In Canada we have this wonderful program called the Tax Free Savings Account. We can contribute up to 5,000 dollars a year to this program and the interest, dividends, and reinvestments earned within that account are tax free. We can use it for short term or long term savings goals. It has been around for two years. The first year I put it in a savings account and it serves as my emergency fund. Its earned about 60 dollars in the last two years thanks to our low interest rates. I am waiting for the interest rates to increase so that my emergency fund generates something. The second year, I have been using it to invest in stocks for the very first time in my life. I have a very limited number of mutual funds. However because of the economy I was not interested in continuing to invest in Index funds. The funds I invested in, in 1999, haven't grown since 1999 in fact they are 500 dollars than the purchase value. I am not sure I will make more money than my mutual funds but lets face it, I cannot do much worse.
So I bought my first Canadian stocks, all of the stocks I purchased are dividend paying stocks, two are oil based and one is media based. I have not really made money yet on my purchases. I jumped in slowly...buying roughly 2000 worth of stocks thus far on three different companies. I used a free purchase promotion to buy them so I incurred no broker fees. Spending 2,000 on stocks is a lot of money for me. I would rather look at what happens and spend the last three thousand wisely. I decided to wait for a good deal to spend the rest. I have three companies and a couple of ETFs that I am considering purchasing. I will probably only purchase two. However I am going to approach my stock purchases, like I approach my shopping habits and wait for a good deal.
Today the stocks are down. I am really curious if the stocks will be down through out september and October, maybe this a downward trend that can encourage me to finally jump in? I hope so. If any of my stocks....sink to their yearly lows during this time, those are the stock that I am going to purchase. I am trying to remove all emotions from my stock purchases. Its hard though. I am a big fan of my money. I want it to work for me, so that I can retire early and put my daughter through college one day. In this market you have to pay attention, and spend wisely. So thats my game plan to buy stocks on sale this october after a sizable dip.
What do you invest in and how do you decide when to buy in?