My first stock purchase

About a month ago I finally made my first stock purchase. BNS, which I had been watching, dropped down to $35 and I got in. Since then it has fluctuated and it was kind of fun to see how much money I’ve “made”. But today for the first time I noticed I “lost”. That’s ok though because I’m in for the long haul. It almost makes me wonder if I should buy more!

Another stock I am watching is SC.

But I have also once again been toying with the idea of starting my own business, on a smaller scale than I was thinking before just to make it more doable. So I’m hesitant to tie up all my money in stocks, I’d like to keep some extra for starting-up expenses.

Watching from the sidelines

I think I’m falling into the trap of trying to ‘time’ the market. I can’t decide if I should get in now or wait until the worst of the carnage is over. Maybe what I should do is just get in slowly, although the problem with that is paying the trading fee each time.

I bought more of the index fund I’ve been buying today, but I really would like to do buy some stocks.

Maybe tomorrow? People keep telling me there is no rush to get in to the market the way things are, so maybe it’s ok to just take my time.

I am watching BNS which closed at 48.70. I’d be a lot more keen on getting in at around 43, or even 46.

Missed the boat

Urg. The markets have slightly rebounded since I was ready to buy some stocks and I haven’t bought any yet because the money is still “in transit.”

I’m really feeling like I missed the boat on that one. Live and learn I guess. I don’t think the tumultuous times are over so I will sit tight and wait a few months for a new opportunity. In the meantime I need to research ways that will allow me to access money to buy stocks quickly, but still have my reserves parked in a high interest savings account. Perhaps a line of credit tied to my brokerage account?

Fast track to early retirement inspiration

I randomly came across the blog Early Retirement Extreme today while not even looking for anything to do with the topic, but wow is it ever a good extra push for me!

The points on maximizing savings are good ones. I always thought my 15%+ guideline was good enough, but I can definitely push it higher if that means reaching financial independence sooner! I worked with my numbers and while I can’t do the 75% without some major life changes (moving would be one big one, I do after all live in downtown Vancouver and rents are what they are), I figure I should be able to easily do 41%. If my math is right, that means I should be able to reach financial independence by 50. Not quite the 37 I’m aiming for but better than 65.

That is a good start and I am happy with that. If I were willing to spend the next 19 years without leaving Vancouver, I could do 51%, but life is for living and I’m willing to postpone financial independence another 4 years for a vacation once in a while.

So this is how I’m going to be dividing my pay cheques:

• 45% on all monthly spending – including regular expenses and splurging (previously it was 60%)
• 10% on long term savings – vacations and other life enhancing goodness (previously 20%, half of which was supposed to be for education and other knowledge enhancing activities)
• 4% on gifts – could be readjusted but i want to see how this goes (down from 5%)
• 41% savings and investments – (previously 15%)

Let’s see how this rolls!

Goal colored glasses

It may seem obvious, but it’s taken me this long to figure it out. It’s difficult to take action when you don’t have a clear goal to work towards. I’ve been fluffing around and not really feeling like I was accomplishing anything.

Last night I remembered something I told myself I wanted to do 3 years ago: retire early.

My first action item will be to buy some dividend paying stocks. I had a little bit of money in my TD Waterhouse account and I was going to buy some stocks today. Seems like a good day to buy some long-term holdings.

But when I realized the little money I had in my account would only get me a few shares, I decided I needed to add money to it. So I’m pillaging my cushion fund (which I *just* got to where I wanted it) and set it up (it takes time to move money around), and I am hopefully going to buy my first stocks by the end of this week or early next week.

I am going to buy either BNS or L. I have been watching L for 3 years and it’s totally plummeted, but I believe the company can turn itself around. Regardless, I think the value of their real estate holdings should keep the stock from going down much further. And if I am totally wrong it will only cost me a few thousand and I’m ok with that.

The appeal of BNS is that I can enroll in a DRIP.

Could be that my analysis sucks, but I gotta start somewhere.

Monkeys throwing darts

Nothing better illustrates the futility of trying to ‘play the stock market’ than playing the game over at inspectd.com. Or maybe I’m just saying that because after playing for 20mins I’m at $13,392.18 (from the $100,000 they give you to start with). How did you fare?

Choosing a discount broker

I’ve been thinking I should open an account with an discount broker for quite some time but I keep putting it off because I can’t make a decision about which discount broker to choose.

Right now I’m trying to decide between TD Waterhouse and Questrade. Here are some posts with helpful information:

• Adieu to Questrade in which Canadian Capitalist talks about how he moved his account from Questrade to TD Waterhouse.
• Questrade Review and Canadian Discount Brokerage Comparison over at Million Dollar Journey both have a lot of great information.

From what I’ve been able to find online, Questrade seems like a good choice for me since I don’t have the over $100k to qualify for TD Waterhouse’s lower trade fees of $9.99. The other thing about TD Waterhouse that never appealed to me was that they charge an inactivity fee quarterly. Since I plan on using a buy and hold strategy, that would cost me. However, The Lazy Investor alluded to this fee being waved if you switched in an eService account. I couldn’t find that information on the TD Waterhouse website to verify it, so I called them up this morning and the person I spoke to did verify it. So that definitely makes TDW more appealing to me.

I’m a little concerned with what I’ve read on people’s experience with Questrade’s customer service. And since I already bank with TD, the idea of having my accounts at one place appeals to me because it seems that makes moving money around easier. TDW also allows you to do wash trades, which is useful if you are trading US equities.

It’s funny how writing things down helps to clarify everything. As I write this, I can see that I’m leaning towards going with TDW, but I need to somehow justify paying the $29 per trade when Questrade would only cost $4.95 per trade.

I think TDW will just be easier for me given my long term goals. Right now, I want to start out with some TD eSeries funds and some DRIPs.

Loblaw update

Wow, Loblaw is at $37.74 right now. It just keeps going down down down. I guess they announced their profits were down, again.

They’ve also announced their quarterly dividend for December is $0.21, so at the current price the stock is yielding about 2% a year?

I like Loblaw

Back when I first read Stop Working and wanted to get started in investing, my number one pick was Loblaw. I remember watching it when it was around $52 and thinking it was such a deal and wishing I had the money to buy it right then and there. It’s now at $45, and doesn’t seem to be very popular although since I thought it was a deal at $52, then it’s got to be an even better deal now at $45, right? Problem is, I don’t know anything about determining a stock’s value, so I don’t even know what a deal is.

But I do know that I think Loblaws is doing good stuff. From what I understand, the company has been undergoing some major restructuring and that’s why their profits and share price have been suffering. There is also talk of the threat of Wal-Mart opening up superstores here and such. But seriously, I see enough differentiation between the two and I like what I see at RCSS better. Here out west we have The Real Canadian Superstores, and I think it’s a great store. I really like what they are doing with the President’s Choice brand. The message I get as a consumer is that they want to provide thoughtful, quality products, at a competitive price. When I shop at Wal-Mart, the message I get is that they want to provide stuff at the lowest price possible. Well I don’t want stuff, I want good quality products. In the last couple of months I’ve been really impressed with the President’s Choice products. Their housewares are stylish and well designed. The food products are interesting with a gourmet twist, and they have a great selection of organic products as well. Even the Joe Fresh clothing line is well designed but inexpensive. Basically I think they are doing a great job at building the brand and surely that’s got to be a good thing that will allow them to grow their profits and grow their dividends?

I really don’t know though. I’m pretty sure analyzing stocks solely from a consumer perspective isn’t the way to do it. But I don’t know enough about investing to know how else to look at the stock. Anyone have any thoughts on Loblaws?

One more little step

The library finally got copies of Derek Foster’s new book, The Lazy Investor and I went and picked one up today and read it. It’s a quick and easy read, although it did have some filler cliche quotes and stuff that I just skimmed over. But overall, I found the information helpful for an absolute beginner like myself. I’m now determined to get a hold of a share and get started with DRIPs and SPPs. I’m so glad that The Lazy Investor has a step by step guide on how to set up a DRIP, because when I’d looked into it before I just got very confused and didn’t know how to start.

I’d say The Lazy Investor is a great guide for someone who is interested in dividend investing but is just starting out and doesn’t have much money. I loved Derek’s first book, Stop Working, but I’ve struggled with just exactly how to get started. I figured I would have to start with mutual funds until I got enough cash built up to make buying individual stocks an option. That’s when The Lazy Investor comes in and gives you another option for getting started: DRIPs and SSPs.

I’m still in the middle of reading The Four Pillars of Investing. That’s going along ok, but it’s not as breezy a read as The Lazy Investor for sure. But funny enough, from what I’ve read so far in The Four Pillars of Investing, it actually made me not want to invest in individual stocks at all (be a chimpanzee throwing darts as Bernstein puts it) and just leave my money in an index fund. Since I’ve already set the ball rolling to open an eSeries account with TD I guess for now my strategy will be a mix of index fund and DRIPs.