Blog – Page 4 – SparxTrading

Posted on July 17, 2014 by user — Leave a comment

Deal Review: Questrade’s Commission-Free-Trade-per-Month Offer

The latest offer put forth from Questrade is a sign that Canadian discount brokerages are gearing up to compete even more creatively for new clients. In this post we take a detailed look at Questrade’s commission-free-trade-per-month offer to see what consumers are being offered and what potential strategies might be at play from Questrade’s end.

What is the offer?

Questrade is offering new or existing clients one commission-free trade per month for either 12 or 24 months or for as many months as a client makes consecutive deposits of $1,000 or more (up to a maximum of 24 months). This deal is currently running until August 30, 2014.

Cost and Conditions

There are 3 ways to qualify for this deal:

Deposit $20,000
Deposit $12,000
Deposit at least $1,000/month for consecutive months

The offer is open to new and existing clients of Questrade however existing clients cannot use an existing Questrade account to fund a new account to qualify for the promotion.

Individuals can only use the commission-free trade for the month it is assigned to and there are no roll-overs or carry forwards. If a commission credit is not used in the month it is assigned to, clients forfeit that credit for that month. In other words, it is a ‘use-it-or-lose-it’ offer type.

Another important detail to keep in mind is that trading commissions will be charged at the time of a trade and then rebated back to the client within the first week of the month following the month in which the trade was placed.

What is the Value of the Offer?

The value of a standard commission at Questrade can range from $4.95 to $9.95 (excluding ECN or market fees) and the maximum value of a trade commission set forth in the deal’s terms and conditions is $9.95 per trade.

Since what clients get is a discount on a trade (as opposed to cash up front for example), one important assumption is that a client would, in fact, place at least one trade per month for consecutive months.

Let’s consider the available scenarios attached to this offer to see what clients receive for making a deposit:

Scenario 1: Deposit $20,000

Under this scenario an individual has to commit $20,000 of capital into their trading account. By doing so, they receive 24 commission trades (one free trade per month for two years). Hence, the value of the offer is capped at 24*$9.95 = $238.80 which represents 1.19% of the deposited amount over two years.

Scenario 2: Deposit $12,000

With this scenario an individual deposits $12,000 and receives 12 commission-free trades at the rate of one per month. The value of this option is 12*$9.95 = $119.40 which represents 1.00% of the deposit amount over one year.

Scenario 3: Deposit $1,000 a month consecutively

The last option available for this offer is for a client to receive one commission free trade per month for each month that a deposit of $1,000 or more is made. The value of this option is also about 1% over the possible time frame allowed with this option (which is 24 months). Importantly, if a client fails to make a deposit of at least $1,000 for consecutive months they no longer become eligible for any further commission-free trades as a part of this offer.

Pages: 1 2

Posted on July 9, 2014January 11, 2022 by user — Leave a comment

Is Eight Enough? Credential Direct Drops Commission Pricing

The price war between Canadian online brokerages just got a little hotter as Credential Direct announced a major shift in its pricing structure and a substantial commission price drop.

Effective July 9^th the standard commission per online equity trade at Credential Direct is $8.88. That is a significant drop from their previous standard commission price of $19 per trade and also a reduction in price from their previous ‘best price’ of $9.95. To boot, it is also strategically positions Credential Direct as a lower cost alternative to many of the $9.95 standard commission offers that are currently in play across the online brokerage space.

Drop it Like it’s Hot

The new pricing structure offered by Credential Direct is almost a complete overhaul from its predecessor.

First, the distinction between “active trader” and “standard user” has been removed. That means that all clients, regardless of trading activity level, are offered the best possible price on an online equity trade commission and online options trade.

Another major change is that all online equity trades are $8.88 regardless of the price of the stock/ETF being traded. This is especially welcome news for those who like to dabble in low dollar value shares, ‘penny stocks’ or junior companies where the size of the orders can be quite high. Under the previous commission schedule, non-active users could pay up to $250 per trade depending on the size of the order and the price of the stock.

In many ways, the new pricing plan was the result of a major shift at the beginning of the year from many of Canada’s large bank-owned brokerages. What is particularly interesting, however, is that Credential Direct didn’t just match the offers – they actually bid underneath them.

How Fortun-8

Another interesting touch was the choice to use all 8’s in the pricing. The use of then numbers seems like a clever way to add some cultural appeal to the many East Asian investors that see the number as a sign of good fortune. Given the significant footprint Credential Direct has in British Columbia the new pricing may indeed prove to be self-fulfilling.

Of course other institutions, that focus heavily on connecting with East Asian or Chinese clientele, such as HSBC InvestDirect, have incorporated the number 8 into their pricing schedules for similar reasons (and another example of a ‘fortunate’ coincidence: TD Direct Investing’s Investor Centre address in Downtown Vancouver is 888 Dunsmuir St).

The Tradeoff

While the lowering of the commission price is likely welcome news for many who actively trade, there is a tradeoff that the new pricing structure imposes: administrative fees.

Specifically, for clients who have less than $15,000 in combined assets with Credential Direct, they may be subject to a $25 per quarter administrative fee. Historically Credential Direct did not charge administrative/activity fees but it looks like they’re banking on lower commission pricing offering more competitive value. Other fees are also increasing – especially for telephone assisted trades and some administrative services. These other fees are scheduled to take effect in October of 2014.

Like a couple of other online brokerages, however, Credential Direct does offer clients who fall under the $15,000 balance threshold a couple of ways to be exempt from the administrative fee.

For those with less than $15,000 in combined assets, the first way to be exempt from the administrative fee is to make at least two commission generating trades per quarter. According to this scheme the annual cost of placing two trades per quarter at the new commission price would be $71.04 (which is cheaper than paying the $100 per year for passively holding).

The second way for clients with sub-$15,000 accounts to avoid the administrative fee is to register for a pre-authorized contribution plan of at least $100 per month. What is great about pre-authorized contribution plans is that they create a structured and scheduled way to put some money aside, so having this option is a plus for those just starting out with DIY investing.

New clients (defined as clients that have accounts that are under 6 months old) will also be exempt from the administrative charge.

The Bottom Line

For most online investors, getting a break on commission pricing is welcome news. Other brokerages – such as the bank-owned brokerages as well as (and especially) the independent brokerages have fewer reasons to smile.

The drastic overhaul of Credential Direct’s pricing model is going to make it much easier for investors to understand the commission pricing (and to afford it) – something that the marketplace is clearly communicating to the Canadian online brokerage community.

Credential Direct has been extra bold by challenging the $9.95 standard price floor established by the bank-owned brokerages earlier this year. Whether or not fortune favours their boldness remains to be seen but at the very least they’ve got some lucky numbers to help their chances.

Posted on May 18, 2014 by user — Leave a comment

Made for Millenials: BMO InvestorLine Launches New Offer at Younger Online Investors

In a world filled with TLDRs and endless opportunities to like, tweet, pin and share, finding the time or inclination to take on investing can be as much of a challenge as finding the money to do it with. And yet, as part of growing trend among Canadian online brokerages, would be and actual younger online investors (between the ages of 18 and 35) are increasingly being courted.

The latest promotion announced by BMO InvestorLine is aimed directly at the ‘millenials’ with the challenge to ‘procrastinate or prosper’. While the offer itself is interesting, the campaign and context around it is equally fascinating.

What the Numbers Say

Starting first with the offer itself, BMO InvestorLine is ponying up 35 commission-free trades (trades good for use for up to 90 days), a free investing eBook and they are prepared to waive the minimum balance fees on both registered and non-registered accounts (with a catch) for clients until they reach the ripe old age of 36. Also, for good measure, BMO InvestorLine is waiving the $5,000 minimum deposit requirement when opening an account.

The catch for the fee waive is that clients have to place 2 or more commission-generating trades within 6 months. Thus, the waiving of one fee actually requires the generating of another. Within a 12 month period that amounts to $39.80 per year in commission costs vs paying $100 per year if a client doesn’t meet the minimum balance requirements.

A little bit of extra homework reveals that the the offer to waive fees on non-registered accounts is actually standard practice. As such, the unique benefits of this offer are in the waived minimum deposit requirement and that registered accounts (such as RRSP accounts)can have minimum balances waived. With this offer trading activity can lower the total cost of the account for balances under $25,000 – a threshold that many under 36 may not hit.

In addition to the offer itself, there is also a contest with a cash prize of $3500 that individuals who sign up for a non-registered account may be eligible for.

A Digital Generation

More and more Canadian online brokerages are expected to start courting this segment of online investors, with three important players (Questrade, RBC Direct Investing and Virtual Brokers) already actively providing services or products for younger investors.

The challenge, then, is for younger online investors and those thinking about investing to be able to get up to speed on what their options are and find the best option for their needs.

Interestingly, the power of the digital age creates both the problem and solution for younger investors. On the one hand online brokerages can generate and distribute content much faster than ever before. This means there is lots more fragmented information for self-directed investors to sift through. On the other hand, the digital era has also spawned a number of tools such as our deals and promotions section as well as forums designed to make doing the homework on what options are out there much easier.

On the other side of the fence, the challenge to many online brokerages is to balance what they’ve learned about promotions and brand loyalty from baby boomers with the changing needs and preferences of the next generation of investors. And, although there may be more places to try and be seen, the biggest challenge will be staying relevant.

What it Boils Down to

Overall, then, the advantage of this offer appears to be for younger investors to be able to get up to 90 days in which to execute 35 trades commission-free, a free investing eBook from the Globe and Mail and a discount on the total cost of ownership of a non-registered account until the age of 36 or until the balance hits $25,000 (and stays there by their assessment date). The waived minimum deposit also makes this offer accessible.

While this latest offer from BMO InvestorLine may be worth considering, younger online investors will need to critically evaluate the kinds of information being sent their way via promotions and advertisements (did anyone notice the image on the iPhone of the 12 million dollar portfolio?) by all brokerages in order to make a well-informed decision.

Finally, even though the technology and tools exist to get more information more quickly, there is still time to do homework and make a proper decision. After all, for a younger investor, time is on their side.

Editors Note: The article has been updated to include information on the waived minimum deposit.

Posted on April 17, 2014 by user — Leave a comment

New Online Brokerage Reviews Coming Soon

Just in time for Easter, SparxTrading.com is pleased to announce the roll-out of some very egg-citing features we’ve been working on. While we have been hinting about some improvements for some time, we’re glad to announce that they’re just about ready to be unveiled.

This year will have several big features launched, but one of the first big announcements has to do with a core feature of SparxTrading.com – our discount brokerage profiles. Specifically, we’re creating a new and improved user-centred platform for Canadian self-directed investors to learn about Canadian online brokerages.

Early beta access will be granted to industry members shortly with wider beta access available by the beginning of May.

This post explains why we decided to upgrade as well as what the upgrades will entail.

Starting at the Beginning

Our choice to start by looking at Canadian online brokerages and making the process of choosing a brokerage simpler, reflects the importance that we place on getting started on the right foot with self-directed investing.

Understanding how online brokerages work, what the processes and costs of trading are and staying on top of educational opportunities are things that we believe self-directed investors should be able to find out about easily, reliably and inexpensively. And, while choosing which brokerage to use seems like a simple enough task, it can actually end up impacting every trade a self-directed investor makes.

Our first version of online brokerage comparisons and profiles enabled visitors to access essential product and pricing details for the most popular kinds of trading that many Canadians engage in. As we have grown in popularity and learned what users were looking for, we saw the need to make things even easier and clearer for our visitors.

Building by Listening

Most of what we have implemented on SparxTrading.com has been informed by data and user feedback and what our data has been telling us is that there is an opportunity to offer a greater user experience.

For that reason, our improved brokerage profile pages are built around clearly connecting visitors with product knowledge, providing awareness of different promotions and/or current events as well as data from popular reviews all on one page. With our new online brokerage profiles, users can expect an improvement in the way in which they learn about, share their experiences with and connect to Canadian online brokerages.

A Platform to Learn

Constantly staying on top of the Canadian discount brokerage marketplace is hard work. The highly competitive landscape means information about pricing, products and promotions is always changing. In order to make better-informed decisions about choosing an online brokerage, however, it is critical to be able to access timely and accurate information on the choices that are out there.

Our new online brokerage reviews offer Canadian consumers convenient and comprehensive information about a discount brokerage that was previously scattered across many different websites. When combined with our online brokerage comparisons section, consumers have a full view of what is currently being offered by different brokerages and what price.

The redesigned profiles enable consumers to learn about online brokerage pricing and products (including platforms), current promotions (if they’re available for that brokerage), educational events as well as read the results of reviews done on brokerages all on one page. In addition, for those interested in learning more about a particular brokerage’s recent activities, the related articles link enables users to connect to stories on SparxTrading.com that mention or feature the discount brokerage.

A Platform to Share

When it comes to discount brokerages, every investor may have slightly different needs and therefore have different experiences with their brokerage. We understand that many self-directed investors would like a channel to share those experiences, whether they be positive or negative, with prospective clients as well as with online brokerages.

Fortunately, SparxTrading.com is widely read by both consumers as well as by online brokerages, so feedback is viewed by both groups. The new profiles will provide an opportunity for users to post and read comments made by other users or would-be users of a particular brokerage – again conveniently located on the broker profile.

A Platform to Connect

Whether it’s to find out more information about a brokerage or to get in touch with them directly, we provide easy to find contact points about a brokerage. New on the profiles this year, users will notice two important changes.

First, we are providing links to a brokerage’s social media presence – if they have one. While it is not a widespread practice, some brokerages do have a presence on social media (such as a Twitter feed or LinkedIn page) and for those that do, we’ve provided users with a quick way to connect to those channels.

A second important change for this year is that hyperlinks to brokerage sites will now be active only if/when a brokerage enables those links. To help facilitate the transition we will be leaving the links up during the beta test phase. After that point, however, only those brokerages that subscribe to this feature will have it enabled.

We’d Love Your Feedback

Since we built SparxTrading.com for self-directed investors, we always value feedback on what features users enjoy, which features they’d like to see added and which one’s they’re not so crazy about. During this beta testing phase we’ll be ironing out some of the bugs and so if you happen to notice a feature that isn’t working quite right, drop us a note with the details and we’ll look into it.

Turning an Exciting Corner

The exciting changes we’re rolling out this year mean that self-directed investors will be able to access information about Canadian discount brokerages in a way that they haven’t been easily able to do before. Of course the new online brokerage profiles are just the start of some exciting improvements we have planned.

In addition to the content improvements, we’ve been working harder to make our site much more mobile friendly and will be implementing some further design improvements to ensure visitors can do their discount brokerage research effectively on smartphones, tablets and desktops.

Stay tuned as we will be enabling beta access for a select group of users first and then widening access to all users. If you are with a discount brokerage and would like early access to the new profiles, please contact us directly. Note, only users replying from official organization emails will be allowed to participate for early release.

Posted on February 25, 2014 by user — Leave a comment

Ten is the New Thirty: A Review of Price Drops at Canadian Bank-Owned Online Brokerages – Part 2

In part one of this series, we looked at the recent moves by Canadian bank-owned online brokerages to reduce their standard commission fees. Since standard commission fees are just part of the fee picture, part two focuses on how to evaluate the other fees that clients may still be on the hook for.

Small Stack

For individuals with less than $50,000 combined in their investment accounts, the access to better commission pricing is most certainly welcomed. That said, there are still minimum account balance thresholds (between $10,000 and $20,000 depending on the brokerage) that can result in fees being applied against an account.

Fortunately, all of the online brokerages promoting sub-$10 standard commissions offer some type of option to have these additional fees waived. The current options fall into the following three categories:

Executing a certain number of trades per month, per quarter or per year
Contributing a certain amount per month to a pre-authorized investment plan
Holding additional accounts with the same discount brokerage/parent bank

In deciding on whether doing something to save on a fee is a sound strategy, it is important to first understand the cost of ‘doing nothing’.

Maintenance Costs

In comparing the current sub-$10 commission fee offers, the administrative fees (also called custody fees, maintenance fees or account minimum fees) that are charged by the four bank-owned brokerages are about the same when compared on an annual basis. Across the board, the annual fee works out to $100 per year although how this is calculated varies from brokerage to brokerage.

Three online brokerages (BMO InvestorLine, RBC Direct Investing and TD Direct Investing) assess this fee ($25) on a quarterly basis. National Bank Direct Brokerage, however, evaluates trading activity on an annual basis and charges $100 per year for those that don’t meet the activity/balance minimums by a specified cut-off date each year.

Strategy 1: Trade to Save

Each bank-owned discount brokerage currently offering sub-$10 trades allows clients to trade a certain number of times (e.g. quarterly, semi-annually, or annually) to avoid the maintenance fee.

While each offer may vary in the time frame over which they require trading, annualizing the cost of trading in order to qualify for fee exemption allows for comparison between plans and also presents an interesting result.

As shown in the chart below, at three out of the four brokerages (BMO InvestorLine, TD Direct Investing and National Bank Direct Brokerage), it is actually cheaper to trade the minimum activity than it is to pay the maintenance fee. At RBC Direct Investing, however, trading to avoid the maintenance fee is actually more expensive than paying the maintenance fee because clients have to trade at least 3 times per quarter to qualify for an exemption.

Pages: 1 2

Posted on February 21, 2014 by user — Leave a comment

Ten is the New Thirty: A Review of Price Drops at Canadian Bank-Owned Online Brokerages – Part 1

For Canadian discount brokerages, 2014 has already been an eventful year. It has now been just over a month since RBC Direct Investing announced the lowering of their standard trading commissions and in that time, the predicted response from several other bank-owned online brokerages has materialized. Since the RBC announcement, BMO InvestorLine, TD Direct Investing and National Bank Direct Brokerage have all lowered their standard equity commission pricing with more bank-owned brokerages expected to follow suit.

Going forward, there are two important reasons why do-it-yourself investors will have to pay extra attention to the online trading account plans being pitched to them. First, in the short term, expect pricing to continue to change as more brokerages adjust to the new ‘standard’ fee at below $10 per trade. Second, discount brokerages will be marketing even harder to communicate what makes one brand better than another. For consumers, the upside is that they can likely expect more promotions, however the downside is that they will likely have to untangle a lot of clever marketing and read the fine print much more closely on any offers presented by Canadian discount brokerages.

In this two part series, we take a look at the bank-owned discount brokerages and the recent shift in standard commission pricing to uncover what this means for self-directed investors and for the discount brokerage industry in Canada.

Catch a Falling Star*

The priority self-directed investors place on commission pricing is an open secret amongst discount brokerages big and small. As a case in point, several of the discount brokerage rankings that use cost as part of their measurement framework typically weight cost among their top categories. Considering the competitive dynamics of the industry, however, it is understandable why price is a popular battleground between competing firms. While having a major bank-owned brokerage such as RBC Direct Investing lower its pricing, there may have been other forces at play too. The presence of deep-discount brokerages such as Questrade and Virtual Brokers may have also helped to accelerate the pricing cuts. Whatever the case, it is clear that consumers were growing impatient with prices and other providers were able to gain traction with that dissatisfaction.

Judging by the consumer reactions online to the commission price cut as well as the speed with which other major bank-owned online brokerages have followed RBC’s move, two things are clear: competition amongst discount brokerages remains high and pricing matters to consumers.

Pages: 1 2

Posted on February 1, 2014 by user — Leave a comment

RBC Direct Investing: Lowering Commissions and Raising the Stakes

For many years, observers of the Canadian discount brokerage marketplace as well as the discount brokers themselves have all understood that the online brokerage business is a highly competitive space. Despite the many trends in products, services and pricing that have occurred over the last decade the standard commission rates at bank-owned brokerages have remained largely high and untouched. After a bold move by RBC Direct Investing, however, all that is set to change.

10 is the New 30

With the announcement by RBC Direct Investing that they were lowering (and simplifying) their standard commission fee from $28.85+ down to $9.95 flat, they have set the wheels in motion for one of the most potentially disruptive moves to happen in this space in a very long time.

With this pricing adjustment, not only does RBC Direct Investing now get out in front of their bank-owned brokerage peers in terms of pricing, they also have taken a shot directly at the traditionally lower cost online-only brokerages such as Questrade and Virtual Brokers. The ‘flat’ in the pricing means that ECN fees which some deep discount brokers pass along on their standard plans makes them more expensive than RBC Direct Investing on certain market orders of over 995 shares.

	Standard Commission Rates	Assets Required for Discounted Commission Rate	Discounted Commission Rate
RBC Direct Investing	$9.95 (flat)	Not required	Not required
Scotia iTrade	$24.99+	$50,000	$9.95 (flat)
CIBC Investor’s Edge	$28.95+	$50,000	$9.95 (flat)
National Bank Direct Brokerage	$28.95+	$50,000	$9.95 (flat)
BMO InvestorLine	$29+	$50,000	$9.95 (flat)
TD Direct Investing	$29+	$50,000	$9.95 (flat)

Keeping it Simple

While the announcement about pricing is a headline-grabbing way to kick off 2014, observers of RBC Direct Investing will note that over the past 3 years there have been a number of steps RBC has taken to bring their products, platform and services to a more competitive level with their peers. Whether it was the streamlining of their administration fees, the introduction of the “community” investing feature, their practice account or the lowering of minimum investment amounts of the Series D mutual funds, RBC Direct Investing has been steadily deploying investor-friendly features and pricing.

One of the individuals who is, in part, responsible for these tactical maneuvers is Michael MacDonald, Vice-President of Strategy for RBC Direct Investing. We spoke to Mr. MacDonald regarding the recent changes to RBC Direct Investing’s pricing and what his thoughts were on the impact these changes will have on the industry as well as to retail investors.

Pages: 1 2

Posted on January 23, 2014 by user — Leave a comment

Review: Dalbar Canada’s Direct Brokerage Service Award 2013

For individual investors, shopping for an online trading account often requires doing a fair amount of research and comparison between brokerages. While commissions & fees are the most important factor investors consider when choosing an account, what it’s like to be a client of a particular brokerage is also something many investors are often curious about.

Fortunately for self-directed investors, one Canadian research firm (Dalbar Canada) measures client experience for most of the Canadian discount brokerages as part of their direct brokerage service evaluation (DBSE) program. As part of the DBSE, Dalbar Canada also recognizes the high achievers in their evaluation with their Direct Brokerage Service Award.

Earlier this year, Dalbar Canada announced the two highest performing brokerages on the DBSE: RBC Direct Investing and HSBC InvestDirect.

Quick Overview

In our previous two-part series explaining the Dalbar Direct Brokerage Service Evaluation, we looked in detail at how the evaluation takes place including the components that go into defining ‘client experience’ at discount brokerages. Here is a brief overview of why client experience still remains an important feature to track when comparing discount brokerages.

More than Just Price

With competition amongst online brokerages increasing, many of them (especially bank-owned brokerages) have adopted very similar pricing models. Thus, comparing discount brokerages by price alone may not provide enough information for potential clients to make a decision. Going forward, shoppers will have to turn to the other features of a brokerage (such as client experiences) in order to evaluate how ‘good’ they believe the fit will be.

For those shopping for an online trading account, the only somewhat reliable ways to find out about client experiences have been through third party research/reviews and/or from other investors via investor forums or friends, family and colleagues. The Dalbar Direct Brokerage Service Award is therefore unique in its focus on client experience and tries to provide a picture of what clients can expect from a brokerage when connecting via phone or email.

Pages: 1 2

Posted on December 19, 2013 by user — Leave a comment

How Fantasy Hockey Can Teach You To Be A Better Investor

If you’ve ever watched a hockey game, you’ve probably seen team owners and managers high up in the stands stoically gazing down at the action. Even though they’re watching the same game as many of the cheering fans, the team managers and owners’ view of the action is far different than that of the crowds below them. In the minds of owners and managers, wins and losses translate into real business revenue gains and losses and ultimately portfolio value being created or getting destroyed for someone.

While you don’t have to put on a power suit or practice an emotionless stare, getting into the shoes of a hockey team owner/manager can offer a great window into how to translate team performance into portfolio value. Thankfully, in today’s world there are a number of great fantasy hockey leagues (such as Yahoo or ESPN) that make it easy for users to experience many of the same thrills and spills of managing a team for a whole season. As with the finance world, there is no shortage of stats, analysis and commentary to wade through in order to make a decision. Further, planning and executing trades can be as simple or complex as a league permits.

On the whole, the business of managing a hockey team offers a fun way to learn and apply some of the core principles of investing. This article looks at 3 ways that managing a fantasy hockey team can teach you to be a better investor (and also provide a great reason to spend so much time immersed in hockey for the season).

Lesson #1: Asset Allocation

When investing in the real world, the prevailing wisdom states that portfolios ought to have different asset classes (such as stocks, bonds and cash) portioned out accordingly. As the owner of a fantasy hockey team, your players are your assets. Like a financial portfolio, a hockey team requires a mixture of players each playing a particular role. While financial portfolios have more flexibility in the concentrations of assets, fantasy hockey teams require managing the right mix of players and positions and achieving the right mix of growth (with rookies), stability (veterans), offense (point production) and defense (preventing points against).

Lesson #2: Risk Management

Injuries, slumps, illnesses, personality clashes, dirty hits, run-ins with the law – there’s a long and unpredictable set of circumstances on and off the ice that can sideline a player. Just like investing in the stock market (or any other market), in fantasy hockey there is no such thing as a sure thing. Chasing the high flying players (stocks) at the expense of having depth and stability on the bench (portfolio) means that one unfortunate incident can seriously impair the entire portfolio’s performance. In fantasy hockey, however, the losses are nowhere near as catastrophic as those in the real world.

Savvy investors understand that risks are ever present and so they also understand that in order to successfully invest, risks have to be minimized (where possible). Equally savvy fantasy hockey team owners know that having several players who are strong in a particular category (such as faceoffs or goal scoring) helps to underwrite the risk of one really great player in that category getting injured.

Pages: 1 2

Posted on December 13, 2013 by user — Leave a comment

12 Days of Investor Tips

In the spirit of sharing, we’ve put together a special series of tips for investors collected from throughout SparxTrading.com’s collection of great articles, interviews and reports. Be sure to check back here daily through December 25th for the latest tip or follow us on Twitter to get updates on when they’re released.

Investor Tip #12: Know When to Take a Loss

This gem was provided to us from veteran trader Victor Adair as part of the series Mistakes Investors Make. Click to read about why Victor Adair thinks its crucial that investors know when to take a loss.

Investor Tip #11: Take Ownership of Your Investing Decisions

This next tip comes to us from an interview with Josef Schachter. In our interview, he shared some brief but insightful comments for investors. Chief among his thoughts was the importance of knowing what you (as an investor) are choosing to invest and who you’re choosing to invest with. Read more of what Josef Schachter had to say here.

Investor Tip #10: Buy the Business, Not the Symbol

Ryan Irvine, from Keystone Financial, provides this piece of investing wisdom. Often times investors can get caught up in the hype of a particular name or stock symbol and forget about what it is that gives the stock real ‘value’. Click the link to learn more about Ryan Irvine’s perspective on avoiding this common investing mistake.

Investor Tip #9: Build a Solid Foundation

The saying goes, “it is a wise man who learns from his mistakes but it is a fool who doesn’t learn from the mistakes of others.” The benefit of hearing what experienced investors have to say about getting involved in markets is highlighted in this video on getting started with investing. Noted expert on business valuation Ian Campbell provides his 10 timeless tips for all investors to consider when participating in stock markets.

Investor Tip #8: Pick the Right Advisor for Your Needs

When it comes to investing, there is no shortage of opinions or trading styles. Learning to find the right financial advisor for your investments, however, entails finding someone who you can share ideas and opinions with and who shares a similar style of investing. In this video tip, Reg Ogden shares his views on how to pick the right financial advisor.

Investor Tip #7: Make Sure to Have a System

Whether you prefer technical trading or value investing, having a system (and the discipline to follow the rules of the system) is crucial to successful trading. For beginners, there are some additional considerations that need to be made before jumping in to the investment pool with both feet. Find out what 3 tips Danielle Park has to offer for beginner investors.

Investor Tip #6: Trading is Simple but not Easy

Many people believe that trading on the stock market basically comes down to making a few clicks with a mouse and magically money will appear. What many of those people don’t realize is that trading is about making decisions that involve money – and the risk of losing it. That little cognitive monkey wrench can wreak havoc when it comes time to decide what actions to take and when to take them. These tips from Stockscores founder Tyler Bollhorn help to explain why trading may be simple but not easy.

Investor Tip #5: Trading is Not Gambling

While the element of uncertainty is common to both trading and gambling, there is a big difference between speculating with structure and simply guessing to be entertained. Read more about this concept in the summary of chapter 3 of The Mindless Investor along with two other really important points related to becoming more aware of your investing personality.

Investor Tip #4: Becoming a Successful Trader Takes Time and Training

Becoming a great trader or investor doesn’t happen overnight. Like any skill, trading takes time and effort in order to be mastered. Today’s tip comes from chapter 5 of The Mindless Investor, which explains why taking it slow and steady is the better way to improve as an investor.

Investor Tip #3: Use Your Size to Your Advantage

Unlike most institutional investors, retail investors aren’t going to be managing multi-million or billion dollar portfolios. For that reason, the kinds of trading opportunities and strategies that smaller investors can take advantage of are sometimes out of range for larger players. In this series of tips from chapter 6 of The Mindless Investor, find out how smaller traders can use their size as an advantage.

Investor Tip #2: Remember the 3 D’s of Investing

With all of the information and/or noise that investors have to filter through, one of the best tips for investors to remember is to try and keep things simple. Unfortunately, that’s easier said than done. There are, however, 3 important traits that all successful investors and traders share. Read more about how the 3 D’s of investing: Discipline, Diligence and Decisiveness, can help improve your trading or investing performance.

Investor Tip #1: Consider the Risk vs Reward

If there were a golden rule in trading or investing, considering the risk vs reward on any transaction would be it.

All experienced traders and investors accept that there are going to be instances where they ‘get it wrong’ or when they ‘get it right but at the wrong time’. The savviest traders and investors, however, manage risk from the outset by identifying whether there is a plausible prospect for a reward, and whether that reward substantially outweighs the risks (usually by a factor of 2 or more) associated with the trade. By focusing on those candidate trades that offer a better risk/reward profile, not only are you shifting the odds for success in your favour, but you’ll also likely make fewer trades and have an easier time researching opportunities and managing your portfolio.

We hope you’ve enjoyed the 12 days of investor tips. One of the great things about trading in the stock markets is that it changes constantly and so it requires a commitment to lifelong learning in order to stay in top trading form. Whether you’re a passive investor or an active trader, remember to keep earning you have to keep learning.

Have you got an investing lesson or tip that you would like to share? Feel free to do so in the comments section below.