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Money on your mind

Helpful investing tips from a financial expert

by Lana Sanichar

Chartered financial analyst Peter Hodson recruited me to work for Canadian MoneySaver magazine (CMS) in 2011. At the time, I was in my mid-30s, and Peter quickly became my money mentor and began, unknowingly, through day-to-day conversation, teaching me about the stock market and investing.

I recently reached out to him to ask about the lessons he has learned over his 40-year investment career. Here are his top tips.

Don’t sell too early
Many investors like to sell when they have a profit. After all, as they say, you can never go broke taking a profit. But before selling, put yourself on the other side. Ask yourself why the stock is up and why people are buying it. Having your stock up is a confirmation that others like it. Why do you not like it? Are you selling just because it is up? Remember: Some stocks will rise 1,000% or more, with compounding. Make sure you are selling for the right reasons.

Don’t listen to forecasters
No one knows what the stock market will do. The doomsayers have no greater forecasting ability than the optimists, but the doomsayers get way more attention. They get the most publicity when markets are bad, but this is the worst time to sell (generally) or to listen to them. There is always a reason to sell, and every single trade means someone doesn’t like a stock. Nevertheless, the market has created long-term value for hundreds of years.

Buy when there is panic
The best time to buy is when others are panicking. Whatever the reason, every few years volatility increases, fear rises and investors sell. Going against the crowd usually works well if the crowd is panicking. Is there a war? Well, that coffee company is still going to sell coffee. A housing crash? Groceries and medicine will still be necessities. Focus on quality companies and ignore the noise.

Investing can be a tricky endeavour, and finding the right person to guide you is important, whether it’s a trusted investment adviser or a money mentor. They may have advice that you’ve never considered. For me, it made all the difference.

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Please do your own due diligence when making any financial decisions. This column is for general informational purposes only and may not apply to all provinces. It is meant to get the reader thinking about their finances; it is not meant to be used in lieu of advice from a professional.