Tweet it off

Chart courtesy marketwatch.com/investing

For all those social media fanatics who use $TWTR to air their opinions, follow others, or promote their content, it might be a matter of interest that this stock was at its peak (since inception) on January 3rd 2014 at $69.00 while today, though it has increased by 2.08%, stands at $17.16.

If you were of the buy-and-hold ilk, this might have hit you hard. Just as the stock bubble caused in part by the technology sector of 2008 hit many of us. We either rode the storm with hats in hand, or were bowled over, keel a-splinter. A concern about the technology sector is that many stocks do not give dividends. Therefore, if the stock falls, there is no income to shield the unwary investor. If you are covered by an income-generating options strategy, it might assist you temporarily. Otherwise, you take what is thrown your way, sudsy dishwater or not.

As a tweeter who is approaching well-nigh five thousand tweets, I wonder why $TWTR which is well-liked by media and leading political contenders, business owners and celebrities, with a market cap of $12.11 billion, needs a business strategy that could impel the stock upwards. While $FB inches upwards, while $MSFT showers dividends, while $INTC dithers with chips and computer purchasers, $TWTR may need to expand its market share by the well-tried method of mergers and acquisitions. Just a thought.

Please contact your investment adviser for investment recommendations. We are available to do extensive investment analysis and provide a second opinion. We prepare extensive Capital Gain schedules (Schedule 3, T5018) for Canadian personal taxes. #TrushaDesai.com

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Freefall

Chart courtesy ca.finance.yahoo.com

On a day when $TRP has fallen by 4.13% and trade was halted for sixty minutes, we might do a reality check and see how the stock has performed over the past year vis-à-vis the S & P TSX. Transcanada Corporation’s stock price increased by 22.85% while the $TSX fell by 6.54%. We must remember that the $TSX is a basket of 239 stocks, weighted in financials (37%), energy (18%) and materials (11%). As the constituent stocks perform, so does the $TSX. As the constituent stocks (only one of which is $TRP) express their volatility and emotional hysterical responses of shareholders, so does it.

Why was trade halted? In the good old golden days of stock trading when the bourse had stockbrokers getting apoplectic fits when stocks became volatile, trade was not halted. This permitted a freefall at the whim of an investor’s chilblains. Not anymore. As we have more sophisticated(?) tools that permit us to place trailing stop orders, at the discretion of the stockholder, trade is certain to be halted when there is investor emotion involved or global economic doom predicted.

Perhaps I am of the ilk where I place more stress on investor psychology. Perhaps that is because whether we deny it or not, our inherent fight-and-flight response sets in. Despite eons of being agriculturalists, our hunting instinct strikes and we go in for the kill or flee.

We may only anticipate that trade will not be halted without a moment’s notice when investors depend not only on sophisticated tools but focus on their long-term investment goals which would include dividend growth.

Please contact your investment adviser for recommendations. We are available to provide a second opinion and do investment analysis. We prepare extensive Capital Gain schedules (Schedule 3, T5018) for Canadian personal taxes. #TrushaDesai.com

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Dividend Growth Works

While the $DOW and $TSX are closed for a long weekend, this is an opportune moment for us to evaluate our long-term and short-term financial priorities. TFSA or RRSP is the question in some minds as RRSP season is at its peak. If we have not enrolled in monthly RRSP investment that would enable us to obtain the benefit of dollar-cost averaging, now is the time to get in by a hoof.

With the volatility of the stock market pre-eminent in our radar, we should think of various hedging opportunities like commodities and precious metals, bonds and GIC’s. When you have age on your side, there is the ability to stomach a certain degree of risk. However, the older one gets, the higher should be risk aversion.

As always, to learn from the best: as Warren Buffett would do, always keep some cash on the sidelines for an investment opportunity, or as a hedge. For we cannot all invest in Berkshire Hathaway ($BRK.A or $BRK.B). In the meanwhile, a dividend growth investment in a registered portfolio works.

Please contact us for innovation consult, budget preparation, cash flow projection and management, preparation and discussion of customized financial statements. Please contact your investment adviser for recommendations. We are available to provide a second opinion and do investment analysis. We prepare extensive Capital Gain schedules (Schedule 3, T5018) for Canadian personal taxes. #TrushaDesai.com #TrushaDesai.com

#financialplanning #investments #options #creditrating