In case any of you missed it (or more likely, if you want to see it again, since most of you know about my blog because of the interview), the link is below:
http://watch.bnn.ca/investor-month/clip269689#clip269689
Sunday, February 28, 2010
Saturday, February 27, 2010
February Comes to an End
Two months down in 2010, ten more to go. After a 50%+ gain last year, I had set myself a more realistic goal for 2010 - to average at least 1% return per month for the whole year. With banks offering 'preferred' deposit interest rates of 0.3% per year, I figured that 12% return for 2010 would be great, and much more realistic than expecting a repeat of my 2009 return.
At February month end, my overall YTD return is 2.5% so I am slightly ahead of my goal at this early stage in the year. With the TSX being up about 2% since the start of the year, I am happy to be slightly ahead of the Canadian index, while being far less than 100% invested (due to the uncertainty of the markets).
I sold quite a few stocks this week, as my stop losses were triggered. As I have mentioned, I not only put in stop losses just below the 40-day moving average line for each stock, but I also use stop losses to preserve gains if one of my stocks has achieved a gain since I have bought it. I am only 20% invested in stocks right now (the remainder in cash), after ending last week 60% invested in stocks. This type of swing is normal with my investing method, as I sell stocks when they are moving down and I buy stocks when they are moving up. I am NOT a buy and hold investor, even when I believe in the long-term prospects for a stock. I have learned that it doesn't matter if a stock SHOULD be going up, it only matters if it DOES go up.
Right now, I own HXU (Horizons TSX up), TRP (TransCanada), FTT (Finning), T, (Telus), YLO.UN (Yellow Pages Income Fund - although I have sold about half of my holdings, as it is down a bit from its highs and I wanted to preserve the good gains), and PN (PNI Media - the only small-cap that I follow, because I like (and use) their online technology).
For Monday, I am looking at adding HBU (Horizon gold bullion up), HOU (Horizon oil up), and LIF.UN (Iron Ore Income fund). The daily volume for LIF.UN is not as high as I would like, so I may not buy it since it is difficult to do so with stop-buys and still get a good price when the volume isn't there.
As most of us are Canadian investors, I assume that you either already have TSFA's or you are looking to get one. I opened one TFSA in September 2009 and another in January 2010 (I opened a second one since my bank didn't originally offer TFSA accounts that allowed self-trading of stocks). Both accounts were opened with $5,000, the maximum allowed per year. Once I determine which format I like best (between the two online trading formats) and which ones have better long-term trading fees (they have special introductory deals right now), I will combine the two TFSA accounts into one, so I don't have as many accounts to manage.
TFSA #1 (opened in Sept 2009) is now up 23.4% (in 6 months) and TFSA #2 (opened in early January 2009) is now up 10.2% 9in 2 months. I realize that many people may have higher returns in their TFSA accounts but they likely involve much more speculative stocks than the stocks that I follow, so I think my investments are safer (at least for me). Sure, the $5K limit on TFSA accounts (per year) limits your investment levels, but if you combine decent annual returns with maximizing your yearly contributions, you can build up a nice balance in your TFSA account, and not pay tax on the gains.
I see that I have many more followers after the BNN interview this week (I still don't have too many, but many more than I had before the interview), so I hope my information and approach helps at least some of you determine an investing strategy that suits you and your risk tolerance.
At February month end, my overall YTD return is 2.5% so I am slightly ahead of my goal at this early stage in the year. With the TSX being up about 2% since the start of the year, I am happy to be slightly ahead of the Canadian index, while being far less than 100% invested (due to the uncertainty of the markets).
I sold quite a few stocks this week, as my stop losses were triggered. As I have mentioned, I not only put in stop losses just below the 40-day moving average line for each stock, but I also use stop losses to preserve gains if one of my stocks has achieved a gain since I have bought it. I am only 20% invested in stocks right now (the remainder in cash), after ending last week 60% invested in stocks. This type of swing is normal with my investing method, as I sell stocks when they are moving down and I buy stocks when they are moving up. I am NOT a buy and hold investor, even when I believe in the long-term prospects for a stock. I have learned that it doesn't matter if a stock SHOULD be going up, it only matters if it DOES go up.
Right now, I own HXU (Horizons TSX up), TRP (TransCanada), FTT (Finning), T, (Telus), YLO.UN (Yellow Pages Income Fund - although I have sold about half of my holdings, as it is down a bit from its highs and I wanted to preserve the good gains), and PN (PNI Media - the only small-cap that I follow, because I like (and use) their online technology).
For Monday, I am looking at adding HBU (Horizon gold bullion up), HOU (Horizon oil up), and LIF.UN (Iron Ore Income fund). The daily volume for LIF.UN is not as high as I would like, so I may not buy it since it is difficult to do so with stop-buys and still get a good price when the volume isn't there.
As most of us are Canadian investors, I assume that you either already have TSFA's or you are looking to get one. I opened one TFSA in September 2009 and another in January 2010 (I opened a second one since my bank didn't originally offer TFSA accounts that allowed self-trading of stocks). Both accounts were opened with $5,000, the maximum allowed per year. Once I determine which format I like best (between the two online trading formats) and which ones have better long-term trading fees (they have special introductory deals right now), I will combine the two TFSA accounts into one, so I don't have as many accounts to manage.
TFSA #1 (opened in Sept 2009) is now up 23.4% (in 6 months) and TFSA #2 (opened in early January 2009) is now up 10.2% 9in 2 months. I realize that many people may have higher returns in their TFSA accounts but they likely involve much more speculative stocks than the stocks that I follow, so I think my investments are safer (at least for me). Sure, the $5K limit on TFSA accounts (per year) limits your investment levels, but if you combine decent annual returns with maximizing your yearly contributions, you can build up a nice balance in your TFSA account, and not pay tax on the gains.
I see that I have many more followers after the BNN interview this week (I still don't have too many, but many more than I had before the interview), so I hope my information and approach helps at least some of you determine an investing strategy that suits you and your risk tolerance.
Thursday, February 25, 2010
More Stuff Bought and Sold Today
Today was a good example of how my need for buying and selling on stop (since I work during the day and can't watch the market) can hinder my ability to profit. The markets opened down today, and many of my equities sold, only to recover later in the day. Today, I sold AGU, HXU, HOU, COS.un and ENF.un. On the other hand, I purchased TRP and S, so my level of investment balanced out a bit. I also still hold OCX, T, PN (the only small cap that I follow), and YLO.UN.
For tomorrow, the buys are HXU (yesterday was a false sell, due to the turnaround - you just have to get used to this with the method I use), FTT, LIF.un, QBR.B, and TRP (still a buy, but I already own it so I don't need to buy more, at least not yet).
I am still up about 2% overall YTD, which is pretty good when you compare it to the performance of the markets during that time. I was up 3.5% YTD about 4 days ago, but you have to get used to these swings from day to day. To really profit from my method (or when holding any stock), you need the markets to pick a direction and stick with it for a while. When the market trades sideways (a few up days followed by a few down days...), it can be hard to make any money, unless you day-trade (which I don't).
One of these days, I will post a complete list of the 10 ETF's and 40 or so stocks that I follow on a daily basis, and buy and sell according to the graphs. If anyone has a stock that they like to follow in this manner, I would love to hear about it.
For tomorrow, the buys are HXU (yesterday was a false sell, due to the turnaround - you just have to get used to this with the method I use), FTT, LIF.un, QBR.B, and TRP (still a buy, but I already own it so I don't need to buy more, at least not yet).
I am still up about 2% overall YTD, which is pretty good when you compare it to the performance of the markets during that time. I was up 3.5% YTD about 4 days ago, but you have to get used to these swings from day to day. To really profit from my method (or when holding any stock), you need the markets to pick a direction and stick with it for a while. When the market trades sideways (a few up days followed by a few down days...), it can be hard to make any money, unless you day-trade (which I don't).
One of these days, I will post a complete list of the 10 ETF's and 40 or so stocks that I follow on a daily basis, and buy and sell according to the graphs. If anyone has a stock that they like to follow in this manner, I would love to hear about it.
Wednesday, February 24, 2010
Interesting Day Today - Interview on BNN
I see that I now actually have a few followers, other than just my friends and family, so I assume that you saw me on BNN today. I must say that it was an interesting experience being interviewed by Pat live on TV. I know my family and co-workers got a big kick out of it.
I have been asked to outline my approach in a little more detail, so here goes:
You start by selecting a stock - let's take Westjet (WJA-TSX) for example. You then need a site that allows you to graph the stock price and compare it to a moving average (I use my bank trading site, but I think Yahoo and others have this service - any home-gamers likely already have a site that lets them do this).
Next, you graph the daily stock price and the 40-day moving average line (you can use the 50-day, or any other, if you prefer, but I like the 40-day) and make sure you look at six months worth of data at least (a year is better).
Right now, the price of WJA is above the 40-day moving average so that means that you keep it if you already own it but you don't necessarily buy it (you missed the buy point), but you CAN always buy it if you want, since it is in HOLD territory (and it HAS been going up steadily since early November, all above the 40-day moving average line).
IF the share price was to go down over the next few days, the daily price would approach the 40-day moving average. When the daily price goes below the 40-day moving average, you SELL WJA. I only check each stock in the evening, so if the daily price is below the moving average, I put in the stop loss (a few cents lower than the current price) for the next day. I use stop losses since I work during the day but if you have the luxury of being able to watch the market, you can wait until the open to see where WJA goes - selling it if it goes down and maybe waiting a bit if it starts to go back up (it could have been a false sell signal).
You should look at the historical data from the past year and note how many times the daily share price bounces off the 40-day moving average and goes back up (for WJA, I count 4 times). That is why this line is a good buy / sell indicator.
Similarly to the above, if a stock you are following is currently below the 40-day moving average (like CP, for example), you wait until the share price appreciates and goes up through the 40-day moving average and then you BUY the next day.
Plain and simple - you buy a stock when the daily price goes UP through the 40-day moving average and you sell a stock when the daily prices goes DOWN through the 40-day moving average.
** Additions I have made to this strategy:
1) I didn't like when I bought a stock and it went up initially, only to end up going back down, meaning I didn't make any money. To counteract this, once a stock is up a bit (say 5 - 7%), I put in a stop loss to preserve some of the gains (careful to give the stock a bit of room to move).
2) If I don't own a stock, and the daily price is above the 40-day moving average and stays above it and goes back up then I buy it (just like if it had been below the line and moved up through it). Once I buy the stock this way, I follow it the same was as the other stocks I follow and sell it when the graph tells me to.
Keep in mind, there are only three possibilities for each stock you follow - BUY, SELL, or WAIT (keep it if you own it, don't buy it if you don't). I really do keep it that simple.
For tomorrow, for example, I will look to sell HXU and ENF.UN if they go down more, since they fell below the 40-day moving average line today. I will also look at selling COS.UN (I actually should have sold it today, but didn't).
The BUYS I am looking at for tomorrow are LIF.UN, S (note - released good results today), and TRP. Keep in mind that if I buy them tomorrow and they drop on Friday, the graphs may tell me to sell it. False buys and sells are a reality of my approach and I just have to learn to live with them.
As I say in my profile, my goal is to have more winners than losers, and to limit the size of the losers. Sounds simple, but as you know it can prove challenging. In the last 16 months (starting in November '08), I am up in 14 of the months, even in 1, and down 0.75 in the last. Given the state of financial markets during that time, that is a pretty good record. Especially when I only spend about 20 minutes each evening watching the 40 stocks and 10 ETF's that I follow.
I have been asked to outline my approach in a little more detail, so here goes:
You start by selecting a stock - let's take Westjet (WJA-TSX) for example. You then need a site that allows you to graph the stock price and compare it to a moving average (I use my bank trading site, but I think Yahoo and others have this service - any home-gamers likely already have a site that lets them do this).
Next, you graph the daily stock price and the 40-day moving average line (you can use the 50-day, or any other, if you prefer, but I like the 40-day) and make sure you look at six months worth of data at least (a year is better).
Right now, the price of WJA is above the 40-day moving average so that means that you keep it if you already own it but you don't necessarily buy it (you missed the buy point), but you CAN always buy it if you want, since it is in HOLD territory (and it HAS been going up steadily since early November, all above the 40-day moving average line).
IF the share price was to go down over the next few days, the daily price would approach the 40-day moving average. When the daily price goes below the 40-day moving average, you SELL WJA. I only check each stock in the evening, so if the daily price is below the moving average, I put in the stop loss (a few cents lower than the current price) for the next day. I use stop losses since I work during the day but if you have the luxury of being able to watch the market, you can wait until the open to see where WJA goes - selling it if it goes down and maybe waiting a bit if it starts to go back up (it could have been a false sell signal).
You should look at the historical data from the past year and note how many times the daily share price bounces off the 40-day moving average and goes back up (for WJA, I count 4 times). That is why this line is a good buy / sell indicator.
Similarly to the above, if a stock you are following is currently below the 40-day moving average (like CP, for example), you wait until the share price appreciates and goes up through the 40-day moving average and then you BUY the next day.
Plain and simple - you buy a stock when the daily price goes UP through the 40-day moving average and you sell a stock when the daily prices goes DOWN through the 40-day moving average.
** Additions I have made to this strategy:
1) I didn't like when I bought a stock and it went up initially, only to end up going back down, meaning I didn't make any money. To counteract this, once a stock is up a bit (say 5 - 7%), I put in a stop loss to preserve some of the gains (careful to give the stock a bit of room to move).
2) If I don't own a stock, and the daily price is above the 40-day moving average and stays above it and goes back up then I buy it (just like if it had been below the line and moved up through it). Once I buy the stock this way, I follow it the same was as the other stocks I follow and sell it when the graph tells me to.
Keep in mind, there are only three possibilities for each stock you follow - BUY, SELL, or WAIT (keep it if you own it, don't buy it if you don't). I really do keep it that simple.
For tomorrow, for example, I will look to sell HXU and ENF.UN if they go down more, since they fell below the 40-day moving average line today. I will also look at selling COS.UN (I actually should have sold it today, but didn't).
The BUYS I am looking at for tomorrow are LIF.UN, S (note - released good results today), and TRP. Keep in mind that if I buy them tomorrow and they drop on Friday, the graphs may tell me to sell it. False buys and sells are a reality of my approach and I just have to learn to live with them.
As I say in my profile, my goal is to have more winners than losers, and to limit the size of the losers. Sounds simple, but as you know it can prove challenging. In the last 16 months (starting in November '08), I am up in 14 of the months, even in 1, and down 0.75 in the last. Given the state of financial markets during that time, that is a pretty good record. Especially when I only spend about 20 minutes each evening watching the 40 stocks and 10 ETF's that I follow.
Sunday, February 21, 2010
Good week for stocks - YLO.un keeps chugging along
Only a 4-day week this week, but my portfolio was up almost 1.5% this week. Yellow Pages (YLO.un) was one of my leaders again as it approaches $6 per unit, but many other stocks performed well too.
For the first time in a while, I am back into the 'up' index ETF's, jumping into HOU (oil), HBU (gold bullion), and HXU (TSX) in the last few days. Other indices such as HQU (NASDAQ) and HSU (US S&P) are getting close to buys as well, but not yet.
I mentioned in an earlier post that I invest my RRSP money first, then move on to non-RRSP funds. Right now, I am fully invested in my RRSP and almost half invested in my non-RRSP funds, so that is a pretty high rate of investment for me, at least for the last many months while the markets have been so uncertain. I am now about 59% invested overall.
Other than the ETF's mentioned above, I am also in SLW (Silver Wheaton), G (Goldcorp), COS.un (Canadian Oilsands Trust), AGU (Agrium), OCX (Onex), BIN (BFC Ltd.), BBD.B (Bombardier), ECA (Encana), ENF.UN (Enbridge), PN (Photochannel, my one small cap stock), PWF (Power Financial), TCM (Thomson Creek Metals), RIM (Research in Motion), PMZ.UN (Primaris), and YLO.UN (Yellow Pages Income Fund).
There are two other stocks that I watch that moved into buy territory on Friday - MSI.UN (Morneau Sobeco) and RUS (Russel Metals). I likely won't buy MSI.UN, though, since it has fairly low daily trade volumes and it makes it hard for me to buy and sell since I used stop buys and stop sells to do so (since I can't watch the market during the day). This is a case where outside information - like trading volume - overrides the moving average indicators for me, having been burned before by low volume stocks.
YTD, I am up 3.5% in my portfolio, so I have to be pretty happy with that. January was a pretty flat month for me (and down for most of the indices), so most of my gains have been in the last two weeks.
For the first time in a while, I am back into the 'up' index ETF's, jumping into HOU (oil), HBU (gold bullion), and HXU (TSX) in the last few days. Other indices such as HQU (NASDAQ) and HSU (US S&P) are getting close to buys as well, but not yet.
I mentioned in an earlier post that I invest my RRSP money first, then move on to non-RRSP funds. Right now, I am fully invested in my RRSP and almost half invested in my non-RRSP funds, so that is a pretty high rate of investment for me, at least for the last many months while the markets have been so uncertain. I am now about 59% invested overall.
Other than the ETF's mentioned above, I am also in SLW (Silver Wheaton), G (Goldcorp), COS.un (Canadian Oilsands Trust), AGU (Agrium), OCX (Onex), BIN (BFC Ltd.), BBD.B (Bombardier), ECA (Encana), ENF.UN (Enbridge), PN (Photochannel, my one small cap stock), PWF (Power Financial), TCM (Thomson Creek Metals), RIM (Research in Motion), PMZ.UN (Primaris), and YLO.UN (Yellow Pages Income Fund).
There are two other stocks that I watch that moved into buy territory on Friday - MSI.UN (Morneau Sobeco) and RUS (Russel Metals). I likely won't buy MSI.UN, though, since it has fairly low daily trade volumes and it makes it hard for me to buy and sell since I used stop buys and stop sells to do so (since I can't watch the market during the day). This is a case where outside information - like trading volume - overrides the moving average indicators for me, having been burned before by low volume stocks.
YTD, I am up 3.5% in my portfolio, so I have to be pretty happy with that. January was a pretty flat month for me (and down for most of the indices), so most of my gains have been in the last two weeks.
Sunday, February 14, 2010
Yellow Pages Persistence Pays Off
Sorry I haven't written in awhile but I just got back from some time in Cancun - some much-needed relaxation (of sorts). I was pleased to see, when I returned, that Yellow Pages Income Fund had not only released their latest financial results and confirmed their monthly payout, but they also announced that they would be converting to a Corporation at the end of 2010. They are reducing their current 80 cent per year distribution to a 65 cent dividend - still about a 12% yield at the time it was announced! With the tax treatment of dividends versus trust distributions, it looks like the investor return is actually HIGHER once they convert. Investor response to the news was great, with YLO.un moving up about 4% on Thursday and another 5% or so on Friday. The units jumped from 5.15 to 5.67 in two days. Since I am in YLO.un mostly for the high yield, getting unit appreciation is a bonus. I could honestly see the units moving back to the $7 range in pretty short order, as long as the unit holders hold tight.
I am just over 61% invested in equities at the moment - I had been expecting a correction (which happened in January), and the moving average graphs have been telling me to buy lately. Most of the ETF's (upside) are still in 'don't own' territory, but I am looking to them pretty soon. I will be looking to purchase HFU on Tuesday (financial ETF), as it just passed the 'buy' signal on Friday.
Currently, I own many securities including YLO.un (Yellow Pages), ENF.un (Enbridge), PMZ.un (Primaris), PN (Photochannel), PWF (Power Financial), TCM (Thompson Creek), QBR.B (Quebecor), RCI.B (Rogers Communications), WJA (Westjet), RIM (Research in Motion), AGU (Agrium), COS.un (Canadian Oil Sands Trust), OCX (Onex), TCW (Trican Well Services), LIF.un (Iron Ore Income Fund), and S (Sherritt).
I am more heavily invested right now than I planned to be but that is what the graphs told me to do. The markets have had a good couple of weeks so it seems to be the correct call for now. If there are a couple more strong days early next week, even more stocks will move into 'buy' territory.
Next week, I am looking to purchase HFU (Financials ETF), MSI.un (Morneau Sobeco), and T (Telus - even though they just announced disappointing results, the graphs still say buy right now).
I am up 2.02% YTD, which doesn't seem all that good, until you consider that the markets were down considerably in January. As the markets continue to recover, I hope to ride that momentum upwards.
I am just over 61% invested in equities at the moment - I had been expecting a correction (which happened in January), and the moving average graphs have been telling me to buy lately. Most of the ETF's (upside) are still in 'don't own' territory, but I am looking to them pretty soon. I will be looking to purchase HFU on Tuesday (financial ETF), as it just passed the 'buy' signal on Friday.
Currently, I own many securities including YLO.un (Yellow Pages), ENF.un (Enbridge), PMZ.un (Primaris), PN (Photochannel), PWF (Power Financial), TCM (Thompson Creek), QBR.B (Quebecor), RCI.B (Rogers Communications), WJA (Westjet), RIM (Research in Motion), AGU (Agrium), COS.un (Canadian Oil Sands Trust), OCX (Onex), TCW (Trican Well Services), LIF.un (Iron Ore Income Fund), and S (Sherritt).
I am more heavily invested right now than I planned to be but that is what the graphs told me to do. The markets have had a good couple of weeks so it seems to be the correct call for now. If there are a couple more strong days early next week, even more stocks will move into 'buy' territory.
Next week, I am looking to purchase HFU (Financials ETF), MSI.un (Morneau Sobeco), and T (Telus - even though they just announced disappointing results, the graphs still say buy right now).
I am up 2.02% YTD, which doesn't seem all that good, until you consider that the markets were down considerably in January. As the markets continue to recover, I hope to ride that momentum upwards.
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