I've had my current stock broker for approximately 5 years. Every year, he's producing very mediocre results that result in return of 4 or 5%. I could probably put my money in a GIC and get that return without having to take any risk or do some research on companies. He's a nice guy but he can't time anything worth shit. Out of 20 stocks, 18 of them have gone down 20% right away and I have to play the waiting game to break even and then be ahead. He'll always say that these stock pay dividends but they're modest at around 4%. I'm not greedy but I thought a return of 10% would be reasonable. Is it time for a change or be patient?
Firing my Stock Broker
- Thread starter KYG
- Start date
The reason that your stock broker can't time anything worth shit is because nobody can. Nobody. You need a change in stratagem because year-over-year measurements of performance are meaningless and living by them encourages a dangerous high-turnover approach to investing.
The absolute simplest way to go about securing quality long-term returns is by purchasing an inexpensive (i.e. low MER) market-indexing fund and reinvesting all the payments it delivers. If you want higher returns you can try your hand with a quality value fund, of which there aren't many in Canada.
Since you're clearly incensed about your performance, I'd suggest reading the Intelligent Investor by Ben Graham. It won't teach you how to analyze companies or pick stocks and it won't tell you when to buy and sell but it will teach you some of the most important investing lessons to be learned.
Shift your focus to the long term. If you want to stick with individual equities, then the simplest way to go about building your wealth is to buy quality dividend-paying companies, reinvest the dividends and hold for the long run. Buy companies that generate quality earnings at low prices and wait. Controlling yourself and being patient is the hardest part.
The absolute simplest way to go about securing quality long-term returns is by purchasing an inexpensive (i.e. low MER) market-indexing fund and reinvesting all the payments it delivers. If you want higher returns you can try your hand with a quality value fund, of which there aren't many in Canada.
Since you're clearly incensed about your performance, I'd suggest reading the Intelligent Investor by Ben Graham. It won't teach you how to analyze companies or pick stocks and it won't tell you when to buy and sell but it will teach you some of the most important investing lessons to be learned.
Shift your focus to the long term. If you want to stick with individual equities, then the simplest way to go about building your wealth is to buy quality dividend-paying companies, reinvest the dividends and hold for the long run. Buy companies that generate quality earnings at low prices and wait. Controlling yourself and being patient is the hardest part.
stockbrokers are in business to make money ... for themselves!
if there was an ounce of honesty in the business they wouldn't
charge commissions to get rid of the losers they recommended!
you would be better off asking some wino or Grav's puppy to pick
stocks than a stockbroker!
as for the 'fundamentals' on most companies, they are useless.
find companies that pay dividends, invest and hold a reasonable
sector mix and hope nobody tanks.
consider short-term options (sell puts and if you get put, sell a call!)
Real estate as an investment stinks ... buy what you want to live in
and rent a room.
if there was an ounce of honesty in the business they wouldn't
charge commissions to get rid of the losers they recommended!
you would be better off asking some wino or Grav's puppy to pick
stocks than a stockbroker!
as for the 'fundamentals' on most companies, they are useless.
find companies that pay dividends, invest and hold a reasonable
sector mix and hope nobody tanks.
consider short-term options (sell puts and if you get put, sell a call!)
Real estate as an investment stinks ... buy what you want to live in
and rent a room.
IMHO, timing the market is like picking who's going to win a hockey game or a football game. Anyone who does it can expect to be wrong a lot of the time. But it's not totally random, if for no other reason than there's a lot of people out there who are also trying to time the market, and people tend to move in herds.
My advice would be to either: (1) give up timing the market, throw your money in a middle-of-the-road balanced fund or index fund, and be done with it (2) choose an asset allocation fund where the fund manager tries to time the market for you (here is an example in Edmonton, I'm sure you've got ones in Vancouver: www.globalwealthbuilders.ca), or (3) educate yourself and invest your money yourself. At least if things go well or go poorly you know where the buck stops.
My advice would be to either: (1) give up timing the market, throw your money in a middle-of-the-road balanced fund or index fund, and be done with it (2) choose an asset allocation fund where the fund manager tries to time the market for you (here is an example in Edmonton, I'm sure you've got ones in Vancouver: www.globalwealthbuilders.ca), or (3) educate yourself and invest your money yourself. At least if things go well or go poorly you know where the buck stops.
Timing the market is not hard if you are following cylical parts of the economy over periods of years
The resource sector has its ups and its downs. Oil for instance was at $14 or so per barrel in 98, and now it is at $60 per barrel. At $14 per barrel companies were not investing in bring new production on stream, leading to todays tighter market and the higher prices. Now companies are spending like mad to bring new production to market. Leading me to believe that unless we are at peak oil ( for conventional oil ) oil will drop down to $30-40 in a few years. Meaning selling oil stocks today is not a bad idea, especially as you will likely be able to pick them up at lower prices in a few years.
The resource sector has its ups and its downs. Oil for instance was at $14 or so per barrel in 98, and now it is at $60 per barrel. At $14 per barrel companies were not investing in bring new production on stream, leading to todays tighter market and the higher prices. Now companies are spending like mad to bring new production to market. Leading me to believe that unless we are at peak oil ( for conventional oil ) oil will drop down to $30-40 in a few years. Meaning selling oil stocks today is not a bad idea, especially as you will likely be able to pick them up at lower prices in a few years.
This is a dangerous place to get advice....but here's my .02 worth....You owe it to yourself to develop an investing philosophy that you feel comfortable and can sleep at nights. You need to educate yourself. If you had cancer, would you rely on everything your doctor said, or would you research it, change your lifestyle and diet if necessary?
The brain dead way would be to buy an index fund, say the TSE 60. Stay away from mutual funds, as they steal at least 2.5% before you get paid.
If it sounds too good (ie doubling your money every year), it's probably a scam or illegal.
Decide whether you want to be an investor or shareholder. Find some companies that are owned by billionaires (Pattison, Desmarias), and put your money in with them.
The brain dead way would be to buy an index fund, say the TSE 60. Stay away from mutual funds, as they steal at least 2.5% before you get paid.
If it sounds too good (ie doubling your money every year), it's probably a scam or illegal.
Decide whether you want to be an investor or shareholder. Find some companies that are owned by billionaires (Pattison, Desmarias), and put your money in with them.
Yes you can do better
What is the reallity of making a good return on your investment...
Don't expect some one else to do it for you .. They are in it to make money for themselves...
I don't know how much money you are investing. but it does not matter
5 to 10 thousand .... 40 t0 100 thousand.. In todays market ... pick a stock that has some volitility...and buy otions ..Calls and Put.. and you will make 50% to 100% or more on what you invest ...and 5 to 10 thousand is all you really need .. If you have more that is better but just to cover your ass some times
And then you have to look after it your self ... making money is a job... and what you put into it is what you will get out of it .. You have to learn the ups and downs ..and why .. You have to make the mistakes .. and don't exspect any one else to make you money..
Option trading is still one of the best ways to make money when the market is moving ..You can ride it up and down and make money both ways in the same day. Yes you can loss but not like you can on owning a stock... but when you have option you can make all the gains that stock make ... and you can make gains on when that stock goes down.
All you need is pick 3 or 4 stocks that are moving 5% to !0% in the week or the month and follow there trading patters..
It is a job Guy.. and you need to be watching when ther is a move up or down ...to make you prof. .. and a lot of intuition.
See there are not meny brokers that will take the time to work a plan ... they want easy money and they follow the trend..tghe trend makes you 5%.
It is a funny thing how people that have money use it to make more money ... But the little guy keeps thinking he has to keep working at his job to make and save money... But once you have a good pill You never realize .. you can just use that money to make more and injoy your time alot more
It is not always easy .I have failed a few time for any number of reasons..
And i will have losses also .. Don't be gready . but beleave that you can mke $5000.00 a month with only 5 to 10 thousand .. and you will.
Look into it for your self.... It can be amazing
What is the reallity of making a good return on your investment...
Don't expect some one else to do it for you .. They are in it to make money for themselves...
I don't know how much money you are investing. but it does not matter
5 to 10 thousand .... 40 t0 100 thousand.. In todays market ... pick a stock that has some volitility...and buy otions ..Calls and Put.. and you will make 50% to 100% or more on what you invest ...and 5 to 10 thousand is all you really need .. If you have more that is better but just to cover your ass some times
And then you have to look after it your self ... making money is a job... and what you put into it is what you will get out of it .. You have to learn the ups and downs ..and why .. You have to make the mistakes .. and don't exspect any one else to make you money..
Option trading is still one of the best ways to make money when the market is moving ..You can ride it up and down and make money both ways in the same day. Yes you can loss but not like you can on owning a stock... but when you have option you can make all the gains that stock make ... and you can make gains on when that stock goes down.
All you need is pick 3 or 4 stocks that are moving 5% to !0% in the week or the month and follow there trading patters..
It is a job Guy.. and you need to be watching when ther is a move up or down ...to make you prof. .. and a lot of intuition.
See there are not meny brokers that will take the time to work a plan ... they want easy money and they follow the trend..tghe trend makes you 5%.
It is a funny thing how people that have money use it to make more money ... But the little guy keeps thinking he has to keep working at his job to make and save money... But once you have a good pill You never realize .. you can just use that money to make more and injoy your time alot more
It is not always easy .I have failed a few time for any number of reasons..
And i will have losses also .. Don't be gready . but beleave that you can mke $5000.00 a month with only 5 to 10 thousand .. and you will.
Look into it for your self.... It can be amazing
a small example
Here is how it works .. THis week SU. Suncore.. which is a tar sands oil company .. there stock ended the week at $89.28 or some thing like that
Well i bought a call @ weeks ago ,on that at $85....10 SU C Nov 85.. @ 5.75 What does that mean .. Well I bought an option to buy 1000 Suncore stocks at $85 on Nov 17. If I have to take possetion of those stocks on that date it will cost me $85,oo.oo .. I payed $5.75 for an option .. cost $5750.00
Now SU has gone as high as $92.50 on thursday ...and i sold my option for
$7.50 .. X 1000=$7500...
I made $1750 close to 28%... in 2/ 3 weeks If I had wantedf to risk $85000
I would had made $12.50 if i had sold befor it weht down..
$12.50 X1000 =$12,500... about 15% . but i riske a lot more
THe other side of this is That on thursday when SU was at it high .. i thought it would drop below $90... So i bought ..20 SU P Nov 90.. @ $1.00
And friday morning SU had droped as low as $89.30.. and it went up and down all day below the $90 I sold my Puts a @ $1.90
2000 X1.90= $3800... I payed $2000.. SO I MADE ANOTHER $1800 IN A DAY
But i am small potatoes . some one else would have 10000 put and make $9,000..
BUT i WAS ONLY WILLING TO RISK and the is the key what is your limite of loos .. i couls have just as easily lost on all of those options if I did not stay on top of it and see where the stock has gone before,,, and when some thing goes up some one will sell to take a profit and bring the stock down that is what i had to learn.
Here is how it works .. THis week SU. Suncore.. which is a tar sands oil company .. there stock ended the week at $89.28 or some thing like that
Well i bought a call @ weeks ago ,on that at $85....10 SU C Nov 85.. @ 5.75 What does that mean .. Well I bought an option to buy 1000 Suncore stocks at $85 on Nov 17. If I have to take possetion of those stocks on that date it will cost me $85,oo.oo .. I payed $5.75 for an option .. cost $5750.00
Now SU has gone as high as $92.50 on thursday ...and i sold my option for
$7.50 .. X 1000=$7500...
I made $1750 close to 28%... in 2/ 3 weeks If I had wantedf to risk $85000
I would had made $12.50 if i had sold befor it weht down..
$12.50 X1000 =$12,500... about 15% . but i riske a lot more
THe other side of this is That on thursday when SU was at it high .. i thought it would drop below $90... So i bought ..20 SU P Nov 90.. @ $1.00
And friday morning SU had droped as low as $89.30.. and it went up and down all day below the $90 I sold my Puts a @ $1.90
2000 X1.90= $3800... I payed $2000.. SO I MADE ANOTHER $1800 IN A DAY
But i am small potatoes . some one else would have 10000 put and make $9,000..
BUT i WAS ONLY WILLING TO RISK and the is the key what is your limite of loos .. i couls have just as easily lost on all of those options if I did not stay on top of it and see where the stock has gone before,,, and when some thing goes up some one will sell to take a profit and bring the stock down that is what i had to learn.
I have 3 things to say about this...
1. I like to sleep at night
2. I don't want to die by bleeding out through my GI track
3. I have only normal sized testicles
I put a good chuck of money in a "Managed Account" a couple years back and I'm making double digits both last year & this year.
1. I like to sleep at night
2. I don't want to die by bleeding out through my GI track
3. I have only normal sized testicles
I put a good chuck of money in a "Managed Account" a couple years back and I'm making double digits both last year & this year.
true?
Yes CL.. that is what has been said .. And i did read avery good book on option trading.. that was very easy to understand.. not like some that complicat the whole prosses
THere is another side to option trading .. the stock owner that is selling the option
Yes there is money to be mad there also. You see i am buying the option from the person who owns the stock( through a pool)
Why are they selling options . well they want to make some money on there stock . now ..rather then wait foer it to go up .. in fact they don't want it to go up once they have sold an option on it ..
So here how that works ... They have SU they may have payed $79 for it ... and yes it went up ... butthey don.t want to sell they are holdin long term .. but they want to make some money on this money that they can use.. They could barrow on the stock .. but that means paying interest.. need income to pay that ... So let sell option..They can make 5% to 10% . or more . depending how far out they sell that option for.. 39 days , 60 day . a year.. So that is what i bought, My Su c Nov 85 @ 5.75 . was paying the stock owner 7% on his money .. as it staies there ... now it t did not stay at $85 .. or even go below .. so it was in there best iterest to buy back those options when i wanted to sell... But if they did not ... i had allready payed them for some of the gain befor with my $5.75 option price ..
So that is why stock owners sell options
Yes CL.. that is what has been said .. And i did read avery good book on option trading.. that was very easy to understand.. not like some that complicat the whole prosses
THere is another side to option trading .. the stock owner that is selling the option
Yes there is money to be mad there also. You see i am buying the option from the person who owns the stock( through a pool)
Why are they selling options . well they want to make some money on there stock . now ..rather then wait foer it to go up .. in fact they don't want it to go up once they have sold an option on it ..
So here how that works ... They have SU they may have payed $79 for it ... and yes it went up ... butthey don.t want to sell they are holdin long term .. but they want to make some money on this money that they can use.. They could barrow on the stock .. but that means paying interest.. need income to pay that ... So let sell option..They can make 5% to 10% . or more . depending how far out they sell that option for.. 39 days , 60 day . a year.. So that is what i bought, My Su c Nov 85 @ 5.75 . was paying the stock owner 7% on his money .. as it staies there ... now it t did not stay at $85 .. or even go below .. so it was in there best iterest to buy back those options when i wanted to sell... But if they did not ... i had allready payed them for some of the gain befor with my $5.75 option price ..
So that is why stock owners sell options
That depends on whether the seller is naked or covered. If the seller is naked then yes it is a zero sum game. If the seller is covered then they will at least make some money from the sale of the option.craiglist-lover said:
Naked that is scary
Nice to know that there is some one else that know something about options on a more positive note ..
Thanks Sir L. Naked options.. Scary ... some good money to ge made in the right market ... but you can end up paying to
When i first read about option That is where I wanted to go with it .. But saw that iot was not possiable with out being able to cover the losses
I have been on the selling side of options .. and never did well.. Gave let the stock go once and payed to much to buy another back.. But if you have a couple hundred thousand in in few big stock i think selling option on them is good for an income potentual .. with out going for the big profits
Nice to know that there is some one else that know something about options on a more positive note ..
Thanks Sir L. Naked options.. Scary ... some good money to ge made in the right market ... but you can end up paying to
When i first read about option That is where I wanted to go with it .. But saw that iot was not possiable with out being able to cover the losses
I have been on the selling side of options .. and never did well.. Gave let the stock go once and payed to much to buy another back.. But if you have a couple hundred thousand in in few big stock i think selling option on them is good for an income potentual .. with out going for the big profits
the only 'option' I would recommend is to sell a 'put' on a stock that
you know very well.
you want the stock to be down trending and sell a put at a strike price
that reflects what you would be willing to pay on the open market to
own that stock outright.
you then need to ensure that the 'value' of the option is sufficient to cover
the risk of owning that stock.
For example: Stock X is trading at 20, has been as high as 25 and as low
as 15 ... selling an option pays you $1 per share for a strike price of $17.50
meaning you 'paid' $16.50. Would that be a decent deal?
If yes, sell the 'put', take the option money and if you are 'put' you can then
wait for the stock to show an up-trend and sell a 'call' or sell it yourself
and get your money back (and hopefully profit)
ANY OTHER OPTION I would not recommend.
and what CL was babbling about are 'futures' on commodities which IS
a fool's game.
You can make decent returns on careful selling of either puts or calls ...
the information you need is what are the upper and lower 'turning points' for
that stock. Do NOT choose a stock that only goes up or down ... it needs those
cycles to allow you to sell the put on the down and then calls going up.
Another important strategy is to make sure you only write one put or call at a time
on a stock and leave money in your account so that if things change you can profit
on those changes. This is how most people also lose money, they invest all of it and
have no reserves to invest when there are great opportunities to invest.
you know very well.
you want the stock to be down trending and sell a put at a strike price
that reflects what you would be willing to pay on the open market to
own that stock outright.
you then need to ensure that the 'value' of the option is sufficient to cover
the risk of owning that stock.
For example: Stock X is trading at 20, has been as high as 25 and as low
as 15 ... selling an option pays you $1 per share for a strike price of $17.50
meaning you 'paid' $16.50. Would that be a decent deal?
If yes, sell the 'put', take the option money and if you are 'put' you can then
wait for the stock to show an up-trend and sell a 'call' or sell it yourself
and get your money back (and hopefully profit)
ANY OTHER OPTION I would not recommend.
and what CL was babbling about are 'futures' on commodities which IS
a fool's game.
You can make decent returns on careful selling of either puts or calls ...
the information you need is what are the upper and lower 'turning points' for
that stock. Do NOT choose a stock that only goes up or down ... it needs those
cycles to allow you to sell the put on the down and then calls going up.
Another important strategy is to make sure you only write one put or call at a time
on a stock and leave money in your account so that if things change you can profit
on those changes. This is how most people also lose money, they invest all of it and
have no reserves to invest when there are great opportunities to invest.
Index funds
Very low fees, no commissions, and you can create the mix you desire by selecting several funds from different sectors.
Because your money is spread so thinly very small chance of losing much.
Not sure what is available to Canadians but in the US the top 3 no-loads are Fidelity, T. Roe Price, and my favorite, Vanguard. Fees for each of these are in the 0.2 % - 0.3% range. (Not to be confused with the PERB tradition of pricing system, that would be approximately 1/4 of 1%.)
Very low fees, no commissions, and you can create the mix you desire by selecting several funds from different sectors.
Because your money is spread so thinly very small chance of losing much.
Not sure what is available to Canadians but in the US the top 3 no-loads are Fidelity, T. Roe Price, and my favorite, Vanguard. Fees for each of these are in the 0.2 % - 0.3% range. (Not to be confused with the PERB tradition of pricing system, that would be approximately 1/4 of 1%.)
Turf your broker. If you haven't made at least 10% over the last 3 years in the TSX then something is wrong.
The markets have averaged over 8-12% over the long term. Don't try and make a quick buck and invest in penny stks. Be patient and buy high quality dividend paying stks. The two richest men in the world -buffet and gates don't own anything speculative.
With interest rates stabalizing, look at some long bonds and financials. Also, there are a few uranium companies out there with provable reserves and growth prospects. Stay away from Sprott (John Embry) - he's on crack. Buy funds that are concentrated in Europe/Asia. Growth in those areas should outpace North America. Also look at emerging market debt. Countries such as Brazil (investment grade)are at the top of thier interest cycle and will be reducing rates. Many bargins in the US too. Take advantage of the high Canadian$$. Seems like everyone was buying US stks w/.60 canadian dollar - but at .88 no one is. Real estate has only returned an avg of 6% a year. The big 5 canadian banks have returned 19% a year for the last ten. If you have any questions PM me.
The markets have averaged over 8-12% over the long term. Don't try and make a quick buck and invest in penny stks. Be patient and buy high quality dividend paying stks. The two richest men in the world -buffet and gates don't own anything speculative.
With interest rates stabalizing, look at some long bonds and financials. Also, there are a few uranium companies out there with provable reserves and growth prospects. Stay away from Sprott (John Embry) - he's on crack. Buy funds that are concentrated in Europe/Asia. Growth in those areas should outpace North America. Also look at emerging market debt. Countries such as Brazil (investment grade)are at the top of thier interest cycle and will be reducing rates. Many bargins in the US too. Take advantage of the high Canadian$$. Seems like everyone was buying US stks w/.60 canadian dollar - but at .88 no one is. Real estate has only returned an avg of 6% a year. The big 5 canadian banks have returned 19% a year for the last ten. If you have any questions PM me.
Sorry guys, i wanted to pm kyg, but his mailbox is full.
thats why i posted this msg here for him
thanks
hey there,
the biggest problem is the firm(s) you work with. not to bash anyone in the industry - i have a few friends that work for canacord and their clueless on investing!! they just focus on pushing the stuff that the firm underwrites. in some instances they may get up to 18% compensation for selling an issue they underwrote. as for rbc action direct - its a good avenue only if you know what your doing and if you have the time. you may save on costs but who will recommend your investments, when to sell, buy ect. stay away from the investors group, clarica, and primerica of the world - they are just fund shops.
my opinion - just stick to the basics: buy good companies at a reasonable price, don't follow the crowd ( you want to buy the stuff that no one else is buying eg. buying metals and energy during the tech boom), diversify with proper asset and geographic allocation and get proffessional advice.
i hope this helps.
thats why i posted this msg here for him
thanks
hey there,
the biggest problem is the firm(s) you work with. not to bash anyone in the industry - i have a few friends that work for canacord and their clueless on investing!! they just focus on pushing the stuff that the firm underwrites. in some instances they may get up to 18% compensation for selling an issue they underwrote. as for rbc action direct - its a good avenue only if you know what your doing and if you have the time. you may save on costs but who will recommend your investments, when to sell, buy ect. stay away from the investors group, clarica, and primerica of the world - they are just fund shops.
my opinion - just stick to the basics: buy good companies at a reasonable price, don't follow the crowd ( you want to buy the stuff that no one else is buying eg. buying metals and energy during the tech boom), diversify with proper asset and geographic allocation and get proffessional advice.
i hope this helps.
as an account executive in vancouvers leading investor relations firm i can assure you that ANY individual who is making less than a 10 percent return should pack it up and get with the program.
I cannot even count the number of times that I have seen a jr resource stock on the tsx or more commonly the tsxv double, triple or even quintuple....
There is a cyclical bull market occuring right now and it will not last for ever (read Jim Rogers books, like hot commodities for a start).
if anyone wants to pm me i will show you some co's that you can watch over the next couple months and see what i mean.
fire your broker.
my 1 year old nephew could pick em better than 4-5%.
I cannot even count the number of times that I have seen a jr resource stock on the tsx or more commonly the tsxv double, triple or even quintuple....
There is a cyclical bull market occuring right now and it will not last for ever (read Jim Rogers books, like hot commodities for a start).
if anyone wants to pm me i will show you some co's that you can watch over the next couple months and see what i mean.
fire your broker.
my 1 year old nephew could pick em better than 4-5%.
