Investment question

[luckyjackson]

In what is an unfortunately a rare circumstance for me, I find myself with a bit of money to play with. Not much, about $20 000.00. Never played the market, but I'm thinking of doing something a bit more than just plunking it into a guaranteed investment.

If you were going to put out some money on a riskier investment today, what would you choose? If we are coming out of the recession, it seems to me that oil is a really good bet. Property?

Opinions? Please...nothing along the lines of the "open an MP" type suggestions. ;)

[mexican]

If you are going to make an investment ask yourself three questions:

1. What is the purpose of the investment - e.g. retirement savings, education fund, home improvement etc.

2. What is the time frame for the investment - i.e. how long are you going to invest for - 1 year, 10 years, until retirement

3. What is your risk tolerance - i.e. how much risk are you going to find acceptable. It is no good making an investment if it is going to keep you up at night.

An honest answer to those three questions should start to lead you to the correct investment choice.

[Surfbum84]

take it for what it's worth, but i've parked a lot of money in Brazil and China. So far it has worked out well for me. If you don't wanna research things, you can get mutual funds (and im sure ETF's) that are like "Latin America Fund" or "Pacific Rim Fund" and they can manage it for you.

Again, beware of fees and commissions which can be high.

[GDLLover]

I would think stocks in a large packaging company would be something to think about. 80% of all manufacturing requires packaging of the products they produce.

During recession = less mfg = less shipping = less packaging material needed

The inverse effect happens when we start producing higher quantity of produced goods.

Good luck with whatever investment you make.

[Gomer123]

In Ontario? Solar power. You'll get at least 10% ROI for a 20 year contract with the OPA. Zero risk too.

But if you don't have some good unshaded roof space...oh well.

[HAMSTER INSPECTOR]

I can give you a suggestion on very safe places to put your money and still get an investment upside with the added bonus if a dividend. These days the banks pay nothing on bank accounts and GICs are not that much better.

My suggestion is that you buy a utility like Trans Canada Pipeleine ( TRP )

http://i47.tinypic.com/2w6b7v7.jpg

Trans Canada Pipe is now at $31.94 and pays a near 4% quarterly dividend.
Analyst expectations are that it will reach $42. Put it away for the medium term ( 5 years ) or the long temp and re-invest the dividends annualy. You can buy on the dips and sell on the rises, but I would not trade it on every rise or dip, this will make you crazy and reckless. Trans Canada Pipe is the safest of the safe investments, you will not find safer or surer investments. The Canadian banks are also a good investment and pays a simular dividend.

[big dogie]

I believe there is a lot of risk in the market right now, transcanada or shoppers may be a place to go until the pull back...

b d

[luckyjackson]

If you are going to make an investment ask yourself three questions:

1. What is the purpose of the investment - e.g. retirement savings, education fund, home improvement etc.

2. What is the time frame for the investment - i.e. how long are you going to invest for - 1 year, 10 years, until retirement

3. What is your risk tolerance - i.e. how much risk are you going to find acceptable. It is no good making an investment if it is going to keep you up at night.

An honest answer to those three questions should start to lead you to the correct investment choice.

Thanks, good suggestions. I had these figured out, but should have stated them explicitly.

1. Purpose of the investment is purely speculative and for profit. This isn't about my regular savings, it's separate and apart from that.

2. I had some idea of a relatively short term, like 2 years or so.

3. Risk tolerance is high.

...and no guys, I wouldn't consider a week in London fucking off-the-scale hotties a good return on the 20 000 thou....well, at least not the kind of return I was thinking of here.

[diane-35]

I can give you a suggestion on very safe places to put your money and still get an investment upside with the added bonus if a dividend. These days the banks pay nothing on bank accounts and GICs are not that much better.

My suggestion is that you buy a utility like Trans Canada Pipeleine ( TRP )

Trans Canada Pipe is now at $31.94 and pays a near 4% quarterly dividend.
Analyst expectations are that it will reach $42. Put it away for the medium term ( 5 years ) or the long temp and re-invest the dividends annualy. You can buy on the dips and sell on the rises, but I would not trade it on every rise or dip, this will make you crazy and reckless. Trans Canada Pipe is the safest of the safe investments, you will not find safer or surer investments. The Canadian banks are also a good investment and pays a simular dividend.


How can you call it safe when its march low was around $22, about that's 30% volatility within a year. If we see another market downturn we can expect the same performance in TRP. It is not any better than buying market index ETF such as SPY or ETC. Maybe there is upside potential, but I would not call it safe.

[HAMSTER INSPECTOR]

Ahh, to the unsophisticated investor it may seem to be an unsafe investment. All Stocks went down at that time in a mini melt down, but you can see the resilancy of the stock as it bounced back quickly. Do not trust me, a voice amoungst the pervs that inhabit this twighlight zone of hornyness. If you have a broken faucet you will call a plumber, if you have an electrical outlet that stopped working you would call an electrician. If you have a finacial question, I suggest you call experts in the finance world. See if any of them will tell you any different that Trans Canada Pipeline and the Canadian banks are some of the very safest investments with good short, medium and long temp upside as well as a close to 4% dividend. With the added bonus of being taxed at a favorable rates as compared to other investment returns. This is a stock you can keep long, medium or short term. No one will tell you it is a bad investment. This is an investment you can do with absolutely minimal risk. I challenge you to find better.

FYI - Trans Canada Pipeleine is in the Oil Pipeline and Electrical Transmission business as well as having some nuclear reactors. They have few competitors.

[hinz]

Depends on your asset location regarding the $20K.

Pay down all outstanding, high interest debts such as credit card balances.

Student loan is next.

If there're still something left, try to pay down mortgage as much as you can. Top up your emergency funds in high interest saying account, assuming you have exhausted the Mortgage prepayment option for this year.

By paying down the debts and controlling your spending via budget, you are guarantee to earn more than putting the $20K at risk by chasing the top performaning sectors.

Assuming you do not have any outstanding debts and need to top up emergency funds, you could max out your TFSA contribution room in the coming 4 years and invest 1 year GIC annually. Whatever interest generate will be tax free and you could use those as down payment for a modest condo.

Another option will be to max out your RRSP and TFSA contribution rooms and use those amounts to invest in corporate bond ETF (XCB) and real-return bond ETF (XRB). For the remaining funds in non-registered account, you could invest in dividend paying equities ETF (XDV) but keep in mind that it's heavily tilted and exposed to financial industries, which may not be your liking.

As far as picking Canadian stocks are concern, TRP is decent but it's a quasi energy play and you would expose yourself too much on energy if you have already owned one of ECA, IMO, SU, TLM, COS.UN, HSE or all of the above. Having said that, IMHO, investing George Weston (WN) in low 50s or Rogers Cable (RCI.B) in low 30s or Power Financial (PWF) in mid-20s are better in terms of risk return. You could "speculate" by investing Manulife (MFC) around mid teens if you think the company's woe on variable annuities volatility is done :rolleyes:

[djk]

Depends on your asset location regarding the $20K.

Pay down all outstanding, high interest debts such as credit card balances.

Student loan is next.

If there're still something left, try to pay down mortgage as much as you can. Top up your emergency funds in high interest saying account, assuming you have exhausted the Mortgage prepayment option for this year.

By paying down the debts and controlling your spending via budget, you are guarantee to earn more than putting the $20K at risk by chasing the top performaning sectors.

Assuming you do not have any outstanding debts and need to top up emergency funds, you could max out your TFSA contribution room in the coming 4 years and invest 1 year GIC annually. Whatever interest generate will be tax free and you could use those as down payment for a modest condo.

Another option will be to max out your RRSP and TFSA contribution rooms and use those amounts to invest in corporate bond ETF (XCB) and real-return bond ETF (XRB). For the remaining funds in non-registered account, you could invest in dividend paying equities ETF (XDV) but keep in mind that it's heavily tilted and exposed to financial industries, which may not be your liking.

As far as picking Canadian stocks are concern, TRP is decent but it's a quasi energy play and you would expose yourself too much on energy if you have already owned one of ECA, IMO, SU, TLM, COS.UN, HSE or all of the above. Having said that, IMHO, investing George Weston (WN) in low 50s or Rogers Cable (RCI.B) in low 30s or Power Financial (PWF) in mid-20s are better in terms of risk return. You could "speculate" by investing Manulife (MFC) around mid teens if you think the company's woe on variable annuities volatility is done :rolleyes:

Well said, Sir.

[hinz]

Well said, Sir.

Thanks :o

BTW, in addition to pay down all the debts and have liquid emergency funds on hand before investing, it's not a good idea to overpay a house and/or a car. Make sure you assess and budget the cost accordingly to upkeep and maintain both depreciating assets for years, if not decades.

[mexican]

You might consider buying gold. Odds are continued economic and political instability. Could see a very good return in 2 years.

[hinz]

You might consider buying gold. Odds are continued economic and political instability. Could see a very good return in 2 years.

Do you mean gold bars, paper gold, gold futures, gold companies like Barrick or Goldcorp, or Gold ETFs like XGD (a basket of publicly listed gold companies) or GLD?

Personally I prefer Silver to Gold as the metal spot price has more upside. Silver is less prone to IMF/central banks manipulations since none hold silver, while having similar storage value like gold.

BTW, it's not a good time to be bullish on gold and silver right now as almost everybody are anticipating the pending demise of USD and executing the mother of all "carry-trade" by borrowing more USD than Yen short-term to speculate commodities or commodities related currencies like Aussie, Rand, Kiwi, Loonie and real estates of all types in the emerging markets. :rolleyes:

If I ever incline to speculate and gamble my money allocated for hobbying for the year, I would be bullish on Uncle Sam tactically for few months. But again I believe the 4 letter F-word is better than 4-letter R-word-risk right now.

[roblestone]

take it for what it's worth, but i've parked a lot of money in Brazil and China. So far it has worked out well for me. If you don't wanna research things, you can get mutual funds (and im sure ETF's) that are like "Latin America Fund" or "Pacific Rim Fund" and they can manage it for you.

Again, beware of fees and commissions which can be high.

I agree. If the dollar falls flat gold might not be the place for your money. Don't forget it has no real value other than it is sparkly and it costs money to store it. When it's price comes down it drops like a rock. Investing in emerging markets has the advantage of being in currencies other than the dollar.

I like ETF's better than mutual funds because of lower costs and you can trade them any time without waiting for the end of the trading day.

If you really want to gamble invest in a wildcat oil or gas well.

[Wild Wiglin Willie]

TRP is decent but it's a quasi energy play and you would expose yourself too much on energy. :rolleyes:

Trans Canada Pipeleine is not considered an energy play. It is listed as a utility, its core business is to transport electricity for regional electrical energy producers to outside markets when there is an excess that can be sold to another utility that requires additional power. An example of this is during high electrical consumption periods like during a summer hear wave or winter cold snap where if Ontario has extra capacity it is transported and sold to NY state. TRP is also in the oil transportation business, transfering oil by pipeline.
While TRP is not an energy play. All stocks in the energy sector is at moderate levels not and energy is expected to spike when there is an econmic recovery. In the long term oil prices are expected to go up and not down.
TRP is the safest of the safe. All major portfolios in Canada contains some TRP. If you watch BNN regularly you will see that many analist recommend it highly. Especialy if you want a minimal risk moderate yield investment. It also pays a dividend. As Kevin O'Leary sais: you are paid to wait. Good prospects for an upside and a fat near 4% dividend.

[night ride]

Spent it on escorts.

[hinz]

Trans Canada Pipeleine is not considered an energy play. It is listed as a utility, its core business is to transport electricity for regional electrical energy producers to outside markets when there is an excess that can be sold to another utility that requires additional power. An example of this is during high electrical consumption periods like during a summer hear wave or winter cold snap where if Ontario has extra capacity it is transported and sold to NY state. TRP is also in the oil transportation business, transfering oil by pipeline.

TransCanada is a utility but it's core business is transportation of natural gas, which is the bread and butter business. The majority of the businesses, including power generation business in Canada are simply toll systems that are heavily regulated and scrutinized by the governments. The recent acquisition in the NY states is if I am not mistaken the first time they engage buying and selling electricity on the spot market unregulated, something that was once had bad reputation following the collapse of Enron.



While TRP is not an energy play. All stocks in the energy sector is at moderate levels not and energy is expected to spike when there is an econmic recovery. In the long term oil prices are expected to go up and not down.

There may be long term demand on oil to justify high oil price but the price has more to do with people stretching the fact by carry-trade and the weak USD than the fundamentals. The so-called demand pick up from emerging market in China and India do not justify the oil price that expensive.

Just take a look on the relationship between the electricity outputs in China and the GDP growth one can be trusted. I would not be surprised Chinese economy is getting bubbly and ready to burst as early as 2010, There's no way emerging economy such as China could be that "efficient" when importing huge quantity of commodities to stimulate the economy, while the electricity output if I could recall is essentially flat.


TRP is the safest of the safe. All major portfolios in Canada contains some TRP.

Nothing is safe. Remember TRP cut their dividend to 80 cents annually exactly 10 years ago after they invested all over the Americas with different businesses and the retired CEO, Doug Baldwin came out of the retirement to fix the mess before Hal Kvisle took over?

Some fund manager even dare to equal what's happen to Manulife right now is similar to TRP 10 years ago :rolleyes:.


As Kevin O'Leary said: you are paid to wait. Good prospects for an upside and a fat near 4% dividend.

Even though Kevin O'Leary was fun to watch at the old Squeeze Play sometimes, his stock picks suck. You would loss big if you recalled his disclosure regarding holding AIG and KKR equities and people followed by investing a big chunk of their assets on those companies just before the Lehman collapsed.

The best investment he had was to sell his "baby" softkey to Mattel at 9 figures, an amount the latter was hell bent to overpay in retrospect.

[Wild Wiglin Willie]

When it comes to investments, I will trust an educted informed person over a arm chair investor. ( as we all are, armchair investors ) In the long run the large investment houses can predict the direction of stock much better than any of we can. There seem to be a consensus among the investment houses that TRP is a solid investment that have minimal risk and good upside. Will you will not disagree that it is a sound investment?

I am working at my computer 7 days a week and 80% of the time I have BNN on a small screen beside me. There is a small list of stocks that are recommended very often by different investment advisors from different investment firms. TRP is mentioned very often. If I had only $20,000 to put into a safe place, I know of no better stock to put it in for the short, medium or long term. I you know of one, I would appreciate the tip.;) I do not think that diversification with the small amount of $20,000 is a good idea. TRP is the safest surest way to keep you money safe with a dividend and possible upside? Anyways, I am confident in this stock. Time will tell. If you ask me to put a large bet on it, I will tell you that I already have.

The dividend for TRP is now at 4.7%, much better than the .5 % you will get at the bank.

On the matter of Kevin O'learys pick. I can tell you that he is a very intelligent and well informed about investments. He may not be right 100% of the time on his investments. ( no one is ) In the long run he will be right the vast majority of the time, as the market fluctuates and not all investments turn a proft at the same moment.

The thread starter is looking for a safe place to invest his money, a place where he can get a good return with minimal risk. TRP is a good place, but by no means the only place. The Canadian banks are a good investment as well, with some banks better than others. These are all places with the least risk and very decent returns.

[HAMSTER INSPECTOR]

Spent it on escorts.

http://i48.tinypic.com/1rvzhf.jpg


Dreaming of better times.

[hinz]

When it comes to investments, I will trust an educted informed person over a arm chair investor. ( as we all are, armchair investors ) In the long run the large investment houses can predict the direction of stock much better than any of we can. There seem to be a consensus among the investment houses that TRP is a solid investment that have minimal risk and good upside. Will you will not disagree that it is a sound investment?

I don't trust those "educated, informed professionals" by default just because they have alphabetically soups of designation like CFP or CFA or both and good looking, seem nice personalities. Regardless of the money those insitutions spend on researches, technologies like the Bloomberg or creating "innovative" financial products/instruments (remember CDS, CDO, SIV and death bonds, which are selling like hotcakes nowadays). They are no better or worse than the so-called arm chair investors.

I am sure many of them have good intention at heart but the compensation is full of conflict of interest. It's tough not to be biased to sell house products ahead of clients interests. Some of them are at best glorified pharma sales agents soliciting paneceas to your financial woes, at worst used car salesman to solicit lemons. They all have to meet aggressive sales targets (grow the books in their terminology) to feed the bottom line of their financial institutions working for.

How many times these professionals, top 1% in particular are wealthier well before their clients? Maybe this time is different as it seems there's no discrmination between rich and poor in terms of losing your nest egg.

In terms of consensus, they could be right but they could equally suffer from herd mentality and turn out to be wrong too. Not saying TRP is a bad investment since I started to invest the shares right after they cut the dividend 10 years ago, completed the purchase around $10 per share and rebalanced out the whole position in RRSP a couple of years ago.


I am working at my computer 7 days a week and 80% of the time I have BNN on a small screen beside me. There is a small list of stocks that are recommended very often by different investment advisors from different investment firms. TRP is mentioned very often.

It's neither the fund manager/advisor nor their companies he or she is working for interest to recommend cash in the profit and leave the cash aside for future opportunites live on National TV. Cash alone does not generate commissions by churning and they recommend those stocks not necessarily because of good fundamentals. Equities like SC, TRI, TRP, BCE and even WN/L are leggards in terms of stock price compared to the index. Assuming there's no "black swan" event, the downside risk and volatility for these stocks are low but not impossible.

BTW, BNN looks "amateurish" compared to the Bloomberg and CNBC.


If I had only $20,000 to put into a safe place, I know of no better stock to put it in for the short, medium or long term. If you know of one, I would appreciate the tip. I do not think that diversification with the small amount of $20,000 is a good idea.

$20K is a lot of money for people living paycheque to paycheque and/or recent grads who are struggling to start a career and pay off the student loans.

Like I mentioned before, you should pay down all of debts, build up emergency funds and keep an eye on spending like a hawk before you ever invest a penny in stock market. No investments return short and medium term could beat that when you are debt free and in control of your spending.

Still, do not pass any free money your employer match to your DC plan. At minimum invest the % equal to your employer's match before paying down the debts.


TRP is the safest surest way to keep you money safe with a dividend and possible upside? Anyways, I am confident in this stock. Time will tell.

TRP is safe compared to say TransAlta and slightly more attractive in terms of valuation compared to ENB. But the risks for TRP would be a collapse of natural gas price if there's double dip recession. Or the governments pose a cap on the toll charge TRP could raise. That's not include execution/management/cost overrun risks for future projects to transport natural gas for clean energy in the States.


The dividend for TRP is now at 4.7%, much better than the .5 % you will get at the bank.

For sure in non-registered accounts but you get paid for taking the risk and lower liquidity.


On the matter of Kevin O'learys pick. I can tell you that he is a very intelligent and well informed about investments. He may not be right 100% of the time on his investments. ( no one is ) In the long run he will be right the vast majority of the time, as the market fluctuates and not all investments turn a proft at the same moment.

I dunno no but I do know is he can be unbelievely stubborned and big mouth :p


The thread starter is looking for a safe place to invest his money, a place where he can get a good return with minimal risk. TRP is a good place, but by no means the only place. The Canadian banks are a good investment as well, with some banks better than others. These are all places with the least risk and very decent returns.

CAD banks are the strongest in the world by accident as the Liberals ban them from mergers back in 1998, so that they do not have excessive inflows of cash for the CEOs to do stupid things to get the bonus and become the big boys like the Goldman Sachs, BofA and even CITI.

In terms of productivity, there're still plenty of room for the CAD banks to increase productivity. It's mind bogging and crazy to saturate the market even further by increasing bank branches like retail clothing stores and hire part-timers to operate at the front like McDonalds. This is going to waste the banks a lot of money in overheads annually

Contrary to what the Canadian banks are doing, many banks in the world, including the Chinese ones are cutting the number of branches and focus on resources and money to intergrate IT, merge back offices into one simplified network and transform the remaining branches into stores that utilize automation and self-services on mundane day-to-day banking, freeing the staffs to focus on cross-selling products, including selling insurances in branches. Canadian Banks may be the safest but they're still years away to be the most productive banks in the world.

[abstinent]

Im in a similiar situation, but want to start with only 10Gs.

They say Warren Buffet averages 20% yearly returns "consistently," while most day traders lose, even though there may be a few flukes/spikes/penny stocks etc... and even the decent ones, assuming enough to live off it, can make 8 -15%?

any opinion on this relatively new HNU HND - HOU HOD ETF horizon beta dealing with commodites of gas/oil and such? with bull/bear market, one goes down, just buy the other? =) someone i know has made decent returns past 3mths, ill see how he does past this winter, assuming it increases when weather gets colder..

safer than tech/penny stocks, but not as reliable/slower returns than long term bank stocks, such as RBC recently..

[diane-35]

I would also add, wasn't Eron or lots of American banks considered "solid" investment before they tanked? So what makes Trans Canada so different from those stocks? How do you know there is no accounting fraud going on? I just cant trust investing in a single company, way too much risk. Diversification is the only safe way, even so, it is not without downside risks.

[Wild Wiglin Willie]

Hinz,

- I trust the educated informed professionals, when it comes to investing they are smarter than I am. I have done quite well taking their advice.

- As far as the set backs that TRP had 10 years ago, it was a situation of short term pain for long term gain. They invested in intrastructure that is paying off big now.

- BNN vs. CNBC/Bloomberg. I watch them all, but I am the slow cautious investor that does not have to turn on a dime. By no mean am I a day trader, I am more like a quarterly trader. Although I always like to keep my powder dry and take advange of a good investement when it comes my way.

- Of course $20k is a lot of money to people who do not have it. I was just answering the question for the thread starter. He wanted to put away the money in a safe place where it can grow and compound for the short or medium term. TRP is good for the short, medium or long term with minimal risk. You can even trade it on the dips and peaks.

- As you said yourself, TRP is safe as compared to Trans Alta. Having said this, would you not also say that TRP is at the top of the list in the minimal risk catagory. I am certain TRP and the Canadian banks are in the top 10 Canadian safe stocks.

- Lower liquidity? Yes your bank account will have your money for you on demand, with your TRP stock you can have your money in a few days or maybe a weeek.

- Ahh, Kevin O'leary. I totaly agree with you that he is loud and opinionated, but he is very inteligent and interesting as borish as he is.

- Canadian banks are as conservative as they come, but extremly safe. Not as fun as those Texas banks that will give you a Smith and Wesson .44 if you open an account with them.

__________________________________________________ _______________

Abstinent,

- $10,000 or $20,000, you are still in the same ball park. So I my opinion is not to diversify and stick with safe and sure. Which is Trans Canada Pipeline or a Canadian bank. Minimal risk, good upside, with a dividend 4.7% paid quarterly and you are taxed at a favorable rate. Thats my opinion, maybe Hinz has another suggestion?

__________________________________________________ _______________

Diane-35

- The difference between Enron and Trans Canada Pipe is that Enron was a paper company that had few real assets, and Trans Canada Pipeline has infrastructure and good long term prospects. TRP is as solid as they get.
When we are talking about $10,000 or $20,000 it makes no sense to diversify.
I can not think of a better stock to buy where have good upside, minimal risk and a sure dividend.


__________________________________________________ _______________

I can not think of a better investment for a person that wants to invest $20,000 for the short term. If there is something better out there maybe Hinz can tell us. I will be ahppy to know it.


wWw.

[Fireseal]

Contrary to what the Canadian banks are doing, many banks in the world, including the Chinese ones are cutting the number of branches and focus on resources and money to intergrate IT, merge back offices into one simplified network and transform the remaining branches into stores that utilize automation and self-services on mundane day-to-day banking, freeing the staffs to focus on cross-selling products, including selling insurances in branches. Canadian Banks may be the safest but they're still years away to be the most productive banks in the world.

Fuck that, who wants to go in knowing what they want to do and have to listen to pitches for useless insurance products? I had to listen to some bullshit when I was getting my bank visa card activated. What I like having is easy access to a bank machine to do any physical transactions and the rest online. I don't want to see ads for garbage.

[diane-35]

Willie, you almost have sold on TRP and existance of such thing as safe stocks. The reason I am asking is I have about $200K in cash to invest. But the thought of catching a "black swan" frightens me. I also thought of diversification, but if you look at DJIA in the past 10 years, it has not advanced a bit. If you bought DJIA in Oct 2000, you would have lost 30% last March, and just breaking even now. Oh and DJ consists of only blue chip stocks - the kind of stocks all analysts think are safe, quality, and most are dividend paying... but still they are not immune to the market volatility. So there goes the idea of "long term" investing. If 10 years is not long term enough what is?

[poker]

Gold.



...a bit pricey now.. but it will be even more pricey 3 yrs from now.


Cheers!

[Wild Wiglin Willie]

Willie, you almost have sold on TRP and existance of such thing as safe stocks. The reason I am asking is I have about $200K in cash to invest. But the thought of catching a "black swan" frightens me. I also thought of diversification, but if you look at DJIA in the past 10 years, it has not advanced a bit. If you bought DJIA in Oct 2000, you would have lost 30% last March, and just breaking even now. Oh and DJ consists of only blue chip stocks - the kind of stocks all analysts think are safe, quality, and most are dividend paying... but still they are not immune to the market volatility. So there goes the idea of "long term" investing. If 10 years is not long term enough what is?

Diversification is not a bad thing if you have enough to diversify with. Having$20,000 is not the same as having $200,000. TRP is in the top 5% of the safest stocks. TRP is part of almost every big portfolio, and it should be part of yours as well if you have $200,000 to invest.

- Ask the experts, not some fool on TERB for investment advice.
- If a stock goes down it is part of the game, in the long run if it goes up you have not lost a thing.
- There is no stock that is immune to market volitility, if you want absolutly sure put your money in the bank for .5% interest.

Here is a question for you to ask investment advisors:

If you were to put all your $200,000. in TRP for 10 years and do nothing. What will happen if you allow all dividends to be re-invested. I think that they will all tell you the same thing. Go forth and multiply. ( YOUR MONEY ) :D

[hinz]

- As you said yourself, TRP is safe as compared to Trans Alta. Having said this, would you not also say that TRP is at the top of the list in the minimal risk catagory. I am certain TRP and the Canadian banks are in the top 10 Canadian safe stocks.

No doubt about the TRP but I am not buying around $33, maybe $30 or less.

I would be interested in investing EXC or FPL in low-40s. Both are listed in NYSE. Used to own FPL shares years ago but cashed in the profits to invest in UST. Not necessarily a good strategy when you need to do the FX (CAD to USD) and not tax sheltered.



- Canadian banks are as conservative as they come, but extremly safe. Not as fun as those Texas banks that will give you a Smith and Wesson .44 if you open an account with them.

There is a conservative, boring bank based in Texa but I don't think you can get a consumer loan and checking accounts :p

http://www.bealbank.com/

BTW, Smith and Wesson stock, SWHC listed in Nasdaq may be attractive for speculation since it's a small cap. Product wise, I prefer Heckler & Koch (H&K) anyday to S&W or Rutger or Colt but H&K is privately controlled by German investors after the Royal Ordinance sold the company back to Germany.

[HAMSTER INSPECTOR]

- Ask the experts, not some fool on TERB for investment advice.


Hinz,

Willy is giving good advice. Now quit your jabbering and get back in the kitchen and wash that pile of dishes from last night. The lunch crowd is starting to come in!

[hinz]

The reason I am asking is I have about $200K in cash to invest. But the thought of catching a "black swan" frightens me.

Read the book of the same name and listen to Nassim Taleb far too many times with all those gloom and doom theatrics, with Arabic accents no less.

Though most of what he says are dead on but sometimes you have to wonder whether he has a vested interest in mind. He advises a hedge fund called Universa that based on "Black Swan Protection Protocol". It's his interest to talk doom and stretch the truth regarding the market, spread fear and convince subtly the big money (8 to 9 figures of cash) to hand in money to Universa and get "annuity" in terms of (2/20) rule.

That's on top of big consultation fees charged on road shows, speaking engagement, better than being just a prof in Academia.

Oh BTW, he could be entitle to indexed pension too, assuming he contributed during the tenure and the pension plan in question is sound or grandfathered after he departed.


I also thought of diversification, but if you look at DJIA in the past 10 years, it has not advanced a bit. If you bought DJIA in Oct 2000, you would have lost 30% last March, and just breaking even now. Oh and DJ consists of only blue chip stocks - the kind of stocks all analysts think are safe, quality, and most are dividend paying... but still they are not immune to the market volatility. So there goes the idea of "long term" investing. If 10 years is not long term enough what is?

I think S&P 500 is what the media and pundit make reference regarding the loss of decade in long term investment when it comes to investment, not DJ 30 since the Dow 30 is not represtative to all sectors.

Moreover, there's no guarantee in life and what people do not mention or want the "investors", speculators for most to know is you do not have to buy and hold the index, doing nothing for a decade. The key is to take the profit along the way and rebalance to fixed income, term deposit/GIC and raise cash based on your age and needs annually. And that's in addition to keeping an eye on spending and stay invested.

Still, unless you were lucky to cash in everything and selling short everything other than buying long on US T-bills before Lehman collapsed last year, everybody lost money and you would lose less if you prepared adequately.

[hinz]

Hinz,

Willy is giving good advice. Now quit your jabbering and get back in the kitchen and wash that pile of dishes from last night. The lunch crowd is starting to come in!

Willy is giving a good advice but like I said before don't take any advice for granted, including mine. Use true common sense and you have to do research and homework, just like some who do research here before paying a visit to a SP/MPA.

Oh, did I forget to mention I used to be TRP shareholder and lucky to cash in a decent capital gain in the past? Never a good idea to place a big bet by putting a big chunk of hard-earned money on a few stocks and put your faith/fall in love with the company, no matter how attractive the yield is.

BTW, how do you know I work in the kitchen?:rolleyes:

[HAMSTER INSPECTOR]

BTW, how do you know I work in the kitchen?


http://i48.tinypic.com/1rvzhf.jpg


Dreaming of better times.


WTF do you mean, how do you know I work in the kitchen? I hired you, stumblebum! Its not 1987, and your not on Yonge Street anymore! Get back to work!

[hinz]

WTF do you mean, how do you know I work in the kitchen? I hired you, stumblebum! Its not 1987, and your not on Younge Street anymore! Get back to work!

Funny to know how you could "hire" me when I am not even here in 1987.

And there's no Younge street here either.

BTW, good luck to your TRP investment;)

[HAMSTER INSPECTOR]

Aeehhh! No sense of humor! I guess its from all that drinking.:confused:

[hinz]

Aeehhh! No sense of humor! I guess its from all that drinking

LOL!!:p

BTW, speaking of drinking. You made a killing to invest big in Anheuser Busch stocks (BUD), and receive fat dividends while you waited, like Warren Buffett did before the Brazilians and the Belgians teamed up and be bigger suckers to takeover the Budweiser company.

[Rockslinger]

Is this a brand new forum? Didn't notice it before.

[wonkyknee]

Physical Gold is up big and so are the Gold miners(large caps).

Small Cap Golds still show a lot of value, and if you need a write off, you can buy into a small cap precious metals flow-through, so you make $10 000 right away in tax deductions and have exposure in a gold sector which hasn't truly taken off yet.

[duang]

Ahh, to the unsophisticated investor it may seem to be an unsafe investment. All Stocks went down at that time in a mini melt down, but you can see the resilancy of the stock as it bounced back quickly. Do not trust me, a voice amoungst the pervs that inhabit this twighlight zone of hornyness. If you have a broken faucet you will call a plumber, if you have an electrical outlet that stopped working you would call an electrician. If you have a finacial question, I suggest you call experts in the finance world. See if any of them will tell you any different that Trans Canada Pipeline and the Canadian banks are some of the very safest investments with good short, medium and long temp upside as well as a close to 4% dividend. With the added bonus of being taxed at a favorable rates as compared to other investment returns. This is a stock you can keep long, medium or short term. No one will tell you it is a bad investment. This is an investment you can do with absolutely minimal risk. I challenge you to find better.



Wow, pretty condescending with the 'unsophisticated' comment.

Diane 35 says a lot less but there's a lot more common sense and qualified opinion rather than your definitively stated pronouncements...

D.

[duang]

In what is an unfortunately a rare circumstance for me, I find myself with a bit of money to play with. Not much, about $20 000.00. Never played the market, but I'm thinking of doing something a bit more than just plunking it into a guaranteed investment.

If you were going to put out some money on a riskier investment today, what would you choose? If we are coming out of the recession, it seems to me that oil is a really good bet. Property?

Opinions? Please...nothing along the lines of the "open an MP" type suggestions. ;)

With a holding period of as little as two years any equity investment is speculative to some degree.

If you want to swing for the fences then just pick one or two good ideas and roll the dice. You could hedge your bets by diversifying using ETF's or mutual funds: this would reduce the range of possible outcomes on both the higher and lower ranges. Any individual asset [stock or commodity] is many times riskier than a diversified portfolio no matter how many sheep bleat how guaranteed safe any single investment is. Follow the herd and you get led to slaughter eventually.

There's very good advice here to look at your personal situation with respect to debt, liquidity and what kinds of accounts to use to reach your goals. Do the research or get someone to advise you.

For what it's worth, I have my money split between emerging markets and resource mutual funds but my holding period is long and my risk tolerance is very high [and I'm also in the industry].

D.

[duang]

Willie, you almost have sold on TRP and existance of such thing as safe stocks. The reason I am asking is I have about $200K in cash to invest. But the thought of catching a "black swan" frightens me. I also thought of diversification, but if you look at DJIA in the past 10 years, it has not advanced a bit. If you bought DJIA in Oct 2000, you would have lost 30% last March, and just breaking even now. Oh and DJ consists of only blue chip stocks - the kind of stocks all analysts think are safe, quality, and most are dividend paying... but still they are not immune to the market volatility. So there goes the idea of "long term" investing. If 10 years is not long term enough what is?

Don't let the fear of an abnormal event paralyze you. If you worried about getting hit by lightning you might never leave your house. Just don't run around in a storm with a golf club over your head. Same with investing: don't overconcentrate and invest appropriately for your risk tolerance and holding period.

Any money you might need in the next 3-5 years should have lots of government bonds, corporate bonds and some income producing trusts and stocks. Money not needed for at least 5 years can go into diversified equities subject to your risk tolerances and goals. Diversify by currency, asset class and geography in all cases to be prudent.

As someone already pointed out, the DJI is not a diversified index but in any case, most global indices have been very weak over the last ten years [a lot of that due to the appreciating Canadian dollar]. That doesn't mean that stocks are poor investments unless you think the next ten years will be the same. In fact, looking at the 50, 100 and 200 years of stock investing history many might see an opportunity going forward. Many areas around the world will have high growth [e.g. emerging markets] in the years ahead so some exposure will help you grow ahead of inflation and taxes.

If you are upset that the DJI fell and took a year or two to get back then that might be a good clue that you should be careful about how much you commit to equities since they rise and fall continually. Luckily, people don't think the same way about real estate since it took 10 years for housing prices to recover in Toronto after the correction of the early nineties yet most people consider real estate safer than the stock markets.

Diversify and be prudent about your risk tolerance and holding period and you'll be fine.

D.