Building Wealth All-in-One For Canadians For Dummies E-Book

Bryan Borzykowski

• Herausgeber: John Wiley & Sons
• Kategorie: Fachliteratur
• Sprache: Englisch

Seitenzahl: 1221

Veröffentlichungsjahr: 2015

Beschreibung

The comprehensive, six-books-in-one package Canadian investors can trust with their money Designed for those investors who are already familiar with the fundamentals of the investment process and are looking to take their finances to the next level, Building Wealth All-in-One For Canadians For Dummies, is a higher-end title that will make diversifying your portfolio--the key to successful investing--a cinch. Offering readers a wealth of information on investment techniques, along with options ranging from stocks and mutual funds to trading on the Foreign Exchange and buying investment properties, the book is: * Fully up-to-date and packed with current content * Written by Canadian authors who understand Canadian finances * Filled with everything you need to know about investing The ultimate resource for Canadian investors looking to make more profitable investment decisions, Building Wealth For Canadians For Dummies All-in-One is the book you need to take the next step towards increasing your wealth.

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Building Wealth For Canadians All-in-One For Dummies®

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Table of Contents

Introduction

About This Book

Conventions Used in This Book

Foolish Assumptions

How This Book Is Organized

Book I: The Basics of Building Wealth

Book II: Making Money with Mutual Funds

Book III: The Skinny on Stocks

Book IV: Trials and Tribulations of Trading

Book V: Delving into Day Trading

Book VI: Reviewing Real Estate Investing

Icons Used in This Book

Where to Go from Here

Book I: The Basics of Building Wealth

Book I: Chapter 1: The Basics of Building Wealth

The Road to Building Wealth Starts Here. . .

The Net Worth Statement

Use the Net Worth Statement to Reach Your Goals

Avoid Bad Debt

Dump Debt Sooner

Pay more than the minimum

Reduce your rates

Accelerate your payments

Start Saving

Understanding Risk and Reward

What’s the worst-case scenario?

What’s the best I can hope for?

What’s a realistic course?

Realizing Gains through Compounding

Focusing on a Goal

Starting Your Savings Now

Starting and Staying with a Diversified Investment Approach

Developing a Dollar Cost Averaging Plan

Book I: Chapter 2: Playing It Safe

Starting with Savings Accounts

Tiered Accounts

Diving in to Savings Accounts

Considering Guaranteed Investment Certificates

Comparing GICs

Checking up on savings accounts and GICs

Learning about Bond Basics

Understanding how bonds work

Recognizing different types of bonds

Identifying potential bond investments

Purchasing Bonds

Looking at Bond Performance: The Indices

Checking out the DEX

Coping with poor performance

Book I: Chapter 3: Mind your Rs and Ts: RRSPs and TFSAs

Investing in RRSPs

The key benefits of RRSPs

How much you can contribute

Deciding where to put your RRSP money

Self-directed RRSPs

Income splitting and spousal RRSPs

Foreign content inside RRSPs

Borrowing from your RRSPs for a home or education

Cashing in your RRSPs — and the benefits of RRIFs

What Is a Tax-Free Savings Account?

The TFSA rules

The TFSA vs. the RRSP

Mother’s (and Father’s) Little Helper: The RESP

Comparing pooled and open RESPs

Considering the disadvantage of RESPs

Transferring RESP funds into an RRSP

Investing with Your Eye on Taxes

Savings accounts

GICs

Mutual funds

Bonds

Stocks

Tax-deferred investing with RRSPs

The (tax) price you pay for tapping your retirement accounts early

Book II: Making Money with Mutual Funds

Book II: Chapter 1: Understanding Mutual Funds

Mutual Fund Basics

The Nitty Gritty: How a Fund Makes You Money

Returns — What’s in it for you?

Returns as a percentage

How funds can make you rich

What mutual funds buy

Types of Funds

Reasons to Buy Funds

Offering safety in numbers: Public scrutiny and accountability

Putting your eggs in many baskets

Getting good returns from professional management

Investing without breaking the bank

Watching over your investment

Cashing out — Getting your money if you need it

Perils and Pitfalls of Funds

Excessive costs

When bad managers attack

Can’t see the forest for the funds

Vague explanations of poor performance

Prospectuses that don’t say enough

Too many funds and too few long-term results

Load versus No-Load — The Great Divide

Load funds — The comfort zone

No-load funds — The direct approach

Book II: Chapter 2: Figuring Out Fees — Discount or Full-Service Brokers?

What Are Discount Brokers?

Considering the savings

Getting set up with a discounter

Weighing the Advantages of a Discount Broker

Your one-stop shop — Convenience

Access to a broad selection of options

A wealth of investing information

A break on costs

Investigating the Disadvantages of Discounters

Picking a Discounter

Getting a feel for the service

Finding the right discounter for you

Considering a mutual fund discount broker

Buying Where You Bank

Providing one-stop shopping

Keeping it together

Offering appealing options

Fighting for the right to serve you

Buyer Beware: Shortfalls in Bank Offerings

Few options

Overworked and underpaid: Not just you, some bankers too

Lack of pressure to perform

Alphabet Soup: Figuring Out All Those Titles

Commissioned advisers

Fee-only financial planners

Fee-based investment advisers

Salaried advisers

Deciding Whether to Pay a Fee or a Commission

Paying fees

Going with a commission-paid adviser

Considering and Finding the Right Adviser or Planner

The right way to pick an adviser

The wrong way to pick an adviser

Getting Started with Direct Sellers

Paying to play

Considering whether a direct seller is right for you

The Advantages of Dealing with an Independent No-Load Company

Putting more money in your pocket

Offering advice for adults

Keeping things simple

Allowing frequent trades

Weighing the Drawbacks of Going Direct

Significant levels of cash required

Lack of choice

Book II: Chapter 3: Surveying Your Fund Options

Why Investing in Stocks Is Simple

The ABCs of Picking a Fund

Select from all industries

Hold blue-chip winners

Check out past performance, with caution

How Many Equity Funds Do You Need?

Deciding how much to put into equity funds

Dividing your money between Canadian and foreign equity funds

How do you split your money among equity funds?

Global Equity Funds: Meet Faraway People and Exploit Them

Canadian Equity Funds: Making Maple-Syrup-Flavoured Money

Small and Mid-Sized Company Funds: Spotty Little Fellows

Hitting highs and lows

Picking a winning fund

Understanding the disadvantages

Regional Equity Funds: Welcome to Bangkok — Or Hong Kong?

Sector Funds: Limitations Galore

Resource funds: Pouring money down a hole

Financial services funds: Buying the banks doesn’t always pay

Understanding Balanced Funds

Reviewing the asset mix of balanced funds

Plodding along profitably

Retiring with balanced funds

Steering clear of potholes: Consistently strong returns

Reviewing the Problems with Balanced Funds

High fees and expenses

Bewildering brews of assets

Difficulty judging fund manager performance

A Simple Plan for Picking the Right Canadian Balanced Fund

Knowing what to avoid

Identifying the best funds

Global Balanced Funds — As Good as It Gets?

The cost of going global

Global funds: A near-perfect investment?

Some Great Reasons to Choose Bonds

Offering greater security than equities

Increasing their value against deflation

How Much Do I Need in Bonds?

Picking a Good Bond Fund in 30 Seconds

Insisting on affordability

Looking for quality in provincial and federal bonds

Understanding How Inflation Affects Bonds

Rising interest rates, falling bond prices

Falling interest rates, rising bond prices

Buying the Whole Enchilada: The Ups and Downs of Index Funds

Exploring why index funds and ETFs are great for you

Delving into the dark side of index funds and ETFs

Buying Index Funds and ETFs

Selecting the right index

Choosing between index funds and ETFs

Knowing where to buy

What Are Dividend and Income Funds?

Looking at the upside of dividend funds

Considering the downside

Figuring out why companies pay, or don’t pay, dividends

Determining Whether Dividend and Income Funds Are Right for You

The Appealing Tax Implications of Dividends

Crunching the numbers

Understanding why dividend funds may or may not be good for your RRSP

Selecting a Winning Dividend Fund

Book III: The Skinny on Stocks

Book III: Chapter 1: Building Wealth through Investing in Stocks

Understanding the Basics of Stocks

Knowing How to Pick Winners

Recognizing stock value

Understanding how market capitalization affects stock value

Matching Stocks and Strategies with Your Goals

Investing by Time Frame

Focusing on the short term

Considering intermediate-term goals

Preparing for the long term

Investing for a Purpose

Making loads of money quickly: Growth investing

Making money steadily: Income investing

Investing for Your Personal Style

Conservative investing

Aggressive investing

Exploring Different Kinds of Risk

Financial risk

Interest-rate risk

Market risk

Inflation risk

Tax risk

Political and governmental risks

Personal risks

Emotional risk

Minimizing Your Risk

Gaining knowledge

Staying out until you get a little practice

Putting your financial house in order

Diversifying your investments

Weighing Risk against Return

Book III: Chapter 2: Gathering and Deciphering Stock Information

Looking to Stock Exchanges for Answers

Understanding Stocks and the Companies They Represent

Accounting for taste and a whole lot more

Understanding how economics affects stocks

Reading (and Understanding) Stock Tables

52-week high

52-week low

Name and symbol

Dividend

Volume

Yield

P/E

Close

Net change

Using News about Dividends

Looking at important dates

Understanding why these dates matter

Gathering Data from SEDAR and EDGAROnline

Reading the Income Statement

Revenues

Cost of sales

Gross margin

Selling, general, and administrative (SG and A)

Research and development (R and D)

Depreciation and amortization

Reserves

Interest and taxes

Income from continuing operations

Extraordinary items

Impairments, investments, and other write-downs

Net income

The Balance Sheet

Cash and cash equivalents

Accounts receivable

Inventory

Fixed assets

Investments

Intangible assets

Payables

Long-term liabilities

Owner’s equity

The Statement of Cash Flows

Cash flow from operations

Cash flow from investing activities

“Free” cash flow

Cash flow from financing activities

Book III: Chapter 3: Going for Brokers

Defining the Broker’s Role

Distinguishing between Investment Advisers and Discount Brokers

Investment advisers

Discount brokers

Choosing a Broker

Online Investing Services

Getting online trading services for less

Trading online at a discount

Checking out special features

Opening your online brokerage account

Types of Brokerage Accounts

Cash accounts

Margin accounts

Option accounts

Checking Out Brokerage Orders

On the clock: Time-related orders

At your command: Condition-related orders

The joys of technology: Advanced orders

Pass the Margin, Please

Examining marginal outcomes

Maintaining your balance

Book IV: Trials and Tribulations of Trading

Book IV: Chapter 1: Trying Out Trading: The Basics

Introducing the Broad Markets

Stock markets

Futures markets

Bond markets

Options markets

Reviewing Stock Exchanges

Toronto Stock Exchange (TSX) and other Canadian exchanges

New York Stock Exchange (NYSE)

NASDAQ

Over-the-counter bulletin board stocks

NYSE Amex

Electronic communications networks (ECNs)

Choosing the Right Broker/Adviser for You

Considering more than price

Doing a little research

Understanding how you’ll be paying

Getting to Know the Rules

Margin requirements

Settling trades

Free riding

Book IV: Chapter 2: The Fundamentals: Economics and Stock Market Metrics

The Basics of the Business Cycle

Identifying periods of economic growth and recession

Relating bull markets and bear markets to the economy

Sector Rotation

Early recovery

Full recovery

Early recession

Full recession

Understanding Economic Indicators

BoC and Fed watch: Understanding how interest rates affect markets

Money supply

Inflation rate

Deflation

Jobless claims

Consumer confidence

Business activity

Using the Data

Understanding Stock Market Fundamentals

The income statement

Revenues

Cost of goods sold

Gross margins

Expenses

Interest payments

Tax payments

Dividend payments

Testing profitability

Looking at Cash Flow

Operating activities

Depreciation

Financing activities

Investment activity

Scouring the Balance Sheet

Analyzing assets

Looking at debt

Reviewing goodwill

Determining Stock Valuations

Earnings

Projected earnings growth rate

Figuring Your Ratios: Comparing One Company’s Stock to Another

Price/earnings ratio

Price/book ratio

Return on assets

Return on equity

Book IV: Chapter 3: Nearly Everything You Wanted to Know about Technical Analysis

Why Technical Analysis?

Creating a Price Chart

Creating a single price bar

Measuring volume

Identifying Trends

Supporting and Resisting Trends

Drawing trend lines to show support

Surfing channels

Trending and channelling strategies

Seeing Gaps

Common gap

Breakout or breakaway gap

Continuation gap

Exhaustion gap

Island gap

Waving Flags and Pennants

Withstanding Retracements

Three-step and five-step retracements

Dealing with subsequent trading ranges

Dealing with Failed Signals

Trapping bulls and bears

Filling the gaps

Deciding whether to reverse directions

The Ins and Outs of Moving Averages

Simple moving average

Exponential moving average

Comparing SMA and EMA

Interpreting and using moving averages

Support and resistance factors

Deciding the moving average time frame

Understanding Stochastic Oscillators

Calculating stochastic oscillators

Interpreting stochastic oscillators

Discovering MACD

Calculating MACD

Using MACD

Revealing Relative Strength

Calculating relative strength

Book IV: Chapter 4: Money Management Techniques and Trading System Tips

Identifying Important Characteristics of a Successful Trader

Opening the Door to Successful Trading

Managing Your Inventory

Thinking of trading as a business

Finding a better plan

Protecting Your Principal

Recovering from a large loss: It ain’t easy

Setting a target price for handling losses

Understanding Your Risks

Market risks

Investment risks

Trading risks

Entering and Exiting Your Trade

Understanding bid and ask

Understanding the spread

Devising an effective order-entry strategy

Entering orders after the market closes: Be careful

Selling Stocks Short

Understanding Trading Systems

Discretionary systems

Mechanical systems

Trend-following systems

Countertrend systems

Selecting System-Development Tools

Choosing system-development hardware

Selecting system-development software

Developing and Testing Trading Systems

Working with trend-following systems

Working with breakout trading systems

Accounting for slippage

Book IV: Chapter 5: The Skinny on Swing Trading and Derivatives

Stock Selection Is Key

Swing-Trading Strategies

Trading trending stocks

Trading range-bound stocks

Trading volatility

Money management issues

Using Options for Swing Trading

Getting a Grip on Swing-Trading Risks

More Than Stocks: Trading Derivatives

Futures

Options

Buying Options and Futures Contracts

Opening an account

Calculating the price and making a buy

Options for Getting Out of Options

Offsetting the option

Holding the option

Exercising the option

The Risks of Trading Options and Futures

Minimizing Risks

Exploring the World of Foreign Currency Exchange

Types of currency traders

Why currency changes in value

What traders do

Understanding Money Jargon

Spot transactions

Forward transactions

Options

How Money Markets Work

Different countries, different rules

The almighty (U.S.) dollar

Organized exchanges

The Risks of the World Money Market

Types of risk

Seeking risk protection

Book V: Delving into Day Trading

Book V: Chapter 1: Making a Day Trade of It

What Is Day Trading?

Day Trading Is Work. . .A Lot of Work

Planning Your Trading Business

Setting your goals

Picking the markets

Fixing hours, vacation, and sick leave

Getting yourself set up

Investing in your business

Evaluating and revising your plan

Planning Your Trades

What do you want to trade?

How do you want to trade it?

Figuring out when to buy and when to sell

Setting profit goals

Setting limits on your trades

What if the trade goes wrong?

Closing Out Your Position

Swing trading: Holding for days

Position trading: Holding for weeks

Maxims and Clichés That Guide and Mislead Traders

Pigs get fat, hogs get slaughtered

In a bear market, the money returns to its rightful owners

The trend is your friend

Buy the rumour, sell the news

Cut your losses and ride your winners

You’re only as good as your last trade

What Makes a Good Day Trading Asset?

Liquidity

Volatility, standard deviation, and variance

Capital requirements

Marginability

Securities and How They Trade

Stocks

Bonds

Exchange-traded funds (ETFs)

Cash and currency

Commodities and How They Trade

Derivatives and How They Trade

Types of derivatives

Investing vs. Trading vs. Gambling

Investing

Trading

Gambling

Book V: Chapter 2: Regulations and Taxes

Who Regulates What?

Brokerage Basics for Firm and Customer

Are you suitable for day trading?

Staying out of the money Laundromat

Rules for day traders

Tax reporting

Hot Tips and Insider Trading

Tax Issues for Traders and Investors

Are You a Trader or an Investor?

Hiring a Tax Adviser

Questions to ask a prospective adviser

You still want to do it yourself?

What Is Income, Anyway?

Earned income

Capital gains and losses

Tracking Your Investment Expenses

Deductible investment-related expenses

Other qualified expenses

Paying Taxes All Year

Using Your RRSP, RRIF, and RESP

Trading within a Tax-Free Savings Account

Book V: Chapter 3: Managing Stress and Your Positions

First, the Cautionary Tales

Jesse Livermore

Mark Barton

Anecdotal suicides, divorces, alcoholism

Controlling Your Emotions

The big five emotions

Having an outlet

Support systems

Your walk-away money

Importance of a Trading Plan

Problems following direction

Revising and troubleshooting your trading plan

Managing Your Money and Positions

What’s Your Expected Return?

The Probability of Ruin

Why Size Matters

Valuing volatility

Staying in the market

Considering opportunity costs

Money Management Styles

Fixed fractional

Fixed ratio

Kelly criterion

Martingale

How Money Management Affects Your Return

Planning for Your Profits

Compounding interest

Pyramiding power

Regular withdrawals

Book V: Chapter 4: Using Fundamental and Technical Analysis

Research Techniques Used in Day Trading

What direction is your research?

Fundamental research

Technical analysis

How to Use Technical Analysis

Finding trends

Those ever-changing trends

Reading the Charts

Waving your pennants and flags

Not just for the shower: Head and shoulders

Drinking from a cup and handle

Mind the gap

Grab your pitchforks!

Pitfalls of Technical Analysis

If it’s obvious, no opportunity exists

Reverse-reverse psychology

The random walk with an upward bias

Understanding How the Markets Work

The Psychology of the Markets

Betting on the buy side

The projection trap

Measuring the Mood of the Market

Pinpointing with price indicators

Volume

Volatility

Measuring Money Flows

Accumulation/distribution index

Money flow ratio and money flow index

Short interest ratios

Information Cropping Up During the Trading Day

Price, time, and sales

Order book

News flows

Book V: Chapter 5: Leverage and Arbitrage

Taking Other People’s Money to Make Money

Why leverage is important in short-term trading

The fine print on margin agreements

Managing margin calls

Margin bargains for day traders only

Lots to Discover about Leverage

In stock and bond markets

In options markets

In futures trading

In foreign exchange

Borrowing in Your Trading Business

Margin loans for cash flow

Borrowing for trading capital

Assessing Risks and Returns from Leverage

Losing your money

Losing your nerve

The World of Arbitrage

Obeying the Law of One Price

Punishing violators of the law

Understanding arbitrage and market efficiency

Scalping for Profits

Those Pesky Transaction Costs

Risk Arbitrage and Its Tools

Derivatives

Levering with leverage

Short selling

Synthetic securities

An Array of Arbitrages

Capital structure arbitrage

Convertible arbitrage

Fixed income and interest rate arbitrage

Index arbitrage

Merger arbitrage

Option arbitrage

Pairs trading

Book VI: Reviewing Real Estate Investing

Book VI: Chapter 1: Introducing Real Estate Investing

Investigating Real Estate Investing

Discovering the opportunities

Homing In on Residential

Investing begins at home

Rent out a suite, pay down a mortgage

Securing Commercial and Industrial Properties

Assessing classes

Assessing liquidity

Laying Into Condos

Investing in residential condos

Investing in commercial condos

Dreaming of Recreational Properties

Cottages and cabins

Fractional ownership

Resorts by the suite

Developing a Taste for Raw Land

Staking your claim

Goin’ country or swingin’ in the city?

Banking on land

Deciding to build

Howdy, Partners: Buying into Syndicates

Gaining strength in numbers

Knowing the risks

Researching Real Estate Investment Trusts

What’s the excitement about?

Choosing an asset type

Reading financial statements

Book VI: Chapter 2: Figuring Out Financing

Identifying Resources

Liquid: Savings

Illiquid: Long-term investments

Vaporous: Friends and family

Working with Professional Financial Partners

Squaring accounts

Recognizing danger

Understanding How Mortgages Work

Interest

Amortization

Exploring the Types of Mortgages

Conventional mortgage

High-ratio mortgage

Condominium mortgage

Leasehold mortgage

Blanket mortgage

Collateral mortgage

Builder’s promotional mortgage

Construction mortgage

Vendor mortgage

Assumed mortgage

Second and subsequent mortgages

Choosing between Fixed or Variable Mortgages

Fixed-rate mortgages

Variable-rate mortgages

Determining Your Mortgage Limit

Calculating your limits

Stretching your limits

Securing a Mortgage

Banks, credit unions, and brokers

What lenders require

Selecting a mortgage broker

Checking Out Insurance

Insuring your mortgage

Insuring the property

Scheduling Payments

Make a date: Payment schedules

As often as possible: Payment frequency

Opening doors: Prepayment privileges

Default: Don’t go there

Renegotiating and Refinancing

When to renegotiate

Why refinancing can make sense

Book VI: Chapter 3: Scouting Properties: Where to Look and What to Look For

Assessing Current Market Cycles

Research: Doing your homework

Analyzing thoroughly: Tallying the variables

The decision: Trust your gut

X Marks the Spot: Identifying a Target Market

Separating the fads from the fundamentals

Getting to know markets and neighbourhoods

Honing your vision

Consulting the locals

Selecting a Property

Home sweet home

Location, location, location

Amenities and services

Looking to the future

Appraising Properties

Understanding appraisals

Seeking professional advice

Assessing Potential

Operating expenses

Cap rates

Good neighbourhoods, bad buildings

Renovations versus redevelopment

Understanding Due Diligence

Sizing up the property

Sizing up the vendor

Sizing up the deal

Inspecting a Property

What to watch for

Inspection reports

Book VI: Chapter 4: Closing the Deal

Getting the Deal You Want

Making an offer

Evaluating the bid

Finding acceptance

Trying again

Dotting i’s, Crossing t’s: Financial and Legal Paperwork

Wading through the legalese

Tallying the costs

Paying the piper (and everyone else)

Building Property Value

Ongoing maintenance

Renovating for fun and profit

Managing Expenses

Distributing costs

Recouping expenses

Knowing When to Sell

Gauging your needs

Gauging the market

Managing the Sale

Becoming a vendor

Preparing the property

Working with buyers

Closing the deal

Cheat Sheet

Building Wealth For Canadians All-in-One For Dummies®

by

by Bryan Borzykowski, Andrew Bell, Christopher Cottier, BSc, MBA, Andrew Dagys, CMA, Matthew Elder, Lita Epstein, Douglas Gray, LLB, Michael Griffis, Ann C. Logue, MBA, Peter Mitham & Paul Mladjenovic, CFP

Building Wealth For Canadians All-in-One For Dummies®

Published by John Wiley & Sons Canada,Ltd. 6045 Freemont Boulevard Mississauga, Ontario, L5R 4J3www.wiley.com

Copyright © 2012 by John Wiley & Sons Canada, Ltd.

Published by John Wiley & Sons Canada. Ltd.

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