new investor

[raxdax10]

Hi, I'm 20 years old and I have $10,000 sitting around that i want to invest. I was wondering what's the best thing to invest in if im an aggressive investor that can hold the investment for 15-25 years? my current banker is rbc but i could go with td too if thats the best option. Is this the best time to invest? Should i wait for a better time to invest if this isnt the best time?

[SkimGuy]

I would recommend TD e-series Index funds and buy broad based index funds. If you want to do a buy and hold strategy, those types of investments are the best kind, along with Index ETFs.

Once you reach around 30,000.00 portfolio wise, start looking into Canadian Couch Potato portfolios. Site is http://canadiancouchpotato.com/ . The reason for this is high commission fees will likely eat into your 10,000 pretty quickly.

Essentially, Couch potato investing is buying broad index ETFs (i.e buying almost every stock in the market), adding onto them periodically and holding onto them until retirement/when you need the money because there is empirical evidence that passive investing, for 99% of investors is better in the long run than trying to pick winning stocks.

As for being the best time to invest - Nobody knows despite what some people may claim. If you're worried about putting all your money in at the wrong time, you can dollar-cost average your purchases (for example, put in 1000 a month for 10 months) to make sure you'll get at least some of your money in at the right time. However, the general consensus is the earlier you invest in life, the better.

[valinrace]

Its better to invest your money on stocks but I think you should attend some seminars first, so you will understand and know on which one you will invest your money.

[MarcFromOttawa]

Don't listen to the above poster.

You don't have nearly enough money to start picking individual securities.

Be wary of seminars and other sales tactics.

[ccyk]

if i were to start with couch potato, i would be still trying to break even

My stock picking lead to my 500% gain over ~5 years.

$10,000 is enough to pick 4 stocks individually, even with $29 commission. 5 stocks if you go for a cheaper broker

[raxdax10]

if i were to start with couch potato, i would be still trying to break even

My stock picking lead to my 500% gain over ~5 years.

$10,000 is enough to pick 4 stocks individually, even with $29 commission. 5 stocks if you go for a cheaper broker

wouldn't I need an advanced knowledge of stocks to know which ones are good to pick so I don't lose money?

[boipinoi604]

wouldn't I need an advanced knowledge of stocks to know which ones are good to pick so I don't lose money?

Yes and unless you have the skills of a security analysis, you are better off with buying the index.
- it's self diversification
- get the market return
- get the low fee

Incidently, 10k is enough to couch.
-2.5k CDN index
-2.5k US index
-2.5k INT index
-2.5k Bonds

[boipinoi604]

if i were to start with couch potato, i would be still trying to break even

My stock picking lead to my 500% gain over ~5 years.

$10,000 is enough to pick 4 stocks individually, even with $29 commission. 5 stocks if you go for a cheaper broker

6x your money, good on you.
Where did you learn how to pick stocks? I've move most of my dough in index, and planning to stock pick with a couple of Gs. I'm wondering where I can get the know-how to stock pick.

[charliebrown]

6x your money, good on you.
Where did you learn how to pick stocks? I've move most of my dough in index, and planning to stock pick with a couple of Gs. I'm wondering where I can get the know-how to stock pick.

Back in 2008/9, if u had the $ and guts to buy really beaten up stocks, 500% was achievable -- the "phoenix" stocks that rose from the ashes.

Sometimes, it's pure luck, other times, it's your understanding & conviction about a company, so that you are buying when everyone else is throwing the baby out with the bath water.

If you want more recent examples, then buying up gas stocks in May/June could been very profitable (~20-60% in two months) eg Celtic, Legacy, Niko etc

[boipinoi604]

Back in 2008/9, if u had the $ and guts to buy really beaten up stocks, 500% was achievable -- the "phoenix" stocks that rose from the ashes.

Sometimes, it's pure luck, other times, it's your understanding & conviction about a company, so that you are buying when everyone else is throwing the baby out with the bath water.

If you want more recent examples, then buying up gas stocks in May/June could been very profitable (~20-60% in two months) eg Celtic, Legacy, Niko etc

It's great if you're a stock analysis during the 2008, it's like boxing day for the stock pickers. I would not entertain the idea of picking stocks by mere luck, I would much be better of by sitting at a poker table with that kind of money. I would derive my investment decision through fundamental analysis eventhough the market disagrees, as long as you do the process correctly. The trick is how do you fundamentally quantify a company?

The process not the outcome should be the focus. Incidentally, this is my 2nd year into investing and I'm up 80%. My silver got me up but then I realized it was a speculated move not an investment one.

[angelok]

Back in 2008/9, if u had the $ and guts to buy really beaten up stocks, 500% was achievable --

I lot of stocks have doubled from the lows of March 09, 2009, but 500% is a bit over exaggerated..

Having said that, Objects in the Rear View Mirror always Appear Larger Than They Are.

[cjottawa]

The plural of "anecdote" is not "data".

You may hear or read about people making huge profits "trading stocks."

How did they do over a 10 year period? 20 years? 40 years?

If you start investing at age 35 and assume you'll live to be 95, you've got 60 years over which you need to protect your money.

Most people playing the market are not successful over that long a time period.

I consider myself to be a smart, rationale person and even a "contrarian investor".
I still don't think I have what it takes to safely pick individual stocks that will survive for 60 years.

That's the argument for buying index funds and not attempting to time the market.

Yes and unless you have the skills of a security analysis, you are better off with buying the index.
- it's self diversification
- get the market return
- get the low fee

Incidently, 10k is enough to couch.
-2.5k CDN index
-2.5k US index
-2.5k INT index
-2.5k Bonds

^^^ Exactly this.

Raxdax10,

Do yourself a huge favour: buy and read the book "The Four Pillars of Investing". It may save you from financial ruin.

[charliebrown]

I lot of stocks have doubled from the lows of March 09, 2009, but 500% is a bit over exaggerated..

Having said that, Objects in the Rear View Mirror always Appear Larger Than They Are.

Check the historic prices for these companies:

Teck (i got out at $25 and $48; bought at $8...could've added more at the $6 level and keep riding until $60)

Sherritt (aka poor man's version of TCK) -- low around $2; bounced back to $10; but now back to $4

Bankers Petroleum (low was around $0.60-70; i think it went as high as $9-10)

Las Vegas Sands (low was around $2; i think it bounced back to around $60)

Even US Banks went thru quite the recovery from their lows, ie BAC from $4 to $20; C from below $1 to $5

Granted, all of these names are way below their 2011 highs -- while i dont think they will go back to their 2008/2009 lows, it may take a while to recover to 2011 april levels

[angelok]

Check the historic prices for these companies:

Las Vegas Sands (low was around $2; i think it bounced back to around $60)

Granted, all of these names are way below their 2011 highs -- while i dont think they will go back to their 2008/2009 lows, it may take a while to recover to 2011 april levels

I bought 1,000 shares of MGM @ $1.52 which I am still holding. Granted, there were companies that gained 500% from their 2009 bottom. My point is that how many people bought at the absolute bottom in March of 2009 and sold on April of 2011?

I am also sure that a lot people bought Teck @ $3.34, but how many rode it all the way up to $64.00 ?

[charliebrown]

I bought 1,000 shares of MGM @ $1.52 which I am still holding. Granted, there were companies that gained 500% from their 2009 bottom. My point is that how many people bought at the absolute bottom in March of 2009 and sold on April of 2011?

I am also sure that a lot people bought Teck @ $3.34, but how many rode it all the way up to $64.00 ?

I guess as long as you didnt cash out everything at the 2009 lows, you should be ok