Investment Advice

[shakalaka]

Hey guys so I am looking for some investment advice here. Let's say that you have $10K to invest, what kind of investment would you be looking into? In terms of return obviously i don't expect anything unrealistic. As far as the time period for the investment is concerned, it should be short to mid range roughly.

I was thinking about stocks maybe but as of now I don't know much about them. I am willing to put in the effort and do the research to learn about them or anything else for that matter if needed. But I wouldn't know where to start. Another option would be real estate but I doubt you can do much with 10k when it comes to that, plus I wouldn't want to get into the hassle of monthly maintenance/payments etc.

Well so basically I am just a little confused as to what I should be investing in to see a decent rate of return. All kinds of ideas are more than welcome.

I have never done anything like this before so I am looking for a little insight into it all if possible. Thanks in advance guys.

[tch7]

Personally, I'd put 50% into stocks, and 50% into an indexed ETF.
Other people would put it all into a high interest savings accounts, others would buy mutual funds, others would buy bonds, some would buy REITs (basically real estate stocks), and some people would hide it under their mattress. It all depends on your risk tolerance, how involved you want to be, and precisely what you consider a "decent rate of return."

Since it's mid-short term, it'd be best to make use of your TFSA contribution room if it isn't already full. Unless you plan to use the money to buy your first house, then you presumably wouldn't want to put it in an RRSP.

Check out some of the links in the "Official Investment Links" thread a few posts down. There are also some good Canadian blogs out there that'll help you weigh your options - milliondollarjourney.com has some good articles that aren't overly technical.

[broken_legs]

Originally posted by shakalaka
Hey guys so I am looking for some investment advice here. Let's say that you have $10K to invest, what kind of investment would you be looking into? In terms of return obviously i don't expect anything unrealistic. As far as the time period for the investment is concerned, it should be short to mid range roughly.

I was thinking about stocks maybe but as of now I don't know much about them as of now. I am willing to put in the effort and do the research to learn about them or anything else for that matter if needed. Another option would be real estate but I doubt you can do much with 10k when it comes to that, plus I wouldn't want to get into the hassle of monthly maintenance/payments etc.

Well so basically I am just a little confused as to what I should be investing in to see a decent rate of return. All kinds of ideas are more than welcome.

I have never done anything like this before so I am looking for a little insight into it all if possible. Thanks in advance guys.

Back in the day, before the government ran the stock market, before there was QE, and QE2, before the federal reserve owned more treasuries than any other investor, before Warren Buffet gambled billions on derivatives, before bizarro world where we are now, you could expect to average 6-10% (WITH DIVIDENDS). That is the long term average of the stock market. If you discount dividends, treasuries and long bonds have actually returned more than the stock market...

Today if you lose money in stocks you are the worst stock picker in the world. I know several (brave) people who have doubled their trading accounts in less than a year. EVERYTHING is going up. The stock market going up is a government sponsored 'wealth affect'. The problem is that everything is rigged, the system is broken, and you could lose everything any day... (wait for the oil shock). We just spent 128 days over the 50 DMA. ????

Trade at your own peril...

If you want a safer investment choice I would consider buying actual THINGS WITH VALUE.

Consider this as an alternative:

Take 3,000 and go buy 90 SMLs from Albern Coin.
Take 3,000 and go buy 2 GMLs from Albern Coin.
Take the other 4,000 and buy a nice battle rifle, a side arm, and a home defense weapon and a few thousand rounds of ammunition.

In 5 years after the USD has imploded and world will be a very strange and scary place, I guarantee your investment will have at least doubled in value and you will have the added benefit of knowing that you are safe and sound.

:D

[max_boost]

Originally posted by broken_legs


Back in the day, before the government ran the stock market, before there was QE, and QE2, before the federal reserve owned more treasuries than any other investor, before Warren Buffet gambled billions on derivatives, before bizarro world where we are now, you could expect to average 6-10% (WITH DIVIDENDS). That is the long term average of the stock market. If you discount dividends, treasuries and long bonds have actually returned more than the stock market...

Today if you lose money in stocks you are the worst stock picker in the world. I know several (brave) people who have doubled their trading accounts in less than a year. EVERYTHING is going up. The stock market going up is a government sponsored 'wealth affect'. The problem is that everything is rigged, the system is broken, and you could lose everything any day... (wait for the oil shock). We just spent 128 days over the 50 DMA. ????

Trade at your own peril...

If you want a safer investment choice I would consider buying actual THINGS WITH VALUE.

Consider this as an alternative:

Take 3,000 and go buy 90 SMLs from Albern Coin.
Take 3,000 and go buy 2 GMLs from Albern Coin.
Take the other 4,000 and buy a nice battle rifle, a side arm, and a home defense weapon and a few thousand rounds of ammunition.

In 5 years after the USD has imploded and world will be a very strange and scary place, I guarantee your investment will have at least doubled in value and you will have the added benefit of knowing that you are safe and sound.

:D

That's a bit heavy for shakalaka to digest lol but I do know where you are coming from. I've been reading a lot of zerohedge the last couple days haha:eek:

My advice to shakalaka is, before you do any buying, learn how the markets work and the type of environment we are currently in. I know you have a law book to read and still trying to get ripped lol but since you are planning to put your money into something, at least know why you are doing it.

[Sugarphreak]

...

[shakalaka]

Ok well as some of you may know that I am fresh out of law school and obviously my priority is finishing my last exam, getting my articles and settling into my career. But i have always thought about investing money into something that would increase the original capital (indeed, who would'nt want to make more money right?)

Eventually when i am well settled in my profession i would be looking into much bigger and serious investments. Most likely real estate investments, considering they are one of the safest one's with more or less guaranteed profit.

In the meantime i thought it would be clever to start looking into investing with not a substantiate amount of money, if anything it'll just teach me about the whole thing and how it works. Plus i kind of have a bet going on with my dad that i can figure out some decent investments. He's even offered me capital if i can earn him some profit. But all the jokes set aside, i personally want to learn about this stuff, considering the fact that i don't know much about such things because all i ever did was ready and study my school books. Haha

I am willing to put in the effort and learn about stocks or other things. Basically read up or do whatever it takes. If you guys can direct me to some good resources where i can learn about this all would be helpful as well.

(Typing on the iPad so please excuse any errors or punctuation mistakes.)

[broken_legs]

Originally posted by max_boost


That's a bit heavy for shakalaka to digest lol but I do know where you are coming from. I've been reading a lot of zerohedge the last couple days haha:eek:



Ya im a preachy rant roll around here lately... lol



But Shakka, just know that people who have been investing for a lifetime have lost fortunes in this market. The rules are changing, there is no normal rate of return anymore. The markets are broken. Things that have worked for the last 70 years, aren't working today, and the things that are working now (BTFD) might not work tomorrow.

But if you really want to try the stock market out, just go take $500 and buy a couple shiny silver coins.


EDIT:
http://forums.beyond.ca/st/309731/official-investment-links/

Start reading....

IF you can understand how stocks are valued, and balance sheets, and income, P/E etc... that would have helped you out5 years ago.

Now you have to pay attention to high finance and government intervention in the markets for a large part of whats going to happen.

Technical analysis is huge IMO (even though many of the FOR SURE patterns have been broken lately). Learn your candlesticks, chart patterns, volume, etc..

Learn the market structure, futures, options, warrants, all the different exchanges

Watch the global markets. Watch the Emerging markets. Watch commodities. Know what commodities affect the economy the most, and vice versa.

It's a never ending journey. Tonnes of good reading for you in DavidI's thread.

[shakalaka]

I understand that stocks are a very risky market. I would never invest blindly into it, without studying properly and having some sort of guarantee for a favorable outcome. Although obviously there are no guarantees. I guess what i am saying is that I'd make sure that i do my due diligence before i put any money in something like that. I just suppose that i am willing to learn into details about it.

[MyMan23]

To: broken_legs, you make some very astute comments. They have been spend thrifts since the late 60's, but over the last 5 years or so something changed and the US has gone on a bender like never before. They don't even pretend to be fiscally responsible anymore.

I give them 5 to 10 more years of this nonsense, with ever rising inflation, then they lose world reserve status and then who knows what happens.


To the OP, I could not tell you what to do, the system has been so muddied up thanks to government/central banking interference there's no telling whats real and whats not.

[Sugarphreak]

...

[broken_legs]

Originally posted by Sugarphreak


Learn to weather the ups and downs without panic, if the stock dips below what you expected as the risk you set... think seriously about selling it and recouping your loss in your next stock.

Good advice in there from my bro Sugardude. - Also forgot to say:

HAVE A PLAN

You need an investment thesis

"I Think this stock will go to this price because XYZ or when ABC happens"

Treat it like a science experiment. There needs to be conditions met when it's failing, this is when you sell. "I will sell if earnings are below this level, or if the price drops X% below my purchase price"

Likewise you need conditions to tell you the investment is working too.

If that doesn't happen, or there is a material change in the stock, or the economy etc..,re-examine your thesis. Do not become a victim of 'Thesis Drift' where you make excuses and hold onto something even though your original reasons don't apply anymore.

^^ I've victimized myself once or twice. Very very hard lesson to learn. I catch myself all the time doing stupid shit with my money... :rofl: Discipline!!! I keep notes on mistakes I have made and read them every couple of months to remind myself. If you are like 99% of other retail traders despite all the advice we give you, and all the books you read, you will inevitably learn the hard way too.

[dawerks]

Pay off your debts. Done?
Save more for a place of your own. Done?
Have your $5K 'emergency' fund. Done?
Maxed out your RRSP contribution. Done?

Now, still have 10K? Buy one of these 6 stocks in your TFSA. TD, RY, CM, BNS, NA, BMO.

Done.

[davidI]

Good article on self-directed investing

http://www.financialpost.com/personal-finance/become+savvy+self+directed+investor/4377576/story.html

[ZenOps]

Uh oh.

I see an ugly ugly pattern in the stock market today. Not that I'm an expert or anything, but anyone can tell that a storm is coming when the wind starts blowing a certain way...

Tomorrow could be the start of a bloodbath. Silver and gold will probably not be spared if the whole market dives.

[bitteeinbit]

If you are like 99% of other retail traders despite all the advice we give you, and all the books you read, you will inevitably learn the hard way too
True. Only one way to learn: the hard way.

On a related note I'm hoping you can give me some advice regarding a particularly bad situation I’ve put myself in.

Background info:

I've traded CLQ for some time now with success. Basically, it's a lithium mining company, I\m sure many of you know about it. Obviously lithium is found in just about every electronic devices nowadays and there's a huge demand for it. The company planned to start mining battery-grade lithium around 2012 with mine and facilities construction beginning around spring-time this year. Late last year it finished a feasibility study regarding the amount of minerals it had (46 million tonnes containing roughly 1.19% lithium oxyde). The mine could therefore operate for 15 years and would be the biggest North American producer and third or fourth biggest worldwide with around 20% of world production.

So I've traded them successfully a few times in the past (never holding very long), but always selling too early and missing the big spikes. Given the potential they had, combined with the fact that I always sold early, I was tempted for several months to just keep a position for the long-term. So early this year I waited for an entry-point. And by long I mean i planned on keeping it for maybe 2 years or so to stay ahead before production started and revenue started pouring in (they got financing worth several million in late jan this year, which also caused a large drop in share price).

Now, fast-forward to recently:

They announced that they aren't sure how many resources they are exactly sitting on and have hired an independent review of their findings to find out just how much they have. At the moment no one knows if there is a mistake. The review should be up in two weeks, so who knows what it will say... A few extra months will be needed to inspect the minerals as it's not an easy process.

So obviously the stock plummets... 30%!... I'm shocked obviously and unsure as to what to do. Late afternoon the same day, I considered closing my position and shorting with double the shares hoping to recoup some losses but decide against it. Turns out i should of done just that as the next day it went down another 19%. It then went back up 39% and today it went back down 12%. So basically I've lost almost half my position. Now I had 5000$ in it, so it's not the end of the world but it's not a good feeling either as I'm no millionnaire and that money (all my trading money in fact) was for a project down the road in a few years. Before people start saying I'm an idiot for not putting a stop: I know but it's a risk I took. I always put a stop if taking going long for a few days/weeks. But considering this was going to be a very-long position (adding along the way if it worked out), I decided against any stop-losses as I find big players who control the market often make stocks fall at 5 or 10% to activate people's stops. I've seen it with CLQ as well.

Anyways, the way I see it my options are now:

1) Stick with it as I've already lost 2000$ or so already. Write it off, forget about it completely and hope it eventually goes back up within a year or two (I can wait). Theoretically, even if they have less minerals than anticipated they'll still be a large producer in the coming years.
2) Take my losses and move on (with a lot less cash)
3) Wait to see when the reports come out and if they turn out being positive and it starts going back up, add to the position to lower my buy-in price.

So far I've been waiting and I think I'm tempted to just wait it out some more as that's what my original plan was. Any ideas?

[shakalaka]

Thanks a lot for all the suggestions, help and articles guys. Clearly I have a lot to read and look into, before I can even think of putting any money into the stocks. That being said stocks isn't the only option I am looking into, I would be willing to put the money in anywhere that could be a potential good investment.

I am going to be checking out the websites mentions and links posted to try and understand as much as I can. Feel free to add to what has already been said. :D

[roopi]

Originally posted by bitteeinbit
Anyways, the way I see it my options are now:

1) Stick with it as I've already lost 2000$ or so already. Write it off, forget about it completely and hope it eventually goes back up within a year or two (I can wait). Theoretically, even if they have less minerals than anticipated they'll still be a large producer in the coming years.
2) Take my losses and move on (with a lot less cash)
3) Wait to see when the reports come out and if they turn out being positive and it starts going back up, add to the position to lower my buy-in price.

So far I've been waiting and I think I'm tempted to just wait it out some more as that's what my original plan was. Any ideas?

Ride it out now. Wait to see what the study says. Your initial plan was to be in this stock long term. Short term there may be a problem in the size of reserve (or not). I'd ride it out until the report comes at least. If they have the reserves they originally claimed they did it will go up just as fast as it came down. If they don't well chalk it up as a lesson and sell as soon as you read the bad results.

[broken_legs]

Originally posted by roopi


Ride it out now. Wait to see what the study says. Your initial plan was to be in this stock long term. Short term there may be a problem in the size of reserve (or not). I'd ride it out until the report comes at least. If they have the reserves they originally claimed they did it will go up just as fast as it came down. If they don't well chalk it up as a lesson and sell as soon as you read the bad results.

I'd be calling the company and asking questions once a week.

Check the LII and see what the action is telling you

What is the Mutual Fund holdings? Are they dumping this thing?

What was the PP price? Where is the stock price in relation to that?

Sometimes institutions will short a stock to hedge their warrants - what is the short position?

OOops we accidentally miscalculated our reserves sounds fishy as hell, but I dont have the news release to read - Who are the directors of the company? What history do they have bringing online lithium deposits? Is this a legit management team? What companies were they involved in before, what happened to those stocks? Who did the private placement? Who is the largest shareholder? Is there any insider buying/selling?

What's your plan for this stock? Sell when they go into production? Hold until the resource is shored up and they are bought out by a major?

Lots of questions you need the answers to before you can make an educated decision IMO.


EDIT:

Bought deal was at 1.50 for 126,000,000
imagine how those shareholders are feeling right now 1 week later LOL :rofl: It could always be worse!

[skandalouz_08]

Shakalaka you have PM

I'll throw out the same offer to anyone else who wants it. I'm a Financial Advisor and would be more than willing to sit down with anyone who is just getting started or looking for more information on investment options and what advantages or disadvantages there are, depending on the investment choice. I'll do my best to give unbiased suggestions and advice. PM me if you are interested.

Personally, I wouldn't suggest any first time investor jump into the stock market(self-directed) without watching it for 3-6 months and taking either a stock course or doing a large amount of reading and studying. While it's a great way to make money (provided you have some idea what you are doing) but, its not for everyone and definitely not for the first time investor in my opinion. While I wouldn't suggest it, people are free to do what they want with their money.