Stocks! anyone play with them?

BC_hunter

If you had 5k - 10k of money to put into a stock, where would you put it?

Also, what does everyone think of the oil prices? is oil etf, stocks, etc a good bet or is there going to be more price drops to come?

Rorschach

Parking it in some form of RRSP would be a better bet, IMO, given the current market volatility. There is also the TFSA, if you haven't already taken advantage of that. And I don't see oil climbing back up any time soon, so the loony is likely not going to climb back up any time soon either.

Rico

Eh, trying to play the stock market is a fools game. Monkeys throwing darts blindfolded can pick stocks better than expert investors.  If I had $5K to invest, I'd put it in index funds - reasonably steady growth, and the broad mix of funds ensures you won't get wiped out with something like Enron.

With that being said, silver seems to be a pretty safe bet at the moment - it will always retain *some* value, and it's currently a bargain (~$14/share, compared to $40-50 a few years ago).  It tends to run inverse to the stock market, and we're due for a correction in the next few years - my guess would be summer/fall of 2016, with the US presidential election and all.

frillyfun

Check out this guy- a link to his blog was posted here before, and it seems pretty cool.
http://www.mrmoneymustache.com/

He suggests index funds too.

SunDance

TLT & XLE

BC_hunter

I will check out that link.

Hou.to and hod.to (both etf)  have caught my interest. seems like it could turn upwards with the current oil pricing.

I use questrade and etfs are free to buy but when you sell you then pay the comission.

Mustache

I have questrade and do some TD bank dividend stocks and other stuff there, but really only for long term gain...hopefully anyways. Return so far 4%.

I am a big advocate of Index funds. Particularly TD bank e-series index funds. Very low Management Expense Ratio at under 0.45% (depending on the fund). I had annual return of 17% this past year. Everyone I know had more active managed portfolios and at best got the same ROI that I did, but with 2% higher MER. Bottom line, I outperformed them without investing much time and with little to no market knowledge simply by keeping the expenses to a bare minimum.

Playing the stock market in my opinion is only an option if you already have saved up your retirement nest egg and then some extra. Before that and especially if you still have a mortgage or other debt, no one can afford playing stocks.

My 2 cent.

ETA: I'm a big moneymustache believer and plan on retiring in 15 years with about 55. I rather spend less now and live richer earlier on, although I still do spend some money on wasteful things.

Tennee

RE:  oil, the Saudis are playing a game to 1) idle some North American shale production by driving the price point  low 2) impact some OPEC members they don't like and 3) find what the 'floor' price is, because fraking/shale isn't going away and they know it.  Very volatile, and they will purposely continue to monkey with the market.  I also avoid commodities like the plague.

If I had some scratch to play with, and it was individual equities I was interested in, I'd seek undervalued / distressed but solid companies and take a medium horizon position - buy low, sell on the gradual uptick but before it tops out, take your profit.  

Agree with @Mustache‌ -  avoid gambling.   Day Trade / market 'timing' et al is like playing craps to me.  Avoid...

Mr_Brown

Long term?? Growth stock mutual funds or Vanguard 500 fund. 

JaaD

$5-$10K in stocks for a novice. NO! Don't even try. Silver & Gold - nope, both are in a down trend.

Right now the indexes are a tad over bought so unless you average, ie. put some in each month, not all at once. The January Effect is starting so if you buy now, be prepared to sell in 4 months.

My free money is going into no load / commission bond funds like TIYRX, PRHYX, MWHYX, JAHYX, STHYX, PHYDX. Not sexy but a good steady return and very low volatility. Buy more on dips.

If you have your heart set on trading stocks, first spend $25 and get the book Chart Patterns (2nd edition) by Thomas Bulkowski.

Of course, since it's the New Year, you can do the Dogs of the Dow buying thing.

allievo

Argh! Don't gamble on stocks!  Your best bet (by far) if you don't know too much of what you are doing is to invest in a passive index fund.

What is your timeline for investment???  You should be planning on having the money invested for at least 5 years.  Investing in stocks can be risky, as the market cycles.  To reduce your risk you should be intending on investing for a longer time period.

allievo

http://www.marketwatch.com/story/warren-buffett-to-heirs-put-my-estate-in-index-funds-2014-03-13

Tennee

@BC_hunter‌ I took it, and responded such, that you are specifically looking for info/advice on equities.  So I assumed that you have other stuff in order - retirement, etc.  Is the $5-10K 'tinkering' funds - in other words you could eat this no sweat and it doesn't impact things like emergency $, retirement, etc. etc. etc.  This is play money, right?

I would avoid - like the plague - any gimmicks:  timing, pattern analysis, etc.  Go play Blackjack, you have better odds.   What do you want to accomplish with a stock purchase?  Medium/long term gain?  Blue chip holding for long-term gain / dividends?  Are you talking 'day trading'?  Again, see Blackjack...

BTW - see what Oil did today?  

BC_hunter

@Tennee‌ ;  yeah... got my long  term funds sorted out and being put to good use. 5k is some play money to tinker with. Day trading (maybe every few days or so) is/was kinda the goal but not necessarily. In and out with small worth while gains is all I hope for in the long run.

I suck at blackjack. lol

Tennee

Ok man, I can't give you any advice here as I've never played the short - gain game.  I don't have the time, patience, or risk tolerance for this.   I sure wouldn't buy Oil right now....

BC_hunter

@Tennee‌ ;its OK. I appreciate the feedback anyhow.  

Tennee

Wonder if @Tiger‌ would opine here.  Bet I know what he'll say too....

HildaCorners

Day Trading is a losing game, unless you can eliminate commissions. Commissions will get you in the end, and they aren't included in any of the "beat the market" books.

If you have money to lose, you can play the game, but the rules are the same as at the casino ... stop playing when you lose your initial amount, never go in deeper, not even by 1¢.

If you're trying to make real money, follow these steps:

1) pay off ALL debt except your mortgage (instant 15% gain if you stop carrying credit card balances)

2) fully fund your 401k or equivalent (and invest that in index funds or other boring stuff)

3) build up your emergency fund, and that goes in a savings account or CD ladder

4) speed up paying off your mortgage

5) Now, you can play with the market with what's left over.

Tiger

Short term/day trading is a way to make a bunch of money in commissions for your broker, but that's about it.  I remember the late 90's when the Internet was new, and everyone was a genius stock picker making a killing day trading.  Of course, the only reason it worked is because they were is a rising market and happened to just get lucky. Worked really well right up until it didn't.  Everyone thought they were a genius, but eventually the market turned and all those geniuses went broke.

I did reasonably well buying and holding about a dozen stocks during that time (1996-2008), even though I held on through the 2000 and 2003 market declines.  I am almost completely out of the stock market right now, I hold one stock that I've owned since 1999 because I believe it's a solid company that will do well over the long haul.  I am also continuing to make equities part of my 401k strategy, though I'm pretty conservative at the moment.

I share the concerns others have expressed about the current high valuation of the US equity markets, I would not be comfortable moving a big block of money into stocks in any form right now.  I think it's more likely we'll go to 1/2 the present value than double the present value over the next 2-5 years. Using Dollar Cost Averaging to make a long term investment into the markets is not unreasonable though.  That way you can do okay over the long haul no matter what happens in the short term.

If the market goes up, you made money.
If the market goes down, then you get more value from next month's investment.

I'm a big fan of Vanguard in particular and Indexing in general.

HildaCorners

^^^

And I forgot to mention I'm also a Vanguard S&P 500 Index Fund fan.

PhilosophicEntrepren

It's wrong to throw up your hands and say just put it in index funds. The only people who benefit from that is Wall Street fund firms. They have a vested interest in convincing Americans that "nobody can predict the market." Really, well then why should I give YOU my money to invest? You're basically guaranteeing me that I can't do better than the market, and I could do that on my own. And "buy and hold" is a bunch of shit, too...how did that work out for people who needed their money in the bear market? If a stock's not performing, dump it unless you have very specific reasons for holding it.

Use the Investors Business Daily CANSLIM momentum investing method. Spread it among 4-6 stocks. Be sure to use the selling triggers like they teach you or you'll hold onto shit too long. Make money. Lather, rinse, repeat. If you buy 5 stocks and choose wisely, one or two will go down a little bit and your selling triggers will kick in at a 10% loss, one or two will make a little money over the course of a year or two and offset the small losses on the first set, and one or two will go on a prolonged upturn and double or triple the money you put in it.

I don't have time to pay attention to stocks anymore, and have been focusing on investment homes (since before the market upturned, and please, DON'T listen to some fraud on the radio who tells you to come to his seminar and learn how to make $20,000 a month using other people's money....they're full of shit). But the above method made me 15-30%/year returns in both strong and weak markets for a period of 7-8 years when I was diligent about it.