Playing the Toronto stock market

If you have savings that are not tied up in residential properties, and have no debts, the logical thing to do with it is to invest it in the stock market. If you don't, your money will be eaten by inflation, as interest payed by Canadian banks is ridiculously low, and does not even match inflation. Here I document what stocks I bought and why, so that for future reference I can look back on my mistakes. I thought I would do it in public, so others may learn from the mistakes I made as well. I trade my stock at Toronto, because that is cheapest for me, and I avoid the bad currency conversion rates that RBC is prone to offer you.

So the first stock I bought after opening my trading account was a boring stock, just to test the trading portal, and see how buying stock works. The stock was RA or Royal Bank of Canada, as I figured it would be reasonably stable due to its size and steady operations. I bought this for 61.40 on march 9, and so far lost a few percent on it.

The next purchase I made was triggered by the Japan earth quake. In its wake, the markets fell, and the largest losers were nuclear energy related stocks. On Toronto, Uranium One (a large uranium mining company) fell hard during a couple of days. My common sense told me that the price drop was far too large to reflect the actual change of value of the company. This is why I bought UUU for 3.81 on march 15. This turned out to be a golden decision so far, as I bought it at almost the lowest point, and the stock shot up just as hard as it fell: so far a tidy profit in just a few days.

Next up were some utility stocks. I live in Vancouver, and see how much electricity is used here to heat and cool buildings. Frequent harsh winters and frequent hot summers, coupled with the ever expanding city makes me believe the demand on electricity will rise. Even though hydroelectricity is produced cheaply here, it is sold at really high rates to the consumers (you should see the energy bill I had on a 2 bedroom Beach Avenue apt). To find the stock, I typically look for bargains. I want to see healthy business for low price-to-book ratios, with low debts. This brought me to the renewable energy producer Boralex. I bough BLX for 8.46 on march 22. Boralex does hydro and geothermal. I also bought a solar energy technology company Arise Technologies, APV for 0.15 on march 22. With the advent of electric vehicles, electricity should become a hot commodity.

My friend tipped me on the growth potential of companies that work on 3D printing. On Nasdaq, there are Stratasys and 3D Systems corp. Both have sky high price to earnings ratios, so I will hold off for now. But would they ever crash, it could be time to scoop them up as they are potential supergrowers.

So, what are your ideas on the market? I would love to read them, so leave them in the comments. Let me conclude with a warning: never invest with borrowed money, only invest what you can spare.