Wealth Management
If you’re new to investing, a good place to start managing your wealth is to consult your tax preparer or accountant. They may be able to provide you with financial planning services. They may also be able to refer you to somebody who can.
There are three types of professional wealth management services you can use.
- A full service stock broker - A good stock broker is one who understands investing and who has the integrity to settle conflicts of interest in the client’s favour. Good stock brokers can provide an effective and economical way to manage your investments. But if you are going to use a full-service broker, take the time to find a broker you can trust.
- A discount stock broker - A discount stock broker will simply carry out buy and sell orders for their clients, and charge lower commission rates than full-service brokers. You pay even lower commissions if you trade stocks online, instead of placing orders over the phone.
- Portfolio managers - A portfolio manager is someone who fully manages your wealth portfolio and has a fiduciary responsibility to make sound investment decisions on your behalf. Portfolio managers are more stringently regulated than full-service or discount brokers.
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Members of our Inner Circle service often ask for investing advice on stocks they are thinking of buying that we don’t cover in our newsletters. A large number of these stocks fall into a grey area. Sometimes our investing advice is that they are “okay to hold,” but we wouldn’t advise buying them. When Inner Circle members ask about one of these companies, that’s what our investing advice would be: it’s “okay to hold.” However, when Inner Circle members ask about companies we think they should sell (or avoid if they don’t already own them), we say so. Here are three recent examples of our Inner Circle investing advice: Day4 Energy (symbol DFE on Toronto) designs and makes solar panels using its patented electrode technology and silicon cells....
In a recent TSI Network poll, we asked site visitors whether if trust the advice they get from their stock broker. Aside from a yes or no option, we gave visitors a third choice: “I trade online through a discount broker.” Seventy-five percent of the poll’s respondents selected this answer. You can see the full results of this poll, and a full archive of previous polls, on TSI Network. Just click the “Poll Archive” button below the main banner on the site’s home page.
Discounters’ lower commissions are a plus — but use caution
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No matter what kind of investing approach you follow, we feel that you can improve your overall results — and cut your risk — by avoiding these 5 common investment errors. 1. Failing to follow a realistic stock market trading strategy: Some investors, particularly newcomers, plan to buy a few hot stocks (or funds, or options or futures), and double or triple their money in a few years. Then they’ll settle into a low-risk investing style that may only return an average 10% to 12% yearly. But if you could make 200% or 300% in a few years, why would you quit? If you could do it once, you should be able to do even better as you gain experience. Of course, if you doubt that you can keep it up indefinitely, you should also question whether you can pull it off the first time. The best stock market trading style for most investors is one that will work for them more-or-less indefinitely. You’ll want to be sure it suits your circumstances and temperament, that it won’t take up too much of your time, and that it doesn’t require luck or extraordinary circumstances for success....
These days, many investors who are approaching retirement worry that their retirement planning won’t generate the income stream they were banking on once they’ve left the workforce. Some investors in this situation look for what brokers sometimes refer to as a “rescue stock” — a can’t miss trading idea that can make up for the shortfall in their retirement planning. This, of course, is unrealistic. If such a low-risk, high-potential stock existed, why would you buy anything else? In fact, if you’re heading into retirement and are short of money, you should move your retirement planning in the opposite direction: aim for safer investments, rather than one last gamble....
Stock trading advice: How TSI Network helps you “take the pulse” of the Canadian investing community
I hope you are enjoying and profiting from the stock trading advice in my TSI Network Daily Updates. Every day, TSI Network attracts a wide variety of Canadian investors. To take the pulse of this unique online community, we publish weekly polls so we can see what the site’s visitors think of current financial issues. The feedback we get from these polls often forms the basis of the stock trading advice we give you in our TSI Network Daily Updates. We also welcome you to submit your own questions about stock trading advice or any other investment matter, so you can quickly and easily get a feel for where other investors stand on issues that affect you. Just send your suggestions to pat@tsinetwork.ca. If we think they’re suitable for the site, we’ll post them as our “Financial Question of the Week.”...
Registered Retirement Savings Plans (RRSPs) are a great way for investors to cut their tax bills and make more money from their retirement investing. RRSPs are a form of tax-deferred savings plan. RRSP contributions are tax deductible, and the investments grow tax-free. (Note that you can contribute up to 18% of your earned income from the previous year, to a maximum of $21,000, rising to $22,000 in 2010). March 1, 2010, is the last day you can contribute to an RRSP and deduct your contribution from your 2009 income. When you later begin withdrawing the funds from your RRSP, they are taxed as ordinary income....
When you join my Inner Circle service, you get my investing advice on your own personal investment questions, plus you get to see what other Inner Circle members have asked, along with our answers. So you can get a sense of how our service works, and how our investing advice might help your portfolio, I’d like to share two recent member questions about exchange-traded funds (ETFs). Q: Pat, What’s your investing advice on iShares MSCI Brazil Index Fund?...
Sometimes a stock moves downward and creates what we consider a buying opportunity. We apply the term when we feel an attractive stock has dropped in price for reasons that are of a passing nature, or that are exaggerated in investors’ minds.
This shouldn’t be confused with “averaging down.” That’s when you buy more of a stock you own that has fallen in price, mainly to lower your average cost per share....
This shouldn’t be confused with “averaging down.” That’s when you buy more of a stock you own that has fallen in price, mainly to lower your average cost per share....
One way to cut your tax bill in retirement is for you and your spouse to arrange the family finances so that you each have equal retirement income. That’s because, if one spouse earns more than the other, the higher-income spouse would, of course, be in a higher tax bracket. That means that any extra money the higher-income spouse earns on investments, such as through capital gains, interest or dividends, would be taxed at a higher rate. So, you can lower your family’s overall tax bill by aiming to have both spouses in the same tax bracket. The Canada Revenue Agency won’t let you lower your income tax by simply giving invested funds to a lower-income spouse. “Attribution” rules apply if you do that. That means the higher-income spouse must pay tax on any gains or investment income from those funds....
There’s a random element in stock-price movements that you just can’t get away from. Stocks sometimes ignore bad news for long periods, then suddenly take note of it and collapse. Stocks may overreact to bad news, or react to downbeat but irrelevant news. To top it off, stocks that are headed for a big rise often start their move with a slump. You can’t overcome this random element by intense study, reading charts, expensive computer programs or stock investing advice that aims at fine-tuning your market timing. (But our system can help you minimize this random element. Read on to find out how.)...