The following question is from Matthew of Welland, ON:
I am a 21-year-old Student and I’d like to buy some low-risk stocks (basically shares selling for no more than $5). Every online trading site I have found requires a steep deposit of $1000, some near $5000. Do you know of any good/cheap sites or have good advice for me? I have no idea where to find a stockbroker in my city.
You won’t be surprised that I don’t recommend stocks even to our friends and relatives because I’ve picked such winning stocks like JDS-Uniphase and Nortel for our own accounts. Imagine recommending JDSU to your friend at the height of the bubble and also imagine that your friend was foolish enough to invest based on your tip. Needless to say, it would have created a very awkward situation all around.
After investing in individual stocks for over five years, I’ve come to the conclusion that stock picking is an extremely difficult endeavour. You spend a lot of time and effort and even then you probably won’t outperform a passive portfolio composed of various index funds. If I were just starting out in life, I would simply invest in a sleepy portfolio and focus on all the fun things you can do when you are 21.
I’ve written many posts on the subject of passive investing that you may find useful. You can search for them using terms such as “sleepy portfolio” or “TD eFunds”.
