With the pandemic, thousands of people have improvised as independent investors. But a minority of them will be successful.
Since the arrival of COVID-19, discount brokers and “fintechs” have attracted tens of thousands of new clients who suddenly have more time to devote to investing in their RRSP and TFSA accounts.
But becoming an independent investor cannot be improvised (I talk about this at length in my guide Le Brokerage en ligne). And seeing how many people have rushed into cryptocurrencies or non-fungible tokens (NFT) does not bode well.
Especially since, according to the Dalbar company, the returns of the 6.5 million Canadian private investors are systematically between 3 and 5 percentage points below those of the stock market indices. Rest assured that the vast majority of mutual fund managers struggle to beat their benchmark year after year.
When the pros struggle, imagine the amateurs!
So before you make yourself a Gordon Gekko, a few basics are in order:
- You need to know how to control your emotions and your personal risk tolerance;
- We must avoid being swayed by what experienced investors call “noise around us”: the media, rumors, crises, the herd effect (the ebb and flow of financial markets);
- it is necessary to master the basic concepts of economics and investment;
- you have to be constantly educated and informed about investments; dedicate at least an hour a week to his portfolio.
resources available
Individual investors in particular have access to many online resources, most of which are free, such as B. Tutorials and research reports offered by discount brokers.
You should also regularly consult financial publications (Wall Street Journal, Forbes, Bloomberg, The Economist) and certain websites (Morningstar, MarketWatch, Motley Fool, Investopedia, Business Insider, Hardbacon, The Street, Stockhouse, ValueLine). Yes, unfortunately you have to understand English.
But that is not enough. Because any good, self-respecting independent investor needs to read at least some basic books on investing (see table below). And take courses, including those on Bourstad.ca or L’Actif.net.
Learn by example
Finally, there are the investment clubs sponsored by Actif.net, where you are part of a group of investors who benefit from educational follow-up and a real shared investment portfolio. For modest amounts invested, the risks, potential gains and losses are reasonable. But the exchange of experiences makes a huge difference!
ESSENTIAL BOOKS
The Smart Investor, Benjamin Graham, Valor Publishing
Photo courtesy of Editions Valor-
Lessons from the Masters of the Stock Market, John Boik, Valor Editions
Photo courtesy of Editions Valor-
What if you knew enough to win in the stock market, Peter Lynch, Éditions Valor
Photo courtesy of Editions Valor-
The Stock Market or Life, Guy and Philippe Le Blanc, COTE100 Editions
Photo provided by Editions COTE100-
The Little Book for Stock Market Success, Pat Dorsey, Éditions Valor
Photo courtesy of Editions Valor-
Invest in the stock market and get rich, Bernard Mooney, Éditions de l’Homme
Photo courtesy of Editions de l’Homme-
Online Brokerage, Stéphane Desjardins, Éditions du Journal
Photo provided by Editions du Journal-