Investing your hard-earned money is a daunting task, especially during times of heavy volatility. One day your online brokerage account is showing a 3% gain and within a few days, all of the profit has been wiped out — and then some.
With that said, there are many tips and tricks that you can use on a regular basis to avoid the stress associated with logging into your brokerage account. The most important of which is to select a platform that best suits your individual needs.
New investors often choose convenience over practicality and doing so is among the biggest mistakes new investors make. For example, there are a small handful of major banks in Canada and each bank has their own stock broker platform. Signing up for a stock broker account within the same institution could be completed in seconds since the bank already has your personal information so there are likely fewer forms to fill in.
But is this always the right choice for investors? Of course not. Some of the leading online brokerage account Canada are those hat blow major banks away in terms of fees and other features. In fact, an online broker like Questrade offers rock-bottom fees of $4.95 per trade (for up to 500 shares) while big banks typically charge $9.95 per transaction.
New investors that want to save as much money as possible should go with the option that saves them $5 per trade. It might not seem like a lot but if you are starting with just $1,000 then you will save $10 ($5 to buy a stock, another $5 to sell) on a trade which is the equivalent of 1% of your portfolio.
Governments are supportive of individuals putting money away for the long-term and offer people incentives to save. Exact programs vary country by country so it is prudent to take some time and best understand how to take advantage of any programs.
In Canada, for example, Registered Retirement Savings Plans (RRSP) lets an individual earn a tax rebate on the money they invest with an approved online Canadian broker. Contributions made to an eligible RRSP account are tax-deductible up to a predetermined limit. For example, someone that earns $60,000 a year and adds $5,000 to their RSP account can now declare their income to be $55,000.
In most cases, the reduced salary means the individual will receive a rebate come tax season. Also, all gains in the account are not taxed until the funds are withdrawn when the individual retires and enters their golden age.
Canadians can also take advantage of a special account where all interest and profits are not subject to income taxes, known simply as the tax free savings account (TFSA)
A Roth IRA offers Americans a different saving program that offers compounded benefits for young investors. Money transferred to an eligible Roth IRA account can grow tax-free while withdrawals in the future are also tax-free, under certain conditions. An individual must be at least 59.5 years old and have held a valid account for at least five years to be eligible to take distributions and earnings without any tax paid to the federal government.
Online stock brokers once upon a time existed to facilitate trading and nothing else. In other words, investors were at the mercy of their own investment knowledge. Not everyone is up to date with the latest Wall Street news and rumors and have complete confidence in their investment decision.
Quite the contrary. Even highly educated people in fields outside of finance have little to no knowledge on how to invest their money. This includes lawyers, doctors, engineers, and even accountants.
So a great tip to extract the maximum value out of your stock broker account is to take advantage of the learning and research tools. If your broker doesn’t offer free access to news, analysis, and tools then the broker isn’t right for you.
Download the mobile app so you can always be one push of a button away from pulling up live quotes. Or when you have some spare time on your way to and from work, why not read up on the latest news so you are up to date on your finances.
Just as important as staying up to date on news and analysis is staying on top of your portfolio. How exactly is your portfolio performing? Is a 6% annual return good, bad, or just OK? Do you know? Well, your online broker likely knows and makes it very easy to compare your performance with those of a benchmark.
If your broker offers these tools and much more, you have to be foolish not to take advantage of these features.
As any professional investor or trader can attest to, the markets can be subject to extreme volatility and stocks can crash within a matter of minutes. Are you a professional trader glued to multiple computer screens throughout the day? Obviously you aren’t — but that’s ok.
Online stock brokers have multiple features that will allow you to remain well informed about your investments in real time. Leading online brokers have “trading alert” features that notify you of valuable information when you need to be aware of this information.
Alerts are pre-defined so that you get to remain in control of your investments. Want to know if a stock you are following hits a certain value? Your broker will blast out an email alert the second this happens. Want to know if your stock is up a certain amount so you can sell? No problem.
Investing for the long-term by buying a stock just once and holding it for years if not decades can be one of the most profitable and lucrative strategies to maximize profit. In essence, you buy shares of a company that has excellent long-term potential and you don’t even have to check its performance on a daily basis.
In other words, buy a stock once and let it grow in your Canadian brokerage account. Buying a stock once also means you only pay a commission once. The alternative option is something that many novice investors do when they try to “time” a stock by selling shares with expectations of re-buying it cheaper.
CNBC pundit Jim Cramer is an advocate of this strategy and used Apple shares as an example as to why long-term buy-and-hold is the right strategy:
“If you try to trade [Apple shares], you don’t get in. You can’t be nimble enough to get out and get in. You just have to stay in, and you stay in because Apple makes products that are fantastic.”
Not only does this strategy risk buying back shares at a higher cost, but it can also add unnecessary fees in some cases. Unlike global online brokers like Robinhood and eToro, Canadian online brokers aren’t known for offering zero-commission fees.
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Did you know the Declaration of Independence is rumored to have been drafted on hemp paper by Thomas Jefferson?
Amazingly, hemp first arrived in North America back in 1606, and it played a pivotal role in the economy for many centuries to come – that is until it was made illegal in 1970 by the Controlled Substances Act.
But here’s the good news – hemp is back on the scene once again, and it’s making real waves this time around. The incredibly versatile plant has the power to disrupt a myriad of different industries, and it looks like things are just starting to heat up. This brings about various investment opportunities and a whole host of ways to make money from the new hype train.
First of all, let’s clear a few things up. Unbeknownst to most people, hemp is an absolute wonder plant. Thought to be the first domestically cultivated plant, it has a staggering number of use cases and is incredibly efficient at producing a wide variety of modern-day products.
In many ways, hemp is a viable answer to many of our sustainability issues across the world, such as deforestation, as it produces four times more paper per acre than trees. It even has potential use cases in the manufacturing sector as hemp fiber is roughly ten times stronger than steel. Some of the most common use cases of hemp include:
It begs the question, why don’t we use this stuff more?
Now, for those of you that aren’t aware, hemp is not synonymous with marijuana. While they are the same plant from the same species, there is one clear distinction between the two, and that’s their psychoactive components.
THC (Tetrahydrocannabinol) is the chemical compound found within cannabis plants that is responsible for making you feel “high.” With that in mind, a cannabis plant will only be considered hemp if it contains no more than 0.3% THC. The reason being is because hemp plants do not contain enough THC to give off a psychoactive experience. In other words, it will not alter your mind, and as such, it is not considered to be a drug.
This is an abundantly vital fact to keep in mind as this is the only reason hemp is federally legal and marijuana is not. Even though fifteen states have now legalized recreational marijuana, it remains illegal federally in the United States. This makes it extremely hard for marijuana businesses to operate as they must contend with heavy taxes and stringent laws that prevent the expansion of operations between states.
On the other hand, hemp was made legal to grow and sell in the United States in the 2018 Farm Bill, which means it’s now fair game for business owners and investors.
In many ways, hemp is a considerably safer alternative for people who want to invest into the cannabis industry, especially those who may be concerned about the lack of nationwide legality of marijuana in the U.S.
While the marijuana market does look like it is ready to take off, it’s still a precarious investment while it remains illegal under federal law.
In addition to this, as we stated earlier, hemp has a tonne of different use cases which means there will always be demand for hemp growers and manufacturers going forward, and this demand looks set to increase from here on out.
With that said, here are the main ways to make extra money by investing in hemp stocks:
For many years the hemp industry has been a magnet for speculative investors looking to make a quick buck on their investment. The excellent news for traders is that this speculation brings in a massive amount of volume, which means they are ripe for trading.
Day traders open and close positions on the stock market within the course of one day. The idea is to profit from the price fluctuations, and then once the day is done, you step away from your laptop with your earnings in your back pocket.
There are tons of hemp stocks you can day trade, ranging from penny stocks to the more prominent players in the field. Just do your research, refine your strategy, and make your profit!
Swing trading is similar to day trading in the fact that you hold open positions over a short period of time; however with this type of investing/trading, you usually hold your positions between a few days and a few months. The whole idea here is to benefit from significant price movements, or trends, that you observe and subsequently take advantage of.
Hemp stocks fluctuate in price for a whole variety of reasons, and in many cases, all it takes is one or two positive pieces of publicity, and the stock can spike massively. If you’re smart enough and time the market well, you can be on the right side of these swings and make huge profits.
Finally, the least “hands-on” approach to investing in hemp stocks is to enter into long-term positions in some of your favorite stocks. Rather than looking to get in and out quickly, the objective is to find great companies with solid fundamentals and a high likelihood of future growth.
Fortunately, there are plenty of companies that fit that bill in the hemp industry, so conduct some research and take your pick. Some of the biggest players in the sector include Charlotte’s Web, Canopy Growth Corporation, and Cronos Group.
Whatever route you decide to take, remember to always do your own research and never invest more than you can afford to lose. Good luck!
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You don’t have to travel too far on the internet before you find someone claiming to have made a fortune trading the stock market, but is this actually possible for the average joe? You’d be forgiven for being skeptical about the plausibility of making it as a day trader, and for many people, it seems like a pipe dream that is out of reach for those that don’t come from a financial background; however, that simply isn’t true.
Trading for a living is an entirely viable method of making money online. With a bit of practice and carefully controlled exposure to the markets, just about anyone can turn their hand to trading and make a consistent and reliable income.
First, it’s important to address the somewhat pessimistic statistics before moving onto the more complex stuff. If you’ve already done your research on the industry, you will have almost certainly come across stats such as; “95% of traders lose money” or “only 3.5% of traders are successful.”
While there is little empirical evidence to back these statements up, they do seem to hold water when we look at the trading population as a whole. You see, most people try day trading without any real knowledge of the skills required to succeed. Moreover, the average trader tends to make the cardinal sin of overestimating their skills and underestimating the volatility and variance of the market.
The fact of the matter is that trading for a living is extremely difficult as you’re going to be competing with some of the biggest banks and financial investors in the world. That’s because trading the markets is, in many ways, a zero-sum game. In other words, for there to be a winner, there must be a loser.
This dog-eat-dog scenario does not allow much room for error, and as a result, if you want to succeed, you must study, hone your craft, seek guidance, and learn to master your emotions. It is certainly not impossible, but it does require a lot of hard work and dedication.
Day trading certainly isn’t for everyone. What might be considered a dream job for some might be a nightmare for others. It all depends on your appetite for risk and whether or not you have the emotional stability to deal with long losing streaks and unprofitable days/weeks/months. After all, there aren’t many jobs where you can go to work for a month and end up losing money. With that said, here are the main skills a day trader must have:
Whether you want to become a master at scalping, position, or swing trading, you need to have the ability to conduct quality research and solid market analysis. Your job as a trader is to research all of the available information pertaining to one particular stock and use that information to accurately determine its potential effect on the market.
The more apt you become at utilizing market information from charts, indicators, and patterns, the more successful you will be.
Every successful trader needs to have both patience and discipline in abundance. The reason for this is because day trading can actually be an incredibly boring job. You can sit in front of the screen searching for a trading opportunity for hours and still not find anything that is worth entering into.
Most traders have a specific set of criteria that a stock must fall into if they are to be deemed worthy of a trade. However, the real test comes in when the markets run-flat and there is very little volatility to take advantage of. Sometimes, this leads people to see things that aren’t really there, and they enter a trade out of border on rather than proper training and well thought out logic.
Remember, sometimes, the best trades are the ones you don’t make.
Most day traders are self-employed, which means they do not have a boss or a strict schedule to adhere to. This is the true definition of a double-edged sword.
If you’re the kind of person that finds it easy to self-motivate and create a good routine for yourself, then you may have no issue adjusting to this new way of life. However, many people fall into bad habits, and the time between work and leisure starts to become a little bit murky. This can lead to a lot of stress and, more often than not, leads to poor trading results.
The most important aspect of day trading for a living is being able to control your emotions. You must have the ability to step away from the screen when you feel as though you aren’t performing well and refrain from the temptation of chasing your losses.
The problem is, most people feel uncomfortable walking away from their screen while at a loss. Instead of taking the rest of the day off and calming down, they relentlessly chase their losses and try to enter more trades in an attempt to recoup from their previously failed trades. This is a bad idea, as you will almost certainly lose your discipline and enter into sub-optimal trades that fall outside of your regular trading strategy.
It may sound trivial, but emotional investing is one of the leading causes of financial losses in the stock market. If you think this is something you might struggle with, it’s not a bad idea to stay well away from the charts.
Unfortunately, there is no hard and fast rule about how much money you will make as a day trader. In general, your earning potential boils down to three main aspects:
Each person is different, and there is no real way of knowing how well you will do until you get out there and give it a try for yourself. However, before you head out there and risk your capital, it’s highly advised that you open a demo account and paper trade with your strategies first. Good luck!