In this episode of Trader’s Lens, Tyler Bollhorn of Stockscores.com gives us tips on how to get an edge on market by using some uncommon sense, the difference between a good company and a good stock and how to roll with punches when it comes to trading as a business.
In this episode of Trader’s Lens we get some great perspective from Danielle Park, author of the blog JugglingDynamite.com, on the current global economic conditions, how to look for value in uncertain markets, the Facebook IPO saga and the importance of reading quality vs. quantity.
Facebook Going Public – Learning Objective:
There seemed a time in the business news not too long ago where all you would hear about was the debut of Facebook in the stock market. Now that Facebook has officially started trading and media outlets have squeezed as much as they can out of its initial stumble, it appears that the world has predictably moved on. For those beginner investors who were drawn in to the hype of Facebook going public, trying to put the events of Facebook’s debut as a publicly traded company into some kind of context is difficult, especially if the headlines on it have started to disappear. In this second part of our series, we take a closer look at what an IPO means and why they happen. If you missed the first part of the series, you can click here to read it.
Will that be cash or credit?
To understand how stock markets function, one of the most important questions to ask is how companies end up there. After all, isn’t shopping much easier when you realize why you’re in the mall in the first place?
From startups to blue chips, the one rule of business is true – it takes money to make money, and if you’ve got big dreams as a business you’ve certainly got to be able pay for what will help get you there. Even though some of the regulations have changed, the principle of raising money to grow is as true today as it has ever been – check out this neat little cartoon from the 1950’s for a fun explanation.
The decision that all businesses have to make is how they are going to pay for what they need in order to do what they do. Of course since money doesn’t just appear out of thin air (unless you’re a central banker – which is another story altogether) it needs to come from somewhere or someone. The two main ways of raising money (that it doesn’t already have) for a business are to take out a loan (debt) or sell a portion (equity) of your company.
An IPO or initial public offering, similar to the one that Facebook undertook, is an opportunity to raise money to help pay for all of those things that are going to make a company even more money in the future (or at least that’s how the story is supposed to go). If you are a business owner, you want to raise as much money as possible for your business and “going public” enables businesses to sell shares of their company to the general public, as opposed to selling to only a limited number of investors. Business owners raise money from investors – people who want their investment capital to appreciate in value.
Summer is officially here and with it are a few major league offers that Canadian online discount brokerages have going. It seems like this month, the four big promos are from Virtual Brokers, Questrade, Scotia iTrade and Disnat Direct. We’ve also got a special discount brokerage deal offering from Jitneytrade now officially launched!
It seems like lots of free trades is all the rage this summer. Virtual Brokers has extended their offer of 150 free trades to September 30th when you open an account with at least $25 000. From Questrade, a chance to get 100 free trades when you open and fund an account with $10 000. Questrade also has a “refer a friend” deal that looks like an interesting win-win promo. Scotia iTrade has extended their 100 trade credit offer out to Sept 30th, but to get that deal you’ll have to pony up at least $25 000. Disnat Direct’s Active 5 offer is still in full effect – definitely one to take notice of if you’re an active trader or are thinking about becoming one, 50 trades commission credit and 5 months of best rate trading along with 5 months of their active trading platforms with data make it definitely worth considering – you’ll need $10 000 to land that deal. National Bank Direct Investing also just joined in on the giveaway front with their $750 commission reimbursement when you deposit $25 000 into a new account – make sure to read the fine print on this one though because reimbursements will get paid out in either January 2013 or April 2013 depending on when you open your account.
The official SparxTrading deal with Jitneytrade is now officially launched. If you’re a very active trader, you’ll want to check out the details below on this amazing offer of discounted commissions and a huge discount on the RealTick active trader platform.
Enjoy the rest of this month’s deals!
| Company | Brief Description | Details Link | Deadline |
|---|---|---|---|
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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. | For more details click here | none |
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Open a new account (TFSA, Margin or RRSP) and receive $50 commission credit . Use promo code: kdkfnbbc | none | none |
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Move your brokerage account to Questrade and they’ll cover the transfer-out fee. | Transfer Fee Promo | none |
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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. | Refer a friend | none |
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Maximize your returns. Get up to 1% (or more) of your mutual fund value rebated back to you. | Mutual Fund Rebate Promo | none |
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Get up to 100 free trades when you fund an account with a minimum of $10 000. You must open this account by August 31st 2012 and fund it with $10 000 within 30 days of account activation to qualify. You must enter promo code “100FREEQ”. There are quite a few other details, including a minimum balance requirement, so be sure to check the details link. | 100 Free Trades | August 31st, 2012 |
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Get $150 in cash for opening a Disnat Classic account worth at least $25,000 from a financial institution other than Desjardins. Call Disnat at 1-800-268-8471 and mention the promo code “Reference 150”. [Note this offer applies to Disnat Classic not Disnat Direct] | Disnat Refer a Friend Promo | July 31st 2012 |
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Disnat has created the Active5 offer so that active traders can test drive their services. New Disnat Direct clients get a package of: 5 months of free real-time trading platform, 5 months of theirlowest commissions (starting at $5), 5 months of free Stockscores newsletter and 50 free trades ($ 250 commissions credit). You can hear Tyler Bollhorn of Stockscores talking about the Active 5 offer here. | Disnat Direct Active 5 Offer | July 31st 2012 |
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Transfer $25,000 or more to a National Bank Direct Brokerage account and they will pay up to $135 plus taxes in transfer fees | Transfer Fee Rebate | none |
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If you are an existing National Bank Direct Brokerage client and you refer someone to join, you each get $100. To qualify, the referred account must transfer at least $25,000 from another financial institution. If at least $25,000 is transferred, up to $135 of the transfer fee is covered. Use the promo code “FRIEND” when opening the account | Refer a Friend | October 31, 2012 |
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Holders of National Bank Platinum, Ovation Gold, Allure or Escapade Mastercard or a card identified by a professional association can now redeem À la carte reward points for a contribution to your National Bank Direct Brokerage RRSP or Spousal RRSP account, or the new TFSA (Tax-free savings account). As the principal cardholder you can exchange your points, either partly or entirely, for one or more 100 $ contributions (100 $ = 11,000 points). contact one of National Bank Direct Brokerage’s Investor Services representatives (514-866-6755 or 1-800-363-3511). | Mastercard points transfer | none |
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Open and fund a new account with National Bank Direct Brokerage with $25 000 or more, and you can receive up to $750 in commission reimbursements. To qualify you must use the promo code “REGISTERED2012” in the general information section of the application form. Reimbursements will be paid in either January or April 2013 depending on date account is opened. See the terms & conditions link for more information. | Commission Holiday Promo” | October 31, 2012 |
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Virtual Brokers will cover transfer fees from your transferring institution to a maximum of $150 per account. This offer is only applicable to accounts opened with at least $25,000 in equity before September 30, 2012. | Transfer Fee Promo | September 30th, 2012 |
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Open a new account with $25,000 before September 30, 2012 and receive 150 trades free. (Applies to the first 150 trades placed within 60 days of account opening at a maximum of $6.49 per trade with a total maximum value of $973) | New Account Promo | September 30th, 2012 |
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Open and fund a new Scotia iTRADE account with at least $25,000 (cheque deposit or transfer of assets) before September 30, 2012 and the commissions associated with your first 100 trades placed within 60 days of the date the account is activated and funded with at least $25,000 in the account, will be credited back to your account within 30 days of each order fill, to a maximum of $9.99 per trade in the currency of the account (maximum total cash rebate from this offer is $999). Offer valid only for the first Scotia iTRADE account opened by new Scotia iTRADE clients who do not have an account with ScotiaMcLeod Direct Investing or TradeFreedom. Free trade credits and other Scotia iTRADE offers have no cash redemption value. This offer cannot be combined with any other promotional offer. | Scotia iTrade $100 in free trades | September 30th, 2012 |
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Open a new iTrade account before July 31, 2012 and receive either: $100 cash and 25 trades free for a deposit of between $25,000-$49,999 or $150 and 50 trades free for a deposit of $50,000 or more. You must use the code SPRING-MA when signing up. | Springaccount opening bonus | July 31st, 2012 |
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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. | Transfer Fee Promo | none |
Site: http://www.getsmarteraboutmoney.ca
Technical Analysis Tools: no
Fundamental Analysis Tools: no
Markets Covered: Canada
Notes: Get Smarter About Money is a collection of really well-written and easy to understand resources on personal finance, including many sections and resources related to investing. Although this is not a tool for stock-specific research, it is a very handy website to consult, especially for beginner investors. There are a number of reasons why this is an important resource for Canadian retail investors to know about, however here are three that we think are most important.
First, this site is sponsored by the Ontario Securities Commission Investor Education Fund, a program developed to “unbiased, independent financial information, programs and tools to help consumers make better financial and investing decisions.” This certainly earns them a gold star in our books.
Second, they have great content around financial planning and literacy. Investing and trading are just two of the ways you can impact your financial bottom line. Knowing the landscape of your options, understanding product options or just having a basic grasp of budgeting and financial management – all of these contribute in different ways to making you a savvier investor and trader. Their sections on identifying investment fraud are also super important to take note of.
Third, you get to learn more about other investors and from other investors. As a self-directed investor or even as someone who wants to take better control of their investments, it can feel like a lonely road. The research, surveys, articles and stories shared by the different writers (known as the “Masters of Money”) are great to learn about the landscape of other Canadians who are trying to take control of their personal finances.
Overall, this is a great site to know about and to stay plugged in to get you on the right track to personal financial success or to help keep you there. With a wise looking owl for a mascot, it’s reassuring to know that this is a site that definitely gives a hoot!
In this latest edition of Trader’s Lens Jim Letourneau of The Big Picture Speculator talks to us about commodity cycles, and what to look out for when timing an entry into the markets
Jay Martin of Cambridge House International reflects on the success of the 2012 World Resource Investment Conference held in Vancouver, where they’re headed to next and gives insight into why it’s important for investors to attend.
My first full time job, a Marketing Assistant at an HR firm, came right after university and with it came the realization that not only would I have to pay income taxes but also that some of what little I earned had to be saved. After all I’d heard the story of the ant and the grasshopper and I wasn’t planning on starving in winter.
Ironically, I knew very little about personal finance and money management despite having graduated with a business degree. Recognizing that I would need some extra help I decided to get a financial advisor to show me some ways to save on taxes as well as guide me through the jungle of investment products.
Finding an advisor turned out to be easier than I thought. It so happened that one of my colleagues referred me to an advisor (let’s call her Jane) that was part of her networking group. She had never used Jane before but she knew Jane and that was enough for me to give her a try. My advisor and I ended up working together for the next two years building my portfolio. It was a good relationship which was lucky, because in hindsight, I should have done more research and done more due diligence before putting all my money in her hands. It could have just as easily turned sour. Some questions I should have asked before signing on included:
Had I asked these questions I would have known where her motivation lies, what products I would most likely be advised in and whether or not we matched based on our views of personal financial management. She was more conservative than I, despite the movements in the market. My portfolio mix was mutual funds with bonds and Canadian resource companies in the mix. She didn’t like anything being held in cash. Later I discovered that’s where my preference lies: cash and some stocks.
Jane was very kind but we didn’t have the same point of view. As I took more of an interest in financial management I eventually outgrew the relationship. I started asking questions that couldn’t be answered easily. For example, why was it ok for my mutual fund to say ‘past performance doesn’t guarantee future performance’ and then use examples of past performance to talk about the track record of mutual funds? It wasn’t anyone’s fault it was just the natural progression of a higher level of education. The more I learned the more I began to recognize gaps in what I was being told. Most importantly, I began to ask more insightful questions which helped me recognize when answers just didn’t add up. Still parting ways can be hard.
I relied so much on someone for so long to make crucial decisions when managing one of the most important aspects of my life: my money; it was difficult imagining anything else. It’s scary to take off the training wheels. It’s scary having to come face to face with the reality that you can no longer blame someone else for losing money even if you could never have blamed them in the first place. What I have learned is that losing money is always my own fault. Who I choose to manage my money is my choice so I can either pick someone who picks winners or pick the winners myself. I would now be fully responsible for my wins and for my losses. I also liked my advisor. She was really nice and that made breaking up more difficult.
My desire to learn more about trading started when I began working on SparxTrading.com. When I first started I was primarily responsible for the look and feel of the site and our brand. But then I started reading all the articles and watching the interviews with Danielle Park and Tyler Bollhorn among others which really inspired a shift in my mindset.
I realized that while I didn’t know a lot about trading and investing it’s because of a choice I made. I chose not to know. I could continue to make that same decision, to remain uninterested, intentionally unaware of how a system that impacts me so much works. It’s a choice that would have been disadvantageous and would hurt me in the long run.
So now I’m ready to take the little education I have in personal financial management to the next level. I’ll be reviewing some key learning points, running trading simulations, reading analysis from the people who know it best, before putting my skin in the game and opening a trading account. Join me as I take over the reins of my finances and learn with me from my moments of heartbreak and glory.
Happy trading!
Sepi
This month’s discount brokerage deals and promotions from Canadian online discount brokerages still includes some substantial offerings, such as the Disnat Active 5 offer and the Scotia iTrade 100 free trades offer. Some new promos this month include the ‘one free trade’ offer from Scotia iTrade to download and try their mobile trading app (for which you qualify for 1 free equity trade and one free options trade) and the ‘refer a friend’ offer from National Bank Direct Brokerage. Scotia iTrade also added another promotion that can give you either $100 or $150 plus 25 or 50 trades free (respectively) depending on your deposit – the fine print is a bit tricky so make sure to read it on this one as the promo code is buried in that fine print. Questrade has extended their “stick it to your broker” 10 free trade offer until the end of June. Lastly there are some exciting whispers floating around that Jitneytrade may be announcing a deal soon and that National Bank Direct Brokerage is working on another promo for release sometime in June. Stay tuned!
| Company | Brief Description | Details Link | Deadline |
|---|---|---|---|
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Open a new account (TFSA, Margin or RRSP) and receive $50 commission credit . Use promo code: kdkfnbbc | none | none |
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Move your brokerage account to Questrade and they’ll cover the transfer-out fee. | Transfer Fee Promo | none |
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Open and fund your account with a minimum of CAD $1,000 before May 31st, 2012 and you’ll get 10 commission-free trades. Use your 10 stock trades within the first 30 days. Buy or sell, one at a time or all at once. | Stick12 additional terms here | June 30 2012 |
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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. | Refer a friend | none |
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Maximize your returns. Get up to 1% (or more) of your mutual fund value rebated back to you. | Mutual Fund Rebate Promo | none |
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Get up to 100 free trades when you fund an account with a minimum of $10 000. You must open this account by August 31st 2012 and fund it with $10 000 within 30 days of account activation to qualify. You must enter promo code “100FREEQ”. There are quite a few other details, including a minimum balance requirement, so be sure to check the details link. | 100 Free Trades | August 31st, 2012 |
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Get $150 in cash for opening a Disnat Classic account worth at least $25,000 from a financial institution other than Desjardins. Call Disnat at 1-800-268-8471 and mention the promo code “Reference 150”. [Note this offer applies to Disnat Classic not Disnat Direct] | Disnat Refer a Friend Promo | July 31st 2012 |
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Disnat has created the Active5 offer so that active traders can test drive their services. New Disnat Direct clients get a package of: 5 months of free real-time trading platform, 5 months of theirlowest commissions (starting at $5), 5 months of free Stockscores newsletter and 50 free trades ($ 250 commissions credit). You can hear Tyler Bollhorn of Stockscores talking about the Active 5 offer here. | Disnat Direct Active 5 Offer | July 31st 2012 |
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Switch your account to Credential Direct and they’ll pay up to $125 of the transfer fees your online broker charges. If after 90 days you’re not completely satisfied, Credential Direct will waive the $125 transfer out fee. To qualify, you must deposit at least $5000 within 30 days of opening a Credential Direct account. Promo code “SWITCH ME” | Switch Me Offer | June 30th, 2012 |
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Transfer $25,000 or more to a National Bank Direct Brokerage account and they will pay up to $135 plus taxes in transfer fees | Transfer Fee Rebate | none |
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Become a new National Bank Direct Brokerage Client before June 30, 2012 and receive a fixed rate commission of $6.95 for 6 months. Minimum deposit not specified. Promo code “TRADE2012”. | Call customer service: 1-800-363-3511 – Available to Western Canada Customers only (BC/Alberta) | June 30th, 2012 |
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If you are an existing National Bank Direct Brokerage client and you refer someone to join, you each get $100. To qualify, the referred account must transfer at least $25,000 from another financial institution. If at least $25,000 is transferred, up to $135 of the transfer fee is covered. Use the promo code “FRIEND” when opening the account | Refer a Friend | October 31, 2012 |
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Holders of National Bank Platinum, Ovation Gold, Allure or Escapade Mastercard or a card identified by a professional association can now redeem À la carte reward points for a contribution to your National Bank Direct Brokerage RRSP or Spousal RRSP account, or the new TFSA (Tax-free savings account). As the principal cardholder you can exchange your points, either partly or entirely, for one or more 100 $ contributions (100 $ = 11,000 points). contact one of National Bank Direct Brokerage’s Investor Services representatives (514-866-6755 or 1-800-363-3511). | Mastercard points transfer | none |
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Virtual Brokers will cover transfer fees from your transferring institution to a maximum of $150 per account. This offer is only applicable to accounts opened with at least $25,000 in equity before September 30, 2012. | Transfer Fee Promo | September 30th, 2012 |
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Open a new account with $25,000 before September 30, 2012 and receive 150 trades free. (Applies to the first 150 trades placed within 60 days of account opening at a maximum of $6.49 per trade with a total maximum value of $973) | New Account Promo | September 30th, 2012 |
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Open and fund a new Scotia iTRADE account with at least $25,000 (cheque deposit or transfer of assets) before June 30, 2012 and the commissions associated with your first 100 trades placed within 60 days of the date the account is activated and funded with at least $25,000 in the account, will be credited back to your account within 30 days of each order fill, to a maximum of $9.99 per trade in the currency of the account (maximum total cash rebate from this offer is $999). Offer valid only for the first Scotia iTRADE account opened by new Scotia iTRADE clients who do not have an account with ScotiaMcLeod Direct Investing or TradeFreedom. Free trade credits and other Scotia iTRADE offers have no cash redemption value. This offer cannot be combined with any other promotional offer. | Scotia iTrade $100 in free trades | June 30th, 2012 |
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Download the new Scotia iTrade mobile app and get one trade free (one equity and one option). Trade must be placed on the mobile app. | Scotia iTrade 1 free trade | June 30th, 2012 |
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Open a new iTrade account before July 31, 2012 and receive either: $100 cash and 25 trades free for a deposit of between $25,000-$49,999 or $150 and 50 trades free for a deposit of $50,000 or more. You must use the code SPRING-MA when signing up. | Springaccount opening bonus | July 31st, 2012 |
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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. | Transfer Fee Promo | none |