Comments on: Should You Invest in Stocks?

By: Jason

Jason — Sat, 15 Jan 2011 22:50:31 +0000

Jack Bouroudjian, who has been bearish on the markets for a long time, has now turned bullish and reckons that 2011 will be an excellent year ! I hope he’s right, it’s been a difficult couple of years.
Jason´s latest post ..Stock Market for Beginners Charting

By: Stocks and Bonds: Pros and Cons | Balance Junkie

Stocks and Bonds: Pros and Cons | Balance Junkie — Mon, 02 Aug 2010 13:27:30 +0000

[...] For a more general look at the pros and cons of investing in stocks in general, see Should You Invest in Stocks? [...]

By: Modern Portfolio Theory: Fact or Fiction? | Balance Junkie

Modern Portfolio Theory: Fact or Fiction? | Balance Junkie — Fri, 21 May 2010 12:07:54 +0000

[...] markets will inevitably go higher than many. It’s not that I don’t think folks should invest in stocks at all; it’s just that I think we need to really look at whether, and to what degree they fit [...]

By: 2 Cents

2 Cents — Mon, 10 May 2010 18:50:04 +0000

You’re correct about index investing. If I were invested, that’s the method I would choose. Thanks for stopping by and contributing your comments!

By: Van Beek

Van Beek — Mon, 10 May 2010 14:46:02 +0000

Thanks for the balanced article 2 Cents. I am new to your blog so I missed your article when I posted a blog a few days ago on 10 must read articles on index fund investing. I will include a comment in the post with a link to this article since I like my readers to read it. Your article is not directly on index investing but a see a similar way of thinking.

The last 2 years have only confirmed my view on investing in stocks. I have had my journey during the last 15 years and fully agree with your reasons 5b&d why not to own stock (or what to look out for) and reason 2 why you do can own stocks. I think that some kind of market timing for the longer term trends is definitely possible (I do not try to time the market in time frames of days or weeks; only in terms of months and that goes very well).

I believe that life is too short to worry at night about your stock market investments. On the other hand, the market offers great opportunities to increase your savings and it is just pity if you do not use them. Therefore I have developed a systematic approach that works for me.

By: Online Investing: How to Get Started | Balance Junkie

Online Investing: How to Get Started | Balance Junkie — Tue, 23 Mar 2010 09:46:34 +0000

[...] I mentioned in Should You Invest in Stocks?, you need to have some type of exit strategy. Whether you are trading short term or investing for [...]

By: Carnival Of Personal Finance #249: Who’s Awesomest? Pirates Vs Ninjas Vs Nuns Vs Robots Vs Real Estate Agents Vs Zombies - Amateur Asset Allocator

Mon, 22 Mar 2010 11:10:08 +0000

[...] Should You Invest in Stocks? by Balance Junkie – The famous pirate Richard SaaargsGaarggghd made his fortune shorting the stocks of the shipping companies whose ships he plundered. There’s more money in selling stocks than buying them. [...]

By: Shel

Shel — Thu, 18 Mar 2010 20:48:38 +0000

Cool, thank you

By: 2 Cents

2 Cents — Thu, 18 Mar 2010 18:34:18 +0000

Thanks Dave. If you’re talking about the 40-30-30 spilt I sketched out in the Globe, I think you’re on the right track. Not everyone is as risk averse as I am and I don’t know how much longer I’ll feel this way. But I’m guessing it will last until our income situation (or the global debt situation) improves. I’m hoping both will be resolved sooner rather than later!

By: 2 Cents

2 Cents — Thu, 18 Mar 2010 18:21:57 +0000

Thanks for the question Shel. I don’t really have the resources to give that topic the thorough treatment it deserves. Luckily, The Globe and Mail does. They do an online brokerage survey each year that outlines the features and costs of each. Try this link:

http://www.theglobeandmail.com/report-on-business/online-broker-rankings/

There’s a lot of general information there as well, so I hope you’ll find it helpful. I believe Scotia’s brokerage has now become iTrade after their acquisition of E*Trade Canada. There have been a few criticisms of the E*Trade to iTrade transition, but you would probably be able to find customers that have had some type of bad experience with any of the brokers.

I will try to get a post up about general issues to consider, but for details, I haven’t found anyone that tops the Globe survey. For the record, I’m currently with Questrade. They have very cheap trades, but probably don’t provide as much guidance as other brokerages. That’s OK with me, but it’s not for everyone. Hope this gets you started!

By: Dave

Dave — Thu, 18 Mar 2010 18:15:04 +0000

I like your articles and will continue to follow. It is just when you advocate you are a Balance Junkie and that you have learned a great deal about how markets work; it was a little disappointing to read that you are all cash in RSP. It was like Derek Foster, who I am a great fan of and have all his books and still follow, sold all his equity positions but preaches the “buy and hold” dividend paying companies. You lose a little respect for what they are saying. As a balance junkie myself, I maintained (through the recession) and maintain a similar balance as you stated in the globe mail column in my RSP.
But in the end it is all about how one sleeps at night.
Keep up the good work and look forward to more interesting articles.

By: Shel

Shel — Thu, 18 Mar 2010 18:01:05 +0000

I want to start investing in stocks, but I find a lot of the trading sites are for Americans only. 2 Cents- I would love if you would do a post outlining some Canadian trading sites, with info on how much per trade and how much of a minimum dollar amount you need to begin trading. I bank through Scotiabank so I’ve been thinking about trying their online ScotiaMcLeod, but I haven’t been able to find out what, if any, is the minimum dollar amount needed to begin.

By: 2 Cents

2 Cents — Thu, 18 Mar 2010 16:04:25 +0000

I respect your views Dave, and I understand your position. Just a couple of clarifications: this site is not intended to constitute advice. Rather, I try to cultivate an awareness of all personal finance options. I make my personal choices public in the interest of honesty and full disclosure, not as a means of promoting them to others.

Secondly, my investments are largely in RRSPs, so they will not be taxed until I take them out. If I invested in stocks within my RRSP and had significant gains, those gains would be taxed at my marginal rate, which would likely be higher than the taxes I would pay on the capital gains if I held them outside an RRSP.

You’re right. No bonds or GICs that are currently on the market will pay 6% – 8%. Can you guarantee that return with any stock, dividend-paying or otherwise? Some companies have increased their dividends. Many others have cut them, causing both a loss of capital and dividend income for investors. For us, I’m not interested in that risk for now. If it’s right for you or other investors, I respect that.

As for the balance thing, I explained in the last section that this position represents balance for us at this moment. I don’t recommend this allocation for everyone, but I think we need to consider our financial picture as a whole and not just in terms of our investments. We’ve hit quite a rough patch lately in other areas of our financial life, so I want smoother sailing and high liquidity in others. I hope that makes sense.

We can disagree and still be friends, right?

By: Dave

Dave — Thu, 18 Mar 2010 15:06:55 +0000

I have been a long time reader but after reading your personal position is zero stocks and zero bonds, I lost a little respect for your financial advice. I know about your personal comfort but I would have expected a more BALANCED investment then just cash. If inflation is 2% and you are earning 3% of which you are taxed at the highest rate, you are not really coming out ahead. If you invested in solid long time paying dividend companies, you could easily get 6 to 8% at the lows. And some companies even increased their dividends. What GIC/bond will do that? NONE.
Sorry.

By: 2 Cents

2 Cents — Thu, 18 Mar 2010 12:33:54 +0000

Understood, but as we’ve all learned, the truth can be quite elusive in the markets. In fact, it’s that very dynamic that makes a market. Every trade needs a buyer and a seller. Each, by definition, has a different belief about the prospects for that stock or financial instrument.

There may be other factors based on each investor’s personal situation as well. Maybe the buyer is a 30 year old who is just starting to invest in her future, and the seller is a 60 year old who wants to pare back his equity weighting before retirement.

I understand that fear can cause us to be too cautious. Perhaps that’s where I’m at right now. I may be wrong on the objective reality, but I’m OK with that.