Friday, September 23, 2011

Gut it out

After the recent weeks of market turmoil and tanking I decided to try to get my legs back under me in the day-trading world.  Yes, day trading is foolish if you're reckless and don't establish parameters and rigorously adhere to them.

I bought a VERY tiny position of HOU.  Horizons 2X oil bull.  If oil goes up 1% it goes up 2%.  If oil goes DOWN 1% then you go down 2%.  Plus since it has to do tricky things to keep it's relationship decent to the oil market (which is another topic for another day) it has what's called a "tracking error" which means that if you hold it long term you're not going to make any money.  They have to do some VERY tricky things to keep the percentages locked up with the changes in oil.

Remember, it's not directly linked to the valuation of oil... just the percentage change.

I held my position for a whopping 15 minutes and then sold for a blistering profit of 1.1%

Had I risked more money it could have been a 3% profit, (thanks to trading commissions eating into the profit) but I was holding firmly to my own set of rules for this sort of thing and that's as much "risk" as I was willing considering oil has tanked so much and so quickly.

I made a whopping $10.01 on my trade today.  I think I'll go buy some lunch.

Saturday, September 17, 2011

I like Scotia Itrade.  Perhaps some of that has to do with my holdings.  They are now sufficiently large enough to qualify for a better commission pricing.  But then the news breaks:

Holy savings bat man!  That's a crazy deal!

You poor slobs (I mean readers who have just started) with only $1500 or so in your TFSA or RRSP have to pay $19.99 + $0.02/s > 1000 shares now have a select few funds you can trade for FREE.

If you're wary of links on strange blogs then I'll just tell you.  (Damn you lazy jerks for not clicking the link!)  Claymore Investing and Scotia Itrade have partnered to offer investors "long term" FREE trades on 46 different ETFS.  That means any "long term" trade you won't have to pay buy and sell commissions!

For you small fry out there that's a potential savings of $40!  (1 buy and one sell at their highest commission rates)

What does this mean?  It's the beginning of the end for mutual fund companies that have been robbing Canadians for years.  (Not direct robbery mind you... just oppressively high management fees on mutual funds).

If you're lazy and haven't read my blog, an ETF is an Exchange Traded Fund.  Which works in a similar way to a mutual fund (a basket of companies to insulate you from one company going all Enron on you) but due to the fancy mumbo-jumbo of how they work they charge WAY lower management fees.

The only thing mutual funds had left going for them was the ability to make small purchases and have all your money purchase units of the fund.  Whereas purchasing a unit of an ETF on the stock market would incur a commission to buy.

Now that Claymore and Itrade have done away with the commission provided that you make a "long term" trade then you will NOT pay any commission.  WHOOOOO HOOOO!

If you have $327.50 of cash left in your TFSA or your RRSP but can't afford to buy 100 units of something you like?  (Rather than incurring a very high per-share commission for purchasing such a small number of shares/units) NO problem!  You can buy 1 unit of any of these 46 ETFS without paying a single cent in commission.

NB:  According to the rules from Itrade you have to hold the units for at least 1 business day to qualify for the free commissions.  This of course protects them from jerks like me who would have traded 1 or 2 units 15,000 times in a single day making $0.01 at a time.  It's really to protect themselves and their servers since this kind of traffic would no doubt be done by thousands of other investors as well putting an incredible load on their servers potentially crashing their system.

Claymore has the bulk of the "free" offerings, but you will find a small selection of Horizon and Ishares ETFS too.

On Tuesday I bought 16 units of HXT in my TFSA.  It's now up a whopping 0.42% ($0.68).  I think I'll sell to triumphantly lock in this gain!

The only real catch?  How long will they offer this deal?  Who knows.  But be savy folks.  Don't go all willy-nilly and buy 1 unit each of all 46 ETFS.  If they do decide to cancel then you'll be stuck with a large selection of small positions of ETFS that won't cost you to sell, but you'll be lucky to get out in one piece.  Pick 2 or three that you would want to get anyway and use this opportunity to start building a real position.

Happy investing people!

Tuesday, September 6, 2011

"losses" and losses

If you're like me and you're probably not because if you were you wouldn't be reading my blog.  Ok, ok ok, lets try that again.  If you have taken some of my advice you now probably have a a few humble holdings or a modest selection of not very exciting units/shares and have watched them go down in value as the world seems intent on plunging into more head-spinning turmoil.

The unit values have gone down, so your overall holdings are now worth less than when you started.  Is this a point of concern?  Well, depending on what you bought, it ranges from not really to not at all.  Canada while not completely immune to the world's financial issues is still sitting on the largest bounty of raw materials ON EARTH where freedom, safety and ethics are all a part of the founding principles of this country.  Oil from the other parts of the world (mostly OPEC nations) is all based on systems that haven't progressed since the dark ages.  And to top it all off, the biggest supplier of just so happens to be funding the same extremists groups that are attacking the freedoms of their biggest customers.

Far be it from me to think that it would be a good business practice to be gracious to your best customers and perhaps try to encourage them to keep buying your product by emulating them in some ways?  Nah... lets not bother.  We need some more fat, spoiled princes waddling around who don't know the meaning of a hard day's work, or what it is to have to suffer or struggle just because your family just so happened to be squatting on the right part of desert when the good intentioned folks came by to tell them how much their property is actually worth and offered to pay them to take stuff out of the ground that they never even knew was there nor had any value.  They quickly learned how much their oil was worth though, and how have they used their profits?  Building taller and taller buildings, reclaiming land in the desert to build exclusive residences while exploiting cheap labourers from neighbouring countries.  Hoarding, accumulating, and not really doing anything with it except perhaps keeping working class people uneducated and angry.

Anyway, I digress.  This was not to be a socio-political rant.  Your holdings are secure in Canada.  While we are neighboured by the largest bully on earth who is so oil hungry they will invade (at the drop of a hat) any nation which they deem backward provided of course they have lots of conventional oil bleeding from the ground.  Thankfully our oil is all locked up in sand.  They don't know how to deal with it since the money just doesn't bleed out of the ground and into their pockets.  We have to work for it.  Dig it up.  Clean it up.  And thankfully thanks to the "progress" in the American educational system, they barely even know we exist.  If they do know there's something up there, they think it's just a barren cold wasteland.

So, being where we are in Canada right now, we have the chance to become the next fat, bloated country rich on oil and resource profits.  Buy in now while we have this world turmoil.  in 20-40 years you will thank me.

Thursday, September 1, 2011

tax time is done! Phew!

NB: this posting fell through the cracks and got put on hold by the "draft" monster.  It should have been published in early JUNE 2011.

My taxes are now done and I'm breathing a sigh of relief.  I don't owe them all that much but I suppose you could look at that from the other perspective.  This is BAD!  I wished I owed them more...  LOTS more!  Why?  That would mean I had a larger income and not this meagre pittance I've become forced to deal with.

I always find the Canada Revenue Agency a little perplexing.  They, like most people and corporations tend to "pigeon-hole" everything and everybody.  So what's a mixed artist like myself to do?  Everything I do all tends to blend into one homogenized hole of incomelessness.

Deductions are great, but they require income from which you can deduct!  After all my deferred deductions from yesteryear I'm left with about $12 of taxable income.  All thanks to those deductions mind you.  So save your receipts!  ALL of them.  I don't care if you shoe-box them.  You'll need them.  Even beer/bars are 50% deductible as entertainment expenses if you have customers or potential customers with you.  NB:  Don't try to deduct $10,000 of bar bills on $2000 of income.  It won't get you anywhere except perhaps an express visit with an auditor.

The key is to be reasonable with your deductions.

Disclaimer:  I didn't recommend any investments this time.  You can't sue me for that either.  Damn lawyers.

Getting paid to wait

As many many portfolio managers have said before, and will say again and again and again, I shall now repeat their words so that you too can reap the benefits.

What does this mean?  Big, brand name companies that you know or use their products every day.  

From a risk standpoint, our big banks in Canada will never be going away and most of them have posted huge profits for this past quarter beating the profit expectations.  Plus, with the recent world and market turmoil our banks have fallen in price by at least 10% from the recent highs during the past winter.  If you are tired of losing your savings to inflation, then why not buy a bank stock?  Plus they all yield 3.5% or better.  (No savings account in Canada currently bests inflation!  If you're a die hard saver without any investments I have some bad news for you:  you're LOSING money by saving.  Invest, invest, invest.  Or pay off your debts are FAR better ways to "save" for your future.)

So how does this get me paid to wait?  We're all waiting for economic recovery and while this happens the big bank stocks will creep up in value or go sideways or slide a bit more before things pick up.  All the while they pay 4 times a year a nice dividend.  Protip: re-invest that dividend!

Other thoughts and ideas?  Bell Canada, Rogers, Telus.  Hard to go horribly wrong with any of them.

How have I done after the recent market slip?  I did a tiny bit of portfolio shuffling but I mostly held fast.  I'm not going anywhere any time soon, nor are my holdings.  They continue to yield and do business as usual.  My income from my investments is currently all re-invested.  But if I did stop my re-investment plans I would be making approximately 15% of my monthly budget without having to lift a finger.

My opinions are mine and mine alone.  (Or regurgitated from other people who do this stuff)  If you bet your entire life's worth on some flyer I can't be held responsible.  Since I never recommended any flyer it's your own damn fault.