I know, this is supposed to be about Real Estate! Let’s change it up and talk about stocks this week.
At WeLoveKits, we like to share our life experiences with our clients. In the Real Estate buying and selling process, we use what we have learned ourselves. Not from trial and error with our clients, but through our own buying and selling.
So let’s talk about investing. All of us see the marketing day in and out. You get the messages at tax time to put money into an RRSP. The Banks tell you they can help. Investment advisors tell you they can help. All of this is true, all of that help comes at a price. A large fee sliced off the top of your investments and taken out of your after-tax income. I’m sounding like a commercial for Questrade!
“A trailer fee is a fee that a mutual fund manager pays to a salesperson who sells the fund to investors. The trailer fee is paid to the salesperson for providing the investor with ongoing investment advice and services. This fee will be paid annually to the advisor for as long as the investor owns the fund”. (Courtesy of Investopedia)
Expense Ratio, Sales Charge or Commission, Redemption Fees, Distribution Fee, all terms synonymous with Mutual Funds. All of these fees will reduce your return on investment over the long run.
I had an Investment advisor at one point and time. He was earning all of those fees above. He was a good guy, we enjoyed working with him. I found that my ideas of what stocks I should be investing in and his were different.
I think decisions were being made and funds/stocks were being proposed based on commissions and incentives that were being provided, vs what might have been best for us in the long run. We still would have done ok, but is ok good enough?
We have 3 sons. We started investing early into an RESP for the boys. I left it to the experts to invest those funds for us. Life is busy, it’s easy and convenient to leave these decisions to the experts. Funny thing is, I started noticing that the total amount of our RESP seemed to be stuck. We would make contributions and the “number” wasn’t changing. Hmm.
At that point, I made the decision that I might be better served by helping myself. I didn’t have any background in trading stocks. I had read articles over the years and was aware of trends happening in the markets. I worked in the tech industry for a long time so I could see first hand the changes that were happening in my world. It made sense to invest in that world.
The other thing that I started hearing about was Index Funds, followed by Exchange Traded Funds or ETF’s. Both of these investment funds offered the opportunity to invest without having all of those fees above taken off the top, the middle, and the bottom.
Now ETF’s are cool. You can trade anything you want within an ETF fund. Large markets, small markets, tech, real estate, biotech, the list goes on and on. Pick an industry you know, or pick something that you have knowledge of, that’s doing well and invest away!
I started doing this, and the numbers were promising. Our investments started to go higher, I wasn’t loosing as much from my investments. And, it really didn’t take too much time to learn.
While I was doing this I started reading some articles on a website called Seeking Alpha. Investment articles are written by numerous “investment people” and share with the likes of you and me.
You read these articles though and deep down you wonder. Does this person know what they are talking about, or are they just trying to move a stock and get you to buy?
I read an article one day that was interesting but confusing. It resonated with me because the author seemed sincere. The message that came through loud and clear was, the market is rigged. It’s the big players that move stocks and make the real money. The little guy like you and I are left to watch and wonder what happened.
I have many friends who have advisors who have invested for them. When the stock market tanks, and it does from time to time, guess what happens. We panic, we see those funds drop rapidly and we tell our advisors to get us the hell out.
Usually we are invested in mutual funds. Well, those take a couple of days to redeem when you sell them. By the time they are redeemed the market has fallen more, and out the window flies our money. And the Banks and Large Institutions buy back those shares at a fraction of the cost. ETF’s and index funds by the way can be traded real-time.
The other message I read in that article that left an impression with me was TIME. How much time do you have left? How much money do you think you need to retire? Do you feel like you are behind schedule? Have you lost money in the markets?
All good questions, and for many of our friends those answers would be yes. The Financial Advisors weren’t helping. Well, helping by telling everyone that they needed more money invested. Hmm, more fees 🙂
Anyways, I liked what he had to say. I wasn’t 100% on what he was saying, but I knew over time I would figure it out. He published regularly and would give a tip each time. I started following and watching and damned if his suggestions didn’t seem spot on. Hmm.
I started taking those suggestions and putting them to use. His methods are different. He claims that old school methods are obsolete. Old school being buy and hold investing. The comment was, the markets are rigged. The Institutions have the upper hand and influence the price of the stock. Algorithms, computer/technology-based trading etc, how can we compete?
Well, being in tech and knowing what was happening, that made a lot of sense to me. His comment was the market makers are influencing stock prices short term. And he used to be one of them. So why stay in a stock long term when it’s going to go up and then back down. Invest in the stocks that are going up, sell, repeat. All in a nice tidy 3-month window.
Now, this still takes a little bit of work. But, who doesn’t want to invest some time for a decent return? Let’s talk about Mutual Funds for a split second. Returns seem to be stuck in a good year at about 8%. Not bad when your savings account is getting under 2%. In a really good year you might do 12-14%, yippee, good times.
So I took a screenshot of one of our accounts below. Yes, that’s the RESP account that had flatlined for about 3 years. Those are my returns below.
I’m not trying to sell you anything. Well, Real Estate if you ask for help 🙂 I’m just sharing some valuable information with you.
I’m happy with those returns. What do you think? When I started off I wasn’t as active as I was now. I hadn’t really figured it out yet. So actually, my returns have been getting better the last few years.
Here is how it works. You pay (Yes you have to pay), don’t lose me here. $50 buys you a list of 16-20 Stocks/ETF’s. He has an algorithm that his company developed. It tracks about 3600 active stocks. On any given day, that list of stocks forecasted to outperform over the next 3-months is provided.
You can do a number of things with this list. You can just divide your investment equally across those 20 stocks. Or you can pick and choose. Blockdesk provides you with a range, both high and low. So you know what the stock price is forecasted to do in the next 3 months.
I’ll give you an example from my latest list. On the list was a tech company called Twilio, a Cloud company. It looked good and the stock price had been moving.
The Stock was priced at $189 per share and forecast to rise to $221 in 18 trading days. I bought the list on Friday, purchased the stock on Tues for $184. It closed today (Friday) at $209. That’s a 13.6% increase in 4 days. That happens sometimes.
It also has a lower limit. It can go both ways and many times it does. I got caught early in the game panicking and selling if it dropped. The Financial Institutions were happy with that decision because they picked up my shares at a discount.
What seems to happen sometimes, the share price is driven down to create a panic and create opportunity. Magically over time the stock inches up and hits that magical number (Now you can sell).
What I have found over time and this works for me. I like technology, I like ETF’s and I like biotechnology. These guys tend to move fast and often. When they move, look out! The range in trading days varies. One stock may be 18 trading days, another 49 trading days.
Now, what you have to understand is the following. If you have a stock that is showing a 10% increase in 20 trading days, and the next one is 10% in 50 trading days. Which stock is better? If you said 20 days you win a prize. TIME is money. So if you can earn that investment in a shorter timeframe, take it and reinvest.
So that’s what we do. We invest, the stock hits that magic number and you sell. And move on to the next stock. This just repeats over and over again.
I’ve read some comments online about his strategy. Most people don’t get it and cling to the old beliefs that buy and hold is key! Some dogs don’t like to learn new tricks. One tip that has proven out over time. Any stock that has a quarterly earnings announcement within 40 trading days seems to outperform the rest.
You can see some good information on Blockdesk here. This page is pretty cool as well. It shows the difference between buying stocks long term and using this methodology. Investing $10,000, and how fast it would take you to grow it to $100,000. Anyone care to guess? Have a look.
That’s my stock tip of the day. If you have been burned before, or maybe you are just starting out and not sure how to proceed. I can absolutely confirm that this works incredibly well. If you don’t have a lot of time and want to do well, have a look. I don’t get paid for this free advertising. Just sharing some of my wisdom. I hope you enjoyed the article and good luck. You can do it!!
PS: Last tip of the day. Take advantage of your tax-free savings account. Why? Because you can grow your income tax-free without paying the government a cent! So invest within this product. If you need to take any $$’s out for an emergency, you are allowed to put that money back in the following year.
Outside of the tax-free account you are going to encounter capital gains and pay taxes based on your tax bracket. So take advantage of what the government is giving you. Not taxing you for being smart 🙂
You can see my trades below, both good and bad:
Nov 3rd: Buy Roku at $221.51 – sell Nov 10th @ $249.61 (12.7% in 1 week)
Nov 3rd: Buy SMTC at $56.11 – sell Nov 19th @ $67.65 (20% return)
Nov 6th: Buy SRPT at $141.57 – sold Nov 10th at $132.55 – (6% loss – I sold contrary to the rules of engagement – it later recovered but I felt better about another stock)
Nov 6th: Buy Twlo at $304.45 – still holding as forecast of $425 in next 20 trading days. (Up 19%)
Dec 27th: Buy Roku @ $337 – should have just stayed in with this one! Still holding as the forecast is still strong. (Up 17% with another 15% still forecast short term)
PPS: Don’t forget, call me if you want to buy or sell a house 🙂
You might also like: Real Estate Investing: Buy and Hold
About the Author:
The above article Interested in a Stock Tip and 100% Returns was provided by Regan Pyke, a leader in the field of sales, marketing, and smart home technology. Regan can be reached via email at [email protected] or by phone at 778-228-2448.
Thinking of selling your home? I have a real passion for buying and selling Real Estate, as well as marketing & real estate investing. I’d love to share my expertise!