One of the big allures of investing is finding a company at a low price, buying it, and then riding it to a high price. Very sweet. It’s said that losses are felt more acutely than wins, but hitting a big winner would be an amazing feeling.
Unfortunately, it’s very hard to do. Being right once, discovering that unpolished gem of a company before it soars is hard. Being right twice, having the unemotional demeanor to sell it and make a clean break with your loot, is even harder. It doesn’t stop people from trying because for every dud an investor might have that didn’t work out, it’s often rationalised it only takes one unicorn to make up for the duds and pave a path to riches.
The stories of big winners are always interesting reading, but they always need to be balanced with a reminder we rarely hear the stories of the big losers.
One recently appeared in Canada’s Globe & Mail, which has a big section dedicated to investing. The newspaper was asking their readers to supply them stories with how they invested in their TFSA. The TFSA is a Tax Free Savings Account in Canada, which can be used to own liquid investments. All income and capital gains made within the account are tax free and you can withdraw at any time. Wouldn’t that be nice! The TFSA came into inception in 2009 for every Canadian over 18 and has an annual contribution limit that has ranged from $5000 – $10,000, and carries forward if not used. In all, the lifetime contribution space now stands at $95k.
Read the full “How to Price Risk” post.
This represents general information only. Before making any financial or investment decisions, I suggest you consult a financial adviser to take into account your personal investment objectives, financial situation and individual needs. Anyone looking to build a portfolio should seek financial advice to find out which strategy is right for them, if you are a high net worth investor looking financial advice then you should consider a high net worth financial adviser, they can help you identify your goals and put in place a reliable strategy to pursue them.
