Why Are We So Clueless About The Stock Market? Learn how to invest your money, how to pick stocks, and how to make money in the stock market by Marius Skonieczny
If you have been thinking about investing in the stock market in order to achieve your medium and long-term savings goals, I would highly recommend that you read Why Are We So Clueless about the Stock Market? . It’s well organized, easy to understand, and provides charts and graphs as well as examples in order to illustrate the main points outlined.
The author discusses the importance of doing research before simply selecting stocks to invest in. The book talks about the process of determining the value of a given stock and provides clear instructions on how to determine whether or not a company is a sound investment choice. The book emphasizes that there is no use in spending a lot of time researching a given company unless it meets certain criteria.
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It is important to make sure that your money is working hard and not just sitting idle in a low interest deposit account. With the exception of keeping a few months worth of living expenses tucked away in a savings account as an emergency fund, I would advise that you make the rest of your money work much harder.
For example, right now we have an open variable rate mortgage at an interest rate of 2.5%. Rather than keeping all of our money in a savings account that pays less than 1%, we decided to put $5000 extra towards our mortgage principal to decrease the amount of interest we pay. Although 2.5% is a fairly low interest rate, our mortgage is our only debt right now; otherwise we would have paid off higher interest debt.
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Many Canadians have recently received unwelcome letters from the Canada Revenue Agency (CRA) regarding excess contributions to their Tax Free Savings Accounts (TFSAs). Penalties in the form of fees owing to the government were assessed for excess contributions made during 2009.
Most people affected were likely confused by the restrictions placed on the TFSA by the government. The important thing for Canadians to understand is that once you have used your contribution space for the year, even if you withdraw from your TFSA, you cannot put that money back until the following year.
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by Guest on June 15, 2010
It is truly amazing how many people entrust their entire life savings to stockbrokers who know absolutely nothing or very little about investing. In their defense, many stockbrokers may be honest individuals who truly want to help their clients. However, the problem is that they were never trained to be investors but instead were trained to be salespeople, and they are constantly being pushed by their employers to sell. After being recruited by a brokerage company, they are subjected to intensive sales training where they are taught how to cold-call, prospect for clients, and counter various clients’ objections. The actual education on how to select and analyze particular investments is limited.
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Guaranteed Investment Certificates (GICs), are a common savings vehicle used by Canadians. There are different types. Some are locked in for a specific period of time, while others are cashable at anytime.
GICs provide the following advantages:
-Your principal is guaranteed.
-For most GIC types, you are guaranteed a fixed rate of interest for a specific period of time.
-They help people to save who would otherwise spend their money. If their money is locked away, they have no way of accessing it, making it impossible to spend it on a whim.
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Inflation, the ever -increasing cost of everything over time, makes a significant impact on your savings. In a normal, healthy economy, the inflation rate usually hovers around 3%. Essentially, everything goes up in value except your money. This is an important concept to understand as inflation impacts your purchasing power.
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Investing For Canadians For Dummies 3rd Edition by Eric Tyson, MBA & Tony Martin
I think it is really important for all of us to learn as much as we can about investing so that we are fully informed when we make our investment choices. It’s good to know the difference between a stock and a bond and how a mutual fund works. If you are like me, and want to learn more about investing, diversification, and establishing financial goals, I would highly encourage you to read Investing For Canadians For Dummies
.
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