Friday 23 May 2014

HowToInvestOnline Guide to Self-Directed Investing

Over the years, we believe that many of the posts we have published have enduring value, as statistics on accumulating reader visits on old posts demonstrate. But there are so many posts that to help readers find their way around, we have now selected, organized and categorized posts into the key investing topics. We've ignored some of our posts, topical at the time, which have become outdated.



Investing 101 - posts in green: the investing basics, which we believe every self-directed investor should know to successfully build and manage a portfolio.
  1. Why Be a DIY Investor and What Does It Take to Succeed?

1) Setting Objectives

  1. A Process to Build a Sound Investing Plan
  2. Setting Investment Objectives
  3. Reviewing Your Financial Assets
  4. Investment Building Blocks - Securities
  5. Investing Principles - Minding the Immutable Forces
  6. A Written Investment Policy, Don't Invest a Cent Without It
  7. Investing for Children: Getting the Goal and Timing Right for Education

2) Getting the Thinking & Decision-Making Right

  1. Psychology of Stock Market Investing: Patience
  2. Five Common Investor Judgment Errors and How to Counter Them
  3. How to Fix Overconfidence, the Worst Investing Attitude Problem
  4. Exploiting Laziness, Procrastination and Conformity in Investing
  5. Controlling Your Own Investing Over-Confidence
  6. Coping with an Uncertain Investment Time Horizon

3) Setting Expectations Grounded in Reality

  1. Investing Lessons from a Golf Game
  2. How to Spot and Avoid Investing Scams
  3. Is Putting Money into the Stock Market Just Gambling?
  4. What Long Term Return Can We Expect from the TSX?
  5. Long Term Stock and Bond Return Expectations for Canada - the Current Outlook (June 2014)
  6. Long Term Return Expectations for USA and Rest of World - the Current Outlook (June 2014)
  7. The TSX and How Blue Chip Stocks Have Done: Food for Thought
  8. TSX Composite and S&P 500 Total Market Return
  9. Investing History Lessons on Inflation Protection and Market Mood Swings
  10. Test Your Portfolio with Historical Investing Returns
  11. Gulp! Asset Allocation & Rebalancing Theory Meet a Scary Real World
  12. The 2008 Crash - Case Study in Diversification
  13. Deflation, Inflation - Which is coming and What to do?
  14. Investing During Deflation
  15. The Historical Effect of Inflation and Currency on a Canadian Investor's International Portfolio

4) Risk

  1. Investing Big Stuff vs Small Stuff
  2. Risk: What Can You Afford and What Can You Put Up With?
  3. Protection for the Online Investor Against Insolvencies and Defaults
  4. Risk Tolerance: Why and how to measure your own
  5. Risk Capacity: What is your capacity and does it match your tolerance?
  6. Risk Need - Figuring out how much risk you need to take
  7. Investing Risk: What is there to lose?
  8. Investing Risk: Historical Worst Volatility, Business Cycles, Crashes and Crises
  9. Investing in a Recession and Avoiding Depression
  10. Investing Risk: How Badly did Inflation and Currency Hurt Past Returns?
  11. Investments to Protect against Inflation
  12. Deflation, Inflation - Which is coming and What to do?
  13. Investing Risk: Default or, How often do investments go belly up?
  14. Seeking Safety: Assessing Default Risk
  15. Investing Risk: The Ouch from Management Costs and Taxes
  16. Investing Risk: The Harmful Effect of Rising Required Rate of Return
  17. What are the important long term investing risks? (Volatility is NOT one of them)
  18. Are Stocks less, or more, risky in the long run?
  19. ETF Risks - Which Matter, Which Don't, What to Do

5) RRSP, TFSA, RESP, In-Trust vs Taxable Accounts

  1. RRSP vs TFSA vs RESP vs Non-Registered Taxable Account?
  2. RRSP vs TFSA? First, the Numbers
  3. RRSP vs TFSA? Critical Differences and Imponderables
  4. Cash in a TFSA or RRSP - What are the best choices?
  5. Save Tax by Income Splitting with RRSP, TFSA, Loans and Pension Income
  6. Investing for Children: RESP or In-Trust For Account?

6) Asset Allocation and Portfolio Construction

  1. Asset Allocation: the Most Important Investing Decision You Will Make
  2. How to Diversify without "Diworsifying"
  3. How Many Stocks to Create a Diversified Portfolio, or Should You Even Try?
  4. Five Reasons to Go Beyond the One-Stop-Shopping Portfolio
  5. Portfolio Rebalancing - What, Why and How
  6. Dollar Cost Averaging - the Good Truth and the Bad Myth
  7. Investing Implications of a Globalized World
  8. Investing Ideas from Norway, Home of a Humongous Pension Fund
  9. Surprise! Equities can Outdo Bonds for Cash Distribution Attractiveness
  10. The Crucial Difference between Price and Income Stability of Equities
  11. Investing for Children: Building a Portfolio from Scratch with Regular Small Savings
  12. Foreign Investments: To Hedge or Not to Hedge Currency
  13. Foreign Investments: What does history tell us about hedging currency?
  14. Hedging Foreign Currency Exposure - Is it worth it? CalPERS Changes Tack and ETF Case Studies
  15. A Falling Canadian Dollar Can be An Investor's Friend
  16. Building Your Own Index ETF
  17. Low Volatility Equity ETFs - Promising Safety and Reward
  18. Low Volatility ETF Update - Are they performing as advertized?
  19. Portfolio Volatility of Swensen Seven, Smart Beta vs Simple Recipe - Which is best?
  20. How to Minimize Portfolio Volatility and Sleep (a lot) Better
  21. Investing Ideas from Two Highly Successful Pension Funds - Ontario Teachers' and Healthcare of Ontario
  22. Mortgage/Debt-Adjusted Asset Allocation
  23. Tax-Adjusted Asset Allocation
  24. How to Assess Your Annual Portfolio Performance
  25. Using Indices to Benchmark Your Investment Results
  26. The Annual Investment Review: Part 1 - Review Goals & Performance, Rebalance
  27. The Annual Investment Review: Part 2 - Tax Matters

7) Model Portfolios

  1. One-Stop-Investing for Your RRSP Contribution(s)
  2. Five Reasons to Go Beyond the One-Stop-Shopping Portfolio
  3. A Lifelong Portfolio and Investing Plan for the Reluctant Investor - Aims and Plausible but Inadequate Options
  4. The Reluctant Investor's Lifelong Portfolio - a Portfolio Inspired by, and for, Albert Einstein
  5. Simple Portfolios Compared
  6. New Improved Model Portfolio: The Smart Beta
  7. A Model Pre-Retirement Portfolio for Canadians - The Swensen Seven
  8. Portfolio Volatility of Swensen Seven, Smart Beta vs Simple Recipe - Which is best?
  9. The Permanent Portfolio: Pros and Cons for Canadian Savers and Retirees
  10. Inside the Permanent Portfolio - Why it succeeded and the chances it will continue
  11. Currency and Inflation Effects on Model Portfolio Performance

8) Portfolio Components – the Actual Securities to Buy and Sell

a)ETFs

  1. ETF Screeners Compared
  2. A Compendium of ETF Resources
  3. ETF Risks - Which Matter, Which Don't, What to Do
  4. ETF Liquidity Risk - What's real, What's hype, What to do
  5. Canadian Large Cap Equity Index ETFs Update - Surprises for Investors
  6. Return of Capital: Separating the Good from the Bad
  7. Canadian ETFs with High After-Tax Cash Yields - Separating the Good from the Not so Good
  8. How does RBC's new Canadian Dividend ETF compare?
  9. The #1 Canadian Dividend ETF according to the Shareholder Yield Test
  10. ETF Comparison: USA S&P 500 or Similar Equity Index Funds
  11. ETF Comparison: Developed Country Diversified Equities
  12. Emerging Markets ETFs Comparison Update - Which is best?
  13. Surprise! Equities can Outdo Bonds for Cash Distribution Attractiveness
  14. Canadian Equity Low Volatility vs Cap-Weight ETFs Reviewed
  15. Choosing Between US and International Equity Low Volatility vs Cap-Weight ETFs
  16. Best Pick Commodity ETFs/ETNs for the Canadian Long Term Investor
  17. Commodity ETFs - Ins and Outs for Canadians
  18. Investing in Utilities - Individual Stocks vs Funds
  19. Socially Responsible Investing: Trends and ETF Track Records
  20. Vanguard Index Change and Navigating The ETF Maze for Global Equities
  21. Pros and Cons of Cross-Border Shopping in the USA for ETFs
  22. Cross-Border ETFs - Here's a Free Tool to Compare Costs
  23. S&P 500 Currency Hedged ETFs - How Well do They Work and Which is the Best?
  24. Different and Better(?) Ways to Invest in the Broad US Equity Market
  25. New iShares Preferred Share ETF - How Does It Compare?
  26. Pros and Cons of Managed Futures ETFs
  27. Canadian Real Estate ETFs - Which is best?
  28. Building Your Own Index ETF
  29. How to Sharpe-n Your ETF Selection Process
  30. ETFs and Mutual Funds - Calculating Capital Gains

b) Canadian Stocks

  1. What Long Term Return Can We Expect from the TSX?
  2. Long Term Stock and Bond Return Expectations for Canada - the Current Outlook (June 2014)
  3. Canadian Aerospace, Waste Management and Engineering Companies - Sustainability, Social, Environmental and Governance Ratings
  4. Canadian Transportation Companies - Sustainability, Social, Environmental and Governance Ratings
  5. Canadian Mining Companies - How do they rate on Sustainability, Environmental, Social and Governance issues?
  6. Canadian Oil & Gas Stocks - Does better Corporate Sustainability & ESG mean better performance?
  7. Corporate Sustainability (aka SRI/ESG) in Canadian Consumer Stocks
  8. Twelve Ultimate Buy and Hold Canadian Stocks
  9. Which Stocks and ETFs are Safe and Secure per the Dispersion of Analyst EPS Estimates (Nov 2014)
  10. Centenarian Companies in Canada - Surviving and Thriving, Mostly
  11. Dogs of the Dow and the TSX - Are they nasty or nice investing pets?
  12. Bank Stocks: Alternative Ways to Invest
  13. Electric Power Utility Stocks for the Income Investor?
  14. Entertainment Companies: Potential Investment Thrills or Spills?
  15. Investing in Utilities - Individual Stocks vs Funds
  16. Dual Class Shares - Are they Ok or to be Avoided?
  17. Dividend Stock Olympics - The 15 Canadian Medalists (Feb 2014)
  18. Canadian Equity Market Darlings and Dogs: August 2014 Update
  19. Canadian CEO Pay Update: Who earned their pay by rewarding investors?
  20. Top-100 Canadian CEOs Update: Who is the Most Over-Paid?
  21. The TSX Composite - Which are the real blue chips? (Sep 2013)
  22. Update on High-Yielding Canadian Mortgage Companies: New Entrants & Rising Interest Rate Effects (Aug 2013)
  23. Dividend ETFs and Stocks - Attractive Cash Distributions and Returns
  24. Going on Autopilot with Dividend Reinvestment
  25. Shareholder Yield - the New, Improved version of Dividend Investing
  26. Shareholder Yield - How do the popular dividend stocks measure up? (August 2014)
  27. Investing in Illiquidity - Where the small guy has an advantage
  28. Using the "Wisdom of Crowds" of Analysts to Find Safe, Profitable Canadian Stocks

c) Preferred Shares, Split Shares and Closed-End Funds

  1. Preferred Shares: an Opportunity for Taxable Accounts
  2. Dividend Income from High Quality Preferreds: Split Shares, Companies and ETFs Compared
  3. Split Share Preferreds - Opportunity from an Outlier?
  4. Split-Share Corporations - Christmas Bargains Amongst Capital Shares?
  5. New iShares Preferred Share ETF - How Does It Compare?
  6. Closed-End Funds - Opportunity vs Risk

d) Real Estate Investment Trusts (REITs)

  1. Real Estate Investment Trusts for Income and Diversification
  2. Return of Capital: Separating the Good from the Bad
  3. Green Certification of Real Estate - Why investors should care
  4. What's up, or should we say down, with REITs?
  5. Canadian Real Estate ETFs - Which is best?
  6. Ins and Outs of Managing Your Own Portfolio of REITs

e) Preferred Shares

  1. Preferred Shares with High-Yield, Safety and Fixed Maturity

f) Convertible Debentures

  1. Convertible Debentures: the Certs mint of investments

g) Fixed Income – Cash, Bonds, GICs

  1. Cash in a TFSA or RRSP - What are the best choices?
  2. Tools and Tips for Picking the Highest Rate GIC
  3. Fixed Income: Which is "best" - GIC, Individual Bonds, Target Maturity ETF or Traditional ETF?
  4. Tax-efficient Fixed Income for Non-registered Taxable Accounts
  5. Bond Ladder vs a Bond Fund? Part1: Ladder Pluses
  6. Bond Ladder vs Bond Fund? Part 2 - Fund Pluses
  7. Which Way is Best to Invest in Real Return Bonds - Direct, ETF or Mutual Fund?
  8. Green Bonds - The Fixed Income Way to Invest by ESG/SRI Principles
  9. Fixed Income - the best rates in Canada across the maturity spectrum (September 2014)
  10. What Happens to a Bond ETF When Interest Rates Rise?
  11. Which Bond ETFs are Most Vulnerable to a Rise in Interest Rates?
  12. Surprise! Equities can Outdo Bonds for Cash Distribution Attractiveness
  13. Ways to Get Steady Dependable Income from Mortgages
  14. High Yield Bonds - Take a Chance on Them?
  15. Ins and Outs of International Bonds

h) Commodities

  1. Commodities: Diversifier and Inflation Hedge or Empty Promise?
  2. Best Pick Commodity ETFs/ETNs for the Canadian Long Term Investor
  3. Commodity ETFs - Ins and Outs for Canadians
  4. Gold: the Why, What and How of Investing in It
  5. Gold Bullion Investing Online: How the alternatives compare

i) Alternative & Fringe Assets

  1. Holiday cheer alternative - Investing in wine and whisky

9) Taxes

  1. Taxes 2015: Compendium of Links & Resources for Filing 2014 Income Tax
  2. Five Last Minute Tax Reducers for Investors
  3. How Your Province, Income Level and Investment Choices Affect Your Income Tax
  4. How to Calculate Capital Gains and Other Income Taxes on ETFs
  5. ETFs and Mutual Funds - Calculating Capital Gains
  6. How to Calculate Interest and Capital Gains for Tax on Bonds, T-Bills, GICs, CSBs
  7. The Mystery of Fund Capital Gains in 2008 Explained
  8. Light at the end of the ACB Tracking Tunnel for ETFs?
  9. Taxes on Foreign Investments
  10. Foreign Income & Assets - Avoid Nasty T1135 Trouble
  11. How to Avoid the Misery of T1135 Foreign Holdings Disclosure
  12. Save Tax by Income Splitting with RRSP, TFSA, Loans and Pension Income
  13. Five Tax Tips for Investor Couples and Families
  14. Tax-efficient Fixed Income for Non-registered Taxable Accounts
  15. Tax Planning for Investors in or near Retirement: Age Credits and OAS Clawbacks
  16. Saving Taxes on Investments at Death
  17. Tax Loss Selling Explained: What, Why and How
  18. Tax-Adjusted Asset Allocation
  19. Income Tax on Dividends: How to Cope with the Myths and the Realities

10) Retirement

  1. Three Key Investing Principles for Retirees
  2. Lessons for Investors from Warren Buffett's Illness (Apr 2012)
  3. What is a Viable Mix for Retirement Savings Success?
  4. Adjusting RRIFs and RRSPs to the New Reality
  5. How to Invest for Retirement Like a Pension Fund by Using ETFs
  6. Two Ways of Generating Cash from a Portfolio
  7. Generating Cash: Income from Securities with the High-Yield Couch Portfolio
  8. Generating Cash: Asset Allocation with the Global Couch Potato Portfolio
  9. A Sustainable Portfolio Withdrawal Rate: the 4% Solution
  10. Refining the 4% Retirement Withdrawal Rate Rule: Pay Attention to Stock Market Valuation (Sept 2014)
  11. Testing the Ultra-Safe ARVA Retirement Portfolio Withdrawal Method
  12. Liability-Driven Investing during Retirement for the Individual
  13. Retirement Spending Rules and Forced RRIF Withdrawals
  14. Why Retirees Need to be More Concerned about Portfolio Volatility
  15. The Retired Investor - Real Return Bonds for Essential Living Expenses
  16. Tax Planning for Investors in or near Retirement: Age Credits and OAS Clawbacks
  17.  Saving Taxes on Investments at Death
  18. Retirement Investing - How an Annuity Complements an Equity-Fixed Income Portfolio

11) Sustainable Investing – Incorporating Environmental, Social & Governance Factors

  1. Socially Responsible Investing - Putting Your Money Where Your Morals Are
  2. Green Investing - Doing Right and Doing it Right
  3. Socially Responsible Investing: Trends and ETF Track Records
  4. Socially Responsible (Environmental, Social, Governance) Investing - What difference does it make?
  5. Stocks & Board Governance - Do the Good Guys Finish First or Last?
  6. Women on Boards of Directors in Canada - Should Investors Care?
  7. Women on Boards: Pleasing Progress (Nov 2014)
  8. CleanTech & Profitable Investment - Yes, the Two Can Go Together
  9. Socially Responsible Canadian Large-Cap Companies - Who's the fairest of them all? (August 2014)
  10. Canadian Aerospace, Waste Management and Engineering Companies - Sustainability, Social, Environmental and Governance Ratings
  11. Canadian Transportation Companies - Sustainability, Social, Environmental and Governance Ratings
  12. Canadian Mining Companies - How do they rate on Sustainability, Environmental, Social and Governance issues?
  13. Canadian Oil & Gas Stocks - Does better Corporate Sustainability & ESG mean better performance?
  14. Corporate Sustainability (aka SRI/ESG) in Canadian Consumer Stocks

12) Tactical Investing – Looking for Market Bargains

  1. IPOs: Avoiding the Dangers and Spotting the Opportunities
  2. Twelve Tricks in Financial Statements and How to Detect Them
  3. Financial Statement Manipulation and Fraud: A Dirty Dozen Warning Signs
  4. Insider Trading: Using It to Get an Edge, Legally of Course
  5. Getting Started in Value Investing
  6. Taking Advantage of Value Stocks
  7. "Small is Beautiful" - Also True for Investing
  8. P/E and PEG Ratios - Remember the Effect of Interest Rates
  9. Stock Market Analyst Forecasts: add Salt and Pepper
  10. Stocks & Board Governance - Do the Good Guys Finish First or Last?
  11. Investment Climate Change: The Mysterious Case of Hot January Returns
  12. Using Weak Currencies to Find Foreign Equity Investment Opportunity (Jan 2013)
  13. Picking Countries with a Weak Currency - How did it perform? (Mar 2014)
  14. Using the "Wisdom of Crowds" of Analysts to Find Safe, Profitable Canadian Stocks (Dec 2012)
  15. How Effective is Using Dispersion of Analyst EPS Estimates to Assess Stocks? (Nov 2014)
  16. Which Stocks and ETFs are Safe and Secure per the Dispersion of Analyst EPS Estimates (Nov 2014)
  17. Which Large Cap TSX Stocks are Most Dangerous or Most Attractive? - Use Short Interest with Volatility
  18. Shareholder Yield - the New, Improved version of Dividend Investing
  19. Dividend Initiators as a Stock Selection Concept
  20. Share Repurchases vs Cash Dividends - Ins and Outs
  21. Women on Boards of Directors in Canada - Should Investors Care?
  22. Canadian ETFs with High After-Tax Cash Yields - Separating the Good from the Not so Good (Mar 2014)
  23. Canadian Equity Market Darlings and Dogs: February 2014 Update
  24. Canadian CEO Pay Update: Who earned their pay by rewarding investors? (Jan 2014)
  25. Dividend Stock Olympics - The 15 Canadian Medalists (Feb 2014)
  26. Top-100 Canadian CEOs Update: Who is the Most Over-Paid? (Jan 2014)
  27. What's up, or should we say down, with REITs? (Dec 2013)
  28. Canadian Mining Companies - Is now a good time to buy? (Oct 2013)
  29. Electric Power Utility Stocks for the Income Investor?
  30. Entertainment Companies: Potential Investment Thrills or Spills?
  31. Fixed Income - the best rates in Canada across the maturity spectrum (Sep 2013)
  32. The TSX Composite - Which are the real blue chips? (Sep 2013)
  33. Update on High-Yielding Canadian Mortgage Companies: New Entrants & Rising Interest Rate Effects (Aug 2013)
  34. Solid Canadian Stocks Currently at a Reasonable Price (Jul 2013)
  35. Canadian Superstar Investors - How good is their performance? (Jul 2013)
  36. Investing Strategy: Less Liquid Stocks Give Better Returns (Jun 2012)
  37. Investing in Illiquidity - Where the small guy has an advantage (Feb 2013)
  38. Looking for Value Stocks amongst S&P 500 Deletions
  39. Company Risks - Pension Plans and the Z-Score

13) Leveraging – Borrowing to Invest

  1. Borrowing to Invest: When & How to Do It
  2. Borrowing to Invest: Examples of Potential Profits
  3. Borrowing to Invest (Leverage) - Choosing Amongst Loan, Margin, Leveraged Fund, Capital Split Shares

14) Tools

  1. Test Your Portfolio with Historical Investing Returns
  2. The Best of the Online Investing Discussion Forums
  3. Tools and Tips for Picking the Highest Rate GIC
  4. ETF Screeners Compared
  5. Cross-Border ETFs - Here's a Free Tool to Compare Costs
  6. Investing Books
Guide updated to 15 June 2015



Disclaimer: This post and those linked-to above also written by me, are my opinion only and should not be construed as investment advice. Readers should be aware that any comparisons are not an investment recommendation. They rest on other sources, whose accuracy is not guaranteed and the article may not interpret such results correctly. Do your homework before making any decisions and consider consulting a professional advisor.



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