With the markets continuing their push higher yet again, it seems like the bears may just want to find a comfier place to rest – for now. Despite the advances, there seems to be no shortage of market stories looking to poke them back into action. Aptly enough, this week’s roundup has a focus on investors being able to share stories (none of which seem to involve bears though).
This week we take a look at a project launched by one major discount brokerage that seems to have investors talking, followed by an article on trading as a DIY investor, and then hop to a couple of interesting threads from the Canadian investor forums.
RBC Direct Investing Forum Shows Promise
One of the great promises of the internet was that it could bring people together. As a DIY investor, however, trading online can be a bit of a solitary enterprise. Enter investor forums.
As many regular readers of the roundup know, the Canadian investor forums are one of the ways in which investors of all skill levels can connect and discuss a variety of online-investing related topics – or simply brag/trash their latest stock choice.
Recognizing the power of user engagement and the importance of creating a space for investors to connect and compare notes, several Canadian online brokerages including Desjardins Online Brokerage (via Stockscores), Questrade and RBC Direct Investing have created investor-specific forums.
This past week, RBC Direct Investing announced an update on the progress of their investor community and forum. As part of their update, RBC Direct Investing provided some interesting stats on usage of the forums that were launched in 2013. At the most recent count over 8,500 clients have joined the community and RBC has been running a contest in order to encourage more individuals to sign up. One of the unique features of RBC Direct Investing’s community is the ability of users to compare their portfolio against other users (anonymously) which a functionality that none of the other popular forums (online brokerage run or otherwise) currently offer.
Strategically, social and finance is a difficult combination to get right.
One example of it not going right was the now decommissioned TMX social site Waggle. Although considerable money was spent on its development and deployment and it had promising functionality, it never really gained traction. Conversely, the barebones Reddit Personal Finance Canada section continues to grow (and has well over 9500 “readers” at the time of writing), in popularity largely on the strength of community participation.
For RBC Direct Investing, being able to adequately resource the forum doesn’t seem to be the challenge. Instead, like their competitors, the success of their community feature will depend on the time and effort users choose to invest on it.
Do You Like To Trade It, Trade It?
There are more than a few savvy investors that believe that active trading is not only (largely) futile but also detrimental to portfolio performance.
In an interesting piece in the Globe and Mail geared towards DIY investors, author David Israelson highlights this position as he lays out the perils of “overtrading” – a term that the article admittedly acknowledges has no consensus. While the perspectives in the article provide important guidelines for investors to bear in mind, the article essentially posits that a strategy that loses money in the markets is not a good one. These are similar to Warren Buffet’s infamous advice on investing in the markets: “Rule No.1 is never lose money. Rule No.2 is never forget rule number one.”
What is cold comfort to DIY investors is that just like the professionals, there is no way to know if their portfolio strategy worked until after they’ve tried it. For DIY investors, however, it is especially more of a challenge because they don’t have the same structures and controls in place to manage risk or cut losses that professionals (usually) do.
From the Forums
This past week, there were a couple of interesting forum threads courtesy of the Reddit Personal Finance Canada subreddit.
Fact or Fiction
For DIY investors, one of the most difficult decisions is which discount brokerage to trust with their online trading account. In this post, one user talks about the reports of horror stories associated with Questrade, however the Reddit community chimes in to provide a more balanced point of view.
Are we there yet?
In keeping with the previous thread, the following post is from another user (an account holder with Questrade) who attempted a transfer of funds into their trading account. In an increasingly ‘instant’ world, the delay seemed to get the author a little panicked. While the answers that the community provided where valuable, it was also interesting to note that a rep from Questrade also replied to the author.
That does it for this week’s roundup. For those sports portfolio pickers, good luck on the fantasy football drafts and the season ahead. Have a great weekend and be sure to find excuses to go long on fun!
As much as investors and traders alike are beholden to the hard right edge of a chart, there’s something precarious about staring back at a trend line breaking behind you. Despite the possible gloom (for the longs) in stock markets that accompanies a break of an upward trend, Canadian discount brokerages may be experiencing the beginning of a series of new trends. Of course, the funny thing about trends is that it’s often tricky to know just when you’re in or out of one.
After a flurry of activity across the discount brokerage space these past several weeks, this past week was a bit quieter. The same, however, can’t be said for the markets. Despite the relative quiet on the discount brokerage side, a couple of items of interest to DIY investors crossed our radar. In this roundup, we take a quick look at an interesting announcement from a US trading platform provider, a new deal being offered at a popular Canadian brokerage and as always some interesting perspectives from the Canadian investor forums.
What a difference a day makes. Yesterday was July and the markets were floating near all-time highs today it’s August those gains are gone. While that might not seem newsworthy, when it comes to trading/investing it’s often the simple lessons rather than the ‘news’ that make the difference. Learning how to stomach volatility (ironically as this edition of the roundup is being written while descending through some stomach churning turbulence) is part of the growth and development for every investor. Unfortunately, knowing that doesn’t quite make the experience any less unpleasant.
As we cruise into the end of July, every trader’s favourite season is drawing to a close. No, it’s not summer but rather earnings season. Depending on which side of an analyst’s estimate a company falls, the news may be great or simply a great disappointment. Regardless, the lesson the market forces everyone to learn over and over again is to keep your expectations realistic.
With the World Cup now officially over many folks can get back to their regular routines. Of course for many traders, staring at a screen all day only to have nothing happen is a regular routine. Don’t be fooled by the calm, as things can (and usually do) change quite quickly. Soccer or no, for Canada’s discount brokerages, the game is still ‘afoot’ and this past week they showed that they’re still out to try and win the attention of DIY investors.
