A familiar saying among investment circles is that “everyone is a genius in a bull market”. Even though a bull market is reflective of significant optimism about stocks, in the stock market for every up, there is usually a down and it is fascinating to look at investor behaviour whenever markets go to extremes in one direction or another. For that reason, contrarian investing interesting in that it is an approach that relies on the idea that more money can be made selling to the crowd instead of trying to chase it. In the second part of our Vancouver Resource Investment Conference interview with Ben Stadelmann and Benj Gallander of ContraTheHeard.com, we got their perspective on how beginner investors can think about getting started in the markets and how they can navigate investor conferences (to read part 1 of our interview click here).
Know what type of investor you are
Both Ben and Benj have been investing for quite some time and as a result they’ve learned what approaches suit them best. In their case, value investing is the approach they are most comfortable with and in particular contrarian investing is what they enjoy and are good at. As Ben Stadelmann pointed out, “there are lots of ways to make money in the market”. Each investor needs to figure out where their own comfort zone is and what type of investing is right for them. The key, therefore, is to be willing to experiment, to make some mistakes and most importantly to learn from those mistakes.
With so many options to choose from, exploring all of them can not only seem overwhelming, it could also get very expensive. According to Benj Gallander, the best approach is to take it slow, especially when you’re stepping into the markets for the first time. Since the odds favor beginner investors making more mistakes at the outset, if you “go in whole hog, you’re much more likely to get hurt”.
These days, taking it slow may be a challenge especially for beginner investors or those stepping into the stock markets for the first time. Technology has drastically changed how individual investors can find out about market information but also how fast they can act on it. Mobile trading, for example, now allows investors and traders alike to place trades from virtually anywhere their smartphone gets reception. The hazard, according to Benj, is that with all of this instant access, investors might forgo patience and instead expect that stocks go up in price quickly or they might be inclined to risk
too much too soon.
Whether you are a beginner investor or a seasoned pro, staying on top of the mountains of investment information available online is a constant challenge. The sheer quantity of information often makes it difficult to find quality, reliable sources to turn to. With so many opinions to wade through investors have to constantly be cautious about where their information is coming from, and what the intent is of the person/organization providing it.
The issue of making quality investment information available to Canadian investors has not gone unnoticed by the regulatory agencies that oversee the Canadian securities markets. While collectively the different provincial securities regulators have embraced the cause of providing quality and timely educational materials and resources to investors, there are some who are more proactively trying to connect with investors than are others. As such, the reality of the Canadian investor is that what information you get and how you get it may be impacted by where you live.
Know the Rules of the Investing Road
Just as drivers on the road need to understand and follow the rules of the road, being a participant in the securities market (such as the stock market) comes with the responsibility of following the rules and regulations of the marketplace. Regardless of portfolio size, investors in the securities markets are all considered participants and are all bound to play by the same set of rules. As such, the resources and information provided by securities regulators are in-line with securities rules and regulations set forth within each agency’s region.
For retail investors, knowing the rules is beneficial not just to avoid overstepping the lines, but also to recognize when investment ‘opportunities’ and the people peddling them might be offside or unscrupulous. Canadian securities regulators constantly monitor the marketplace as a whole, including the conduct of the companies and people participating in it. If or when securities learn of suspicious or fraudulent activity, are able to investigate it and provide reliable news regarding the status of any investigations or disciplinary decisions. In other words, they are a valuable resource to learn and stay current on the rules of the securities marketplace as well as the possible types of fraudulent activities targeted towards investors.
As we move past the 2013 RRSP season, many of the promotions offered last month are either expired or will be expiring at the end of this month. It seems like several discount brokerages are going to pass altogether on offering up any promotions for March whereas others are just extending out the deadlines of existing promotions. This month there are seven discount brokerages offering promotions with free trades or credits for trades being the most popular.
The BMO InvestorLine RSP promotion offering 250 free trades is set to expire within the first week of March. While 250 free trades is a substantial offer it is important that potential clients be clear that the “free trades” being offered in the advertisement refer to 250 free trades, not unlimited free trades which some of the other discount brokerages have recently been offering. At the opposite end of the month, Scotia iTrade‘s 100 free trades offer is set to expire March 31st. Questrade is still running their 100 free trades promotion through till the end of April.
Both Scotia iTrade and National Bank Direct Brokerage are continuing to offer their refer-a-friend deals with iTrade’s offer now extended out until May 31st 2013.
We will keep an eye out for more deals may surface during the month and always invite our readers to share news of any promos they may have seen.
Discount Brokerage Deals & Promos
Minimum Deposit Amount
Commission/Cash Offer Type
Time Limit to Use Commission/Cash Offer
A Sparx Trading exclusive offer! Use the promo code “Sparx Trading” when signing up for a new account with Jitney and receive access to their preferred pricing package and a massive 45% discount on the Real Tick trading platform.
Open a new account (TFSA, Margin or RRSP) and receive $50 commission credit . Use promo code: kdkfnbbc
$50 commission credit
Refer a friend to Questrade and when they open an account you receive $100 and they receive $50. To receive this deal you must be an existing client with an equity account and refer a person that does not reside with you and who has not previously opened a Questrade account.
If you refer a friend/family member who is not already a Scotia iTrade account holder to them, both you and your friend get a bonus of either cash or free trades. You have to use the referral form to pass along your info as well as your friend/family members’ contact info in order to qualify. There are lots of details/conditions to this deal so be sure to read the details link.
A) You(referrer): $50 or 10 free trades; Your “Friend”: $50 or 10 free trades (max total value:$199.80) B) You(referrer): $100 cash or 50 free trades; Your “Friend”: $100 cash or 50 free trades (max total value: $999)
Open and fund a new Scotia iTRADE account with at least $25,000 before March 31, 2013 and the commissions associated with your first 100 trades placed within 60 days of the date the account is activated and funded. Also, the new FlightDesk platform is being offered for free for 60 days. Use promo code WAC13-EN. See details link for further terms and conditions.
100 free trades ($999 value @ $9.99 commission rate)
If you refer a friend/family member who is not already a National Bank Direct Brokerage account holder to them, both you and your friend get a bonus of $100 each. The promotion code “FRIEND” must be used on the account application form. Read the details link for full terms and conditions. Note the maximum referral bonus per client is $1000.
Disnat is celebrating its 30th anniversary by offering new & existing clients $300 in commission credits which can be used for up to 6 months. To be eligible, new/existing clients need to deposit $50,000 into a Disnat account. You’ll have to call 1 800 268-8471 and mention promo code Disnat30. See details link for more info.
Open a new account or upgrade an existing account with either A) $100,000 or B)$250,000 to receive 250 trades (for those who deposit $100K) or 250 trades + $250 (for those who deposit $250K). Use Promo Code: RSP2013. NOTE: There are lots of details/important conditions attached to this promotion. Be sure to read the terms and conditions carefully.
A) $100,000 B) $250,000
A) 250 Free Trades ($2497.50 value @ $9.99/trade) B) 250 Free Trades + $250 ( $2747.50 value @$9.99/trade)
Below are the discount brokerages deals that cover transfer out fees from other discount brokerages.
Maximum Transfer Fee Coverage Amount
Deposit Amount for Transfer Fee Eligibility
Qtrade Investor will reimburse your transfer fee up to $125 when transferring a balance of $25,000 or more. For reimbursement, please mail or fax a copy of your statement from the transferring institution that shows the transfer charge to Qtrade Investor at 604.484.2627 and indicate your Qtrade Investor account number.
Disnat is celebrating its 30th anniversary by offering up to $150 to cover the cost of transfer fees from another institution. To be eligible, new/existing clients need to deposit $50,000 into a Disnat account. You’ll have to call 1 800 268-8471 and mention promo code Disnat30. See details link for more info.