risk tolerance. I remember when I started out I felt like tough guy thinking: “pff, I’ll have no problem if my stocks plummet I’ll just wait it out no problem” …until it actually happened. Actually witnessing your hard-earned money shrink is frightening, but it was a good lesson for me to find out where I stand on the risk tolerance scale. It’s important to find the perfect balance where you’re earning decent returns but you’re also able to sleep at night.
4. Reduce that Risk! Diversify.
When I’m at a buffet, I would never fill up my entire plate with only those sketchy-looking pork dumplings; I’d grab 9 or 10 different things in hopes that at least a few of them are good. Similarly, I’d never put all my money in only one stock, because if that one company goes bankrupt, I’m living in a cardboard box behind the liquor store for the next year. By diversifying, you can spread the risk over many different industries, and therefore, significantly lower the risk… And maybe, just stay away from those dumplings entirely.
So plan it out- make a portfolio with companies of different industries in hope that they don't all move in the same direction. For example, when the real estate market slumps, maybe the fast food industry prospers. Big Mac’s will always be comfort for lots of people in a struggling economy.
Sometimes diversifying with different industries isn’t even enough; some people buy into markets all over the world. They use the term ‘Emerging Markets’ for countries like Brazil and Saudi Arabia, where the economy is starting to boom due to new sectors like new energy and technologies. Also, most professionals recommend no more than 20 stocks in your portfolio. This gives you good diversification but you don’t have to spend all day keeping track of a long list of stocks.
Even further, it’s a good idea to diversify with different forms of investments. It’s good to have cash available for emergencies, as well as have a certain amount invested in safer investments like mutual funds, GIC’s and bonds. Avoid as much as possible putting any of your money in one basket like the stock market. You just never know what will happen!
5. Capital Gains vs. Dividends
There are basically two ways to profit from stocks. The first and most common way is by buying a company at a low price and selling it for a higher price some time later when the company’s value rises. This is profiting from a company’s capital gains. The second way is through dividends (which I’m particularly fond of).
Dividend-paying stocks in my opinion are the ultimate investing tool as you benefit from both capital gains AND regular dividend payments. By buying and holding dividend-paying stocks, you can wait out the down markets while still getting a paycheck. Many professional studies have shown that companies that pay a solid dividend actually outperform companies that don’t pay a dividend at all!
Typically large dividend-paying companies pay around 2-5% returns in dividends, and if you look close you can find some that pay upwards of 9-15%, but be careful with these as this high payout may not be sustainable! If a company is dishing out more money as dividends than they actually make in profits, it means their Payout Ratio is over 100% and is most likely unsustainable in the long-term. Watch out for that.
Most companies pay their dividends either monthly, semi-annually or just once a year (Merry Christmas!). For safer, low-risk dividend stocks, look for larger, well-established companies that have regularly increased their dividend over many years. For instance, Coca-Cola has increased their dividend slowly over the last 22 years. It started at 3.5 cents in 1986 and is now 44 cents!
Math Time!
To get an idea of dividend calculations, let’s look at Coca-Cola (chart taken from Google Finance):
Current stock price of Coca Cola = $32.2
With my $2000 I made from my lemonade stand this summer, I decide to buy $2000/$32.2 = 62 stocks of Coca Cola
Dividend Earnings
Coca Cola pays me a $0.16 dividend quarter-annually for each stock I own
62 stocks x $0.16 dividend x 4 times in a year = $40 dividend earnings in one year
How to Calculate Dividend Yield
Dividend Yield = (Amount you make from 1 stock in 1 year) / stock price
So in our case: $0.16 x 4 payments per year / $32.2 (stock price)
= $0.64 from one stock in one year / $32.2
= 0.02
or 2.0%
This means a 2% annual return or 2% dividend yield. Practice calculating this one, it’s really useful when picking a stock.
If these stocks are in a normal taxed account, the dividend gains are taxed as income. But in a Canadian Tax-Free Account, it is 100% cash in your pocket!
TIP – Keep in mind there is a home-town advantage for us Canadians when buying Canadian dividend-paying stocks. We can make use of the dividend tax credit so we pay less tax on dividends. For example, in 2009, if you lived in Ontario and your total income was $36,850 or less, your marginal tax rate on Canadian dividends would have been zero. (source: moneysense.ca)
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More on Dividends:
A great article for starting out dividend investing: http://www.ndir.com/SI/articles/MS0510.shtml
It also provides an excellent list of good companies with healthy dividend returns.
Dividend.com http://www.dividend.com/
6. Doing Your Research: How to Find the Right Stock for You
As TeenAnalyst.com says, “You wouldn't spend thousands of dollars on a car without doing your research, so why would you spend thousands of dollars on a stock without doing your homework?” Keep in mind there is no hard-and-fast set of rules to evaluate a company; everyone develops their own strategy over time.
- Get ideas from every day life
Warren Buffet advises us: “Don’t invest in companies that you don’t understand, invest in what you know and what makes sense to you.” The best way to get ideas is to take a look around in your every day life. What stands out as a solid product? Is there a reason there’s always a line-up in Tim Hortons even at 2am on a Tuesday? Is there a market with a lot of room for growth? For example, companies supporting green, sustainable lifestyles keep popping up everywhere, maybe that’s a good place to look. Will solar power be the next big energy source? Maybe look at solar panel production companies. Just examples.
This is only the first step to get ideas, then you have to make sure your paying a good price for the company, and that they aren’t carrying a ton of debt or are in trouble for some shady business transactions.
- Find the company’s Annual Report
Most companies make available to the public their Annual Reports that provides all the great information about the company like growth, debt, earnings per share and total shareholder return. There’s a lot of information there but by searching out the summaries and main facts you can get a good idea of how the company is doing. Just do an internet search for any company’s report and it should come up. Look around their website too, it should provide excellent summaries of what a company is up to.
- Growth vs. Value investing
Value and growth investing are almost seen as competing forms of investing strategies. Value investing places emphasis on buying shares below the 'intrinsic value'. The tricky thing about the intrinsic value is that it’s not a number you can calculate, it’s based pretty much based all on opinion. Basically, the intrinsic value is the value of the stock that value investors believe the stock should be worth. For instance, if Bill’s Water Services has a stock price of $20 but because of the company’s good fundamentals, management and potential for higher earnings, the intrinsic value might be $35. Therefore buying at $20 would be buying below the intrinsic value.
Warren Buffet, who is widely considered the most successful investor of all time, is known to have made his billions using a value investing strategy.
Growth Investing is much simpler to explain, it emphasizes on buying shares in companies with both historical high growth rates and estimated high future growth rates.
Typical Characteristics:
- Price to Earnings Ratio (P/E Ratio)
Remember we want to focus on the potential for long-term success of the company. Over the short-term, stock prices can fluctuate because of various things like changing interest rates or the current mood of investors, even the weather! But what matters most over the long-term is company earnings.
There are a lot of different numbers and ratios to look at when evaluating a company such as the Price to Book Ratio, the Profit Margin and Return on Equity to name a few. This is where most people get a bit overwhelmed with stock picking. We’ll discuss the Price to Earnings Ratio or P/E Ratio as it is the most common and well-known ratio that investors look at, and hopefully make it seem not as complicated as it sounds.
It’s a ratio of the current share price to the per-share earnings. The calculation is:
Let’s use a quick example. Take a current market stock price of $20. The company earned $100,000 in 2012 and there are currently 10,000 shares distributed. Therefore, the earnings per share is $100,000/10,000 shares = $10 earnings-per share or EPS. Each share of the company earns $10.
The P/E Ratio is then:
The P/E Ratio is then:
What would your ideal stock look like? It would have a really low price, but the company would be earning a lot of money, right? Experts would say this company is undervalued, since the price is low and the potential for growth is high. This means that the lower the P/E ratio, the greater the potential. But keep in mind, it is only “low” with respect to other companies in the same industry. If Bill’s Utilities has a P/E Ratio of 4, but the average Utility Sector ratio is 2, then Bill’s company has a high ratio, which means you might be able to find better earnings potential elsewhere.
The Earnings Per Share (EPS) can be from the past four quarters (trailing P/E) or from the projected or estimated earnings in the next four quarters (projected or forward P/E). Using both numbers, you can decide if it is a worthwhile company to invest.
Be careful not to invest in a company based solely on the P/E Ratio, numbers can be skewed depending on how corporations calculate their earnings and can be misleading.
The Earnings Per Share (EPS) can be from the past four quarters (trailing P/E) or from the projected or estimated earnings in the next four quarters (projected or forward P/E). Using both numbers, you can decide if it is a worthwhile company to invest.
Be careful not to invest in a company based solely on the P/E Ratio, numbers can be skewed depending on how corporations calculate their earnings and can be misleading.
More on P/E Ratio:
7. Buying Stocks With Borrowed Money
Borrowing money to buy stocks is a risky endeavor and is only recommended for experienced investors. If you don’t have enough money to buy stocks but you believe there is a great deal to be had and you need to buy now, you can 'leverage' money by borrowing from either a bank or from the stock broker with what's called a margin account. When borrowing money this way it’s referred to as 'buying on margin'.
It can be profitable if you do it right, but the danger of buying on margin is that the bank or broker can sell your stocks on your behalf (without even telling you) if your stocks fall below a certain level; they don’t want to take any chances losing their money!
My personal tip: if you plan on trying to buy on margin, buy large companies with solid dividends. They usually don’t fluctuate in price as much and the dividend can cover the interest rate you’re paying to borrow the money.
I should define the term 'leverage' as it's a great term to add to your 'sound smart in front of your business friends' arsenal. Leverage is just a way for risky investors and business owners to increase their money's firepower by borrowing money. Think about a T-shirt company starting out with $1000. They would grow slowly as they could only afford one sewing machine and a small office. If they borrow $5000 from the bank, they are leveraging their business because they can afford another employee, a great website, another sewing machine and a designed logo. Doing so their company can grow much, much faster and with the increased profits they can pay back their loan. But of course it's way more risky if the business fails: leverage magnifies both gains and losses. Most big companies couldn't even exist without borrowing money!
Watch this awesome video on Leverage from Investopedia:
Leverage Video
It can be profitable if you do it right, but the danger of buying on margin is that the bank or broker can sell your stocks on your behalf (without even telling you) if your stocks fall below a certain level; they don’t want to take any chances losing their money!
My personal tip: if you plan on trying to buy on margin, buy large companies with solid dividends. They usually don’t fluctuate in price as much and the dividend can cover the interest rate you’re paying to borrow the money.
I should define the term 'leverage' as it's a great term to add to your 'sound smart in front of your business friends' arsenal. Leverage is just a way for risky investors and business owners to increase their money's firepower by borrowing money. Think about a T-shirt company starting out with $1000. They would grow slowly as they could only afford one sewing machine and a small office. If they borrow $5000 from the bank, they are leveraging their business because they can afford another employee, a great website, another sewing machine and a designed logo. Doing so their company can grow much, much faster and with the increased profits they can pay back their loan. But of course it's way more risky if the business fails: leverage magnifies both gains and losses. Most big companies couldn't even exist without borrowing money!
Watch this awesome video on Leverage from Investopedia:
Leverage Video
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8.The Tricky and Risky Stuff
These days every possible sport and activity is taken to the extreme. Just like an extreme mountain biker would be pretty bored with a leisurely ride by the lake, some stock investors find conservative, safe stocks pretty boring. So they invest in things called Options and Futures, Short and Long, Calls and Puts and Penny stocks,. All of these can be extremely profitable if done properly but also can lead to major losses.
I'll just say that you better have some investing experience under your belt before you start with these investments. Since this is an investing basics website, I won't go into much detail about them but it's nice to know what they're all about so you can consider them in the future. I highly recommend avoiding Penny stock investing. They do cost pennies and they invest in very small, not yet established companies. It's an attractive purchase for the gambling type because some companies do grow into major corporations and can lead to huge 10,000% increases. But those happen so infrequently that you might as well just buy scratch and win tickets. Options and Futures are types of investments that involve signing a contract with another party. Say you have $200 and you want to invest in Burger King. Option #1 is you could simply buy 10 stocks of Burger King on the open market for $20 per stock. But you're a keener and you want to get more out of your $200, and since you are also a huge Burger King fan you know all the financial in's and out's of the company. They also have a big 2 for 1 burger promotion coming up and you believe the price of Burger King will increase over the next few months. So option #2 is you buy an Options contract from a financial investor. The contract expires at the end of July and to buy the contract, you pay the financial investor your $200. Say the current price of Burger King stock is $20, and your options contract gives you the right (not the obligation) to buy 100 Burger King stocks at $20 any time before the expiration date in July. So imagine your prediction was right and the Burger King stock price skyrockets to $40. You can now buy 100 stocks at $20 and instantly sell them for $40, making a solid profit. If you were wrong, you lose your $200 that you paid for the contract, since you have no obligation to buy the stocks. This allows you to use leverage. With only $200, you essentially gain the control to 100 stocks of Burger King, something that would cost you $2000 to straight up buy the stocks on the market. This would leveraging your money by 10 times. But the risk is you can easily lose that $200 and have absolutely nothing to show for it if the price of Burger King drops below $20. Calls and Puts are types of Options. A Call gives you the right to buy the stock at a certain price, and a Put gives you the right to sell stocks at a certain price. This is a crazy concept because now you can make money no matter what direction the stock market goes! If you predict a big recession, you can buy a Put on a company you think will tank. So if that company drops from $50 to $10, you have the right to sell at $50. You would go and buy the stocks at $10 and immediately sell them at $50. Just like you'd buy collision insurance for your car, you can buy options for stocks you own: for a small premium you can avoid a huge loss in the possible event of a crash. When you buy insurance on your stocks it's called 'hedging' in the financial world. Hedging is a way to reduce the risk of owning a stock. For example let's say you buy 100 stocks in Suzie's Slippers Co. for $20 each but you're not completely confident that Suzie will succeed over the next year. So for a small price (like your insurance premium) you could buy a Put option on your 100 stocks of Suzie's Slippers that allows you to sell your stocks at a locked-in price of $20 over the next year, regardless of what direction the stock price goes. So if Suzie's Slippers crashes and the stock price goes to $3, you can still sell your stocks for $20 and avoid losing your money! But if Suzie's stock price goes up to $30, your put option is useless, but that's just like your car insurance premiums that you pay and you never have an accident. Big companies use hedging just like this to avoid huge losses. |
9. Once You Buy a Stock, Stay Up to Date
After you’ve done your research and purchased your stock, it’s always helpful to stay up to date on what is going on with the company. This doesn’t mean reading every article on the company and getting overly worried over issues they face, just keep a basic understanding- it could present good buying or selling opportunities. Yahoo! Finance and Google Finance list relevant articles on any company you search, and websites like MorningStar.com and MotleyFool.com have a huge archive of articles and opinions on companies. Basically, don’t buy it and forget about it.
10. Where Can I Buy and Sell Stocks and Mutual Funds?
The best place to buy stocks and mutual funds is on the World Wide Web. Online services range from low-cost discount brokers to full-service web brokers. The full service brokers put research databases, tax-tips, retirement planning and stock advice at your disposal, but you’ll pay for it. So if you just want to simply buy and sell stocks and mutual funds, discount brokers are the ticket.
A couple options to consider:
Questrade (www.questrade.com) is a discount Canadian broker. I find it very user-friendly and has a 24/7 Live Chat. Only $5 to buy/sell and usually has good promotions
TD Waterhouse (www.tdwaterhouse.ca) is a full-service web broker that provides an exhaustive amount of resources and research tools. It’ll cost you upwards of $30 on your trades though.
Check out the Stingy Investor (http://www.ndir.com/SI/brokers/discount.shtml) to compare the most common Canadian brokerage companies.
A couple options to consider:
Questrade (www.questrade.com) is a discount Canadian broker. I find it very user-friendly and has a 24/7 Live Chat. Only $5 to buy/sell and usually has good promotions
TD Waterhouse (www.tdwaterhouse.ca) is a full-service web broker that provides an exhaustive amount of resources and research tools. It’ll cost you upwards of $30 on your trades though.
Check out the Stingy Investor (http://www.ndir.com/SI/brokers/discount.shtml) to compare the most common Canadian brokerage companies.
11. Have Fun!
I love roller coasters, the ups and downs, how they throw you for a loop and make you a bit queasy, but in the end it's really fun. Stocks to me feel like this. It’s a little sad to see them go down and it feels great when they shoot up, but in the end, if you’ve picked solid companies, they will rise over time. The little bumps don’t matter. I find it fun to check them every morning, see which ones are doing well and follow their respective news headlines. As a young adult, my lifestyle doesn’t require the money I’ve set aside in stocks. Even though GIC’s are safe, and bonds are steady, they aren’t nearly as exciting. So if you’re like me and you like to see the risk pay off in higher rewards, then try the stock market. And enjoy investing and keep it positive. You will learn something about yourself: whether you prefer to ride the Mind Bender roller coaster or if you like to stick to the scenic train ride. Nothing wrong with either.
Sources and Resources
Becoming minimalist http://www.becomingminimalist.com/2011/08/03/escaping-excessive-consumerism/
Guru Focus- dividends http://www.gurufocus.com/news/142791/why-i-am-a-dividend-growth-investor-mcd-ko-jnj-afl-cl-cvx
Get Smarter About Money www.getsmarteraboutmoney.com
Buck Investor http://www.buckinvestor.com/basics/7tips.shtml
Canadian Living money http://www.canadianliving.com/life/money/5_essential_facts_about_how_credit_cards_work_2.php
CNN Money 101 http://money.cnn.com/magazines/moneymag/money101/lesson4/index.htm
Wikipedia – Stock Market http://en.wikipedia.org/wiki/Stock_market_index
Couch Potato Portfolio http://canadiancouchpotato.com/model-portfolios/).
Teen Analyst http://www.teenanalyst.com/askus/research.html
Canada Banks Forum http://www.canadabanks.net/default.aspx?article=Certificate+of+Deposit+-+CD
How Stuff Works - Money http://money.howstuffworks.com/personal-finance/financial-planning/stocks.htm
Guru Focus- dividends http://www.gurufocus.com/news/142791/why-i-am-a-dividend-growth-investor-mcd-ko-jnj-afl-cl-cvx
Get Smarter About Money www.getsmarteraboutmoney.com
Buck Investor http://www.buckinvestor.com/basics/7tips.shtml
Canadian Living money http://www.canadianliving.com/life/money/5_essential_facts_about_how_credit_cards_work_2.php
CNN Money 101 http://money.cnn.com/magazines/moneymag/money101/lesson4/index.htm
Wikipedia – Stock Market http://en.wikipedia.org/wiki/Stock_market_index
Couch Potato Portfolio http://canadiancouchpotato.com/model-portfolios/).
Teen Analyst http://www.teenanalyst.com/askus/research.html
Canada Banks Forum http://www.canadabanks.net/default.aspx?article=Certificate+of+Deposit+-+CD
How Stuff Works - Money http://money.howstuffworks.com/personal-finance/financial-planning/stocks.htm