How to win big on the stock market: learn and earn big from my stock investing methods

I am a 29 years old female living in Montreal (Canada) and I want to share my investment story with you. I made my first investment back in 2005. I clearly remember my very first investment: it was a 300$ invested in a GIC. Back in the time, I didn’t have too much money. As years passed, my passion for investment just keeps growing. Among the way, I invested in a multiple of investment products: GICs, great mutual funds, stocks and income trusts. I slowly move from GIC, to mutual funds and segregated funds to stocks and income trusts investment.

In 2007, I start a blog initially call My First 50 000$, where I blog about reaching 50 000$ value in assets. Between 2007 and 2008, mostly I invested in mutual funds such as RBC Canadian Dividend Fund, RBC U.S. Mid-Cap Equity Fund C$, RBC Global Resources Fund, RBC O'Shaughnessy International Equity Fund, RBC O'Shaughnessy All-Canadian Equity Fund, CIBC Dividend Growth Fund, CIBC Emerging Markets Index Fund and CIBC Monthly Income Fund. I generally invested, if not 500$ per funds, 1 000$ each time I had money available.

In 2008, I open a broker account with T D Waterhouse. Ever since, I continue to invest in the Toronto stock market. At 29$ per trade (this being the price per trade for T D Waterhouse in Canada), T D Waterhouse is not cheap. T D Waterhouse is not exactly what we could call a cheap discount broker. But I select this online stock broker because it’s the one Derek Foster use himself.

As a gaga fan of Derek Foster, I don’t have any choice than to open an account with T D Waterhouse. Per trade price at T D Waterhouse is expensive, but TD provide a full service brokerage. Their trading platform is user-friendly and very well design. Even as a beginner, I enjoy T D Waterhouse as online broker day trading. To trade stocks online with TD is simple and easy. Internet trading is pretty safe with T D Waterhouse. As they explain on their Web page: “You will receive 100% reimbursement in the unlikely event account losses occur resulting from unauthorized online brokerage activity.” Major plus: T D Waterhouse call center seem to be open 24 hours per day. I experiment it myself: I once call in the middle of the night, and I was able to reach someone… This means that TD Waterhouse investor services are reliable.

Compare to BMO InvestorLine of BMO Bank of Montreal, TD Waterhouse platform is much more elegant and powerful. I had used both platform, and TD Waterhouse, despite their high fees for small investors like myself, TD Waterhouse is the best of the best.

 

Who’s Derek Foster?

Derek Foster is Canada youngest retiree. Mr. Foster retired at the young age of 34. Derek Foster describes his journey in 4 books: Stop Working, Here's How You Can; The Lazy Investor: Start with $50 and no Investment Knowledge; Stop Working Too: You Still Can and Money for Nothing: And Your Stocks for Free. As a small investor, I appreciate Derek Foster books. I learn how to trade stock by reading Derek Foster books. And even more especially, the reading of Stop Working, Here's How You Can, Derek Foster first book is what had me wanted to invest in the stock market.

My investment journey: more about my winner methods: investing made simple and easy

Before starting describing my methods, I would like to present my investment portfolio. Here’s my investment portfolio on date of January 16, 2010:

Savings
2.69$ (ING Direct)

Non RSP Investments:
Stocks & income trusts investment portfolio
Sprott Inc. (SII): 2 414$
Timminco (TIM): 266$
Blue Note Mining (BNT): 62$
Bank of Nova Scotia (BNS): 4 790$
Hanwei Energy Services (HE): 216$
Methanex Corporation (MX): 2 555$
Fortis (FTS): 2 959$
Pembina Pipeline Income Fund (PIF.UN): 7 204$
Just Energy Income Fund (JE.UN): 5 792$
Dumont Nickel Inc. (DNI): 460$
Yellow Pages Income Fund (YLO.UN): 2 265$
Bell Aliant Regional Communications Income Fund (BA.UN): 2 769$
Pengrowth Energy Trust (PGF.UN): 65$
Enbridge Income Fund (ENF.UN): 3 819$
Corby Distilleries Limited (CDL.A): 1 530$
Davis + Henderson Income Fund (DHF.UN): 1 693$
TOTAL: 38 859$

Mutual funds (outside RSP):
Sprott Canadian Equity Fund: 5 229$

Tax-free savings account:
RBC O'Shaughnessy Canadian Equity Fund: 2 595.96$
Creststreet Alternative Energy Fund: 1 247$
TOTAL: 3 842.96$

RSP:
CIBC Dividend Growth Fund: 482.49$
CIBC Emerging Markets Index Fund: 453.79$
CIBC Monthly Income Fund: 957.38$

Energy and Base Metals Term Savings (Indexed term savings): 503.46$
Natural Resources Term Savings (Indexed term savings): 502.06$

GIC National Bank: 1 154.83$
GIC Finance Plus: 1 513.97$
GIC Plus: 500$

TD Canadian Bond: 110.79$
TD Monthly Income: 97.72$
TD Emerging Markets: 81.54$
TD Energy: 83.16$
TD Precious Metals: 106.87$
TD Latin American Growth: 94.73$
TD Entertainment & Communications: 102.09$
TD Dividend Growth: 186.91$
TD U.S. Mid-Cap Growth: 95.42$

Maritime Life International Equity Fund (Templeton): 667.52$
Manulife Simplicity Growth portfolio: 854.60$
Maritime Life CI Harbour segregated funds: 1 002.67$
Maritime Life Fidelity True North segregated funds: 944.84$
Maritime Life Trimark Europlus segregated funds: 602.60$

Great West - Various: 1 577.81$

RBC Canadian Dividend Fund: 484.12$
RBC U.S. Mid-Cap Equity Fund C$: 1 740.46$
RBC Global Resources Fund: 882.32$
RBC O'Shaughnessy International Equity Fund: 615.36$
RBC O'Shaughnessy All-Canadian Equity Fund: 983.93$
RBC GIC Canadian Market: 1 000$

TOTAL: 18 383.44$

Social Capital at Desjardins Membership share for 3 accounts: 40$

Savings + Stocks, income trusts, mutual funds + Tax-free savings account + RSP + Online Income (53.06$): 66 410.15$. On date of January 16, 2010, my overall investment value was of 66 410.15$. This results from investment of my Tax-free savings account, RSP and non-register investment (outside Tax-free savings account and RSP). A Tax-fee savings account and RSP are programs for Canadians. I won’t go in the deep on those, as I want to direct this article more on my investment techniques.

Now that you have taken a look at my investment portfolio, what do you notice? Probably the amount of investments I hold, isn’t? And you are right! In order to protect the initial capital invested, I diversify my investment portfolio, all combined, in more than 45 investment products! This is the key of my investment method: outrageous diversification. And this diversification had pay off:

On date of August 5, 2009, I met the goal that I have given myself back in 2007: I reach my first 50 000$ in assets!

On date of December 5, 2009, I had exceed the 60 000$ in assets!

While the economy world was stunning into recession, I had been able to reach my investment goals because of my massive diversification method. But diversification is not all. My stocks and income trusts investment portfolio mostly contain dividend payer companies.

Talking about a passive income: my yearly dividend income in review

Sprott Inc. (SII): 505 stocks x 0.10$ = 50.50$
+ (let’s suppose Sprott Inc. will provide a special dividend like last year) 75.75$ = 126.25$
Bank of Nova Scotia (BNS): 104 stocks x 1.96$ = 203.84$
Methanex Corporation (MX): 103 stocks x 0.62$ = 63.86$
Fortis (FTS): 104 stocks x 1.04$ = 108.16$
Pembina Pipeline Income Fund (PIF.UN): 407 units x 1.56$ = 634.92$
Just Energy Income Fund (JE.UN): 411 stocks x 1.24$
+ 82.20$ of the 2009 special dividend = 591.84$
Yellow Pages Income Fund (YLO.UN): 420 units x 0.804$ = 337.68$
Bell Aliant Regional Communications Income Fund (BA.UN): 100 units x 2.904$ = 290.40$
Pengrowth Energy Trust (PGF.UN): 6 units x 0.84$ = 5.04$
Enbridge Income Fund (ENF.UN): 300 units x 1.152$ = 345.60$
Corby Distilleries (CDL.A): 100 stocks x 0.56$ = 56$
Davis + Henderson Income Fund (DHF.UN): 100 units x 1.836$ = 183.60$
= 2 947.19$
+ let’s add 100$, supposing the dividend reinvestment plan (DRIP) system will provide an extra income of 100$
= 3 047.19$

Inside my stocks and units investment portfolio, 12 companies are paying me a quarterly or a monthly dividend. Dividends represent a great source of income. On date of January 16, I had an annual dividend income of 3 047.19$. Since companies can stop paying dividend at anytime, it is very important to invest in different companies in order to protect your annual dividend income. The more you diversify the less risk you are taking to see your dividend earnings being reduce by economic factors.

What’s a dividend reinvestment plan (DRIP)?

If you want to learn more about DRIP, you can read an article of mine that I publish here on HubPages:

The power of a dividend reinvestment plan (DRIP) on an investment portfolio

While waiting to retire from my investment, I had applied for a DRIP. This means that all dividends that I earn are being reinvested in order to acquire more stocks or units. Once my portfolio investment will provide me an annual dividend income of around 15 000$, I will stop the DRIP system and cash in the dividend for my living.

Is it possible to retire on a 15 000$ annual dividend income?

It’s possible depending of your lifestyle. I do not want to purchase any home or condo as I prefer to be able to move whenever I decide to do so. Also, I am a natural saver, I always been pretty careful with all of my expenses and I won’t mind getting off the shopping scene once my 15 000$ annual dividend income being reach. Also, all debts should be paid off and some cash should be put aside. While reaching the 15 000$ annual income in dividend, it would be important at this point to remain debt free. Also, student loan debt should be paid off. If you facing major debts, my advice would be to search for debt assistance and, if require try to find a zero balance credit card debt consolidation.

I was happy to share my investment methods with you! Happy investing!