Forex – An alternative Investment

 Forex, Investing, Monthly Report, personal  No Responses »
Jun 272012
 

Earlier this month I did something that most of you will probably cringe at – I opened a Forex trading account. To justify my actions (as much as I do not have to) I must state that I am a fan of having ‘fun money’ and my Forex brokerage account will be mine. For those of you who are unfamiliar with Forex the definition according to Wikipedia is:

The foreign exchange market (forex, FX, or currency market) is a form of exchange for the global decentralized trading of international currencies.

It is essentially the same as buying stocks but is much more volatile. However, what is nice about the Forex market is that there are not restrictions on who can short units. This makes it possible to make money while pairs decline or rise in value.

As with any investment having a plan is key to success. You cannot just ‘guess’ and expect to receive great returns. Luck only goes so far. I must say though, that my first few days of trading were extremely lucky. I really had no idea what I was doing but still managed to come ahead by almost $200. With this, I opened 2 other accounts and decided that I would diversify my Forex investing/day trading(whichever you prefer to call it).

One of the accounts is automated through the use of an Expert Adviser (EA for short) which is just a robot who trades for you. I will refrain from talking about this here for now as I will eventually be making a series involving them. My second account is also automated but by a signal provider. This is basically a ‘professional’ trader who sends his buy/sell signals to a signal provider who distributes them among followers. I have been having great success with both of them.

As I mentioned, I increased my account by $200 in my first week. This money I split three ways. I put $100 in each of these three accounts. I will not lie, I blew my manual trading account and do not use it anymore. Instead, if I make manual trades I do it through my EA account. Since I blew the account though, I have only been up. Mind you, there are obviously some unprofitable trades. Yet generally, I am up. I have been averaging lately about 1-3% a day. Again, I will save how I do this for another post.

 

To provide you with my first official account balance updates. 

My EA account currently has a balance of $138.93. A 38.93% increase over my initial investment.

My signal provider account currently has a balance of $179.82. A 79.82% increase over my initial investment.

 

I will leave you with that

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My View On Money

 General Finance, Introduction, Investing, personal, Saving  6 Responses »
Apr 132012
 

A year ago if I asked someone to go and have a beer with me, and they repeatedly told me ‘No, I don’t have the money’ I would have complained about them. I would have thought bad of them. My general opinion of them would be greatly reduced and I would have let everyone around me know how ‘cheap’ they were being. My reasoning behind this was because everyone I work with makes almost the same amount of money as I do +/- $5,000 per year. So  if I could afford to go out so could they. Solid logic.

Back then I figured I knew everything there was to know about finances. I thought I was doing OK, especially because I dabbled in the stock market (and lost on penny stocks). I had a small pile of savings. In my mind, I had it made. However, my biggest flaw was that I reasoned that living in the now was more important than the future. You know, we might not be around in ten years right? (Funny how that now I could argue until I turn blue in the face against this thought process)

Everything changed when I realized that if I continued on the road I was on I would end up being buried in debt. Something clicked in my mind – just because I can afford to go out, doesn’t mean I should. But the biggest revelation was that it made more sense to save now so that I could live and enjoy more experiences when I am older. This now seems like the best option. I can retire at age 44 (2 months off from 43 so close enough) which is still very young. My view on money changed that day.

Now saving for my future is my priority. I am much more conscious of my choices and try and base much of what I do now to reflect positively when I am older. So far I feel as if I am doing a good job contributing to my retirement.

If I can contribute the same amount to savings, as I am currently using to pay off my credit card debt by the time I am 44 I will have $217,070 provided a steady rate of return of 4%. This is not including my RRSPs either which I contribute $2400 a year to. At my current rate of savings I should be able to save roughly $300,000 by the time I am 44. I will also be eligible for a pension at that age. So on top of my savings I will be entitled to 60% of my salary. Also I am entitled to a $10,000 raise next year. I can see no reason (aside from buying a house) as to why I would not be able save most of this. I think these are conservative numbers considering most people like using 8%.

For those of you in your 20s, did you ‘click’? Are you on track to meet your financial goal?

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eBook Review – ETF INVESTING Low Maintenance & Stellar Returns

 ETF, ETF, General Finance, Investing  No Responses »
Mar 202012
 

Have you ever had any questions about ETF Investing? Have you gotten lost in technical jargon concerning these funds that you said screw it and went with a mutual fund with a high MER instead? Well today I have a great read for you guys! I was very excited after reading Teacherman’s ETF INVESTING – Low Maintenance & Stellar Returns. Not only because this is my first eBook review, but also because even a young teen could read, and understand the importance of NOT buying into high MER mutual funds.

One of my greatest frustrations in my day-to-day life is how people truly believe that mutual funds are the best investments known to mankind. I believe this is false. This eBook does a much better job at explaining why than I ever would.

Anyways, enough of my ramblings, on to the review!

 

Upon reading the introduction I quite liked how Teacherman (to be known as TM in the rest of this post) specifically states many times over that the eBook is NOT a get-rich-quick guide. And even goes on to say that:

“…. If you’re looking for “PENNY STOCKS THAT WILL YOU MAKE MILLIONS” then do yourself a favour and just go light your money on fire (the warmth will give you more pleasure than watching your portfolio spontaneously combust).” Pg4

This hit home for me as I have fallen into the trap of the penny stock ploys. I agree, if I would have lit my money on fire I would have probably enjoyed it more.

The next 3 chapters goes on to explain TM’s Story, what a ETF really is, and how it is not a good expectation to think you will beat the average. After the great introduction to TM, the chapter ‘What the heck is ETF?’ is where the eBook really starts to get interesting with one of the best explanations I have seen of what an ETF actually is.  However, if I had to recommend only one chapter it would be Chapter 4. Seriously. Read it. This chapter explains how you will most likely not, as an untrained person, beat the stock market.

TM points out on pg 22 that yes, he is human, and is susceptible to human emotions. He allows for this by having 5% of his portfolio as his ‘fun fund’ (he used the name ‘play money’. I like my name better :-p).  This fun fund allows him to indulge in whatever kind of investment he so desires. I think it is important for everyone to have a little bit of money they can play with, if you do not have any kind of fun while doing your finances you will most likely go insane.

In Chapter 6 TM shares what makes up his portfolio and the reasons behind having most of his portfolio in US ETFs. He does state some very strong arguments for investing in US ETFs as a Canadian, but I am still not sold. I have always been a big supporter of Canadian businesses and I guess this will follow me into investing. I doubt that I will be investing a large amount into US markets. Probably no more than 10%. This will greatly limit me with my choices (and diversification). And as TM points out I will also miss out on the phenomenal ETF fees that only US ETFs can provide but I am OK with this.

TM truly gained my respect not for something he said, but instead for something he did not say. I love how he refrained from giving too much detail on ETFs he did not believe in. He provided just enough information so that if we were interested we would know what to look for.

 

This is a great eBook. If you know someone (friends, family, co-workers, random strangers on the street) that has false beliefs on how mutual fund investing is the only investment. You should show them this eBook right now. It offers solid arguments as to why ETFs are just as easy of an investment as mutual funds. However, there are arguably better investment strategies for people who wish to put more time into their portfolios. But for the average Joe who invests and forgets this is a must-read.

As for me I will definitely be an ETF investor.

 

So head on over to MyUniversityMoney and subscribe to receive the eBook!

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