Looking back to day 1

In the beginning....

Well, while rather pretentious it sounded good....I think someone has already used this one though.

I'll summarize what has led me to trading stocks

I started out last year, sometime around September, looking into Dividend Reinvestment Plans (DRIPS) to start up a retirement plan. These amount to buying shares of a company through the company's transfer agent which cuts out the broker and therefore is commission free. The good part is you can register to have the dividends re-invested into more shares automatically and buy more shares directly, in some cases at a discount, which increases the size of the dividend payment which increases the number of shares purchased, etc.. Ultimately you have an investment that grows through compounding the rate of return. It is a very good long term plan.

The biggest upside was that you could start an investment plan with very little money, $50 -$100 would do it, and add to it monthly. The hardest part of any plan is getting started anyway. The downsides I found were that a lot of investigation into the companies to choose is needed, if you do it right, and there are a limited selection of Canadian companies. This list continues to dwindle through acquisitions and plan closures.

Somewhere along the line in my research I stumbled upon some stock trading sites. I found these interesting and read some of what was posted. I didn't really think that was for me so I didn't pursue trading...but I kept reading.

I was investigating companies for DRIPping and had a number selected, started four DRIPs, and kept researching others so I could add to my portfolio as I could. In looking for good companies I found a number that had DRIPs but you couldn't buy additional shares without going through a broker...they were good looking companies too. Keeping that in the back of my mind I continued my researches.

I started to keep track of my DRIP holdings and potential DRIP holdings on the Toronto Stock Exchange (TSX) website where they have a virtual account setup. I could watch as the price changed...I was curious so I started adding other companies, non-DRIPping companies, and watched how the prices behaved. This really attracted my attention as some of the stocks that I picked were doing very well over the short term. I decided that I should look at this further.

Over the Christmas holidays I started looking for better ways of tracking stocks and investigating companies from list rankings I gleaned from the TSX site. I found a charting service that let me create charts for free and print them off to make notes on. I saw opportunities to make some decent money but lacked the knowledge of how to do it.

Mid January I decided to start buying through a broker and only buy for long term investing to take advantage of dividend payments from non-DRIPping companies and to harness some of the growth as well. I figured I could put the investigations that I had already done to good work this way. I started the new account process with a discount broker.

Then January 21st came. I was watching my companies (possible companies) and saw the rather large drop in prices across the exchange...what an opportunity...I could probably buy anything and expect it to bounce...but my account process was dragging, I funded the account, I willed it to speed up but by the time it was ready to trade I figured I had missed the opportunity of a quick gain.

...I was hooked and I knew there was no turning back.

JD