Would you care to share your investment/trading strategies?

[alanbrenton]

I think it would be beneficial for a lot of people frequenting this Personal Finance forum to peruse some investment/trading strategies that other people have made and to discuss the merits/risks and rewards of such trades.

I have decent financial markets knowledge but am only about to dip my feet in the market by transferring over to a self-directed account and would appreciate people sharing their experiences and strategies.

[funkylist]

Don't invest and spend your hard earned cash and enjoy life.

[ShopSmart]

I think it would be beneficial for a lot of people frequenting this Personal Finance forum to peruse some investment/trading strategies that other people have made and to discuss the merits/risks and rewards of such trades.

I have decent financial markets knowledge but am only about to dip my feet in the market by transferring over to a self-directed account and would appreciate people sharing their experiences and strategies.

You mean it would be beneficial for YOU.

All I have to say is good luck taking people's advice on here.

[alanbrenton]

Don't invest and spend your hard earned cash and enjoy life.

That's a good one though I spend my hard earned cash, enjoy life, and have left over savings.


You mean it would be beneficial for YOU.

All I have to say is good luck taking people's advice on here.

I'm not asking for any stock tips, just general investment advice similar to what NUTS posted in one of the threads. At least, with contributors like that, people like me would obtain additional insights as to investment strategies that I would never have thought of employing. I would take each advice with a grain of salt but thanks for wishing me the best.

I would take my chances and spend time reading what other people have to say rather than sulk while reading the gloomy job losses thread on this forum.

[florch]

Develop an interest, read a lot and determine a style that works for you. Seeing as this decision has not been lightly made, stick with it during good and bad so as to prevent performance chasing (= buy high sell low).

My strategy is simple low cost indexing. I don't have a "guy", I don't swing for the fence. I know which products give the desired allocation at the right (lowest) cost. I have allocations for Canada, US, (first world) International (=Asia/Pacific+Europe), Emerging markets, and if you have the stomach/time/interest/opportunity/knowledge Real Estate. Fixed income has a place as well, but not for me until my mortgage is gone. Hopefully that coincides with getting to the age that fixed income becomes more important, for me no mortgage by age 40. Dividends will also become an increasingly large part of my Canadian Portfolio, learn about how these can be used for your income level.

Learn when RRSP's are and are not a good idea.

Finally, if you REALLY REALLY understand it, have a long view, a stable income and a tin-tummy, you might consider moderate leverage. It's not for everyone, but you can't say it's not for anyone.

Re-balance by your purchases or after significant volatility, reduce risk with age.

Best Read: The Four Pillars of Investing, William J Bernstein, but maybe read some crap first so that you can appreciate how good this book is.

[florch]

Hey Shopsmart, why don't you try something constructive?

[asdfvcx]

I hope not to sound rude, but do you think opening up a self directed RRSP is a good idea when you are asking questions like this?

Over the last little while you have been asking a lot of questions about some rather aggressive and exotic investment strategies. This to me sounds like a case where a little bit of knowledge can be very dangerous. And seeing this is your RRSP where you're considering implementing these strategies, if the end result is negative it could have very long term implications.


A couple things to think about:

Have you put together a good plan for your RRSP (and put it into writing)?
Have you figured out what your goals are for it, and what type of returns you expect to require to reach these goals?
Does reaching these goals require you to take high risks? Or are you likely to reach these goals with only taking on a medium level of risk?
If you decide to follow a high risk plan and your RRSP crashes and burns, what are you plans then? Will you retire later or at the same time but on less?


These are the types of questions you really want to have a good answer to before you take complete control of all of your investments. Especially if you are considering a high risk method of investing.

[alanbrenton]

I hope not to sound rude, but do you think opening up a self directed RRSP is a good idea when you are asking questions like this?

Over the last little while you have been asking a lot of questions about some rather aggressive and exotic investment strategies. This to me sounds like a case where a little bit of knowledge can be very dangerous. And seeing this is your RRSP where you're considering implementing these strategies, if the end result is negative it could have very long term implications.


A couple things to think about:

Have you put together a good plan for your RRSP (and put it into writing)?
Have you figured out what your goals are for it, and what type of returns you expect to require to reach these goals?
Does reaching these goals require you to take high risks? Or are you likely to reach these goals with only taking on a medium level of risk?
If you decide to follow a high risk plan and your RRSP crashes and burns, what are you plans then? Will you retire later or at the same time but on less?


These are the types of questions you really want to have a good answer to before you take complete control of all of your investments. Especially if you are considering a high risk method of investing.

Fair enough.

The aggressive and exotic strategies you mention I inquired about on this forum were all about buying call options. At least to me, this is not high risk (as other derivatives instrument are) as the most I can blow is the initial capital outlay and if properly done, can lead to decent gains.

Still, I opened this thread to get a better sense of what other investors are doing and maybe to get some pointers from the veterans. I'd rather learn to avoid serious mistakes here than experience it through the school of hard knocks.

Develop an interest, read a lot and determine a style that works for you. Seeing as this decision has not been lightly made, stick with it during good and bad so as to prevent performance chasing (= buy high sell low).

My strategy is simple low cost indexing. I don't have a "guy", I don't swing for the fence. I know which products give the desired allocation at the right (lowest) cost. I have allocations for Canada, US, (first world) International (=Asia/Pacific+Europe), Emerging markets, and if you have the stomach/time/interest/opportunity/knowledge Real Estate. Fixed income has a place as well, but not for me until my mortgage is gone. Hopefully that coincides with getting to the age that fixed income becomes more important, for me no mortgage by age 40. Dividends will also become an increasingly large part of my Canadian Portfolio, learn about how these can be used for your income level.

Learn when RRSP's are and are not a good idea.

Finally, if you REALLY REALLY understand it, have a long view, a stable income and a tin-tummy, you might consider moderate leverage. It's not for everyone, but you can't say it's not for anyone.

Re-balance by your purchases or after significant volatility, reduce risk with age.

Best Read: The Four Pillars of Investing, William J Bernstein, but maybe read some crap first so that you can appreciate how good this book is.

Thanks Florch for your advice. Yes, I was able to convince my wife to work towards a realtor's license.

[urameatball]

as of recently.
put all money on high interest savings account.
determine how much money I want to risk, then take that money to the casino and put it on black.

[nobody1234]

I see what everyone else is doing and then I do it. Everybody loves a bandwagon.

[Thalo]

Go into the bank and ask 'em what the Mutuals are paying. If they're paying good, buy lot's. Then after they tank, sell 'em and go into GICs. Repeat once the mutuals are paying good again.

/end sarcasm.

[Sylvestre]

Fair enough.

The aggressive and exotic strategies you mention I inquired about on this forum were all about buying call options. At least to me, this is not high risk (as other derivatives instrument are) as the most I can blow is the initial capital outlay and if properly done, can lead to decent gains.

Still, I opened this thread to get a better sense of what other investors are doing and maybe to get some pointers from the veterans. I'd rather learn to avoid serious mistakes here than experience it through the school of hard knocks.



Thanks Florch for your advice. Yes, I was able to convince my wife to work towards a realtor's license.

Thing about it is, you pretty much can't avoid the experiences. It's easy to talk about risk etc. but it's another thing entirely to see your money disappear. It's super easy to say "don't be a sheep" but it's damm hard to take the opposite view.

[Bullseye]

Develop an interest, read a lot and determine a style that works for you. Seeing as this decision has not been lightly made, stick with it during good and bad so as to prevent performance chasing (= buy high sell low).

My strategy is simple low cost indexing. I don't have a "guy", I don't swing for the fence. I know which products give the desired allocation at the right (lowest) cost. I have allocations for Canada, US, (first world) International (=Asia/Pacific+Europe), Emerging markets, and if you have the stomach/time/interest/opportunity/knowledge Real Estate. Fixed income has a place as well, but not for me until my mortgage is gone. Hopefully that coincides with getting to the age that fixed income becomes more important, for me no mortgage by age 40. Dividends will also become an increasingly large part of my Canadian Portfolio, learn about how these can be used for your income level.

Learn when RRSP's are and are not a good idea.

Finally, if you REALLY REALLY understand it, have a long view, a stable income and a tin-tummy, you might consider moderate leverage. It's not for everyone, but you can't say it's not for anyone.

Re-balance by your purchases or after significant volatility, reduce risk with age.

Best Read: The Four Pillars of Investing, William J Bernstein, but maybe read some crap first so that you can appreciate how good this book is.

Excellent post, everyone hoping to learn about investing should read and re-read this post.

For myself, I use indexing for my RRSP's, just set and forget. Outside my RRSP, I use a variation of the Smith manouvre, buying individual stocks and ETF's, with the goal being a growing dividend stream.

I also am looking to get back into real estate (rental properties), if prices fall far enough. Again, the goal would be a semi-passive income stream that grows with inflation.

Also like florch, shorter term goal is to pay off mortgage by 40. Long term goal is low monthly cash requirements, an inflation-protected income stream, and then departing the 9-5 working world.

[aww1970]

As soon as you realize thst 90% of the professional info out there is self serving BS that they feed us you will do OK. Advisors make their money from advising and peeling off a commission from your investment- winner or loser.
4 months ago I was renewing my mortgage and the gal noticed that I was sitting on alot of cash and she advised me that this was not a good idea, I had a civil debate with her and I said we will see in a few months...... All they care about is the product that they sell and they always want you to be fully invested which is a mistake.

[Bullseye]

As soon as you realize thst 90% of the professional info out there is self serving BS that they feed us you will do OK. Advisors make their money from advising and peeling off a commission from your investment- winner or loser.
4 months ago I was renewing my mortgage and the gal noticed that I was sitting on alot of cash and she advised me that this was not a good idea, I had a civil debate with her and I said we will see in a few months...... All they care about is the product that they sell and they always want you to be fully invested which is a mistake.

For certain, they'll never recommend you pay down your mortgage, as that is a double loser from their perspective, less interest earned, and lost fees from you not investing the money with them instead.

For many people, though, mortgage paydown is the best option. If you don't want to learn about investing, and don't understand how markets and risk works, then just take the guaranteed return of mortgage paydown, as you'll likely do better than way.

[funkylist]

Learn to sell.

I think this the hardest thing to do when investing. I know what people are going to say that your not suppose to invest with emotions blah blah blah, but we're all human and greedy.
When the market is HOT and your stocks are up 10%, 50%, 100%, 200%, it's so hard to press the SELL button. You'll be afraid that the next day your stock might go up a few more percent or double..
This also applies to the inverse situation when your stock is losing money. When your stocks is -10%, -25%, -50%, again it's very hard to sell and cut your losses.

[faken]

Thing about it is, you pretty much can't avoid the experiences. It's easy to talk about risk etc. but it's another thing entirely to see your money disappear. It's super easy to say "don't be a sheep" but it's damm hard to take the opposite view.

QFT. Some of the hardest lessons in life are the ones that cost us the most!

[faken]

Learn to sell.

I think this the hardest thing to do when investing. I know what people are going to say that your not suppose to invest with emotions blah blah blah, but we're all human and greedy.
When the market is HOT and your stocks are up 10%, 50%, 100%, 200%, it's so hard to press the SELL button. You'll be afraid that the next day your stock might go up a few more percent or double..
This also applies to the inverse situation when your stock is losing money. When your stocks is -10%, -25%, -50%, again it's very hard to sell and cut your losses.

You have to know when to sell and buy. Don't be too greedy like you mentioned. It's better to win some then to win none. It's better to lose some then lose it all.

[cloudycanada]

short term goal:

to make my sustainable investment income = my current employment income
(things like dividend, interest income, income trust distribution etc)

once that goal is achieved, I can retire in theory based on the investment income . Of course, that goal likely won't be met until I am a lot older ... but once I get there, I can spend everything I make :D

to achieve, the short-term goal ... i look for
- dividend paying stocks
- a diversified portfolio of income-generating securities
- rental properties

at this point, i don't use bonds because i like dividend stocks more

[alanbrenton]

to achieve, the short-term goal ... i look for
- dividend paying stocks
- a diversified portfolio of income-generating securities
- rental properties

at this point, i don't use bonds because i like dividend stocks more

Thanks for taking the time to write your strategy. What sort of stock screeners do you use to select these dividend or interest income paying securities? I believe a lot of websites offer these freely but would the information be comparable to say, a Bloomberg Terminal?

I've only begun investing (used to be invested in mutual funds but will be going self-directed) and pointers are welcome.

I think not many people will be willing to share their strategies for fear that returns will be diminished once people caught on. I thought that only worked if you had millions in portfolio holdings wherein you can move the markets but I guess this clearly isn't the case.

[florch]

Thanks Alan, Bullseye...

My ideas aren't secrets or uncommon, just focused and disciplined. I can't pick stocks. Almost no one can. Indexing and ETF's are a good low cost strategy. You can't spend the time or react to knowledge quickly enough in my opinion. News is almost always immediately reflected in price and when the markets aren't efficient they "can remain irrational longer than you can remain solvent" according to the best stock market investor of our era. Buy and hold. Only sell to re-balance or in retirement.

I'm hoping Pitz (who I haven't seen here for a while) or some of the other true luminaries come on here to share with us. Maybe post the same question on FWF if you don't get your answer here. I'm a humble DIYer, there ought to be some great strategies used here that will only cost the time to write down.

[Germack]

Basically I am investing in a low cost and diversified portfolio via ETFs. My asset allocation is:

20% BONDS/GIC (IngDirect)
10% Real Estate (Reits, XRE)
20% Canadian Equity (XIC)
20% US Equity (VTI)
20% International Equity (VEA)
10% Emerging markets (VWO)

I just buy and hold and never try to time the market.

[sexpuppet6000]

Buy:
-undervalued
-good management
-dominate brand
-cares about shareholder
-monopoly (or industrial leader)
-greedy when people are scared, scared when people are greedy

That being said, does it make sense to buy into good companies with strong fundamentals during a time of economic turmoil?

[AllWheelDrift]

That being said, does it make sense to buy into good companies with strong fundamentals during a time of economic turmoil?
Don't all your points suggest that is exactly what you should do?

[ShopSmart]

That's a good one though I spend my hard earned cash, enjoy life, and have left over savings.

I'm not asking for any stock tips, just general investment advice similar to what NUTS posted in one of the threads. At least, with contributors like that, people like me would obtain additional insights as to investment strategies that I would never have thought of employing. I would take each advice with a grain of salt but thanks for wishing me the best.

I would take my chances and spend time reading what other people have to say rather than sulk while reading the gloomy job losses thread on this forum.

What I was basically saying is don't do it. If you can't think of what your own approach is - then adopting others or following the advice of others is perilous. I've watched the analysts, the PMs, the bank guys and others be just dead WRONG in anything they projected. If you make up your own mind after watching the markets and trying to figure it out yourself, then at least the only person you can blame is yourself, not the stupidity of others.

Most people lose big money and a select few gain a lot of money in the stock markets. Anyone who utters these cookie cutter responses like diversification and Buy and Hold is laughable now. The truth is that there are no fundamentals, no logic, nothing except up and down. Whether you want to participate is up to the individual.

For my part, I bowed out in early 2008 and my portfolio is still up and accumulating interest.

Again, I really mean it when I say good luck.

And the job losses thread is not gloomy to me. It's a sign of change and opportunity!

[sexpuppet6000]

What I was basically saying is don't do it. If you can't think of what your own approach is - then adopting others or following the advice of others is perilous. I've watched the analysts, the PMs, the bank guys and others be just dead WRONG in anything they projected. If you make up your own mind after watching the markets and trying to figure it out yourself, then at least the only person you can blame is yourself, not the stupidity of others.


'A smart man learns from his own mistakes, a wise man learns from the mistakes of others.' But however you look at it, the entire process is a learning experience. You're goal isn't necessarily to duplicate the actions of the big players or the small players, but it is to absorb as much information as possible, and devise an approach that you feel is logical and will be profitable.


Most people lose big money and a select few gain a lot of money in the stock markets.


For every winner there must be a loser. Therefore there are equal amount of winners as there are losers.


Anyone who utters these cookie cutter responses like diversification and Buy and Hold is laughable now. The truth is that there are no fundamentals, no logic, nothing except up and down. Whether you want to participate is up to the individual.


There is no logic in business fundamentals, diversification and owning strong companies? You have a right to laugh as what you've just said is quite laughable.

[asdfvcx]

Most people lose big money and a select few gain a lot of money in the stock markets.
Can you provide sources for this please? I agree most active traders underperform the market and many lose money. But most disciplined buy and hold investors should roughly match the market minus costs. And since history shows that over the long run the market usually rises, it would be expected that disciplined buy and hold investors would make reasonable, but not obscenely large profits.

Anyone who utters these cookie cutter responses like diversification and Buy and Hold is laughable now.
Why? The market crashed. It does that semi-regularly. When I started investing I expected to live through a number of crashes. I'm unclear why I should be particularly bothered by this one. I have a number of decades until I need the money I'm investing, and I have an asset allocation I'm quite comfortable with.

The truth is that there are no fundamentals, no logic, nothing except up and down.
History shows that over the long term (not the short term) growth in the market is highly correlated with growth in the economy. I personally believe that over the long term the growth in the world wide economy is going to be positive. So, I also expect the growth of the world wide market will also be positive over the long term.

Economic history is full of individuals making claims that "This time it's different", and providing seemingly rational explanations why they should be believed. And nearly every time their claim is eventually proved false.

[aww1970]

For every winner there must be a loser. Therefore there are equal amount of winners as there are losers.

I read this and shake my head. I will throw you a bone and agree if you are talking day trades, but even then if I buy and sell the same position in the same day I may have bought a share that someone bought years ago for pennies on the dollar for what I paid- who knows?? Then I take a dollar and the guy who buys it is an investor plans to hold? How is he losing if he sells it more than he paid? With your premise the market would remain flat or go down indefinately. Over the long haul our economy, GDP, whatever you want to call it grows and this makes a companies market cap increase- hopefully quicker than inflation. How do you explain your premise when a company announces a good quarter and the share price gaps up instantly- where is the loser in this case? all shareholders win. Yes someone is willing to pay more because it is worth more. This is called growth and is what makes the whole thing work in the big picture

[ShopSmart]

'A smart man learns from his own mistakes, a wise man learns from the mistakes of others.' But however you look at it, the entire process is a learning experience. You're goal isn't necessarily to duplicate the actions of the big players or the small players, but it is to absorb as much information as possible, and devise an approach that you feel is logical and will be profitable.


Hmm...how is Warren Buffet doing? Would you call him a smart man or a wise man?

There is no logic. If there was, people would be able to devise an algorithm that could predict everything.

Whether you're dipping in to learn or not, the ultimate goal of any sane individual is make money.


For every winner there must be a loser. Therefore there are equal amount of winners as there are losers.


This seems very illogical. What about a hedge fund selling alot of shares at a profit to multiple individual investors who rush to buy in at the top only to realize their shares are going to zero? How is there an equal amount of winners and losers in that scenario?


There is no logic in business fundamentals, diversification and owning strong companies? You have a right to laugh as what you've just said is quite laughable.

I never said those things exactly. What I meant is there's no logic in the markets right now.

[aww1970]

I agree there is no logic in the markets right now- Heh- short term there is rarely logic in the markets even when things are "normal". The market is a great, I will say exact long term indicator of the busineses it represents.

[sexpuppet6000]

Hmm...how is Warren Buffet doing? Would you call him a smart man or a wise man?



He is both a smart and a wise man. When he was young he tried finding trends through patterns and charts, and when he was older, he learned from from grapham.

And one lucky SOB!!! :D

[hagbard]

My strategy has always been to put my money into investments that will lose me the most money. :(

[RedFlagWatcher]

Learn to sell.

I think this the hardest thing to do when investing. I know what people are going to say that your not suppose to invest with emotions blah blah blah, but we're all human and greedy.
When the market is HOT and your stocks are up 10%, 50%, 100%, 200%, it's so hard to press the SELL button. You'll be afraid that the next day your stock might go up a few more percent or double..
This also applies to the inverse situation when your stock is losing money. When your stocks is -10%, -25%, -50%, again it's very hard to sell and cut your losses.

When you say 'Learn to sell,' what do you mean by learn?

Do you just mean having specific points of profit/loss at which you'd sell?

[CeoOfKFC]

I'm still young and need to learn real investment strategies.

However being in the US and having access to log onto my webtrader during work and following all this bail-out crap during work I was able to go ALL-IN (few thousand) on Fannie Mae at 0.51 cents.
Look at it now.

I should look at long-term investing but for now I've been playing the bail-out stocks like tight-aggressive poker :).

[Anonymouse]

I subscribe to the Hulbert Financial Digest to see which newsletters are giving the best long term risk-adjusted returns, then I subscribe to 2 or 3 of them. Hulbert also has a related online service where I can see what the advisors are saying about the specific stocks I propose to invest in.

I don't take the advice I get blindly. For example, the Motley Fool Stock Advisor was recommending Krispy Kreme donuts for a long time but I considered it a fad and stayed away. Awfully glad I did.

I think if you do not have specific insight into particular companies or markets, you're best off with low-MER index funds. I have insight into telecommunications companies like Interdigital Communications and chip makers like Analog Devices because of my training/profession, so I have a bit of a specialization in these kinds of stocks. So far, it's worked out for me.

(I don't necessarily recommend any of the stocks I mentioned; void where prohibited; this post brought to you by contributions from viewers like you, etc.)

[charliebrown]

My bank/trading/RRSP account is telling me that my strategy has been:

Buy HIGH
Sell LOW

:mad:

[florch]

There is no logic. If there was, people would be able to devise an algorithm that could predict everything.



Logic and predictability are different things. If the markets were predictable, people would react and take the opportunities for finding a bargain away. In fact that's what they do. The one predictable part of markets is their tendency to over correct both high and low. A high price means someone is taking future profits from a buyer. We were maybe due for a correction, but this is oversold and therefore a great buying opportunity, and that's as far as I'd go in market timing. I'll just keep dollar cost averaging into cheap equities. If you bought after the crash in 1929, would you have cared if you got the exact bottom 10 or 20 years later? Probably not. If you have a long view, don't be afraid to buy or continue buying. If you are a young investor this is GOOD NEWS.

[NUTS]

I think it would be beneficial for a lot of people frequenting this Personal Finance forum to peruse some investment/trading strategies that other people have made and to discuss the merits/risks and rewards of such trades.

I have decent financial markets knowledge but am only about to dip my feet in the market by transferring over to a self-directed account and would appreciate people sharing their experiences and strategies.

Posted this before around these threads

Over the years I have focused on investing that minimizes losses -while maximizing on the gains. No it is not the buy low-sell high or buy high-sell low

I subscribe to maximize on the income, dividends and cash flow

1. One of my investing strategies (outside of passive REI income) is real simple. It is investing in stocks or indexs on the US big board that have positive earnings, low P/E, that pay dividends and that are optionable (covered calls) long & deep in the money (DITM).

I pick ones for monthly disbursements or quarterly dividends.

2. Should the equity bomb to a level where my total investment in that security equals the bottom out price - I will sell at minimal to no loss, or redo the option further as in #1 above .

My strategy is relatively simple - it is to get maximum option premium (based on time & DITM) plus a dividend based on the investment risk, to continue to reinvest multiples of the premium in more of the same equity (same way same method) max on the premiums, time & dividends, to a point where 50% of the investment is liquid (in cash) at all times

Sounds complicated - but it is not.

At my age, Mutfunds are not my idea of a good investments

[NUTS]

I have decent financial markets knowledge but am only about to dip my feet in the market by transferring over to a self-directed account and would appreciate people sharing their experiences and strategies.

Alan, you have asked, now yours please - what is your investment strategy?

Tell us about your experiences -successes (not the losses) and where you are going from this point forward

Thanks

[alanbrenton]

Alan, you have asked, now yours please - what is your investment strategy?

Tell us about your experiences -successes (not the losses) and where you are going from this point forward

Thanks

Nuts, to start, like yourself, my wife and I are immigrants and so only begun working in Canada a few years back. I've told my wife that because I have the inclination to invest in the financial markets, she at least should give realty a shot since she is blessed being able to speak a few languages. This would start out as a part-time career and could blossom to a full-time career eventually. In the meantime there are lots of write-offs to be made by being a realtor professional. We both agree that ethics would be paramount in this line of work so we are not in there for the quick buck. I was thinking these two passive income streams (investing in the financial markets and properties) would supplement our regular employment income.

Because the market has declined so much, to start, I maxed out what ever RRSP contribution room in the past few weeks and probably got in at good entry points. Prior to this, we were just focusing on paying down our debt (student loan) and took advantage of our employers' matching contribution right on the get go. The GRRSP is very inflexible as I can only trade move between mutual funds and cash every 15 days.

I've actually been on the lookout for a good online broker and after going through TDW's website, have probably decided to go for TDW. I've already asked my uncle if I can change my address to his so that we technical "pool" our accounts as part of one household to easily avail of the $9.99 flat free trade. I openly admit that I have still a lot to learn which is why I decided to start a thread where investors like yourself could share some investment ideas or two. A lot of people on some widely read threads brag about day-trading and how they make good money on a single day, a strategy which I will get into if opportunity arises; but of course, long term strategies such as yours should be the bread and butter if one wants to grow an investment portfolio and be able to sleep soundly at night.

http://www.redflagdeals.com/forums/showpost.php?p=7797495&postcount=27

I believe I have seen your post about you having a TDW and trading for $7 a pop.

Now that I've decided on a broker, I will most likely be imitating part of your strategy, which pitz have also suggested, and will be selling options for some of the securities I will be holding. I'll be on a lookout for dividend paying companies, which one of my uncles espouses, now that some yields look enticing. I will be asking for 2nd opinions too from some colleagues working on the buy-side. Again, so far, all my knowledge is based on theory coming from financial designation(s) I've obtained and additional readings on business news websites. I will most likely be scouring the financialwebring forum as well for trading/investment ideas.

[NUTS]

Now that I've decided on a broker, I will most likely be imitating part of your strategy, which pitz have also suggested, and will be selling options for some of the securities I will be holding. I'll be on a lookout for dividend paying companies, which one of my uncles espouses, now that some yields look enticing. I will be asking for 2nd opinions too from some colleagues working on the buy-side. Again, so far, all my knowledge is based on theory coming from financial designation(s) I've obtained and additional readings on business news websites. I will most likely be scouring the financialwebring forum as well for trading/investment ideas.

Looks like you are about to take the first steps in the right direction, but just be careful - the road can twist & turn along the way- sometimes road blocks & personal diversions - you need to be awake at all times

Keep us informed of your successes

Good luck

[Thalo]

I'm still young and need to learn real investment strategies.

However being in the US and having access to log onto my webtrader during work and following all this bail-out crap during work I was able to go ALL-IN (few thousand) on Fannie Mae at 0.51 cents.
Look at it now.

I should look at long-term investing but for now I've been playing the bail-out stocks like tight-aggressive poker :).

Lucky SOB. You're right though, it is a f'n crapshoot with U.S. financials. A year and a half ago nobody could have predicted that, buying a big steady bank like C, one could lose 95% of the value of their investment or that one could at some point buy C and have it more than double in value in the span of a week.

[alanbrenton]

Have any of you invested in depressed bonds hoping for a turnaround in a few years? I've read last week that a few companies, like an oil company based in Singapore, were yielding close to 25%.

If so, will this make a good long term strategy? How does one begin research on what bonds to purchase? Seems like a good investment to make in a TFSA especially for non-consumer focused companies.

[NUTS]

Have any of you invested in depressed bonds hoping for a turnaround in a few years? I've read last week that a few companies, like an oil company based in Singapore, were yielding close to 25%.

If so, will this make a good long term strategy? How does one begin research on what bonds to purchase? Seems like a good investment to make in a TFSA especially for non-consumer focused companies.

Specific to Singapore bonds, in the past I have delved. Best place for you to start is to contact the folks at www.pimco.com and ask them what bond products they have that are high yielding

Also for reference

www.atlantik.cz/soubor/HighYieldBFEUR_EN.pdf

As for high yield bonds in general - from my own experience those are classified as 'junk bonds' which have all of the high risk as well as being very speculative IMO.

My preference these days for high yield products is the shipping stocks (Bermuda or Channel Islands registered companies) as well as the high quality interlisted Canadian oil royalty trusts that pay monthly disbursements.

The ones that I presently hold are yielding 20% + as well as being optionable long & deep in the money

If you are after quality and long term - there are still many good quailty products out there that have depressed prices due to the global thing that would be a long hold

I do not recommend or generally give stock tips, but for information and research purposes only, I look for ones with low P/E, positive EPS that also have options.

You may want to take a look at the stats on interlisted 'Potash Corp'

Hope this helps

[DanielCarrera]

I subscribe to the Hulbert Financial Digest to see which newsletters are giving the best long term risk-adjusted returns, then I subscribe to 2 or 3 of them.

In other words, Hulbert is trying to predict who is better at predicting the outcome of a coin flipping contest.

[alanbrenton]

Specific to Singapore bonds, in the past I have delved. Best place for you to start is to contact the folks at www.pimco.com and ask them what bond products they have that are high yielding

Also for reference

www.atlantik.cz/soubor/HighYieldBFEUR_EN.pdf

As for high yield bonds in general - from my own experience those are classified as 'junk bonds' which have all of the high risk as well as being very speculative IMO.

My preference these days for high yield products is the shipping stocks (Bermuda or Channel Islands registered companies) as well as the high quality interlisted Canadian oil royalty trusts that pay monthly disbursements.

The ones that I presently hold are yielding 20% + as well as being optionable long & deep in the money

If you are after quality and long term - there are still many good quailty products out there that have depressed prices due to the global thing that would be a long hold

I do not recommend or generally give stock tips, but for information and research purposes only, I look for ones with low P/E, positive EPS that also have options.

You may want to take a look at the stats on interlisted 'Potash Corp'

Hope this helps

Thanks Nuts. Besides requesting information from Pimco, how else do I do research on this high yielding bonds issued by stable/reliable companies? Sorry but it seems that most people on RFD have focused on equities s they seem more glamorous. Is $5,000 too low an investment? I was thinking of stuffing my (and my wife's) first year TFSA accounts with these "temporary" high yield bonds. Or are there products out there (like ETF's) besides the ABN Amro fund that allow for some diversification?

[clipz]

Right now in these unpredictable times i suggest investing in some ETF Funds. some good ones right now is HMU HOU DIG DUG and HFU Ive been investing in these for the passed month or so.

[alanbrenton]

Right now in these unpredictable times i suggest investing in some ETF Funds. some good ones right now is HMU HOU DIG DUG and HFU Ive been investing in these for the passed month or so.

I saw this post by Pitz on 'constant leverage trap'. Anyway to double up the bets while avoiding this trap?

[pitz]

I saw this post by Pitz on 'constant leverage trap'. Anyway to double up the bets while avoiding this trap?

The trap refers to the constant buying and selling of securities to maintain 'constant leverage'.

One way of avoiding the trap is to buy securities that are 30% marginable (maximum leverage = 3.33), but only run the account up to 2X leverage.

As long as the market does not decline significantly going forward, you will not receive a margin call, and you will not be forced into the activity of buying and selling.

Whether this is a good strategy or not depends on your view. Personally I think that housing is the next big shoe to drop, as forced liquidations become increasingly common because of job loss, income loss, etc.

[Newbieinvestor]

[QUOTE=pitz;7823527] Personally I think that housing is the next big shoe to drop, QUOTE]
It just never ends with you, does it?

Is it psychological? Were you reared in a real home?

No matter what the economic situation, you still come up with the same answer.

I don't think you are a true idiot, I suspect you are selling stocks in some way, right?

You're trying to pull a fast one on these forums, right?

[faken]

[QUOTE=pitz;7823527] Personally I think that housing is the next big shoe to drop, QUOTE]
It just never ends with you, does it?

Is it psychological? Were you reared in a real home?

No matter what the economic situation, you still come up with the same answer.

I don't think you are a true idiot, I suspect you are selling stocks in some way, right?

You're trying to pull a fast one on these forums, right?

I like reading what pitz has to say on here. You can either believe him or not lol.

[NUTS]

Personally I think that housing is the next big shoe to drop,



It just never ends with you, does it?

Is it psychological? Were you reared in a real home?

No matter what the economic situation, you still come up with the same answer.

I don't think you are a true idiot, I suspect you are selling stocks in some way, right?

You're trying to pull a fast one on these forums, right?

a poster is poster - just like the rest of us

I would like to hear more about why you think Pitz is "pulling a fast one"

[alanbrenton]

If the US Feds cuts the fed funds rate to zero today, are there financial instruments out there that you can buy, with a medium term outlook, that bet on steady increases?

[NUTS]

???????????????????

Alan, did you have any of your own thoughts about this?

For what its worth - my opinion:D

Should the US bank rate go to zero, its likely that the Canadian dollar strengthens up until the Canadian bank rate drops also

Should the Canadian bank rate fall to zero, then likely, as we all know, the best lending rate will 1.75% above whatever the bank rate is.

Consumer Bank deposits would (I think) match the bank rate

5-year GIC's and the like would be bank rate anywhere between 0% + 1%

Cheap loans should create spending since there would be no need to keep cash earning almost zero interest. If that happens, the economy and inflation will rise, unemployment would go down - thus interest rates should go back up.

Bank - invest in banks (deep in the money options -long) for the next 24 - 36 months. Banks rise first, everything else follows

[Terrific_Deals2k8]

General advice: 50% in securities/ 50% in fixed income (e.g. bonds or gic's)
Diversify AT LEAST amongst 15 stocks or ETFs (exchange traded funds). I'd suggest not buying any Mutual Funds cuz of their higher mgmt cost and avg. lower return compared to the market. Look into some divident paying stocks and maybe a couple foreign investments as well. Do your research and after you invest your money stick w/ a rebalancing/exit strategy. Good luck!

[circa76]

Bank - invest in banks (deep in the money options -long) for the next 24 - 36 months. Banks rise first, everything else follows

I'm curious, wouldn't you rather buy out of the money call options instead? That way you can save on the premium and can catch the wave back up (if things work out like you say).

e.g. BMO CALL JAN 2011 36 is going for $5.20 as opposed to JAN 2011 30 at $9.00 (didn't have any deep in the money out that far)

[sexpuppet6000]

It is one thing to speculate, it is another to to speculate on speculation. Rule of thumb, don't speculate.

[NUTS]

I'm curious, wouldn't you rather buy out of the money call options instead? That way you can save on the premium and can catch the wave back up (if things work out like you say).

e.g. BMO CALL JAN 2011 36 is going for $5.20 as opposed to JAN 2011 30 at $9.00 (didn't have any deep in the money out that far)

first off, the only equities & options that I play is on the US big Boards Those with low P/E, positive earnings and dividends

You have made a good comment about the LEAP and out of the money for max gain, however as one other poster on here that did ATM & OOTM options on RY, he got caught when the stock dropped more than 30%

The reason (the only reason) that I do DITM CC options is to get some small premium on top of the spread as well as to protect the downside (like BAC which I optioned at $2.50) just for the high ROI dividend on the risk and to go out no more than 12 -months.

-Do I care if I get called -NO!
-If the stock pops, yes of course I can buy the CC back at the right time
-If it stays level - I can also buy back the contract before the calendar expiry
-With DITM options, I can use the large spread premiums to buy more stock and re-option once again
-Or buy that $20 stock on a 2:1 margin, sell the option DITM at $10 long getting around $11 (free stock) & collecting a dividend

I dont know whether that makes sense or helps answer your points

[NUTS]

It is one thing to speculate, it is another to to speculate on speculation. Rule of thumb, don't speculate.

Absolutely, unless of course you can minimize any risk, although there are no guarantees in life - even if you were to put all of your money under the mattress, in all likelihood, Murphy's Law would come into play and your house would burn down;)

[alanbrenton]

WSJ: In a Volatile Market, Consider Options

http://online.wsj.com/article/SB122946909871312067.html

Nuts, an excerpt of the article can be found below. Can one actually sell puts without owning shares in registered accounts? I've read and been told that selling naked calls and shorting stocks cannot be done.

As a conservative investor, I sell calls only on shares I own (a strategy known as selling "covered" calls). But selling puts doesn't require owning shares, since your loss is capped at the strike price minus the proceeds of the sale, should you be required to buy when the stock is worthless.

[MoneyTrev]

Don't invest and spend your hard earned cash and enjoy life.

Yeah right. What happens when you enter the retiring age?

[NUTS]

WSJ: In a Volatile Market, Consider Options

http://online.wsj.com/article/SB122946909871312067.html

Nuts, an excerpt of the article can be found below. Can one actually sell puts without owning shares in registered accounts? I've read and been told that selling naked calls and shorting stocks cannot be done.

As a conservative investor, I sell calls only on shares I own (a strategy known as selling "covered" calls). But selling puts doesn't require owning shares, since your loss is capped at the strike price minus the proceeds of the sale, should you be required to buy when the stock is worthless.

In Canada - not directly & not that I am aware of

In a non registered account consider & look at the DITM covered calls as well as covered puts

For example and for information and education purposes only with volatile stocks that pay dividends

within a registered account buy 1000 shares of XYZ say at $20 - sell 10 CC contracts at $10 long for a total premium of $11/share ($11K)

Take $10k of that premium to buy 500 shares of the same stock and sell 5 contracts ATM 60-90 days out, or consider selling 5 contracts covered calls DITM at $10 - again long

Naked covered puts & naked covered calls - do some reading on that first, to be considered or in combination with the DITM covered call strategy noted above

[NUTS]

WSJ: In a Volatile Market, Consider Options

http://online.wsj.com/article/SB122946909871312067.html



"Among a bevy of alternatives, I sold puts on J.P. Morgan Chase, Wells Fargo and, a bit further out on the risk curve, Morgan Stanley. I sold $25 J.P. Morgan puts for $8.45 and $10 Morgan Stanley puts for $3.40, both expiring in January 2010, and $27.50 Wells Fargo puts for $9.20, expiring January 2011. (You can also sell much shorter-term options, though the premiums are generally lower.) The cash is now in my account, and it's more than enough to pay for all my Christmas shopping"

thats only half the story (could be high risk) - and of course you can make money on naked puts, even by adding (selling) a covered naked contract to it;), although, any calendar option can be worked to your advantage.

I would have added to that a calendar spread or even a condor + maybe buying a just out of the money Call contract

Options can be so complicated - yet childs play:D

[petieboy]

Naked/covered puts & naked/covered calls - do some reading on that first, to be considered or in combination with the DITM covered call strategy noted above

Fixed.

(Just in case people who are trying to pick up options strategies go searching for "naked covered calls" and get all confused when they find out there's no such thing)