# Where to start & what to buy



## D-ru (Nov 27, 2011)

Hello,

I enjoy playing around on the stock market but I have NO idea what I am doing. I think it is time to start learning why and when to purchase shares of a company. 

I am hoping someone can point me in the direction of how they began to obtain knowledge in this area. 

Also, I have purchased approx 13g worth of RBC shares over the last few years (set up as a DRIP) I like the idea of purchasing more high paying dividend stocks for when I retire one day (25 years) it will generate me some extra income. I have another $1500 that I would like to purchase another high paying dividend stock, any thoughts? Basically if you had $1500 to buy shares of something what would that be and why?

Thank you


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## none (Jan 15, 2013)

I would short royal bank obviously.


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## D-ru (Nov 27, 2011)

short? i have heard the term many times but not sure how this short thing works


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## none (Jan 15, 2013)

Well the general thesis goes something like this: (1) the mega rally of the last few years was liquidity/QE/ZIRP driven but otherwise very weak on fundamentals, (2) accounting rule changes on mark-to-market loans post-crisis has masked deficiencies in loan quality, (3) the Canadian economy is rather weak, (4) banks are very highly leveraged (RBC is 26:1 by my measure) and will feel the impact of a slowdown rather hard, (5) the sector is extremely over-owned on the tails of yield chasing + QE inflation and there's a lot of potential downside in reversions to mean, (6) a bank as large as RBC at $112 billion cap is already owned by virtually everyone who can possibly own it, and nobody can acquire it


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## mordko (Jan 23, 2016)

As a beginner you should not do any shorting. ^^^crazy advice. 

Read this before you buy any stocks: https://www.amazon.ca/The-Intelligent-Investor-Definitive-Investing/dp/0060555661


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## Just a Guy (Mar 27, 2012)

First you have to figure out what kind of investing matches your personality. If you're a buy and hold investor, you probably won't do well as a day trader (for an extreme example). 

Once you figure out what kind of investor you are, you need to research the stocks that fit into that type of investing. I suggest you only invest in things you know and understand, as opposed to a symbol who's numbers seem good (think breX for a good example of a stock nobody really knew, but looked good on paper).


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## D-ru (Nov 27, 2011)

mordko thank you I will def look into that book. 

none, Its sounds like RBC isnt the best place to put more money right now.


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## GoldStone (Mar 6, 2011)

D-ru said:


> none, Its sounds like RBC isnt the best place to put more money right now.


none's post is an insider CMF joke. He is mocking a regular poster who hates Canadian banks.

This is internet. Take everything you read with a big grain of salt. Always do your own research.


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## mordko (Jan 23, 2016)

Heh  He had me.


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## Pluto (Sep 12, 2013)

I was going to say buy an etf, but you already bought an individual stock, RY. Good going. Since you are already doing that, it is best to stick with individual stocks. My personal opinion is good areas are banks, pipelines, and telecoms. But of course, consider other opinions as well. You might consider seeing if the "Investment Reporter" is in your local library for some ideas. It has a good track record. 

Forget shorting. Try it later after you have more money and experience. Picking RY was not a bad idea for a beginner. Often beginners pick xyz startup with no earnings and a lot of hype. Bad move. 

Anyway I'm sure you will get a lot of varied advice. Good luck sorting out the wheat from the chaff. The Intelligent Investor is a fine book and the author taught many of the finest investors ever. However, he has this idea of buying beat up companies below net asset value as a margin of safety. His students abandoned that idea for better ones.


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## lonewolf (Jun 12, 2012)

step one figure out money management
step 2 Develop a method that fits your personality that gives you an edge
step 3 follow your method

Warning in step 2 if you do not have & are not able to develop personality for playing the market that gives you an edge do not follow to step 3


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## jollybear (Jun 28, 2015)

You may also want to consider diversifying away from such a commodity driven index as the TSX down the road when you build up more capital to invest. Not a huge priority with the dollar amount you are currently using, but something to keep in the back of your mind.


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## amitdi (May 31, 2012)

Just a Guy said:


> First you have to figure out what kind of investing matches your personality. If you're a buy and hold investor, you probably won't do well as a day trader (for an extreme example).
> 
> Once you figure out what kind of investor you are, you need to research the stocks that fit into that type of investing.


yes, this is a good starting point. you should know what you are, because when things turn red, you need to have the patience and qualities that will help you sail.



Just a Guy said:


> I suggest you only invest in things you know and understand, as opposed to a symbol who's numbers seem good (think breX for a good example of a stock nobody really knew, but looked good on paper).


I buy the symbols for the numbers, I dont even know the names of the companies. do ZERO fundamental research. all the time. I use a rule and buy companies that fit the rule, and its investment not trading. Just want to say that there are tons of different ways to invest.


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## Holland (Apr 24, 2016)

You could buy some REITs if you are after income. The safest bet would be to buy a REIT ETF. XRE.T and ZRE.T both pay 5-6%


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