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Why Do Companies Care So Much About Their Share Prices?

When you buy shares in a company, you are generally buying shares from a shareholder who is willing to sell those shares. For example if you buy $1000 worth of shares of Walmart, that $1000 goes to the seller of those shares not to Walmart. Why then should a company care about its stock price? A company only gets money from the initial public offering (when it’s shares first go on sale), subsequent buying and selling of shares occurs between investors.  Why then do companies put such a strong em…

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Are You An Investor Or Speculator?

Are you an investor or speculator? Or are you a speculator thinking that you are investing?

Over the years I’ve heard people say things like, “I’m going to play the stock market. I’ll gamble a few hundred dollars on this stock. If I get lucky I can retire soon.” When talking about stocks, I never mention the words “play” “gamble” or “lucky”.

Those words belong in a casino not when you are investing your hard-earned money. There is a big difference in investing versus speculating, Benjamin Grah…

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Did You Buy Shares in Facebook? Should You?

On Friday (May 18, 2012) Facebook became a public company. Facebook shares began trading on the stock market, meaning anyone could now own a part of the company. But should you have bought shares in Faceboook?

The answer is no. Facebook shares started trading at $38 each, which valued the company at $104 billion. At $104 billion Facebook became the most valued company ever to go public. Here are some other companies and what they are worth today:

  • Amazon is worth 97.01 Billion
  • McDonald’s, 92…

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$40 Coca-Cola Share Turns Into $9.8 Million Using the Power of Dividends

Last month Coca-Cola’s board announced a two for one stock split, the first in 16 years. A stock split basically doubles the number of shares you own. If you own 100 shares in a company, and the stock splits two for one, you end up with 200 shares. Companies generally split stocks when they think their share price has gotten too expensive or if the stock is trading too high compared to similar companies’ stock. A stock split is a good thing for shareholders if the stock price continues to rise a…

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Do You Think Investing is Too Difficult?

There is a common misconception that people have regarding investing, especially investing in stocks and that is, “investing is difficult”. Most people believe that investing by themselves is too complicated therefore most folks leave it to the so called professionals. I like to call these professionals, mutual fund sales people, sales people who work on commissions. A sales person’s interests may not be in-line with your interests.

Keep in mind that mutual fund companies make money even when y…

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Top 5 Things You Need to Know About Dividend Paying Stocks

Dividends are cash payments made to shareholders.  As a shareholder you are part owner of the company and therefore are entitled to share in the profits. Dividends can also help you determine when a share is undervalued, and priced right for purchase. There are a number of other additional benefits to owning dividend paying shares, and I discuss my top five in this article.

1. Dividends provide an immediate return

2. Your safety buffer against the worst case scenario

3. Dividends increase ove…

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For every $10,000 you have invested in Mutual Funds more than a third is lost to fees!

For every $10,000 you have invested in Mutual Funds more than one third is lost to fees. For every $10,000 invested you will lose $3,367.80 in 15 years*.

After 25 years the amount lost will be $5,613, more than 50% of your initial investment! Mutual fund fees take out a big portion of your earnings. The good news is that you can avoid these fees all together.

Can you imagine losing more than 50% of your investment to fees? It’s no wonder why so many people will have to work for the rest of the…

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Is it Good When Companies Buy Back Their Own Shares?

Companies will sometimes buy back their own shares, but is this good or bad for you the shareholder? Generally it’s a good thing because in the long run it will result in an increase in the share price. Here are the four key reasons for a stock buyback:

  • the company believes their shares are undervalued and the market offers a good buying opportunity
  • good use of excess cash when the stock represents the best investment (stock is undervalued) for a company, over and above using cash for reinve…

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Are you thinking about investing, but never get around it?

Here are 2 reasons why you need to start investing on your own today:

1. Each day you spend invested in mutual funds (take a look at your company RRSP or 401K statement) you are wasting money. Over time this could add up to over $300,000 lost to fees. Click here, and here to read more about this.

2. Start investing early to make the most money, each day you wait is lost opportunity. Do you really want to have to work another 15 years because you waited 2 years to start investing? Click here to…

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The Biggest Investment Mistakes Canadians Are Making

I was recently interviewed for this article by Cindy Waxer (she writes for publications including Technology Review, The Economist, TIME, Fortune Small Business, and CNNMoney.com). Have a look....

Many Canadians are falling short of their investing goals. According to a February 2012 Bank of Montreal survey, only 38 percent of Canadians contributed or planned to contribute to their Registered Retirement Savings Plans (RRSPs) before the Feb. 29 deadline. Whether you're investing in an RRSP, st…

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