OT: Buying Stock

[Alex Maynard]

Here's one more link I forgot to mention:

http://www.efficientmarket.ca/

It seems to have some fairly reasonable suggestions on investment 
strategies, although I haven't looked at them in too close detail.

Certain broad based Exchange traded funds (ETFs) that track broad indexes 
for Canada, US, or most of the world, can provide you a cheap and easy way to buy into
the market as a whole. This does not protect against the risk that the 
market as a whole could fall, but it does protect you against the risk
that a particular company or sector crashes. This is referred to as 
diversification, roughly translated to" don't put all your eggs in one 
basket". I found morningstar.com useful for sorting through the various 
ETFs.

If you are concerned about when to buy in, one strategy sometimes 
advocated is dollar cost averaging, whereby you buy in a little at a time. 
However, trading fees are often charged on a per-trade basis, so if you 
buy in too small quantities your trading fees will be higher on a percentage basis.

Alex

On Fri, 15 Feb 2008, Alex Maynard wrote:

>
> The following page has a description of some of the discount brokerages 
> available in Canada and their fees
>
> http://www.milliondollarjourney.com/review-canadian-discount-brokerages.htm
>
> Globefund: http://www.globefund.com/ has some discussion of Canadian mutual 
> funds.
>
> http://morningstar.com/ has a lot of information on individual stocks,
> mutual funds and exchange traded funds. Yahoo finance also has a lot
> of information.
>
> As pointed out below exchange traded funds and mutual funds reduce your risk 
> relative to individual funds.
>
> Alex
>
>
>
> On Fri, 15 Feb 2008, Stephen wrote:
>
>> Mr Chris Aitken wrote:
>>> I want to buy some stocks. I've never bought stocks before. I have an RRSP 
>>> and I eventually want to move that money into a self-directed RRSP (if 
>>> that's what it's called when you create your own RRSP). I'm taking a 
>>> Business Mathematics course at a local college (I know, I know, 90% of 
>>> investing is guts, timing, luck etc. - it's the other 5% I'm taking the 
>>> math for). For now, though, I thought I'd try buying some blue-chip stock. 
>>> It's a small amount so I don't want to lose a lot in brokerage fees.
>>> 
>>> Does anyone know a good discount broker? Any gotchas? I've never used 
>>> PayPal or any other online payment method. I've only ever bought anything 
>>> "off the Internet" by calling a 1-800 number (from a website) then using 
>>> my credit card over the phone.
>> 
>> Do you have a bank account?
>> 
>> Whoever you bank with is a good starting place since they have some record 
>> that you exist.
>> 
>> The market is down, and you are, I assume, young, so buying stocks makes 
>> sense.
>> 
>> How much is in your RRSP? Buying individual stocks when you have less that 
>> $20,000 (bare minimum) is not wise.
>> 
>> If less than 20,000 consider a stock market index mutual fund from your 
>> bank.
>> 
>> Google is your friend.
>> 
>> Stephen
>> 
>> 
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