Oops! The Do’s and Don’ts of Investing

My Son, Matt, Daughter-in-law Ash, Son Andrew, Shelley(me),  Husband John

Dear Matt, Andrew and Ash,
You are at that point in your life where you are successfully pursuing your careers, off your parents’ payroll (hopefully), repaying loans to us (Not you Ash!) and in a position to think about what to do with your savings. So, I thought I would pass on some obvious and not so obvious do’s and don’ts of investing.

Don’t consume alcohol while working the accounts. Save it for later because while living in Japan…
Shelley: I’m just going to check to see if we bought the stock I placed an order for last night…. That’s funny. Under cash it says negative $75,000. I wonder what they mean by that?… I’ll just go to the “Activity Section” and check… Oh my God!!!
Oh. My. Dear. God.
I ordered $100,000 instead of $10,000 and it went through. Oh God. I was thinking in Japanese Yen. Oh my God. How could I buy $100,000 worth of stock when I didn’t have $100,000? Oh no. What are we going to do?
John: We are going to hope that it goes up, real fast. Don’t worry.
Shelley: That’s all you can say? “Let’s hope it goes up. Don’t worry.” Are you kidding me? I need to phone RBC. Now. Oh. No. I can’t. They’re closed. I’m going to have to wait until 4:30 in the morning. I’m sweating. My whole body is wet. There’s sweat running off my eye lashes. I think I’m going to be sick. Ak. Ak. Ak.
John: Drink?

Matt, Andrew, Ash. This is called “buying stock on margin.” 

OK. That was the worst one. Next…
Do your homework before you do anything with your money (savings accounts, real estate, bonds, stock, etfs…) and continue to educate yourself.
That means talk to professional investors, grandpa, watch BNN, read books, articles, blogs,….

Don’t invest in what you don’t understand.
I still don’t understand what selling short means, despite Grandpa trying to explain it, the good folks from RBC trying to explain it and investment advisors trying to explain it. So, I don’t do it.

Do use your teabags more than once. You would not believe how much money that will save you. Kidding! That’s Uncle Spencer’s advice.

Don’t invest in anything that makes you uncomfortable.
In other words, figure out what your risk tolerance is and invest accordingly. GIC’s are pretty low right now, but you’ll sleep well at night. And, if we had bought them 12 years ago, instead of believing we would average 6% per year from the long list of financial advisors we hired, we would have the same bottom line as we do now, but without the night sweats. Go figure.
Don’t believe that blue chip stocks are 100% risk free. 
We bought BP and two weeks later…
Don’t take research advice too literally. 
A few years back, Apple was priced at $90. Analysts recommended a buy at $89. We didn’t buy. It’s now worth around $700 per share.

Don’t check E-mail, Facebook, Blogs and other accounts while investing. 

Multi tasking ended for me when the following took place…
RBC Rep.: Mrs. Smith. Did you just place an order with RBC?
Shelley: I sure did. Did I buy it?
RBC Rep.: Your order was to sell. That might be a little difficult as you don’t own any of that stock.

And to piggy back on the last one, do stay focused. That means don’t talk on the phone, on Skype or to others while purchasing or selling.

Just last week…
Grandpa (Roy): I’m going to put a buy in at 24.
Shelley: I like that stock too. Let’s see who can get it first.
Grandpa: Ha! You better not buy it before me. It will make the price go up.
Shelley: Ha! Ha! Ha! I just bought it. 
Grandpa: No! Wait. It’s OK, I got in at 24.
Shelley:… That’s because I just bought the wrong preferred.

Do have fun!
Mom and Dadxoxoxox

PS: If anyone else out there has more advice for these young ones, pass it on!

Shelley and John


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