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AV's Coin

Investing in the stock market - Discussion

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I often think about this route and just letting the pros handle everything. For now I enjoy getting up and checking the markets.

You have to be extra careful with the pros. Careful about how they make their money. It could be at your expense. Fund managers are one thing but every trader is never to be trusted. Ever. Theyd all go Wolf of Wall Street on you if you let them.Ive always self directed my investments and Ive always outperformed the market.

IF you have high blood pressure or a history of heart attacks in your family ETFs with solid track records are a good bet.

EDIT: REITS can be OK as well for income. Although the worsening vacancy rates in Alberta could be a problem for ones high in commercial office space.

Edited by Offensive Threat

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You have to be extra careful with the pros. Careful about how they make their money. It could be at your expense. Fund managers are one thing but every trader is never to be trusted. Ever. Theyd all go Wolf of Wall Street on you if you let them.Ive always self directed my investments and Ive always outperformed the market.

IF you have high blood pressure or a history of heart attacks in your family ETFs with solid track records are a good bet.

EDIT: REITS can be OK as well for income. Although the worsening vacancy rates in Alberta could be a problem for ones high in commercial office space.

In Canada, you either go through an online discount brokerage or have a registered financial advisor, who's job is to sell you stuff. So people's best bet is to go with an online discount brokerage. Make sure your mutual funds have no fees to buy and sell.

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Where do I buy organic food producer stocks??

I don't think many or the main organic producers are independent. Most have been acquired by larger food companies.

WhiteWave Foods (WWAV) acquired Horizon Organic and Earthbound Farms.

Hain Celestial (HAIN) acquired Earth's Best, Health Valley among others.

General Mills own Cascadian Farms to balance out their roster of sugary cereals.

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I concur this is a great book to start with - maybe should be required reading in school. I have read it but will probably read it again to refresh.

My next priority may be a small development property and/or rentals! I am a wannabe Scott McGillivray

If you've read that book and continued on from there, you probably have more expertise than I have...I've done very similar to what he's proposed there - have the payment deducted directly from my paycheque every two weeks and watch it grow boring and steady.

On the Scott McGillivary front, he actually visited my place to reno the basement for his first show (I'm in Toronto) but I decided I wanted to design/build it myself! We actually lived in that basement suite for the first couple of years because we could rent the main floor for more money...renters paid our mortgage until we had kids.

The house has been an amazing investment for both rental income and capital growth...if you're somewhat handy already it's by far my favourite way of watching my investment grow.

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Coincidentally here are some views against Actively Managed Mutual Funds and ETF's and some praise for Index Funds

Cramer: Beware funds trying to steal your money


Jim Cramer's head is spinning with all of the options out there for mutual funds and exchange traded funds (ETFs).

How the heck are investors supposed to know which ones to invest in when there are so many of them?

"The important thing is this: You have all sorts of ETFs and mutual funds out there, and they can all advertise. The companies that run these funds want your money. And of the biggest mistake you can make as an individual investor is to give it to them, with a few significant exceptions," the "Mad Money" host said.

If you are an investor who owns mutual funds, Cramer thinks you're probably getting hosed. There is just no other nice way to put it.

Disclaimer: Cramer is not referring to all mutual funds; his main beef is with the actively managed mutual funds where there are people deciding the stocks and securities to buy and sell. Because these managers don't get paid for delivering performance, they collect a fee from investors regardless of the amount of money they make for their client. The amount of money they make depends on the size of assets that are under management. That means their biggest incentive is not for an investor to do well; it is how much of your money they can bring in.

To make matters worse; mutual funds also charge some of the highest fees in the business.

Cramer recommended that the best strategy is for an investor to manage their own portfolio of individual stocks. But for those who do not have the time or do not want to do so, Cramer has a few tips to invest in mutual funds.

"You want a cheap, low-cost fund that mirrors the market as a whole. One that mimics the Standard & Poor's 500," the "Mad Money" host said. "Index funds have ultra-low fees, and with an S&P index fund, you've got a vehicle that will let you participate in the strength of the stock market without having to spend the time picking individual stocks."

As for ETFs, these are bad news, too, for those who are not market pros or managing a portfolio of individual stocks. Many ETFs rebalance every day, which can beat down any long-term performance.

One exception is the GLD ETF, as Cramer thinks of it as a simple way to play gold. But, in general, Cramer does not recommend playing around with ETFs.

"At the end of the day, I think a cheap S&P 500 index fund is the least bad way to passively manage your money—better than the vast bulk of actively managed funds," he added.

Cramer thinks an investor can beat the performance of an index by picking the stocks themselves. However, if you are not up for that task, steer clear of managed mutual funds and ETFs.

Edited by AV's Coin

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So tell me the truth, how much money/profit have you guys made playing this stock market?

i personally don't play the stock market - as discussed throughout the thread I'm the slow-and-steady, boring type of investor (again, because the people i listen to say the tortoise always beats the hare (who's jumping this way and that way, stopping and starting)). rather, i've got mutual funds growing steadily and a home that keeps growing in value.

so with that type of investment system I've made about 10% yearly which compounds year over year. sorry if I'm talking about stuff that's abundantly understood, but compound interest and TIME are the magic resource that any young person can use to turn himself into a millionaire very easily.

I won't give my exact numbers but 10% compounding year over year looks like this in the real world:

Starting with $1000 and adding $100 every month for 10 years comes to about $23,000. Not that much actually, but over 40 years (a 25 year-old letting compound interest really work until age 65) turns into almost $700,000

A realistic view is that a guy should be able to find some way to put in a little more over the course of his working life as he starts making more money (start with $100 and slowly grow to $500 let's say).

So $1000 to start and an average of $300 monthly over 40 years at 10% becomes almost $2,000,000

edited-i'd originally done some bad math

Edited by nzan
  • Upvote 3

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So tell me the truth, how much money/profit have you guys made playing this stock market?

I don't really know the percentage as right now. I do make a few hundred a year off dividends. I'm am still young so don't have a very big portfolio. My goal is to eventually make 100k a year off dividends. I also don't take any money out of my investment account, it all gets re-invested

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i personally don't play the stock market - as discussed throughout the thread I'm the slow-and-steady, boring type of investor (again, because the people i listen to say the tortoise always beats the hare (who's jumping this way and that way, stopping and starting)). rather, i've got mutual funds growing steadily and a home that keeps growing in value.

so with that type of investment system I've made about 10% yearly which compounds year over year. sorry if I'm talking about stuff that's abundantly understood, but compound interest and TIME are the magic resource that any young person can use to turn himself into a millionaire very easily.

I won't give my exact numbers but 10% compounding year over year looks like this in the real world:

Starting with $1000 and adding $100 every month for 10 years comes to about $23,000. Not that much actually, but over 40 years (a 25 year-old letting compound interest really work until age 65) turns into almost $700,000

A realistic view is that a guy should be able to find some way to put in a little more over the course of his working life as he starts making more money (start with $100 and slowly grow to $500 let's say).

So $1000 to start and an average of $300 monthly over 40 years at 10% becomes almost $2,000,000

edited-i'd originally done some bad math

I use as similar method to yours, investing in insured, slow climbing investments and of course property. I just never understood the stocks option, to me it seems like gambling either win big or lose it all with a lot of jargon to describe this gambling type of activity. Only people in the know would do well on stocks.

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Coincidentally here are some views against Actively Managed Mutual Funds and ETF's and some praise for Index Funds

I find the whole stock market analyst industry to be very cost inefficient. You have hundreds of analyst being paid probably billions of dollars in North America looking at more or less the same list of companies on TSX and NYSE, they all more or less come to the same conclusions about them. Even if not, whether Apple's P/E is too high or too low is a matter of opinion. Beyond the financial statements everything is subjective, non-scientific and anyone's guess. More over, the analysts from larger institutions are subject to the investment banking division's pressure to give a company bias favourable reviews.

If there is one industry that can be nationalized for efficiency, it should be the stock analysis industry. Let's NOT have so many analysts and money management firms not really competing with one another for billions of dollars of fees. Let's just have one governmental organization hiring the best CFA's and economists get them to do their due diligence.

Edited by Hugor Hill

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I find the whole stock market analyst industry to be very cost inefficient. You have hundreds of analyst being paid probably billions of dollars in North America looking at more or less the same list of companies on TSX and NYSE, they all more or less come to the same conclusions about them. Even if not, whether Apple's P/E is too high or too low is a matter of opinion. Beyond the financial statements everything is subjective, non-scientific and anyone's guess. More over, the analysts from larger institutions are subject to the investment banking division's pressure to give a company bias favourable reviews.

If there is one industry that can be nationalized for efficiency, it should be the stock analysis industry. Let's NOT have so many analysts and money management firms not really competing with one another for billions of dollars of fees. Let's just have one governmental organization hiring the best CFA's and economists get them to do their due diligence.

Taking your comments regarding how inefficient things are currently at face value (I don't dispute them), I'm not sure your solution is the best one. Removing the bulk of analysts etc. working today, and keeping supposedly the best and brightest to reduce costs then surround them with bureaucrats would do little to reduce groupthink. Also, it would be virtually impossible to remove analysts that are not performing since they would now be federal workers, unless they were hired as contractors.

And, could/would the management firms trust the output? How much input would the bureaucratic overseers have over communicating results of analysis? The last thing investors deserve is to have the financial analysis being politicized. And wouldn't the management firms still have analysts to tweak whatever the government feeds them, so that they can market their edge over competing firms? If so, then the firms would likely out-compete the government for the best and brightest since they have more funds to attract the talent, reducing the quality of the government-run analysts.

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Taking your comments regarding how inefficient things are currently at face value (I don't dispute them), I'm not sure your solution is the best one. Removing the bulk of analysts etc. working today, and keeping supposedly the best and brightest to reduce costs then surround them with bureaucrats would do little to reduce groupthink. Also, it would be virtually impossible to remove analysts that are not performing since they would now be federal workers, unless they were hired as contractors.

And, could/would the management firms trust the output? How much input would the bureaucratic overseers have over communicating results of analysis? The last thing investors deserve is to have the financial analysis being politicized. And wouldn't the management firms still have analysts to tweak whatever the government feeds them, so that they can market their edge over competing firms? If so, then the firms would likely out-compete the government for the best and brightest since they have more funds to attract the talent, reducing the quality of the government-run analysts.

Yeah I agree with what you are saying. Information is cheap and everyone can produce it so even if there is a central governing body handling this inevitably there will be lots of private competition.

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Yeah I agree with what you are saying. Information is cheap and everyone can produce it so even if there is a central governing body handling this inevitably there will be lots of private competition.

Listening to analysts is good, but you have to be able to use your own knowledge to decide if that's the best choice for you. The market is difficult thing.

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Listening to analysts is good, but you have to be able to use your own knowledge to decide if that's the best choice for you. The market is difficult thing.

Yeah naturally. They are getting paid a lot of money to produce redundant information and at the end of the day YOU have to decide for yourself.

So better if I just decide for myself with no consultant fees, or trust the big govt run pension fund managers so I don't have to think about it. Any where in-between like these mutual fund managers and private investment managers are IMHO economic waste and inefficiencies; just lots of middle men making billions off of our money.

But of course the real world doesn't operate that way.

Edited by Hugor Hill

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I stack silver.

If silver ever gets up to $100 an ounce, I am gonna be loaded!

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