FinancialToons

watch?v=rX2-syAt_HA
Warren Buffett is known for his sage advices. This one is quite recent and it resonated with me strongly.

When it comes to Personal Finance/Personal Development books, this book started it all for me.

Call writing is known to be a bearish equivalent of put writing.  With Call writing, the investor expects the price of the underlying interest to remain at or below the strike price.  The investor is therefore neutral to bearish.

The golden rule in building wealth is to decide that you will be wealthy. Or better yet, like Warren Buffett, you KNOW you are going to be wealthy.  Warren Buffett once said: ““I always knew I was going to be rich. I don’t think I ever doubted it for a minute.” That kind of decision is a necessary condition to become wealthy.

What kind of book will help you build such mentality?  If you have doubts I recommend the book “The Power of Your Subconscious Mind” by Dr. Joseph Murphy.

This book has many positive affirmations.  Some say, these affirmations don’t work.  That’s true if you don’t believe in your affirmations.  But this book shows many examples of affirmations that are believable that can help you shape your mindset to a one that brings wealth.

My favorite affirmation that I frequently use is “By day and by night I am being prospered in all of my interests”.
This one is listed under the chapter “How to Use The Power of Your Subconscious for Wealth”. Once you shape your mindset with these affirmations, you will start seeing opportunites and building habits that will help you build your wealth. The necessary condition is now met, so let’s work to meet the sufficient condition.

Well, not exactly.
He’s mostly known for his value investing (which is kind of buy and hold) strategies, but he’s done other difficult stuff like arbritrages. If you’re interested in his other techniques you may want to read “The Warren Buffett Way” buy Robert G. Hagstrom. There’s a section on arbritrage Warren Buffett carried.

That said, he is well known for his buy-and-hold strategy. He’s known to have said quotes like “Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years. ” and “Our favorite holding period is forever. ”

I personally take the buy and hold strategy too. I work for one of the 5 big banks in Canada. They have a very nice employee profit sharing plan, in which you buy the company stock from your pay checque and the company will match 50% of your contribution, up to a certain portion. I don’t have time to play with the volaitility of the market, therefore do not day trade. Plus I cannot take the daily (or even minute by minute) price fluctuation. So I prefer buying and holding.

Is Buying and holding dead? This is a proverbial question these days (check out the article here at Motley Fool), kind of like “should I buy a Mac or PC”? I think there is no real answer to this question. If you like the volatility of the market and following the day-to-day fluctuation of the market, I think buy and hold is probably dead for you, but if you get stressed over that or have other activities to do during the day, buy and hold is not a bad thing at all.

So it comes down to knowing what you like.
Please share your investment strategies and what you like : )

A Registered Education Savings Plan (RESP) is a contract between an individual who is the subscriber, and a person or organization, who is the promoter. The subscriber (or a person acting for the subscriber) makes contributions to the RESP, which earns income. The subscriber names one or more beneficiaries and agrees to make contributions for them. See the government site How an RESP works for more details.

Government matches certain portion of your contribution, depending on your income. This grant is called the CESG – Canada Education Savings Grant. There’s also the Canadian Learning Bond (CLB) if your family quailfies. CLB is only for families with income below a certain level.

A registered disability savings plan (RDSP) is a savings plan that is intended to help parents and others save for the long-term financial security of a person who is eligible for the Disability Tax Credit.
Take a look at the CRA site here for more grant information: http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/rdsp-reei/menu-eng.html

TD Waterhouse offers a discount brokerage account for the RDSP. You can trade some options too.
Some keypoints:
-Eligible investments are generally the same qualified investments as all other registered plans.
-Both individual and government contributions will grow in a tax-deffered manner.
-Payments from the RDSP are taxable to the beneficiaray.

What is Fundamental Analysis? Fundamental Analysis measures the health of the company. It looks at the well-being of the company by looking at ratios/units that measures things like how much profit a company is making, how much debt it is carrying, and how fast it can pay those debts.
Think of a company as a tree – fundamental analysis checks how healthy that tree is from all sorts of angles.

We often hear “leveraging your portfolio” but what does it mean?

It’s derived from the word “lever”. Lever is an object that can multiply the applied force. When you are leveraging your portfolio, it means that you are investing using borrowed money. So you have more money to invest, and if your investment is successful you may increase your invested money with a little bit of your own money. But if you screw up your investment…you may end up with even more debt.
Golden rule is…to only borrow money for an appreciating asset.