Investment question

[luckyjackson]

In what is an unfortunately a rare circumstance for me, I find myself with a bit of money to play with. Not much, about $20 000.00. Never played the market, but I'm thinking of doing something a bit more than just plunking it into a guaranteed investment.

If you were going to put out some money on a riskier investment today, what would you choose? If we are coming out of the recession, it seems to me that oil is a really good bet. Property?

Opinions? Please...nothing along the lines of the "open an MP" type suggestions.

 

[mexican]

If you are going to make an investment ask yourself three questions:

1. What is the purpose of the investment - e.g. retirement savings, education fund, home improvement etc.

2. What is the time frame for the investment - i.e. how long are you going to invest for - 1 year, 10 years, until retirement

3. What is your risk tolerance - i.e. how much risk are you going to find acceptable. It is no good making an investment if it is going to keep you up at night.

An honest answer to those three questions should start to lead you to the correct investment choice.

 

[Surfbum84]

take it for what it's worth, but i've parked a lot of money in Brazil and China. So far it has worked out well for me. If you don't wanna research things, you can get mutual funds (and im sure ETF's) that are like "Latin America Fund" or "Pacific Rim Fund" and they can manage it for you.

Again, beware of fees and commissions which can be high.

 

[GDLLover]

I would think stocks in a large packaging company would be something to think about. 80% of all manufacturing requires packaging of the products they produce.

During recession = less mfg = less shipping = less packaging material needed

The inverse effect happens when we start producing higher quantity of produced goods.

Good luck with whatever investment you make.

 

[Gomer123]

In Ontario? Solar power. You'll get at least 10% ROI for a 20 year contract with the OPA. Zero risk too.

But if you don't have some good unshaded roof space...oh well.

 

[HAMSTER INSPECTOR]

$20,000 is not a lot of money. Put it in a safe place for the future.

I can give you a suggestion on very safe places to put your money and still get an investment upside with the added bonus if a dividend. These days the banks pay nothing on bank accounts and GICs are not that much better.

My suggestion is that you buy a utility like Trans Canada Pipeleine ( TRP )

Trans Canada Pipe is now at $31.94 and pays a near 4% quarterly dividend.
Analyst expectations are that it will reach $42. Put it away for the medium term ( 5 years ) or the long temp and re-invest the dividends annualy. You can buy on the dips and sell on the rises, but I would not trade it on every rise or dip, this will make you crazy and reckless. Trans Canada Pipe is the safest of the safe investments, you will not find safer or surer investments. The Canadian banks are also a good investment and pays a simular dividend.

 

[big dogie]

I believe there is a lot of risk in the market right now, transcanada or shoppers may be a place to go until the pull back...

b d

 

[luckyjackson]

If you are going to make an investment ask yourself three questions:

1. What is the purpose of the investment - e.g. retirement savings, education fund, home improvement etc.

2. What is the time frame for the investment - i.e. how long are you going to invest for - 1 year, 10 years, until retirement

3. What is your risk tolerance - i.e. how much risk are you going to find acceptable. It is no good making an investment if it is going to keep you up at night.

An honest answer to those three questions should start to lead you to the correct investment choice.

Thanks, good suggestions. I had these figured out, but should have stated them explicitly.

1. Purpose of the investment is purely speculative and for profit. This isn't about my regular savings, it's separate and apart from that.

2. I had some idea of a relatively short term, like 2 years or so.

3. Risk tolerance is high.

...and no guys, I wouldn't consider a week in London fucking off-the-scale hotties a good return on the 20 000 thou....well, at least not the kind of return I was thinking of here.

 

[diane-35]

I can give you a suggestion on very safe places to put your money and still get an investment upside with the added bonus if a dividend. These days the banks pay nothing on bank accounts and GICs are not that much better.

My suggestion is that you buy a utility like Trans Canada Pipeleine ( TRP )

Trans Canada Pipe is now at $31.94 and pays a near 4% quarterly dividend.
Analyst expectations are that it will reach $42. Put it away for the medium term ( 5 years ) or the long temp and re-invest the dividends annualy. You can buy on the dips and sell on the rises, but I would not trade it on every rise or dip, this will make you crazy and reckless. Trans Canada Pipe is the safest of the safe investments, you will not find safer or surer investments. The Canadian banks are also a good investment and pays a simular dividend.

How can you call it safe when its march low was around $22, about that's 30% volatility within a year. If we see another market downturn we can expect the same performance in TRP. It is not any better than buying market index ETF such as SPY or ETC. Maybe there is upside potential, but I would not call it safe.

 

[HAMSTER INSPECTOR]

Ahh, to the unsophisticated investor it may seem to be an unsafe investment. All Stocks went down at that time in a mini melt down, but you can see the resilancy of the stock as it bounced back quickly. Do not trust me, a voice amoungst the pervs that inhabit this twighlight zone of hornyness. If you have a broken faucet you will call a plumber, if you have an electrical outlet that stopped working you would call an electrician. If you have a finacial question, I suggest you call experts in the finance world. See if any of them will tell you any different that Trans Canada Pipeline and the Canadian banks are some of the very safest investments with good short, medium and long temp upside as well as a close to 4% dividend. With the added bonus of being taxed at a favorable rates as compared to other investment returns. This is a stock you can keep long, medium or short term. No one will tell you it is a bad investment. This is an investment you can do with absolutely minimal risk. I challenge you to find better.

FYI - Trans Canada Pipeleine is in the Oil Pipeline and Electrical Transmission business as well as having some nuclear reactors. They have few competitors.

 

[hinz]

Depends on your asset location regarding the $20K.

Pay down all outstanding, high interest debts such as credit card balances.

Student loan is next.

If there're still something left, try to pay down mortgage as much as you can. Top up your emergency funds in high interest saying account, assuming you have exhausted the Mortgage prepayment option for this year.

By paying down the debts and controlling your spending via budget, you are guarantee to earn more than putting the $20K at risk by chasing the top performaning sectors.

Assuming you do not have any outstanding debts and need to top up emergency funds, you could max out your TFSA contribution room in the coming 4 years and invest 1 year GIC annually. Whatever interest generate will be tax free and you could use those as down payment for a modest condo.

Another option will be to max out your RRSP and TFSA contribution rooms and use those amounts to invest in corporate bond ETF (XCB) and real-return bond ETF (XRB). For the remaining funds in non-registered account, you could invest in dividend paying equities ETF (XDV) but keep in mind that it's heavily tilted and exposed to financial industries, which may not be your liking.

As far as picking Canadian stocks are concern, TRP is decent but it's a quasi energy play and you would expose yourself too much on energy if you have already owned one of ECA, IMO, SU, TLM, COS.UN, HSE or all of the above. Having said that, IMHO, investing George Weston (WN) in low 50s or Rogers Cable (RCI.B) in low 30s or Power Financial (PWF) in mid-20s are better in terms of risk return. You could "speculate" by investing Manulife (MFC) around mid teens if you think the company's woe on variable annuities volatility is done

 

[djk]

Depends on your asset location regarding the $20K.

Pay down all outstanding, high interest debts such as credit card balances.

Student loan is next.

If there're still something left, try to pay down mortgage as much as you can. Top up your emergency funds in high interest saying account, assuming you have exhausted the Mortgage prepayment option for this year.

By paying down the debts and controlling your spending via budget, you are guarantee to earn more than putting the $20K at risk by chasing the top performaning sectors.

Assuming you do not have any outstanding debts and need to top up emergency funds, you could max out your TFSA contribution room in the coming 4 years and invest 1 year GIC annually. Whatever interest generate will be tax free and you could use those as down payment for a modest condo.

Another option will be to max out your RRSP and TFSA contribution rooms and use those amounts to invest in corporate bond ETF (XCB) and real-return bond ETF (XRB). For the remaining funds in non-registered account, you could invest in dividend paying equities ETF (XDV) but keep in mind that it's heavily tilted and exposed to financial industries, which may not be your liking.

As far as picking Canadian stocks are concern, TRP is decent but it's a quasi energy play and you would expose yourself too much on energy if you have already owned one of ECA, IMO, SU, TLM, COS.UN, HSE or all of the above. Having said that, IMHO, investing George Weston (WN) in low 50s or Rogers Cable (RCI.B) in low 30s or Power Financial (PWF) in mid-20s are better in terms of risk return. You could "speculate" by investing Manulife (MFC) around mid teens if you think the company's woe on variable annuities volatility is done

Well said, Sir.

 

[hinz]

Well said, Sir.

Thanks

BTW, in addition to pay down all the debts and have liquid emergency funds on hand before investing, it's not a good idea to overpay a house and/or a car. Make sure you assess and budget the cost accordingly to upkeep and maintain both depreciating assets for years, if not decades.

 

[mexican]

You might consider buying gold. Odds are continued economic and political instability. Could see a very good return in 2 years.

 

[hinz]

You might consider buying gold. Odds are continued economic and political instability. Could see a very good return in 2 years.

Do you mean gold bars, paper gold, gold futures, gold companies like Barrick or Goldcorp, or Gold ETFs like XGD (a basket of publicly listed gold companies) or GLD?

Personally I prefer Silver to Gold as the metal spot price has more upside. Silver is less prone to IMF/central banks manipulations since none hold silver, while having similar storage value like gold.

BTW, it's not a good time to be bullish on gold and silver right now as almost everybody are anticipating the pending demise of USD and executing the mother of all "carry-trade" by borrowing more USD than Yen short-term to speculate commodities or commodities related currencies like Aussie, Rand, Kiwi, Loonie and real estates of all types in the emerging markets.

If I ever incline to speculate and gamble my money allocated for hobbying for the year, I would be bullish on Uncle Sam tactically for few months. But again I believe the 4 letter F-word is better than 4-letter R-word-risk right now.

 

[roblestone]

take it for what it's worth, but i've parked a lot of money in Brazil and China. So far it has worked out well for me. If you don't wanna research things, you can get mutual funds (and im sure ETF's) that are like "Latin America Fund" or "Pacific Rim Fund" and they can manage it for you.

Again, beware of fees and commissions which can be high.

I agree. If the dollar falls flat gold might not be the place for your money. Don't forget it has no real value other than it is sparkly and it costs money to store it. When it's price comes down it drops like a rock. Investing in emerging markets has the advantage of being in currencies other than the dollar.

I like ETF's better than mutual funds because of lower costs and you can trade them any time without waiting for the end of the trading day.

If you really want to gamble invest in a wildcat oil or gas well.

 

[Wild Wiglin Willie]

TRP is decent but it's a quasi energy play and you would expose yourself too much on energy.

Trans Canada Pipeleine is not considered an energy play. It is listed as a utility, its core business is to transport electricity for regional electrical energy producers to outside markets when there is an excess that can be sold to another utility that requires additional power. An example of this is during high electrical consumption periods like during a summer hear wave or winter cold snap where if Ontario has extra capacity it is transported and sold to NY state. TRP is also in the oil transportation business, transfering oil by pipeline.
While TRP is not an energy play. All stocks in the energy sector is at moderate levels not and energy is expected to spike when there is an econmic recovery. In the long term oil prices are expected to go up and not down.
TRP is the safest of the safe. All major portfolios in Canada contains some TRP. If you watch BNN regularly you will see that many analist recommend it highly. Especialy if you want a minimal risk moderate yield investment. It also pays a dividend. As Kevin O'Leary sais: you are paid to wait. Good prospects for an upside and a fat near 4% dividend.

 

[night ride]

Spent it on escorts.

 

[hinz]

Trans Canada Pipeleine is not considered an energy play. It is listed as a utility, its core business is to transport electricity for regional electrical energy producers to outside markets when there is an excess that can be sold to another utility that requires additional power. An example of this is during high electrical consumption periods like during a summer hear wave or winter cold snap where if Ontario has extra capacity it is transported and sold to NY state. TRP is also in the oil transportation business, transfering oil by pipeline.

TransCanada is a utility but it's core business is transportation of natural gas, which is the bread and butter business. The majority of the businesses, including power generation business in Canada are simply toll systems that are heavily regulated and scrutinized by the governments. The recent acquisition in the NY states is if I am not mistaken the first time they engage buying and selling electricity on the spot market unregulated, something that was once had bad reputation following the collapse of Enron.

While TRP is not an energy play. All stocks in the energy sector is at moderate levels not and energy is expected to spike when there is an econmic recovery. In the long term oil prices are expected to go up and not down.

There may be long term demand on oil to justify high oil price but the price has more to do with people stretching the fact by carry-trade and the weak USD than the fundamentals. The so-called demand pick up from emerging market in China and India do not justify the oil price that expensive.

Just take a look on the relationship between the electricity outputs in China and the GDP growth one can be trusted. I would not be surprised Chinese economy is getting bubbly and ready to burst as early as 2010, There's no way emerging economy such as China could be that "efficient" when importing huge quantity of commodities to stimulate the economy, while the electricity output if I could recall is essentially flat.

TRP is the safest of the safe. All major portfolios in Canada contains some TRP.

Nothing is safe. Remember TRP cut their dividend to 80 cents annually exactly 10 years ago after they invested all over the Americas with different businesses and the retired CEO, Doug Baldwin came out of the retirement to fix the mess before Hal Kvisle took over?

Some fund manager even dare to equal what's happen to Manulife right now is similar to TRP 10 years ago .

As Kevin O'Leary said: you are paid to wait. Good prospects for an upside and a fat near 4% dividend.

Even though Kevin O'Leary was fun to watch at the old Squeeze Play sometimes, his stock picks suck. You would loss big if you recalled his disclosure regarding holding AIG and KKR equities and people followed by investing a big chunk of their assets on those companies just before the Lehman collapsed.

The best investment he had was to sell his "baby" softkey to Mattel at 9 figures, an amount the latter was hell bent to overpay in retrospect.

 

[Wild Wiglin Willie]

When it comes to investments, I will trust an educted informed person over a arm chair investor. ( as we all are, armchair investors ) In the long run the large investment houses can predict the direction of stock much better than any of we can. There seem to be a consensus among the investment houses that TRP is a solid investment that have minimal risk and good upside. Will you will not disagree that it is a sound investment?

I am working at my computer 7 days a week and 80% of the time I have BNN on a small screen beside me. There is a small list of stocks that are recommended very often by different investment advisors from different investment firms. TRP is mentioned very often. If I had only $20,000 to put into a safe place, I know of no better stock to put it in for the short, medium or long term. I you know of one, I would appreciate the tip. I do not think that diversification with the small amount of $20,000 is a good idea. TRP is the safest surest way to keep you money safe with a dividend and possible upside? Anyways, I am confident in this stock. Time will tell. If you ask me to put a large bet on it, I will tell you that I already have.

The dividend for TRP is now at 4.7%, much better than the .5 % you will get at the bank.

On the matter of Kevin O'learys pick. I can tell you that he is a very intelligent and well informed about investments. He may not be right 100% of the time on his investments. ( no one is ) In the long run he will be right the vast majority of the time, as the market fluctuates and not all investments turn a proft at the same moment.

The thread starter is looking for a safe place to invest his money, a place where he can get a good return with minimal risk. TRP is a good place, but by no means the only place. The Canadian banks are a good investment as well, with some banks better than others. These are all places with the least risk and very decent returns.