Fun and games

June 18 2009 by Ellen Roseman

I teach investing at the University of Toronto’s school of continuing education. My courses are short, four weeks (or eight hours), and to keep the discussion going, I started a club.

Our group is part of the Canadian Moneysavers network of share clubs. This means we don’t invest money together, but talk about how to do it.

We started last September and meet monthly at a Toronto community centre. This week, we invited Gaelen Morphet of CIBC Global Asset management to talk about how she picks stocks as a value investor.

Her presentation was terrific, both practical and insightful. She talked about how the stock market may not snap back as expected, since so many companies are putting out big equity issues and diluting their shares. TransCanada Corp. had just come out that day with a $1.6 billion common share offering.

Some group members are participating in a stock simulator contest at Investopedia. The leader has made his fictional $1 million stash grow to $1.3 million in just a few months. That’s impressive. (I can say that because I’m not in the game yet.)

Investing is an essential life skill, in my view. You need to make your money grow beyond the limited returns that savings products can provide over a long period. And you can’t hand over authority to others unless you understand how investments work.

Illiterate investors are easy prey for rogue advisers. Trusting salespeople to put your interests ahead of their own just leads to disappointment.

We’ve talked about specific stocks, from large (Coca-Cola) to small (Ritchie Bros. Auctioneers). We’ve talked about exchange-traded funds and dividend reinvestment plans and we’ve compared tax-free savings accounts.

We even have a mission statement:

We are committed to sharing information among all members, with the goal of working towards preserving capital and increasing the after-tax returns of our individual portfolios.

We strive to strengthen our understanding of investing and gain hands-on
experience in analyzing stocks and interpreting financial statements.

It sounds serious, but it’s also fun. Just look at our name (not my choice, but voted on by the group). It’s Ellen Degenerates Share Club.

2 comments

  1. Lior

    Jun 19 2009

    “Illiterate investors are easy prey for rogue advisers. Trusting salespeople to put your interests ahead of their own just leads to disappointment.”

    So true. I’ve read David Swensen’s “Unconventional Success” twice already and I couldn’t agree more.

    While the book is more of a comprehensive study about the serious flaws of mutual funds and how they hamper investor returns, the direct point was intelligent investors keep a watchful eye on their investment strategy, as there’s no shortage of parties involved who capitalize on the opportunity to tap deep into your pockets and give you nothing for something.

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