Investing in Stocks - Where to begin?

[Tangwhich]

So far my investing has all been in mutual funds/GICs, etc.. typical RRSP type stuff. I'm now ready to start buying stocks in invidual companies. Buy and hold type thing, buying a few shares here and there when I have some extra cash.

I have no idea where to start though. Is there a good place online that I can create an account? Sort of pick a stock, say when it hits price X, buy Y shares.

How does it work with regards to dividends? Do you get send a cheque from the company?

Any advice appreciated.

 

[FailsW0rth]

So far my investing has all been in mutual funds/GICs, etc.. typical RRSP type stuff. I'm now ready to start buying stocks in invidual companies. Buy and hold type thing, buying a few shares here and there when I have some extra cash.

I have no idea where to start though. Is there a good place online that I can create an account? Sort of pick a stock, say when it hits price X, buy Y shares.

How does it work with regards to dividends? Do you get send a cheque from the company?

Any advice appreciated.

If you're gonna buy stocks you're better off buying more than a few here and there. The commissions will kill you.

Look for a well established broker that you can trust. I wouldnt recommend have your own trade account (i.e tradefreedom) yet. When you're more experienced and acutally know how to evalutate companies thats when I would sign up for those account.

I would first find out how much risk you're willing to take.

 

[Tangwhich]

I'm quite willing to be very risky, but I'm looking to buy established companies for the long term (banks, oil companies and the like).
I was hoping to avoid dealing with a broker. I'd much prefer to do the work myself online. That said, I'm open to other ideas as I am so new to it.

 

[freedom3]

answer to your question

I have no idea where to start though.

The toilet. Just take your cash with you and flush.

 

[Tia Phoenixx]

So far my investing has all been in mutual funds/GICs, etc.. typical RRSP type stuff. I'm now ready to start buying stocks in invidual companies. Buy and hold type thing, buying a few shares here and there when I have some extra cash.

I have no idea where to start though. Is there a good place online that I can create an account? Sort of pick a stock, say when it hits price X, buy Y shares.

How does it work with regards to dividends? Do you get send a cheque from the company?

Any advice appreciated.

this is an excellent time to buy good stocks..they are so cheap.

First, do some reseachs, read some newspapers or other sources related to stocks.

Second, target ur limit..how much money u r willing to invest...without having problem if (just in case) your stock decreases in value.
"blue chip stocks" are safer..let say bank stocks. so if u r not a risk taker, these stocks hopefully will be better for you, at least for the long run.
If you want to invest on a particular company, do not forget to check its credibility: read their income statement, mission statement, check who are in the board of directors, the CEO, what is its future stategy, etc..

If you want to save the money, you could register urself to TD waterhouse or other financial institutions (ask your bank).
this is the cheapest way to go, without having to pay commission to a broker. You can even buy your stock online after opening your account.

Third, monitor ur stock: for instance go to www.finance.yahoo.com

Fourth, you have to understand the 3 principles: when to buy, when to hold, and when to sell your stocks.
therefore it's very crucial to gain some knowledge on your stock and understand the market well.

Fifth, do not panic easily when the market is going down..or vice versa..do not be happy too easily either.
the market is very volatile.

good luck!

 

[Hangman]

How does it work with regards to dividends? Do you get send a cheque from the company?

You really don't know,. but you're "ready" to plunge in? Maybe you should speak to a reputable advisor. You're nowhere near ready to start investing real money. You don't seem to understand commission schedules, dividends vs DRIPs, etc... Seriously get some competent help before you lose everything.

It's possible to do very well, but it's a lot more likely on average to do very poorly.

/Just some advice from someone who's worked in the industry...

 

[Tia Phoenixx]

You really don't know,. but you're "ready" to plunge in? Maybe you should speak to a reputable advisor. You're nowhere near ready to start investing real money. You don't seem to understand commission schedules, dividends vs DRIPs, etc... Seriously get some competent help before you lose everything.

It's possible to do very well, but it's a lot more likely on average to do very poorly.

/Just some advice from someone who's worked in the industry...

Ups i forgot about the dividends.

If you, let say open an account with TD Canada trust, the dividends will be sent directly to your account.

You will be sent a report by TD, stating your account information, including ur dividends as well as some gains or losses of your stock(s). It's stated as "book value" and "market value".

Some of this reports will be used for income tax purposes.

but again, as Hangman stated it's better to get some advice from a professional if you do not know the market well.

It's easy to sell, hold, and to buy a stock...BUT..it is very very difficult to know WHEN is the best time to sell, buy or hold a stock
Not to mention to choose the best stocks to have from thousands of them on the market...

 

[oil&gas]

I'm quite willing to be very risky, but I'm looking to buy established companies for the long term (banks, oil companies and the like).
I was hoping to avoid dealing with a broker. I'd much prefer to do the work myself online. That said, I'm open to other ideas as I am so new to it.

Here is a selection of representative companies and stocks
in various sectors. This is NOT meant to be stock
recommendations. But since you ask a listing like this
one could give you a starting point to search for the stocks
that suit you.

-----------------------------------------------
FINANCE and INSURANCE: All of the major banks,
Power Corp, Sun Life, Fairfax, Manulife............

CONSUMERS: Loblaw, Metro, George Weston,
Canadian Tire, North West Company Fund

TRANSPORTATION: Canada National Railway, Canadian Pacific,
West Jet, CHL Helicopter, Transforce.....

OIL and GAS: Suncor, CNQ, Nexen, Encana, Crescent Point,
Baytex, Peyto............................

ENERGY SERVICE: Precision Drilling, Enerflex, Akita, Trican,
Calfrac, Savannah.......

REAL ESTATE: Riocan Reit, Boardwalk, Northern Property, Dundee........

PRECIOUS METALS: Barrick, Agnico Eagle, Goldcorp, Kinross,
Central Fund of Canada

BASE METALS: Hubay Minerals, Capstone, Teck Cominco, Sherritt Intl,
Inmet, Labrador Iron Ore Fund..............

PIPELINE & UTILITIES: Enbridge, Transcanada Corp, Fortis, Transalta,
Great Lakes Hydro Fund, Pembina Fund.............

AGRICULTURE and FOOD: Viterra, Potash Corp, Agrium,
AG Growth Fund, Alliance Grain Traders Fund,
Saputo, Canada Bread, Premium Brands Fund...

URANIUM: Cameco, Denison, Uranium Participation................

ALTERNATIVE ENERGY: Boralex, Innergex, Canadian Hydro Developer

COMMUNICATION: Telus, Rogers, Manitoba Telecom, Bell Alliant Fund..........
----------------------------------------------------------------

I have to skip the sector of industrial manufacturer. There
are too many of them for me to figure out a proper listing.

 

[AdrenalinJunkie]

Most of the banks will have both adviser assisted, or unassissted trading accounts. The difference being you pay a higher commission on an assissted account.

An important thing to minimize risk is to spread your money around different sectors. I would recommend 2 stocks per sector, and spread the money around fairly evenly. If you are in it for the long run, avoid the temptation to chase the hot stocks and sectors.

You can buy shares that reinvest the dividends back into that company. I just let the money flow through to the brokerage account, then select the stock to reinvest in. My preference is for divident paying stocks.

About when to sell? Hard to know. I held Metro up to last July, then dumped it as a non-performer. It outperformed the market in the downturn. You will see some sectors up while others are down.

My feeling now is that if you have a portfolio about $100K or higher, then you can do better in stocks with a diversified selection than in mutual funds.

 

[Tangwhich]

Thanks for the advice folks.

RE: Hangman. When I say I'm ready, I don't mean I've got my cheque book out, I mean I ready to start learning/researching. I'm not foolish enough to believe I can start wheeling and dealing in a couple of days
I just want to do this as much as I can by myself. I hate banks and hate even more giving them my money (fees, commisions, etc). I know I can't avoid that in this case, but I'd like to minimize it.

 

[Dark Chimera]

solid companies that pay dividends as they are taxed lower then other stock income


buy some solid financials and hold

do not fool yourself into thinking you can win by buying and selling that is fools gold

 

[peeler_feeler]

For lower comissions try Interactive Broker -
http://www.interactivebrokers.ca/en/general/about/aboutCA.php?ib_entity=ca

You can win by buying and selling - but you must have discipline and remove emotion (& greed) out of the equation. Very few people can do this consistently.

 

[Malibook]

This latest bull market rally could run some more but I don't see it holding.
I think the recession and bear market have a long ways to go.

Gold is pulling back nicely and should offer a good entry point soon.
I'd like to see it dip back to $800 but $840 or so would be a good place to start nibbling on some gold stocks.

 

[oil&gas]

This latest bull market rally could run some more but I don't see it holding.
I think the recession and bear market have a long ways to go.

Gold is pulling back nicely and should offer a good entry point soon.
I'd like to see it dip back to $800 but $840 or so would be a good place to start nibbling on some gold stocks.

Gold equities are cyclical and too volatile to
buy and hold for the long term IMO. For more
risk-averse investors physical bullions of
gold and silver should provide a good hedge
against further escalation of the current
financial crisis with lower risk than gold miners.

Instead of buying gold and silver coins/bars you
may consider buying one of the bullion funds like
Central Gold Trust and/or Central Fund of Canada.
There are also a few exchanged trade funds indexed
against bullions and precious metal stocks.
Alternatively you may consider mutual funds holding
bullions such as the BMO Bullion fund
or the recently introduced Sprott Bullion Fund.

Central gold trust would've been my choice were it not
for its hefty premium of 30% to its net asset value.
Not too long ago it was trading at a discount to its
NAV for quit a while. I think this shows where the
smart money is flowing.

I too think gold is a buy in the $800-$900
range. But don't forget silver which is dirt
cheap at the current price around $13.

 

[JEFF247]

I would look at a house and retirement account before you start gambling on the market. Vanguard and Fidelity have risk funds based on age. More risk early on and more conservative as you approach retirement. Picking individual stocks is a worse bet than Blackjack at a casino. Once you get to be an old fart with lots of money, then you can start betting on individual stocks. Like most old guys do!!!

 

[Malibook]

Gold equities are cyclical and too volatile to
buy and hold for the long term IMO.

These days, long term buy and hold of anything is not for me but I do think gold can have a nice run as governments monetize their debts.
Quantitative easing is just getting started and I really don't think there is any true desire to remove stimulus cash, in fact, there seems to be no end in sight to the continued additional stimulus.
The only way these massive debts can ever be brought under control is with diluted cash.

 

[peeler_feeler]

Picking individual stocks is a worse bet than Blackjack at a casino.

If you alot of time to educate, educate and educate yourself and a little capital to invest, i think you can do better picking a few individual stocks than at Blackjack. And you can probably do better than most mutual fund managers and not pay their high management fees.

 

[Malibook]

If you alot of time to educate, educate and educate yourself and a little capital to invest, i think you can do better picking a few individual stocks than at Blackjack. And you can probably do better than most mutual fund managers and not pay their high management fees.

This may be true in a raging bull market when most boats are rising with the tide but in this extremely brutal bear market, people are doing relatively well by simply preserving their cash.
This is a trader's market where people need to take profits and cut losses.
Numerous buy-and-holders need massive gains just to get out of the hole and for many it will be an extremely long wait, if ever.

 

[Anynym]

So far my investing has all been in mutual funds/GICs, etc.. typical RRSP type stuff. I'm now ready to start buying stocks in invidual companies. Buy and hold type thing, buying a few shares here and there when I have some extra cash.

I have no idea where to start though. Is there a good place online that I can create an account? Sort of pick a stock, say when it hits price X, buy Y shares.

How does it work with regards to dividends? Do you get send a cheque from the company?

Any advice appreciated.

You asked about the mechanics of trading, and got "free" investment advice. Use it wisely.

Let me try to aid your research regarding trading accounts. One popular one is through TD Waterhouse.

If you don't make "enough" trades, or don't have "enough" invested in any given 3-month period, they'll be kind enough to charge you $29 per trade.

Just to make this clear: if you have $1029 to invest, you'll get $1000 worth of some stock. If that stock goes up to $1058 and you sell, then you'll get your original money back. Choose a number of different stocks, and you pay the fees on each one. Picking winners that often is a difficult thing to do.

As for dividends: The shares you "own" will be held by the investment company you choose (in this case, TDWaterhouse). They actually hold the stocks in their name, and keep track that you're the beneficial owner. Then, when dividends are paid out, TD Waterhouse will receive the dividends and credit their value to your account (as holdings in cash), which you can use as any other cash in your account.

Good luck!

 

[oil&gas]

I would look at a house and retirement account before you start gambling on the market. Vanguard and Fidelity have risk funds based on age. More risk early on and more conservative as you approach retirement. Picking individual stocks is a worse bet than Blackjack at a casino. Once you get to be an old fart with lots of money, then you can start betting on individual stocks. Like most old guys do!!!

I wonder if in your mind the managers of
the Fidelity funds with the handsome salaries
they command and with little to worry about losing
their clients money would not likely pick the stocks
in their funds like betting in the cainos. It is the
individual investors who are more inclined to
gamble away their own money.

Anyway I am not against investing into mutual
funds. Just be aware of the management expense incurred in your funds. Well known fund companies such as Investors Group and Fidelity are among the major ripoffs.