Do it Yourself Investing

I started investing around 15 years ago. We did not have much money then but I thought I wanted to learn how to invest as part of my money management learning. I went to the bank and the bank officer suggested automatic withdrawal of $50 each month to go into an investment account that earns better interest than the chequing account. After a year, I checked and I have enough money to buy 12 stocks of the bank I do business with.

Then, I learned about Dividend Reinvestment Plan (DRIP) which enabled my dividends from the twelve stocks to purchase more stocks. I did this and with additional investment after the years, we are now proud owners of over a thousand shares. Indeed, one of the investments we hold on to. More shares every quarter are added to our investment. And guess what? I have learned enormously since that first step. Just take the first step.

Band-aids splints and crutches mark many small investors who survived 2008-9. However, when your house burns down, you have to build another one! But maybe this time, you'll build it yourself and make it fireproof. Maybe this time, you do your own research and your own investment management. Maybe making Bankers richer as they lose you money is not smart. Perhaps, the idea of paying them regardless of whether your investment makes money is now clearly foolish.

This time, you'll build your own path and make it "advisor proof".

Think of building your own investment strategy in the same way you might think of choosing a path on your journey. You will find that it demands commitment to learn. Forget about those easy millions that you read about from investment promotions. Think of building a house. Let's just look at a simple step by step program that you can handle yourself. Not a Taj Mahal...but not a tent in a swamp either! Besides, doing your own investment will enhance your own sense of self worth as well as your own financial worth. What better investment than this can you make?

First step in the commitment is to learn. Set aside an hour of your day just learning about money, finance, investment and what have you. You can watch programs on TV or read some of the books listed above. Your newspapers will have a Finance Section so you don't have to put more money out. Just search the Internet and you will have tons of information on these.

Start with an area you know very well. Cars! What's hot and what's not and who's next? If you work in the health sector, start there. Chances are you already know a lot about the companies in your sector. Read and research the many articles and websites you come across. What's in the pharmaceutical pipeline? What care services will expand? Will rail services grow... hmmmmm. Who will do well when we finally rebuild roads and other infrastructure?

Among your circle of friends and relatives, there are always one or two who have done this before. Make them your mentors. Their experience will be useful. In your office, you will be surprised at what you will get when you seek for it. Your boss maybe a succesful investor. He will just be happy to share with you. People generally are happy to be asked. This can expand your network in the office or in your line of business. This service is free.

You can start by just listing all your assets and your liabilities. it is good to have a picture of where you are in your finances.

Start with your financial resources but do not stop here. You have your personal resources you can mine to provide you the best life offers. You have your knowledge and skills that you can turn into money. Take good care of your resources and make them grow.

Your best investment is in yourself. Invest in it first before you spend a dime of your paycheck.

Now that you are full of knowledge, start with the basic things you need such as a house, a car (maybe, not this one in the picture but don't stop dreaming), education or other "must haves". Seeing your goals as clear as a laser is key. Make it simple, focused and achievable. You don't have to make it perfect. You can review it later on and with more experience, maybe your goals will change as well. And really look hard at needing a car. If there is ANY other transport... really think about the alternate costs!

First, identify the things you need to make each of your goals come true. Of these goals, which ones do you need to do first? Find that one step which when done will yield you the best results. Which of these do you already have the resources to do right now? Remember timing is everything. Include the best strategies you can think of. Sometimes, these strategies can be grouped or executed simultaneously.

You may want to check out the DRIP (Dividend Reinvestment Plan) if you are the type who does not want to actively engage in your investment. With DRIP, you choose a few quality companies with substantial dividends and just buy their shares. Your dividends will just keep buying new shares, and when the shares go down, your dividends will buy more shares. When the stock goes up, you can partake of capital gains. Know your own risk tolerance. As you get more courage, you can try out the riskier investments.

I started with 20 stocks of one of the top banks in Canada that has a DRIP program. That was all I could afford at that time. But I read somewhere that you don't wait until you have so much money. No, set aside an amount you can afford and just start. Consider this as your tuition fee to enrol in a course on financial management. I have added more since then. There are many companies that manage their own DRIPS. Maybe the company you work with now has one. Check it out. Fifteen years later, I am now a proud owner of over a thousand shares. Your dividends just keep buying new stocks and because there was or were stock splits, I got lucky.

Take responsibility. OK... now we are into old values... but we are so comfortable in today's world with feeling we are entitled... or everything is the Government's job....or somebody else should protect me. Believe me... those values will have you crashing with the market next time... and there will be many next times. The investment market changes constantly. It is dynamic. This does not mean you focus on your computer screen the whole day watching your stocks as they go up and down. This is why you have a plan. And also why you set regular times to review it based on your own risk tolerance.

Remember, your investment is only a facilitator of the values important to you. You need always to have your values clear, or you will be pursuing wealth at their expense. Some know the price of everything and the value of nothing. Get your goals clearly in front of you and manage to get there.

Your investments are there to enhance your life and what is important to your life are those that you value most. You need to have confidence to say that this is the best place to put our money right now. This can change but at that moment, make sure it is where you want to be. I know I can gain much by investing in cigarette companies but I just can't bring myself to do it. I am aware of the risk in investing in green technologies but I think some people have to support these attempts at developing technologies that will make our planet better not destroy it.

A legend of doubtful authenticity has it that J.P. Morgan was once present with a group of men at a bar in the financial district. Beckoning to the waiter, he ordered a beer; at the same time saying, "When Morgan drinks, everybody drinks". Everybody had a beer and when Morgan had finished, he slapped a dime upon the table saying, "When Morgan pays, everybody pays".

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