- The Bank the Nova Scotia has Scotia i-Trade.
- The Royal Bank has RBC Direct Investing.
- The Bank of Montreal has BMO InvestorLine.
- and of course there's TD WebBroker
- and there are more. Google it.
The cost to open and operate a self-directed investment account varies from bank to bank. Many, possibly most, charge about $10 per trade, either to buy or to sell. There is no charge for holding stock, ETFs, mutual funds and such inside your account as long as you maintain a certain dollar amount in your account. This amount varies from bank to bank. For instance, at the TD, if all the accounts in one household have a cumulative value of $15,000 or more, the $25 per quarter maintenance fee is waived. There are other ways to avoid the maintenance charges as well. Here is link to the TD Direct Investing Disclosure of Rates and Fees. Again, before signing on the dotted line, google the other banks. Do some shopping.
Once you have set up a self-directed account, immediately deposit some money, hopefully enough to avoid the quarterly maintenance fees. If you have no stocks on your radar, an investment savings account may be the place to stick the money. The TDB8150 investment savings account calculates interest of 1.6% daily and pays monthly right now.
- TD Investment Savings Account (TDB8150)
- Minimum opening balance: $1000
- Current rate of interest: 1.6%
- Minimum subsequent deposits: $100
At this time, the subsequent deposit rule applies even if you have allowed the balance in your TDB8150 account to drop below $1000. And there is no charge for making a deposit or a withdrawal. Plus, there is no minimum term during which a deposit must remain in the account.
- Asset Allocation ETFs
- Vanguard
- iShares (XBAL and XGRO)
- Bank of Montreal
Once you have a self-directed account, a world of investment suggestions will open up. Be careful. As the old saying goes, if the folks giving you the advice were so smart they probably wouldn't be pounding out investment suggestions to the uninitiated.
As a TD WebBroker client, I can avail myself of a number of different investment advice streams. Here is but a smattering of what is offered.
- TDSI Action List - Our Best Ideas (This comes out around the first of each month.)
- TDSI Morning Action Notes (This comes out every morning the market is open and is updated over the course of the day.)
- Morningstar Canadian Core Pick List (This comes out around the first of each month.)
- Morningstar Canadian Income Pick List (This also comes out around the first of each month.)
There are more lists and suggestions but you get the idea. I treat these tips like seed crystals. I like to see the tip grow, get added to, confirmed, polished and then I may buy. To do this the first step is to look at the info posted by, in this case, WebBroker.
This is the Peyto Exploration & Development Corporation page. I own some PEY. When I bought PEY it was a four star stock according to the Morningstar Quant Report. Four stars means it is selling for less than its fair market value. Five stars are the maximum.
Below the stars are a line of icons showing various reports from different companies with each report discussing PEY. I take most of these with a grain of salt, as they say.
Do you see the line that starts Overview, Charts, News, Fundamentals and Earnings? I find the info under Fundaments very informative. For instance, PEY is yielding 6.86% but it has a Payout Ratio of only 39.18%. This means PEY is not straining to round up the money to pay its dividend.
Although PEY is not earning as much as the industry average, it is profitable. Its Return on Assets (ROA) is 4.22%. This is better than the industry average of 3.04%. Its Return on Equity (ROE) is 8.99%. This is also better than the industry average: 5.71%. From the Fundamentals page I learn, "PEY has one of the highest ROEs of all companies in the Oil & Gas - Integrated industry."
So, why is PEY losing value if it is so damn good? A click on the next tab, Earning, will give us the answer. Total revenue has been dropping since 2014. Unfortunately, the operating expenses are holding steady as revenue falls. The result? The net income is falling. It is gradual but it is on a downward slide.
There is one more place to check. Click on Analysts. Look for the yellow "New" tag.
After seeing all this, I have kept my PEY. I have about one half of one percent of my total portfolio invested in PEY. If it heads south, I'm not going to lose sleep. But if it continues to pay even half its present dividend without losing too much value, I'm happy. Right now, with it yielding 6.86%, I'm ecstatic.
Now, for my biggest and most important investment tip. Be prepared to lose money. Markets have names for money losing situations: corrections are losses from 10% to 20% and bear markets are losses greater than 20%. The average bear market is said by some to lose about 30% and last for just more than a year. Remember that's the average. It can drop more, lots more, and a bear market can last longer, a lot longer.
The trick is to buy when the price is right, to buy when almost everyone else is selling. I got some of my bank stocks, now selling for around a hundred dollars a share, for less than half the present price. I got both my Fortis and my Emera for about 30% less than what is presently being asked. I've sold some of my Emera so if it drops, and it will eventually, I will have locked in some of the profits.
Lastly, if you know other folk who are interested in investing, form an investment group. Get together and share information. Share book recommendations along with stock tips. If different members use different investment firms, the club will have a very rich source of investment reports. There will be some overlap but there will be gems to share.
I started this by saying I had a friend looking for some info. This was written for them. I hope it will be of value. Cheers!
