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Time to Invest or Wait for Dip


pfezziwig

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Economist are predicting another 10% gain for the stock markets this year. Seeing as they have a vested interest in encouraging us to invest I'ld appreciate some recommendations on whether getting back into the stock market is a good idea now or if I'm late to the party.

Is it too late after the massive run up the last year, should I wait for a big or small correction, or is it generally a safe bet this year?

I'm looking at power utility companies like Emera and resources for food like potash in Sask. Is it reckless investing in them after such large gains last year? Should I wait it out for a major dip in these companies next year?

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Economist are predicting another 10% gain for the stock markets this year. Seeing as they have a vested interest in encouraging us to invest I'ld appreciate some recommendations on whether getting back into the stock market is a good idea now or if I'm late to the party.

Is it too late after the massive run up the last year, should I wait for a big or small correction, or is it generally a safe bet this year?

I'm looking at power utility companies like Emera and resources for food like potash in Sask. Is it reckless investing in them after such large gains last year? Should I wait it out for a major dip in these companies next year?

I think lots of stuff is undervalued right now, but Im still leary of putting money into the stock market, mainly because I believe that financial crisis part 2 is still coming.

For the most part the latest recession was mitigated by simply throwing stacks of borrowed money at it. Very little was done to address the structural problems that lead to the recession, and the fact that the way the system is structured now theres theres a hell of a lot of money to be made from crashing the economy and big part of the financial sector working hard to do just that.

Edited by dre
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This is hardly the best place to go for stock buying advice. That being said, I'd go by Warren Buffett's tip: "sell when others are buying, buy when others are selling". Right now, the market is probably going to keep on heading up as the world continues to recover from the little economic dip. But, that's what everyone is counting on, and so stocks are valued accordingly. The real time to buy was when everyone was panicking and selling during the depths of the recession.

On the other hand, we might not have another such dip for many years, so waiting for one would be foolish if you have money ready to invest.

Whatever you're doing though, don't buy companies at historic/long term highs, unless you have very very strong reason to believe they will continue to rise.

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Economist are predicting another 10% gain for the stock markets this year. Seeing as they have a vested interest in encouraging us to invest I'ld appreciate some recommendations on whether getting back into the stock market is a good idea now or if I'm late to the party.

Is it too late after the massive run up the last year, should I wait for a big or small correction, or is it generally a safe bet this year?

I'm looking at power utility companies like Emera and resources for food like potash in Sask. Is it reckless investing in them after such large gains last year? Should I wait it out for a major dip in these companies next year?

It depends on what you're investing for.If it's stock valuation,things might get a little risky.If it's for dividend income PLUS potential stock value gains,things look a little more rosey.

I've been looking at Emera,as well...either that or TransAlta or Fortis in the utility category...I'm also looking at either CIBC or BMO and TransCanada Corp....All for DRIPS and SPP's....

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It depends on what you're investing for.If it's stock valuation,things might get a little risky.If it's for dividend income PLUS potential stock value gains,things look a little more rosey.

I've been looking at Emera,as well...either that or TransAlta or Fortis in the utility category...I'm also looking at either CIBC or BMO and TransCanada Corp....All for DRIPS and SPP's....

In terms of DRIPS I've found much better companies to invest in in the US than in Canada, in terms of yield, stability, and history of increasing dividends over the last several decades.

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In terms of DRIPS I've found much better companies to invest in in the US than in Canada, in terms of yield, stability, and history of increasing dividends over the last several decades.

Sure...There's alot more because the US economy is much larger,and those companies have been around for alot longer (Pepsico,Coca Cola,Colgate-Palmolive,Johnson and Johnson,Proctor and Gamble ,etc).The issue for me is paying the taxes on US dividend income,and the idea is to maximize the dividend profit.And you simply cannot go wrong with the Canadian banks,utilities and/or oil and gas pipeline companies...

Edited by Jack Weber
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The issue for me is paying the taxes on US dividend income

I didn't know we pay taxes on american or foreign dividends, how are we taxed? I was looking at Emerera for the dividend and placing it in a Tax Free Saving Account to avoid any taxes on the dividends.

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I didn't know we pay taxes on american or foreign dividends, how are we taxed? I was looking at Emerera for the dividend and placing it in a Tax Free Saving Account to avoid any taxes on the dividends.

You get charged a 15% tax on all US dividend income. However, depending on your financial situation, you can get much of it back in the tax return at the end of the year.

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Is it possible to place TSE:Potash (Canada) or NYSE:Mosiac (USA) in a Tax Free Saving Account and avoid the 15% tax or at least get it refunded?

I was looking at fertizlers for stock value growth potential and some dividends. TSE:Potash (Canada) seemed safe but I was also considering NYSE:Mosiac (USA) which seems to have a much better dividend and potential for growth?

Can anyone else recommend good Canadian dividend stocks?

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Would you buy metal or stocks?

Not sure which one I'd invest in ... really. Seems with the volatility of the market and a possibility of many currencies around the world on the verge of collapsing (The US greenback being one of them) and austerity measures in Europe, it might depend on what currency you are buying the items with.

Kind of an off note here .....

What I do find interesting is that one solution to the problems in Tunisia is to reduce the cost on many foods. If your currency is devalued, things are going to cost a lot more, and one way to get around it is to arbitrarily reduce costs of items.

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I think lots of stuff is undervalued right now, but Im still leary of putting money into the stock market, mainly because I believe that financial crisis part 2 is still coming.

For the most part the latest recession was mitigated by simply throwing stacks of borrowed money at it. Very little was done to address the structural problems that lead to the recession, and the fact that the way the system is structured now theres theres a hell of a lot of money to be made from crashing the economy and big part of the financial sector working hard to do just that.

I agree with your analysis of the recession picture, and current news about jobless rates in the US does not bode well for a return to the old norms any time soon. It's gonna be an interesting year.

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  • 1 month later...

...I'd go by Warren Buffett's tip: "sell when others are buying, buy when others are selling". Right now, the market is probably going to keep on heading up as the world continues to recover from the little economic dip. But, that's what everyone is counting on, and so stocks are valued accordingly. The real time to buy was when everyone was panicking and selling during the depths of the recession

I agree, but there is a consensus stocks are going up the next 6-12 months, who wants to wait 2 years before investing. I got in last month (Canadian oil and bank stock) and have no regrets...so far ! A lot better than leaving it in the bank or gic's.

I am starting to hear talk of Canadian stocks are in the begining of a Super Cycle, our natural resources will be in great demand for the next 10 years, doesn't take a fortune tellar to predict that, the BRICK countries can afford to pay top dollar now too.

Edited by pfezziwig
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Trying to "time the market" is risky, and often tends to bite you in the ass. Your best prospect is to make regular investments, and plan to hold those investments for decades.

As for what you should invest in: Might I suggest an indexed mutual fund? Rather than trying to pick individual stocks, an index fund selects a group of stocks based on the current top funds on the stock exchange. Since it doesn't depend on one or 2 individual stocks it is safer. And since there's no real 'decision making' as to which stocks to pick, it has a lower overhead and earns more profit than more actively-managed investments.

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Trying to "time the market" is risky, and often tends to bite you in the ass. Your best prospect is to make regular investments, and plan to hold those investments for decades.

As for what you should invest in: Might I suggest an indexed mutual fund? Rather than trying to pick individual stocks, an index fund selects a group of stocks based on the current top funds on the stock exchange. Since it doesn't depend on one or 2 individual stocks it is safer. And since there's no real 'decision making' as to which stocks to pick, it has a lower overhead and earns more profit than more actively-managed investments.

It is almost always more cost effective to "create your own" mutual fund by buying a selection of stocks than to buy an actual mutual fund. Mutual funds have fees, whether direct fees and/or percentage of returns, that greatly reduce how much you actually get from them. If you have a mutual fund you are interested in, just read the details about it: mutual funds reveal all their major investments. Then, you can just buy (some of) those same stocks yourself. You'll get essentially the same safety as investing in the mutual fund without the fees, all without having to do the full research as if you were picking individual companies to invest in stock by stock.

Another good option is ETFs.

But old school mutual funds just use way too much money on management that has been proven time and time again to not outperform the market average, thus driving down returns to far below market levels.

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It is almost always more cost effective to "create your own" mutual fund by buying a selection of stocks than to buy an actual mutual fund. Mutual funds have fees...

You're right, they do... although typically the fees associated with an index fund are a lot lower than with a more 'traditional' fund. (If I remember a year or 2 ago, the fees on my index funds were around 0.5%, whereas my the fees for the actively managed funds were in the 2.5-3% range..

Then, you can just buy (some of) those same stocks yourself. You'll get essentially the same safety as investing in the mutual fund without the fees, all without having to do the full research as if you were picking individual companies to invest in stock by stock.

Another good option is ETFs.

You're right, you can pretty much do the same thing as an index fund/mutual fund by doing all your own stock purchases. Of course, there are a few drawbacks to that too... (e.g. stock trade commissions, research.) For me, the simplicity of dropping by my bank and saying "put $X on this index fund" (without having to do research, set up trading accounts, etc.) is worth the relatively small management fee of the index fund.

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I'd go to cash right now. When tunisia hit I did a fire sale of my inventory of wheat and canola. Big situations plastered on cnn tend to spook investors. I'm getting out until there is some stability and/or direction in the middle east. If saudi arabia starts going south there's going to be a bath taking place in equities and commodities.

Safest bet, oil futures, gold futures, and the usa dollar. Look to buy other investments when there is signs of stabilization.

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I'd go to cash right now. When tunisia hit I did a fire sale of my inventory of wheat and canola. Big situations plastered on cnn tend to spook investors. I'm getting out until there is some stability and/or direction in the middle east. If saudi arabia starts going south there's going to be a bath taking place in equities and commodities.

Safest bet, oil futures, gold futures, and the usa dollar. Look to buy other investments when there is signs of stabilization.

Oil and gold futures sound good but don't invest in the USA dollar.

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  • 2 months later...

By the physical metal and I would suggest buying silver, I am expecting higher gains from silver then gold, silver outperformed gold last year and it is still trading well below all time highs where gold is trading above.

Great call with the silver. Do you think its worth getting into after this big drop the past week?

I went for energy stocks the past few months and have been doing quite well even after this recent dip. Thinking of expanding my exposure to the stock market further with silver. Seems to be an effort to create a bear market but the market won't allow it, profits look good and will be next quarter too?

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Great call with the silver. Do you think its worth getting into after this big drop the past week?

I went for energy stocks the past few months and have been doing quite well even after this recent dip. Thinking of expanding my exposure to the stock market further with silver. Seems to be an effort to create a bear market but the market won't allow it, profits look good and will be next quarter too?

I like the idea of owning Oil, I think it would be good to have it in your portfolio.

I was telling people to buy silver at $16.50 and that was early last year, most of my silver is still up in value. I still believe silver will be up in the long term. You buy on the dips, now may be a good time to buy.

I am not trying to create a bear market for silver, the Federal Reserve is doing that job for me.

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Great call with the silver. Do you think its worth getting into after this big drop the past week?
Great call? Unless you have a time machine, it is very unlikely that you can predict with any degree of consistency the price of a commodity such as silver. Attempts to time the market invariably come to nought.

----

There are two basic lessons for investing: diversify your risks and keep your costs (in particular taxes) down. As for anything else, you may have some specialized knowledge about a particular product/service or company but chances are that many more people than you are better informed about most things. I generally advise people to buy and hold and match risk to their investment horizon.

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Great call? Unless you have a time machine, it is very unlikely that you can predict with any degree of consistency the price of a commodity such as silver. Attempts to time the market invariably come to nought.

In this case you are valuing a currency against a commodity. A bit different.

There are two basic lessons for investing: diversify your risks and keep your costs (in particular taxes) down. As for anything else, you may have some specialized knowledge about a particular product/service or company but chances are that many more people than you are better informed about most things. I generally advise people to buy and hold and match risk to their investment horizon.

You are an investment advisor?

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