Let’s Talk Stocks
Investing in stocks and being invested in the stock market is a big part of making your money work for you and building wealth. So let’s talk stocks! In this episode, I answer just what exactly a stock is? And break down some of the most common industry jargon used when talking about stocks. Also covered are the criteria used to differentiate between stocks and some of the key metrics cited when looking at a stock quote. When it comes to investing a basic level of understanding is vital to feeling empowered and staying engaged because remember it is YOUR money and your money matters!
About the Host:
I am a financial professional, who specializes in helping people to achieve their financial goals. My absolute passion is creating new possibilities in people’s lives by showing them the ropes when it comes to money. I’m here to spark healthy and positive conversations around wealth and investment and create a world where nobody is limited by their financial situation. I believe this begins with education and shifting our relationships with money. I love getting to witness people achieving their most ambitious goals and creating new possibilities for themselves and their families!
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Transcript
Welcome to the wealth and wellness podcast with
Kalee Boisvert:me Kaylie Bob air, I specialize in helping people to achieve
Kalee Boisvert:their financial goals. I have a love for all things numbers, and
Kalee Boisvert:I'm passionate about financial literacy. My goal is to spark
Kalee Boisvert:healthy and positive conversations around wealth and
Kalee Boisvert:investment, and create a world where nobody is limited by their
Kalee Boisvert:financial situation. But wealth is just one piece of the
Kalee Boisvert:equation of living our best lives. So join me as we explore
Kalee Boisvert:both wealth and wellness topics. From your net worth to your self
Kalee Boisvert:worth, get ready to take confident action.
Kalee Boisvert:Hello, this is Kaylee. And thank you for listening in to this
Kalee Boisvert:episode of the wealth and wellness podcast. On today's
Kalee Boisvert:episode, I wanted to take the opportunity to talk stocks, I
Kalee Boisvert:think there can be a lot of intimidation when it comes to
Kalee Boisvert:investing and investing specifically in stocks and
Kalee Boisvert:talking about the stock markets. And that is completely okay. I
Kalee Boisvert:would say and I've said this before on this podcast, that
Kalee Boisvert:it's not something that a lot of us are exposed to during our
Kalee Boisvert:school years. And then even you know, after we graduate high
Kalee Boisvert:school, even when we're talking about post secondary education,
Kalee Boisvert:there might not be a lot of that. Specifically, unless
Kalee Boisvert:you're taking like business courses or finance courses, you
Kalee Boisvert:might not have been exposed to stocks and investing at all, if
Kalee Boisvert:you hadn't really done anything to specialize in those kind of
Kalee Boisvert:specific focuses. So as a result, you know, there's no
Kalee Boisvert:doubt that this could be intimidating, because you might
Kalee Boisvert:be learning this by yourself for the first time. And there's so
Kalee Boisvert:many information sources. So even the information coming at
Kalee Boisvert:you can be somewhat mixed, because it really would depend
Kalee Boisvert:on the source and where you're getting your information from.
Kalee Boisvert:So to start, it's important to have grace with yourself. And
Kalee Boisvert:really also remember that you do not have to be a stock market
Kalee Boisvert:wizard or expert to invest your money or to succeed in the
Kalee Boisvert:market. So I really want to stress that that it's not about
Kalee Boisvert:you becoming this expert on all things stocks before you're able
Kalee Boisvert:to start investing, start where you are, you can learn more as
Kalee Boisvert:you go. But don't let the idea that you have to be an expert
Kalee Boisvert:stop you from taking any action because as I like to stress on
Kalee Boisvert:this podcast is all about taking action when it comes to your
Kalee Boisvert:money. Compounding growth is vital for building wealth. And
Kalee Boisvert:one of the most important factors to compound growth is
Kalee Boisvert:going to be time. So pushing it off, procrastinating is not
Kalee Boisvert:going to serve you when it comes to investing. It's all about
Kalee Boisvert:taking action and starting now. So let's talk stocks to get you
Kalee Boisvert:a bit more comfortable with the topic of investing and growing
Kalee Boisvert:your wealth through investing through stocks. As for
Kalee Boisvert:investment, tools, or products, stocks represent a very
Kalee Boisvert:important part of making your money work for you based on the
Kalee Boisvert:historical return numbers that they have offered. So keep in
Kalee Boisvert:mind that in this episode, I'm talking about stocks on an
Kalee Boisvert:individual basis. But this information is still relevant
Kalee Boisvert:when it comes to investment funds and products such as
Kalee Boisvert:mutual funds, and ETFs exchange traded funds. Because an equity
Kalee Boisvert:fund like so a mutual fund, that's an equity based fund or
Kalee Boisvert:an ETF, something like the s&p 500. Those are simply made up of
Kalee Boisvert:a variety of stocks. So the your s&p 500 is going to be made up
Kalee Boisvert:of your 500 largest stocks in the US market, for instance. So
Kalee Boisvert:those are just, you know, products or funds that are kind
Kalee Boisvert:of a combination of individual stocks. So this conversation
Kalee Boisvert:about individual stocks is still relevant to those types of
Kalee Boisvert:investments. So to start, let's get some industry jargon out of
Kalee Boisvert:the way because there's lots of that, of course when we're
Kalee Boisvert:talking about stocks, so when we say the word stock or when I say
Kalee Boisvert:the word stock, other words that can be used by the industry,
Kalee Boisvert:that interchangeably would also be equities, shares, some people
Kalee Boisvert:might call them common shares. So those are all sort of used
Kalee Boisvert:interchangeably to talk about stocks. When we invest in
Kalee Boisvert:stocks, we can do stuff so buy through the stock market, which
Kalee Boisvert:is an auction market where buyers and sellers are going to
Kalee Boisvert:meet to trade stocks. So generally when we're trading
Kalee Boisvert:stocks, it's done through the stock market and it is an
Kalee Boisvert:auction market. So prices really established by supply and
Kalee Boisvert:demand, you have to have buyers you have to have sellers and
Kalee Boisvert:their prices have to meet to essentially have trades take
Kalee Boisvert:place market hours, so the stock market hours locally for my
Kalee Boisvert:time, so own my timezone, because I'm in, I guess mountain
Kalee Boisvert:time, I think I shouldn't. So my timezone here in Alberta is
Kalee Boisvert:7:30am to 2pm. But it's based on eastern time hours. So New York
Kalee Boisvert:hours, Toronto hours being 9:30am, the stock markets open
Kalee Boisvert:at, and 4pm is when they close. So that's when markets are open
Kalee Boisvert:and available for you to buy and sell stocks. And that's Monday
Kalee Boisvert:to Friday, and some obviously some holidays, stat holidays
Kalee Boisvert:would it would not be open. But there's a list of any specific
Kalee Boisvert:holidays that it will not be open, that you can find online.
Kalee Boisvert:And that will probably change, you know, a little bit year by
Kalee Boisvert:year depending on what days those holidays fall on and
Kalee Boisvert:whatnot. So here in Canada, the largest stock exchange we have
Kalee Boisvert:is called the Toronto Stock Exchange. And then the largest
Kalee Boisvert:the oldest and largest stock exchange in North America would
Kalee Boisvert:be the New York Stock Exchange. Okay, a little bit more kind of
Kalee Boisvert:industry jargon or things you're going to hear thrown around when
Kalee Boisvert:it comes to stock markets and investing. You might hear things
Kalee Boisvert:like bowl or bull market. If someone's bullish, or a bowl on
Kalee Boisvert:the markets, it's someone who expects the overall markets or a
Kalee Boisvert:specific stock position that it will rise. So bullish investors
Kalee Boisvert:generally are going to be buying stocks because they see it as
Kalee Boisvert:that they're going to be continuing to go up. When we've
Kalee Boisvert:talked about a bear market. That means the expectation is that
Kalee Boisvert:the markets in general or specific holding is going to
Kalee Boisvert:decline. So it's when we think you know, markets are not doing
Kalee Boisvert:well. And then bearish investors or when you're bearish on the
Kalee Boisvert:market, you're likely in the position of selling in fear or
Kalee Boisvert:anticipation of a price decline. So thinking that the markets are
Kalee Boisvert:going to decline, it's a bearish market, you have a bearish
Kalee Boisvert:outlook. And that's why you would maybe sell or be sitting
Kalee Boisvert:on the sidelines in cash. So again, those are terminology
Kalee Boisvert:that I was talking about when we talk about investing. As well,
Kalee Boisvert:with investing, there's a variety of stock indices, which
Kalee Boisvert:we can follow our track. And what these do or represent is
Kalee Boisvert:they measure changes in an overall group of stocks. So
Kalee Boisvert:they're represented the representative of the overall
Kalee Boisvert:markets. So it helps the stock market indices are going to help
Kalee Boisvert:you gauge directional moves and overall performance of the stock
Kalee Boisvert:markets. So some examples of this, like stock market indexes
Kalee Boisvert:that you can look at. For the Canadian markets, we have one
Kalee Boisvert:such as the s&p TSX composite, which is made up of about 250 of
Kalee Boisvert:the largest Canadian companies. There's the s&p TSX 60, which is
Kalee Boisvert:going to be the largest, the 60 largest companies. There's the
Kalee Boisvert:TSX Venture, which is about I believe, 500 companies, and
Kalee Boisvert:they're ones that don't meet the criteria to be listed on the
Kalee Boisvert:stock exchange, the Toronto Stock Exchange. So the venture
Kalee Boisvert:is going to be made up of smaller type companies, for the
Kalee Boisvert:US markets, index indexes. So when you're hearing that the
Kalee Boisvert:markets are down this many points are up this many points.
Kalee Boisvert:Generally, what it's going to be based on or what you're going to
Kalee Boisvert:hear is the Dow so the Dow Jones Industrial Average, and that
Kalee Boisvert:consists of 30 companies, US companies, there's the s&p 500,
Kalee Boisvert:which is made up of the 500 US stocks by market capitalization,
Kalee Boisvert:and then there's the NASDAQ 100, as well. So there's all these
Kalee Boisvert:different indexes. And or should I be saying indices I'm probably
Kalee Boisvert:need a lesson in grammar or language for this. But okay, so
Kalee Boisvert:what I'm trying to get across is there's a lot of these, you
Kalee Boisvert:know, different indexes that we can look at, to track and again,
Kalee Boisvert:they're going to be represented representative of certain groups
Kalee Boisvert:of stocks. So obviously, the s&p 500 is going to represent the
Kalee Boisvert:largest US companies. So if your portfolio is very much targeted
Kalee Boisvert:at that type of allocation or a portion is, then that would be a
Kalee Boisvert:great comparison tool for you to see, in general, what your your
Kalee Boisvert:account should have done for the day based on the performance and
Kalee Boisvert:the directional move of the index. So again, there used to
Kalee Boisvert:help gauge overall moves, it's how we sort of have a pulse on
Kalee Boisvert:the markets as a whole. And it might not be a direct reflection
Kalee Boisvert:though, of your investment portfolio. So keep that in mind
Kalee Boisvert:because it really would really depend on your specific
Kalee Boisvert:allocation. So you can think of these as indicators of the
Kalee Boisvert:movement of the markets, and where your portfolio might have
Kalee Boisvert:gone as far as performance wise for the day. But, um, so for
Kalee Boisvert:instance, if the indices show that the markets are down for
Kalee Boisvert:the day, you know, the markets, if you hear they're down 2%, or
Kalee Boisvert:they're down 500 points, like all these different kinds of
Kalee Boisvert:things you might be hearing in the news and whatnot, then what
Kalee Boisvert:you can assume likely, if you're invested, and you have exposure
Kalee Boisvert:to the markets, will your performance or your portfolio is
Kalee Boisvert:likely down as well. So, again, it's helping you gauge overall
Kalee Boisvert:performance. So then, you know, okay, if the markets are down
Kalee Boisvert:10% year to date, I can expect that there's a good chance that
Kalee Boisvert:my portfolio is down, again, might not be that 10% reflective
Kalee Boisvert:of that specific index, but it's likely down if the markets as a
Kalee Boisvert:whole are down if I'm invested in equities in stocks. So you
Kalee Boisvert:can kind of assume that yours is going to move somewhat with
Kalee Boisvert:these indexes. And that's why they exist to help us gauge
Kalee Boisvert:movement overall. Again, though, it's going to depend on your
Kalee Boisvert:specific exposure and how your allocated so it's not a direct
Kalee Boisvert:relationship, or correlation to your investment portfolio, it is
Kalee Boisvert:very dependent on how you're allocated. If you have some bond
Kalee Boisvert:exposure, then of course, you'd want to look at, well, where
Kalee Boisvert:have the bonds markets moved? Or what does that gauge look like?
Kalee Boisvert:And you wouldn't be specifically looking at the equity indexes
Kalee Boisvert:for something like that. So also, when you're looking at the
Kalee Boisvert:movement of an index, it's better to compare the moves with
Kalee Boisvert:the percent on a percentage basis, or Yeah, and looking at
Kalee Boisvert:it as a percentage rather than the point movement. Because if
Kalee Boisvert:you're comparing something like the US markets, and you say, Oh,
Kalee Boisvert:the NASDAQ is up by 475 points, but the s&p was only up by 83
Kalee Boisvert:points. percentage wise, though, the number was a lot closer, and
Kalee Boisvert:I'm just going off of like a day that I was looking at this that
Kalee Boisvert:it has so happened to be those rates, where the NASDAQ up for
Kalee Boisvert:75 points was up just over 3%, s&p being up only 883 points was
Kalee Boisvert:up about 2%. So So percentage wise, close, but point wise,
Kalee Boisvert:quite different again, because of their their different amounts
Kalee Boisvert:and, and values. So percentage wise is going to help you at
Kalee Boisvert:least compare them a little bit better than saying, you know,
Kalee Boisvert:500 points, and this one's down 200 points. And so because
Kalee Boisvert:they're all at different levels, you're going to likely want to
Kalee Boisvert:compare them on a percentage basis. That way, you get apples
Kalee Boisvert:to apples kind of comparison. But again, they're measuring
Kalee Boisvert:sort of different targets as well, though, so keep that in
Kalee Boisvert:mind. So then let's just talk about we're talking stocks, what
Kalee Boisvert:is a stock, let's talk about a stock in its most, I guess,
Kalee Boisvert:simplest terms, kind of breaking it down to how it exists or how
Kalee Boisvert:it comes to be. So if a company needs capital, the company can
Kalee Boisvert:raise capital by issuing stock. So let's say a company's looking
Kalee Boisvert:to grow their business or expand or, you know, expand
Kalee Boisvert:internationally or whatnot. So they're looking to raise some
Kalee Boisvert:money to do so they can raise capital by issuing stocks into
Kalee Boisvert:the market through an investment dealer, and then investors can
Kalee Boisvert:then buy the securities, thereby transferring their money to the
Kalee Boisvert:company, and in return getting a piece of ownership of the
Kalee Boisvert:company a share in the company. And that represents a claim on
Kalee Boisvert:the company's real assets. So when you buy securities that are
Kalee Boisvert:equities, you become a part owner in the business, it's why
Kalee Boisvert:you're called a shareholder. If the business does well and earns
Kalee Boisvert:a profit, the company may distribute money back to the
Kalee Boisvert:holders of the stocks, through dividends, or they might choose
Kalee Boisvert:to reinvest in the business or do a combination of both
Kalee Boisvert:positive results for the company may translate into the stock
Kalee Boisvert:price rising, which is the ideal scenario, when you buy a stock,
Kalee Boisvert:you want it to go up in value, because you're an owner of it,
Kalee Boisvert:you want to see it appreciate in value. And again, that could
Kalee Boisvert:create an increase in value if the company does well. And that
Kalee Boisvert:could lead to capital gains for you if you then sell the stock
Kalee Boisvert:at a higher price. So again, in its ideal scenario, that's what
Kalee Boisvert:you want to happen. So when you buy a stock, the goal would be
Kalee Boisvert:for growth, or an appreciation of value. For instance, you buy
Kalee Boisvert:a stock at $20 a share and you want it to increase in value.
Kalee Boisvert:And you want that to go up so it's okay if you see it at $30 a
Kalee Boisvert:share. Yeah, I made $10 A share if you at that moment sell the
Kalee Boisvert:stock at that price. If you have not sold it obviously you've not
Kalee Boisvert:locked in any amount and your market value so The stock is
Kalee Boisvert:currently trading at is going to continue to fluctuate and
Kalee Boisvert:change. So when it comes to investing in stocks, the
Kalee Boisvert:potential for gain we say, is essentially infinity. I mean,
Kalee Boisvert:that sounds like a lot. And we don't know any stocks trading at
Kalee Boisvert:infinity yet. But really, there's no upper limit, the
Kalee Boisvert:stock can go up to any value. And then so that's the gain
Kalee Boisvert:side, what's potential, the potential for loss would be up
Kalee Boisvert:to your entire investment, because the company essentially
Kalee Boisvert:could go out of business, they can go bankrupt, and the stock
Kalee Boisvert:could go to zero. That's the downside risk. So let's say you
Kalee Boisvert:bought that share at $20, that stock, well, if it went to zero,
Kalee Boisvert:you lost your full $20 investment. So that's the
Kalee Boisvert:potential downside versus upside, it could go for any
Kalee Boisvert:number of essentially, again, we don't know of any stocks, I'm
Kalee Boisvert:not aware of any trading at infinity. But again, there's no
Kalee Boisvert:upper limit, right, there's no hard limit, like we would see on
Kalee Boisvert:the downside, which is it could go to zero, it's important to
Kalee Boisvert:consider the potential for risk when investing in stocks.
Kalee Boisvert:Because as far as investment products, something like a stock
Kalee Boisvert:would have a higher risk than something with a lower return
Kalee Boisvert:offering. So something like a GIC is a guaranteed investment
Kalee Boisvert:certificate, that's essentially that would be a no risk type
Kalee Boisvert:investment. But again, return expectations are going to be a
Kalee Boisvert:lot lower, or you can look at something like a bond or a fixed
Kalee Boisvert:income investment, which is going to have some potential for
Kalee Boisvert:risk based on different events like interest rates, and the
Kalee Boisvert:company being, you know, staying in business being able to pay
Kalee Boisvert:back the bond holder at the end of the term. So there are some
Kalee Boisvert:elements of risk there, but usually on as a whole bonds are
Kalee Boisvert:considered a lower risk investment than a stock. So
Kalee Boisvert:keeping all that in mind that an obviously each investor does
Kalee Boisvert:have a different risk profile. So you do have to consider your
Kalee Boisvert:risk tolerance when it comes to choosing stocks or investing in
Kalee Boisvert:the stock market. Some considerations are things you
Kalee Boisvert:should be asking yourself is, you know, what if your the value
Kalee Boisvert:of your investment declines, can you handle you lose losing a
Kalee Boisvert:large percentage of that investment or even the entire
Kalee Boisvert:value of that investment? So could you handle losing
Kalee Boisvert:10% 20% 30%. And if you go, Oh, no, like I need this money, next
Kalee Boisvert:year, for a down payment on my house, I couldn't handle having
Kalee Boisvert:it lose 20%, then of course, that's an indication that that
Kalee Boisvert:money, you don't want to be investing in the stock market.
Kalee Boisvert:So you don't want to be putting it at that risk. Versus if you
Kalee Boisvert:have a longer timeframe, maybe you're young and you're saving
Kalee Boisvert:up money for your retirement goal, then you you don't have as
Kalee Boisvert:much concern over the short term time periods of okay, if my
Kalee Boisvert:investment declines, I can wait it out, I can give it some time
Kalee Boisvert:and wait for it to recover. So again, risk tolerance is an
Kalee Boisvert:important consideration for investing in stocks, as well.
Kalee Boisvert:stocks within themselves. So stocks is a whole you know,
Kalee Boisvert:category. But within that there's all different types of
Kalee Boisvert:risk profiles. And it's going to be based on other
Kalee Boisvert:characteristics, such as size of the company, the sector that the
Kalee Boisvert:company is involved in. And so the all these are going to
Kalee Boisvert:impact and and the risk potential, because different
Kalee Boisvert:types of markets or events could have a different reaction. So
Kalee Boisvert:how they're broken down if we're talking about the size of the
Kalee Boisvert:company. So if we're looking at a stock and saying how risky is
Kalee Boisvert:it? Well, we can look at a company as its size and say is
Kalee Boisvert:it a small cap stock we talked about or MI medium or mid cap?
Kalee Boisvert:Or is it a large cap or a blue chip stock? Those are some of
Kalee Boisvert:the words we're using. So market cap meaning market
Kalee Boisvert:capitalization, which is essentially a quick measure of
Kalee Boisvert:what the company is valued at by the market. So market cap is
Kalee Boisvert:calculated as the number of shares outstanding times the
Kalee Boisvert:stock price. So when you hear like Apple is worth this many
Kalee Boisvert:trillions of dollars or whatnot, that's the market cap on the
Kalee Boisvert:stock. Okay, so a small cap stock would be a smaller
Kalee Boisvert:company. And generally it's going to be a higher risk than a
Kalee Boisvert:larger, more established companies. small cap companies
Kalee Boisvert:are classified as those between that have a market cap between
Kalee Boisvert:about 250 million to 1 billion mid cap are going to be 1
Kalee Boisvert:billion to about nine to 10 I believe billion and then large
Kalee Boisvert:cap is your over $10 billion market cap by market
Kalee Boisvert:capitalization companies. And that sort of blue chip is going
Kalee Boisvert:to be in that category as well. So it's going to be blue chip.
Kalee Boisvert:When you hear people say blue chip stocks invest in those
Kalee Boisvert:those types of investments. They're going to be companies
Kalee Boisvert:that have strong investors qualities and characteristics
Kalee Boisvert:are a record of continuous dividend payments or growth.
Kalee Boisvert:Some of them might be examples like Amazon, or your Apple or
Kalee Boisvert:your Costco of the world. So those are sort of your blue chip
Kalee Boisvert:type companies. So again, the risk is higher in the smaller
Kalee Boisvert:companies than the larger based on just a variety of factors.
Kalee Boisvert:Just think about it a large company versus a small like mom
Kalee Boisvert:and pop shop, you know, you know, the large company has the
Kalee Boisvert:resources, to stick it out if there is big events in the
Kalee Boisvert:economy and things like that, versus a smaller company, which
Kalee Boisvert:doesn't have as many, maybe clients or as many resources to
Kalee Boisvert:tap into if an event happens that impacts the company. So
Kalee Boisvert:just in a sense of looking at companies, smaller companies are
Kalee Boisvert:going to be higher risk for the most part than larger companies.
Kalee Boisvert:Stocks can also be broken down by how they perform in different
Kalee Boisvert:business cycles. So again, there's all sorts of ways that
Kalee Boisvert:we can look at individual stocks or when we look at the category
Kalee Boisvert:of stocks, breaking it down into what kinds and what types and so
Kalee Boisvert:there's also you can categorize them by business cycles. And
Kalee Boisvert:there would be cyclical versus defensive. So cyclical stocks
Kalee Boisvert:are going to be sensitive to economic swings, they probably
Kalee Boisvert:rise quickly when the economy does well and fall when the
Kalee Boisvert:economy does not. Examples of cyclical could be like an
Kalee Boisvert:automaker, because when times are good people are buying new
Kalee Boisvert:vehicles. But in periods of recession, obviously, people are
Kalee Boisvert:going to just repair their vehicles keep driving what they
Kalee Boisvert:have, defensive stocks are going to demonstrate a relative
Kalee Boisvert:stability, even in maybe poor economic conditions. So when
Kalee Boisvert:when we're in more of like recessionary times, and are
Kalee Boisvert:going to be less impacted, then by the business cycle, and
Kalee Boisvert:again, this is sort of in theory, how they should behave.
Kalee Boisvert:So for instance, like a utility stock might not change much in
Kalee Boisvert:periods of expansion or recession, because maybe the
Kalee Boisvert:rates don't, the usage rates don't change drastically. So
Kalee Boisvert:maybe times are tough, but people are still going to be
Kalee Boisvert:turning on their heat. And using electricity in their house, like
Kalee Boisvert:it's going to take a lot for that behavior to really change.
Kalee Boisvert:So that's maybe more of a defensive type stock. Stocks can
Kalee Boisvert:be divided also in different sectors. So you can have ones
Kalee Boisvert:that fall into the financial the energy, materials are
Kalee Boisvert:industrial, consumer discretionary,
Kalee Boisvert:telecommunication, healthcare, utilities, information
Kalee Boisvert:technology. So again, based on the sector, there is maybe some
Kalee Boisvert:con like based on the overall economy could impact that stock
Kalee Boisvert:more so than others. So for instance, when COVID hit, if you
Kalee Boisvert:were invested in companies that were really kind of in that
Kalee Boisvert:travel related sector, you might have saw a bigger impact on
Kalee Boisvert:those stocks, they might have fell fallen further than some of
Kalee Boisvert:the other companies because that industry was very much more like
Kalee Boisvert:very specifically impacted by the events that occurred. So
Kalee Boisvert:that kind of gives you some ideas for how we can kind of
Kalee Boisvert:break it down or look at stocks on the different qualities. Now,
Kalee Boisvert:let's say you're looking for individual stocks to invest. So
Kalee Boisvert:what do you do, then? The question might be, I'm looking
Kalee Boisvert:so how do I know what to invest in? Well, there's lots of
Kalee Boisvert:different publicly traded stocks to buy or invest in. So there's
Kalee Boisvert:this whole big, you know, pool to choose from, of 1000s of
Kalee Boisvert:different companies. So there's lots of options. So where do you
Kalee Boisvert:start? Well, you might start by taking that more macro approach,
Kalee Boisvert:which means looking at it from kind of the top down, and
Kalee Boisvert:looking at bigger themes and sectors and then narrowing down
Kalee Boisvert:your focus from there. So you might be thinking, I believe
Kalee Boisvert:that if interest rates are going up, I think financial companies
Kalee Boisvert:will do well. So then then your focus is narrowed in on okay,
Kalee Boisvert:maybe you're looking at some banks or insurance companies as
Kalee Boisvert:part of the type of stocks you're looking for. Or you can
Kalee Boisvert:kind of turn things around and look at more of a bottom up
Kalee Boisvert:approach. So you're looking at individual stocks, and deciding
Kalee Boisvert:just based on the stock itself, is it a suitable investment for
Kalee Boisvert:you? So you're not taking that top down approach. You're just
Kalee Boisvert:saying, Okay, I heard about this stock or I read something about
Kalee Boisvert:this specific company, I want to look into it more and decide if
Kalee Boisvert:it is suitable for me. So again, I'm assuming that most of you
Kalee Boisvert:listening to this are not looking to be day traders.
Kalee Boisvert:Because this episode is not for a day trader. And this podcast
Kalee Boisvert:is not really designed to get to that level of detail. So it's
Kalee Boisvert:more so this episode is about if you're looking to just
Kalee Boisvert:understand the basics of stock markets and investing and really
Kalee Boisvert:just a good place to kind of start or some of the basics
Kalee Boisvert:right so when you're looking into something like that well
Kalee Boisvert:and what types of stocks to buy a great place to start when
Kalee Boisvert:we're looking at stocks and stock market. It is a stock
Kalee Boisvert:quote. So having an app on your phone, or just doing an internet
Kalee Boisvert:search of a specific company, and looking up a stock quote. So
Kalee Boisvert:there's a variety, again, there's a variety of apps too,
Kalee Boisvert:that you can use where you're, or just search the internet. But
Kalee Boisvert:a stock code is going to offer you a variety of details in
Kalee Boisvert:itself. So it's a great tool, to if you're looking for an
Kalee Boisvert:investment, give you kind of the basic stats, almost an overall
Kalee Boisvert:picture of the company, it's probably not the only thing
Kalee Boisvert:you're going to use to make a decision on to whether to buy or
Kalee Boisvert:not, but it's going to give you some you know, again, quick
Kalee Boisvert:stats, a good sort of
Kalee Boisvert:overview as as far as what your you know, some of the criteria
Kalee Boisvert:or the, what the company is looking like price wise and
Kalee Boisvert:things like that. So, you're going to use like, a stock
Kalee Boisvert:quote. And if you don't know the symbol, you can actually just
Kalee Boisvert:internet search, you know, this is the company, what is the
Kalee Boisvert:stock symbol, and you will get that the quotes going to tell
Kalee Boisvert:you things like the 52 week high and low, which is going to just
Kalee Boisvert:be it's basically the highest is traded at over the year, and the
Kalee Boisvert:lowest is traded at so you get a nice range of where it's been
Kalee Boisvert:throughout the past 52 weeks, you're gonna also get a daily
Kalee Boisvert:high and low when you're looking at a stock quote. So it's just
Kalee Boisvert:what price was the highest it's gone to today, what is the
Kalee Boisvert:lowest, the last price traded? So again, that's going to show
Kalee Boisvert:you basically any shares that exchanged hands most recently,
Kalee Boisvert:what price did they trade it? So again, it's an auction market
Kalee Boisvert:buyers and sellers, the last trade that occurred, what price
Kalee Boisvert:did it happen at, if the stock pays a dividend, you're going to
Kalee Boisvert:see the dividend yield, and daily share volume too. So how
Kalee Boisvert:many shares have traded for the day that's going to show up as
Kalee Boisvert:well, on the quote, you're also going to get a few more kind of
Kalee Boisvert:detailed measures. So one of the important ones and, and when
Kalee Boisvert:you're looking at when people are talking about stocks and and
Kalee Boisvert:reporting earnings, and things like that you're going to see
Kalee Boisvert:and hear about is EPS so earnings per share. And that is
Kalee Boisvert:your net income, the company's net income, not yours, the
Kalee Boisvert:company's net income divided by the number of shares
Kalee Boisvert:outstanding, which essentially telling you how much it makes
Kalee Boisvert:per share of stock, how much the company earns per share with
Kalee Boisvert:stock, you're also going to get a measure something like PD, so
Kalee Boisvert:p dash E, meaning price to earnings. And that's also
Kalee Boisvert:something that's widely reported. And that's just giving
Kalee Boisvert:you the share price divided by that earnings per share number.
Kalee Boisvert:So again, you don't have to do the math on these, it's gonna
Kalee Boisvert:provide it for you, when you're looking at a stock quote, a PDE,
Kalee Boisvert:something like a high P E could mean so high price to earnings
Kalee Boisvert:could mean that a stock is overvalued or that growth is
Kalee Boisvert:expected. So it's kind of like it's a pricier or maybe a growth
Kalee Boisvert:year stock. So the PE as a measure, it's used best when
Kalee Boisvert:you're using it as a comparison tool against competitors in the
Kalee Boisvert:industry in the specific type of sector industry, or comparing it
Kalee Boisvert:against itself to where it historically was valued. So you
Kalee Boisvert:could say, okay, the stock history is trading at a price a
Kalee Boisvert:P E price to earnings of 13 times, but it usually trades
Kalee Boisvert:around 20 times. So if you're thinking what's trading
Kalee Boisvert:currently at 13 times, it's usually at 20. It's trading
Kalee Boisvert:lower than usual. So that could mean that it's priced a bit
Kalee Boisvert:lower, maybe on sale, maybe a good opportunity to buy. Again,
Kalee Boisvert:this is just one thing to look at, or it's one thing to
Kalee Boisvert:consider or comparing it to itself. But again, you have to
Kalee Boisvert:compare apples to apples. So I grabbed this off of quote, but
Kalee Boisvert:Amazon it said was trading at 58 times. And then Royal Bank was
Kalee Boisvert:trading at 13 times. So if I compare the two, I'm like, well,
Kalee Boisvert:Royal Bank, so a 13 times that's much sort of cheaper or cost
Kalee Boisvert:effective. But of course, you can't compare the two, they're
Kalee Boisvert:in very different industries. So you might want to compare Royal
Kalee Boisvert:Bank with another Canadian bank, or maybe you're going to compare
Kalee Boisvert:some US banks and maybe one bank is trading at 20 times, and one
Kalee Boisvert:bank is trading at 15 times. And that might help your decision to
Kalee Boisvert:say okay, I'm going to buy the one that's essentially not as
Kalee Boisvert:high of a multiple, because if it's a higher multiple, it's
Kalee Boisvert:looking a little bit more expensive. But again, there's
Kalee Boisvert:Amazon and it's trading at 58 times it's historically traded
Kalee Boisvert:at even higher multiples than that. So the it's hard to say
Kalee Boisvert:what is a high number, what is a low number, and you can't really
Kalee Boisvert:use it as comparison against each other in like against very
Kalee Boisvert:different companies. So it's again comparing it to similar
Kalee Boisvert:companies. It might have value or comparing it to where the
Kalee Boisvert:company has historically traded again, it's just this is one
Kalee Boisvert:measure, it's not going to be your ultimate decision maker.
Kalee Boisvert:But when you're listening and hearing about companies coming
Kalee Boisvert:out with earnings and things like that, these are some of the
Kalee Boisvert:things you're going to hear in those reports or in those
Kalee Boisvert:articles. So it's giving you just more information.
Kalee Boisvert:Ultimately, the investment decision of what you invest in
Kalee Boisvert:is going to be based on a variety of factors. So
Kalee Boisvert:as well, so when we're looking at investing in stocks, stocks
Kalee Boisvert:are publicly traded companies. So a benefit to investing in
Kalee Boisvert:stocks being that they're publicly traded, it means that
Kalee Boisvert:information about them is publicly available as a publicly
Kalee Boisvert:traded company, they're required to report financials and major
Kalee Boisvert:company events, so their report financials on a quarterly basis,
Kalee Boisvert:and then they give you their annual numbers. And then any
Kalee Boisvert:major company events that could be material, they have to report
Kalee Boisvert:as well. So maybe it's that the CEO quit or was fired, and
Kalee Boisvert:someone's replacing the person or whatnot, that's going to be
Kalee Boisvert:publicly disclosed as well. So you can get all this information
Kalee Boisvert:directly from the company website. Usually, it's under
Kalee Boisvert:something like investor relations, you can take time and
Kalee Boisvert:read through the company financials, if you so choose.
Kalee Boisvert:And and that's really a like a warren buffett approach, like if
Kalee Boisvert:you've ever, you know, read anything about Warren Buffett or
Kalee Boisvert:I watched like a biography on him once and it was about like,
Kalee Boisvert:basically how his day is structured, and he spends the
Kalee Boisvert:majority of it just reading through Company Financials. I'm
Kalee Boisvert:assuming most of you listening to this, are not so inclined to
Kalee Boisvert:read the company financials, the accountants and whatnot in
Kalee Boisvert:numbers, people, it will be thrilling information. But I
Kalee Boisvert:think for others, they probably opt to watch Netflix or
Kalee Boisvert:something over reading accompany financials. But again, this
Kalee Boisvert:information is publicly available, it's not, you know,
Kalee Boisvert:secretive, it's not only certain people are going to know it is
Kalee Boisvert:available to anyone. So it is something to just be aware of.
Kalee Boisvert:And you can access research reports from the financial
Kalee Boisvert:institution you invest with, you can also get different reports
Kalee Boisvert:from financial professionals. So these research reports are
Kalee Boisvert:sometimes very specific talking and giving a detailed kind of
Kalee Boisvert:overview of a specific company, and their perspective about
Kalee Boisvert:where they think the stock is going. And again, it's an
Kalee Boisvert:opinion based based on the different factors and
Kalee Boisvert:measurements they use. So just be aware of that. And then as
Kalee Boisvert:well, if you're using online sources that are making
Kalee Boisvert:recommendations, do be very aware of where the information
Kalee Boisvert:is coming from who is behind it. Because obviously, there could
Kalee Boisvert:be biased information out there. So you might be reading a report
Kalee Boisvert:about a company or stock, and they're really, you know,
Kalee Boisvert:supporting it and almost promoting it and saying buy the
Kalee Boisvert:stock for all these reasons. Well, you know, are they
Kalee Boisvert:personally invested in the company because obviously, like
Kalee Boisvert:we talked about, it's, it's a auction market, if you get more
Kalee Boisvert:buyers wanting it than sellers, that's going to drive the price
Kalee Boisvert:up. So people that are personally invested in stock are
Kalee Boisvert:going to want lots of people to be buying the stock. So just
Kalee Boisvert:again, keep in mind, you know, what is the source? Is this
Kalee Boisvert:independent report and, or information or research I'm
Kalee Boisvert:reading? Or is there someone's opinions embedded in this. So be
Kalee Boisvert:very mindful as with anything, we need to be mindful of where
Kalee Boisvert:we're getting your information from? Who's behind the
Kalee Boisvert:information. So we're talking about stocks, well, what about
Kalee Boisvert:actually trading stocks buying and selling them. So for that,
Kalee Boisvert:you can do this completely on your own in a direct investing
Kalee Boisvert:account. So using a direct investing platform, which means
Kalee Boisvert:it's very much do it yourself, you pick and choose you buy and
Kalee Boisvert:sell. Or if you think that that's just not a good fit for
Kalee Boisvert:you, you can also work with a financial professional, who's
Kalee Boisvert:going to be working with you to give recommendations and make
Kalee Boisvert:investment, you know, changes and whatnot, and trades for you.
Kalee Boisvert:Or you can use even more of a hybrid approach through
Kalee Boisvert:something even like a robo advisor where it's more do it
Kalee Boisvert:yourself, but you enter some information about yourself. And
Kalee Boisvert:output is giving you some recommendations or ideas. So
Kalee Boisvert:again, there's all types of platforms out there to be aware
Kalee Boisvert:of, and it's about finding the best fit for you. So if you are
Kalee Boisvert:going to take a do it yourself approach. And if you're doing it
Kalee Boisvert:on your own entering a trade, you're concerned about making an
Kalee Boisvert:error and nervous to actually do it. Most platforms will offer a
Kalee Boisvert:help desk number. So do call into that if you need any
Kalee Boisvert:assistance to help have someone walk you through it. Be mindful,
Kalee Boisvert:of course that you're trading during market hours. And again,
Kalee Boisvert:there's financial professionals out there so I'm not necessarily
Kalee Boisvert:making this podcast so you all have to go now and be Do It
Kalee Boisvert:Yourself investors and go start buying and selling all sorts of
Kalee Boisvert:stocks, there is options and depending on you and what you're
Kalee Boisvert:looking for, maybe it maybe a best fit is doing it yourself.
Kalee Boisvert:Maybe the best fit is working with a professional. So I get
Kalee Boisvert:again, though I still encourage whatever option you choose or
Kalee Boisvert:kind of route you take. I still highly encourage anyone to have
Kalee Boisvert:this basic knowledge and Understanding of investing, and
Kalee Boisvert:what we talked about on this episode, because even if you're
Kalee Boisvert:working with a professional, it's always good to stay engaged
Kalee Boisvert:and have a level of understanding. So you're in the
Kalee Boisvert:know, you know what's going on with your investments. You don't
Kalee Boisvert:ever want to be fully giving up control to someone else. You
Kalee Boisvert:want to always be engaged, be involved, be part of the
Kalee Boisvert:conversation, because as the at the end of the day, it's still
Kalee Boisvert:your money. And the end decision has to be yours and you need to
Kalee Boisvert:be on board with it too, and be aligned with who you're working
Kalee Boisvert:with. If it is a financial professional, you need to make
Kalee Boisvert:sure you're on the same page. So again, it's important to have
Kalee Boisvert:this level of understanding yourself as well. That's all I
Kalee Boisvert:have for you today. So hopefully you're feeling ready to continue
Kalee Boisvert:the conversations and talk stocks. So go talk stocks with
Kalee Boisvert:someone else you know,
Kalee Boisvert:it's fun, I love talking stocks. So hopefully this episode has
Kalee Boisvert:made you feel ready and comfortable to go do some
Kalee Boisvert:talking stocks as well. Thank you so much, and I will catch
Kalee Boisvert:you on the next episode.
Kalee Boisvert:I hope you found value in this episode. And because I'm such a
Kalee Boisvert:proponent of taking confident action, I want to pose a
Kalee Boisvert:question to you the listener. What is one action that you feel
Kalee Boisvert:inspired to take after listening to today's episode? If you enjoy
Kalee Boisvert:listening, please subscribe and share with your friends and
Kalee Boisvert:family. Thank you so much and I will catch you next time
