Canadian Personal Finance Blog

Just goes to show that you learn a new thing every day, especially if you have to write about it.

Initially I was going to post:

Why would I want to do that? Well if you have a lot of money hanging around and have been watching a stock and want to catch it “on the way up”. Putting a Stop Buy allows you to buy once the stock you are watching crosses the price threshold and the brokerage house will buy you shares at the price closest to that price that they can.

However after looking it up on Wikipedia , I found the following definition:

A buy stop order is typically used to limit a loss (or to protect an existing profit) on a short sale. A buy stop price is always above the current market price. For example, if an investor sells a stock short hoping the stock price goes down in order to give the borrowed shares back at a lower price (Covering), the investor may use a buy stop order to protect himself against losses if the price goes too high.

This is the REAL reason you’d use this tactic (you can also use it for the lame reason I thought it was there for, but this is the real usage).

This is available on my TD Waterhouse account and I have not tried it yet, however I did use the Stop Sell today selling off a “dog” in my portfolio. It’s always important to understand all of the tools available to you in your investment tactics.

What is a Short Sale, check on Wikipedia, but it is a way to make money if a stock goes down. I have never done that, although, I have wanted to do it a bunch of times, but didn’t have the nerve.

I guess I could talk about Margin accounts, but I don’t think I will since I think it is a dangerous way to get yourself in trouble quickly (but I am a very conservative investor at times as well).

Canadians spent almost $13.2B in April investing in foreign securities and the bulk of that was in Foreign Stocks and Bonds. Canadian investors dumped money market devices (specifically US Government Treasury Bills was a big seller by Canadians).

This is the highest investment in foreign securities since 2001, which reflects the strength of the Canadian Loonie (for now).

What could this mean? Means, the Canadian economy continues to plow along nicely (for now). Foreign investment in Canada continues to be in Stocks with Foreign Investors dumping Canadian Bonds and Money Market facilities as well. Things might change if lending rates go up, so let’s all hold our breath on that one!

There is a great deal more foreign investment coming into Canada, thanks to the Canadian dollar being a little weaker against the Euro, however, thanks to the strength of the Canadian economy, there is more Canadian investment abroad as well!

Foreign investment in Canada is up 10% from 2005-06, but Canadian investment abroad in the same time period is up 13.8% as well! Signs of a vibrant investment community is a good thing. Will Canada be an up and coming economic power with the “decline” of the American Economic Empire? Interesting question.

As for this mornings commentary on Cisco, I should offer the company a deal NOT to talk about there stock on my blog, since I seem to have an ability to “jinx” any stock even those with relatively good numbers. If you haven’t seen Cisco is down $1.68 today, but they also did announce that they didn’t think sales were going to be that good this year either. Just goes to show, you should never base an investment on the statement of one expert dolt like me!