Wednesday, December 22, 2010

Adventures In Stock Investing

If you’d told me a year ago that I would be doing a post on stock investing I would have laughed in your face. Seriously. Then I would have lectured you about the volatility of stocks, their meager returns, and why real estate was such a better way. So it is with a bit of sheepishness and humility that I now say “I was wrong.” Investing in stocks can actually be . . . (ahem) smart.

So how did I get involved?

I have a co-worker who mentioned that her husband invests in stocks. Not only that but he’s trained hundreds of people on how to do so and is quite successful. This is his job – just buying and selling stocks - and training others how to do it as well. He has his own system that he’s developed and she wondered if I would be interested in talking to him. I asked about his returns (which were enough to intrigue me) and then got an email from him a little later. He explained his system to me and told me how it works. And he showed me his record. These were enough to convince me that I’d stumbled onto something spectacular and after some thinking and praying told Jobina “We’d be fools not to try this out!” So I signed up for his coaching plus you pay a monthly fee to be subscribed to his website (where he publishes stock picks as well as runs analysis on the market to help you pick your own).

I have now been doing it a little over 6 months and in that time I have made over a 35% return. I think that’s pretty good and I don’t know if I could do that again (or if I could make more) but I’m content so far. I get into stocks that have momentum and then sell them once they reach the targets that my coach has set out. The goal is never to hold onto any stock for more then 5 days. My biggest loss was about $300 and my biggest gain was just under $1000 (that one was a bit lucky!). I started out with a self-directed TFSA (at Questrade) maxed out to $10,000. By the way, the TFSA is an investor’s dream – you will never be taxed on any of your earnings! I love my TFSA like my own children. To me, it is a gift from our government - take advantage of it while it’s still around!

I found out that investing in stocks can play havoc with your emotions, especially at the start. When you “win” you get a rush and when you lose you feel down and depressed. And yes, you will lose. I found out that I’m not good at taking losses (never had to in real estate) but that it is a necessity in stocks. Luckily I have won much more then I lost. This kind of investing is much like gambling (although farming is a form of gambling too – so is every form of earning income) and so I don’t think it is for everyone. I’m really enjoying it and while I wouldn’t invest everything I have in stocks, I’ve definitely changed my mind about them. My monthly fee that I pay my coach is easily offset by my gains – and if I had more money to invest with the cost to be would be even more reasonable.

When I told my Mom about my stock investing she laughed and said that is what my grandpa (who died when I was 8) also was into. I like the fact that I discovered this on my own, yet it connects me to my grandfather. I think that he would smile, knowing that I’m investing like he did.


Terry L said...

Told ya... ;)

Terry L said...

By the way, are you around at all the next few weeks? Would love to compare notes in your strategy and mine.

Mark said...

Sure, email me and we can go for coffee. said...

Hi Mark,you've got me curious, can you send me some more info on this?



Mark said...

Hi Rick, I just need your email address and I'd be happy to give you some more info.