Opinions are those of the author and may not reflect those of BMO Nesbitt Burns. Portfolio Chef could not have been completed without the help of many people whom I would like to thank.
INGREDIENTS
Under the Canape: Appetizers/Savings Bonds and GLCs 3 The Yeast You Know: Bread/Stock Funds 6 Where's the Beef. Meat/The Blue Chip Foundation D The Starch Staple: Potatoes/Bonds and Fixed Income 2O Caesar's Pieasers: Salad/Utilities 28.
PREPARING AND EATING YOUR MEAL
It took me years to really understand the jargon and nuances of the investment world, and I'm still learning. As this book will help you gain knowledge, use it as a well-informed investor who is always ready to taste and sometimes re-taste the many flavors of the investment world.
SECTION ONE
A good way to start investing is to buy a government savings bond or a guaranteed investment certificate (GIG). Accrued interest is the amount of interest you are entitled to based on the time you owned the savings bond or GIG.
NOW YOU'RE COOKING1
A savings bond or GIC is an ideal first-time investment for the beginner because there is little risk. If you buy a GIC or interest-bearing savings bond inside a tax shelter, you won't have to worry about taxing that interest.
TAKE A SPINACH DIP
This investment mimics the companies that make up a stock index and therefore represents a broad diversification of the market. To pay for the management of the units, the trustee receives the interest on the cash balances and holds it until a quarterly dividend is paid.
Now You're Cooking!
Once you have market exposure through ETFs, you can double down on a specific sector by buying stocks in that area. Be aware that you increase your exposure by buying more shares of a stock that is already part of the index.
Where's the Beef?
But there are some simple steps you can follow to choose blue chip stocks that are right for you. If you are loyal to a brand name, you can be pretty sure that millions of other people also buy that brand.
For investment purposes, it is essential that a company's earnings rise every quarter or, at least, on a year-over-year basis. Bearing in mind that the index itself is represented by a Beta of 1, a company's Beta of 1.5 tells the potential investor that it is expected to be more volatile than the index.
The Starch Staple
Potatoes/Bonds and Fixed Income
For example, someone looking to make money on the spread may be willing to buy your bond at $102 per share. $100 face value. They would still only get an annual cash flow of 5% of face value, but their yield to maturity would be greater - 7%, the same as the default rate.
Caesar's Pleasers
In fact, you get the tax credit because the company has already paid tax on the money it gives as. For other countries, the tax treatment of dividends differs, so it is important to know the tax laws in the country where you live.
Now XouVe Cooking!
Backyard
Macaroni Salad
Preference shares are debt of the issuing company, which pays the shareholder income in the form of a dividend. The convertible feature allows the shareholder to receive repayment of par value by converting preferred shares into common shares.
Fruity Banana Bread
You probably won't be familiar with all the ingredients in it or how it's prepared. It is preferable that the managers of these foreign funds live in the same country in which they invest. Due to a strong international following, it is usually wise for a company to trade as an ADR to attract more investors.
Oriental Lettuce Wran
Add a teaspoon of hoisin sauce and a spoonful of meat mixture to the cup of lettuce leaves. Nothing is more tempting than a rich, moist, luxurious piece of chocolate cake at the end of a good meal (or, for some people, in place of a good meal). Think about the foods that tempt you most; it is most likely the type of food that is described as sinful.
Sweet Tooth
If you were at a party and made a significant amount of money on a stock, you would tell everyone. Or is their best friend's brother's bandmate's sister sleeping with the brother of the CEO's mother's chiropractor's vet. Unfortunately, this is not always the case and I have seen cases where the person telling the seductive hot tip story is secretly trying to sell their own shares of the stock in question.
Something to
Whet Your Whistle
The amount of profit a company makes is affected by the price of the basic commodity. To invest in this area as a novice, it is best to buy stocks that are higher up the production chain: either a refinery or a resource distributor. However, be aware that the share prices of these companies very often rise based on rumors or predictions e\.
Now you're Cooking!
However, remember that if something is too good to be true, it is usually due to a higher level of risk. The common factor is that all these companies generate some type of cash flow that is passed on to the investor at a higher than average rate of return. It is important to fully investigate the stability of this cash flow and determine what the risk is to justify this higher return.
Homemade Baileys
If the public believes that the shares are not a good representation of the value of the company, the shares will go below the issue price. A purchased deal is the sale of shares that have already been issued by the company, but sold as a large block to a dealer at a preferred price. Don't buy into a hyped up company. If you're interested in an IPO, that's important; to research the company by reading and understanding a copy of the "prospectus".
Not Just Any
Chocolate Chip Cookie
When people go to the cinema, they often visit the snack bar – the place where food and drinks are made for giants. The only caveat is that you don't need to have more than your wallet can handle. Have some of your meal for those times when you are watching a movie, at home or at the cinema.
Techy Popcorn Squares
Garnishes/Gold Stocks
These decorations do not contribute to the actual dish, but the presentation of the food is very important. When deciding to invest in gold, you need to assess the risk of inflation - after observing a potential increase in gold prices. This is because production costs are relatively stable and profitability increases if a gold producing company gets a better price for its product.
Dress It Up
Veggie Garnish
This will expose you to currency risk - the risk when there is a change in the exchange rate between the time you buy the bond in the other currency and the time the bond matures and you decide to change back to your home currency. If you buy stocks that trade in a currency other than your own, you should be aware of currency risk—in this case, an amount of risk created by changes in your local dollar. If the Canadian dollar has fallen in value since then, you will make money because of the change in the exchange rate.
Sneaky Alfredo Sauce
You can choose to buy the option when the strike price is equal to or close to where the stock is currently trading; this is called "in the money." Since it is in the money, the option hypothetically goes up $1 for every $1 the stock goes up. If the stock does not rise above the strike price, the option expires worthless and. you lose the price you paid.
Spice It Up Chili
2 tbsp vegetable oil 1 Ib stewing beef, cubed 2 onions, finely chopped 3 cloves garlic, minced 1 Ib minced beef. can peeled and chopped tomatoes with juice. Add them to your portfolio only when you are a more experienced investor and can fully appreciate the high level of risk they expose you to. You can also increase the amount of chili powder and cayenne pepper according to your taste.).
SECTION TWO
PREPARING AND EATING
You can buy quick things at a large supermarket, chain store, farmer's market, specialty fruit and vegetable market, butcher or expensive specialty store. Likewise, there are many ways you can buy your stocks, mutual funds and fixed income products. There are full-service brokerage firms, specialty boutique houses, high-net-worth houses, private money managers, discount traders and online trading.
Generic or Name Brand?
If you have a good relationship with your advisor, it is quite possible that you will work together for 10, 20, even 30 or more years. Do not hesitate to express your own opinion. how else will your advisor be able to tailor the menu to suit you. But her job is also to listen to you, to your feedback and opinions. is not comfortable with Would you recommend something that your advisor. suggest, tell her; if you. If you don't, you're stopping her from doing her best for you and you could be putting your portfolio at risk.
Would You Like Fries
All mutual funds, even those billed as no-load funds, pay fund managers a management fee, even if that fee is not clearly visible. In addition, there is a charge known as the Management Expense Ratio (MER), which covers all costs associated with managing the fund. Investors unknowingly pay MER every year, regardless of whether the fund makes money or
Now VouVe Cooking!
If the market price is greater than the NAV, then the stock is overpriced and you may be paying more than the stock is worth. If the market price is lower, then it's like you're getting the shares on sale - you're paying less than they're really worth. Just like when you buy a stock, it's important to do your homework when buying a mutual fund.
It's a Wrap
You don't have to hand over all your assets to this program if you want to maintain some control. You really have to be aware that you can't just starve and pick up food if you haven't had time to prepare for dinner. If you make the conscious decision to use a discount house, choose investments that don't need to be looked after if you can't spare the time.
What's That on Your Plate?
Balancing Your Diet/Asset Allocation
You should have a target for your personal asset mix that you are comfortable with. You can buy an equal amount for each stock, e.g. $5.00O. You have decided that the total stock exposure for your portfolio is. 15.00O. You should then consider selling half of the position to realize some of the capital gain.
What's That Moldy Thing in the Fridge?
Throwing Out Leftovers/Taking Losses
If you set a limit pull order, the stock will only be sold at that pre-set price. Multiple trading commissions can also become a factor if you end up buying back the stock in this scenario. In cases like this, you might want to keep the stock and forget about it for a while.
Watch Out
You must have invested with enough conviction in order to enjoy peace of mind and not lose sleep. The third step is to reassess the dollar value of each stock and weight its percentage in the portfolio. Another strategy is to have a $10,000 buy-and-hold value for the stocks you identified in step one.
Nowyou'reCooking!
Would You Like an
Inside or Outside Table?
On the other hand, it is not necessary to take such a capital gain within a retirement plan. If you are part of the majority, the simplest way is to transfer assets without being subject to probate fees. If you do not have a spouse and you name your children, this can help to simplify the settlement of your estate.
Sample Menus
Some will turn out to be great investments, but be prepared - there will be the odd dud. If you're educated about your investments, it's easier to understand when things go wrong and to appreciate the times when things are right. Be a well-informed investor who has realistic goals and expectations and you will be delighted with the prosperous results.
Recipe Index
