Weekend Reading – Shorting primer, Robinhood, pretending to FIRE, “I’m out”, dividend all-stars to own!
Wow. What. A. Week.
Welcome to my latest Weekend Reading edition, highlighting some of my favourite (and entertaining) articles from the week that was across the personal finance and investing blogosphere.
Just in case you missed last week’s edition about some funny Bernie memes, why we should practice failure, the benefits of a cash reserve, top REITs to own for 2021, and why cash flow is KING, you can check that out here.
First up, a primer on shorting that I found interesting that’s actually a decent explanation overall, should folks want to know what this shorting buzz (when it comes to Gamestop and other stocks) is all about.
What does this have to do with Robinhood?
Robinhood, TD Ameritrade, and Charles Schwab, which purchased Ameritrade in 2020, all placed restrictions on certain trades regarding GameStop (and other stocks this week). In fact, retail investors on Robinhood were temporarily barred from completing certain transactions involving GameStop.
So, what side are you on?
Do you support the wealthy hedge fund managers and the wealthy folks that invest with them – who have been “allowed” to short and hedge stocks for years, with full-on Wall Street permission?
Or do you support a bunch of 20- and 30-somethings, largely a bunch of would be Reddit traders and investors who are being barred from participation in the free market?
I have my answer, keep fighting the good fight WallStreetBets.
Just be mindful what goes up might come crashing down for some. Hedge funds? Ha. Good luck.
At the time of this post, there is a significant class action lawsuit pending against Robinhood, citing negligence and a “breach of the implied covenant of good faith and fair dealing.” No doubt. I hope they have great lawyers otherwise that company is done in my book. Too bad Robinhood, you reap what you sow people.
I got around to posting some new original content this week – I guess my article was rather timely!
Enjoy this lengthy list of Weekend Reading material and see you here next week!
Freedom 35 Blog, who has a YouTube channel now, told us about the dozens of ways to FIRE (Financial Independence, Retire Early). Whatever he wants to call it, I would agree with him there is certainly a ton of “Celebrity FIRE” these days – whereby some content creators pretend they are retired, they tell you they’re retired, but they still work and they need to work to pay their bills. Sigh.
Done by Forty said “I’m out” when it comes to his job – to save his mental health and well-being. I found this post rather raw but equally honest. Good on him to I don’t think we can overstate how important mental and physical wellness is.
LowestRates.ca interviewed some of my fellow PF friends and highlighted what they believe are some great mortgage and insurance tips for 2021. Check it out!
Mindful blogger, photographer and explorer Chris Istace shared his thoughts and those of other bloggers who incorporate personal elements of mindfulness into their financial journey.
Chris shared his desire to reduce his personal footprint, less possessions, and increase walkability in his life some time ago. Great stuff.
In fact, my wife and I have the same motivations and we’ve acted on them. We downsized our home into a condo almost 2 years go. We simply don’t have room or space for “crap”, just our essentials. We walk to get our groceries, for restaurants (when they are open!), I bike three seasons for exercise (I live in Ottawa remember…), and I avoid spending money on things I simply don’t need or use.
I’m also on a path for semi-retirement, as you know, so that’s very liberating and has mindfulness embedded!!
I checked out some “sturdy” Canadian dividend paying stocks. What are your thoughts on this list? (Image courtesy of Morningstar).
MoneySense didn’t want to be outdone, so they recently released their dividend all-star stocks for 2021.
Fan of this site, portfolio manager, author, investor advocate and more John De Goey wondered what the value of good advice really is? I think it really depends on the individual. “Advice” spans a massive continuum in my book, from very informal coffee talk to directives and must-dos.
MoneyGal aka Alexandra Macqueen said this 60-something is best to leverage her human capital, and keep working for a bit, to optimize her government benefits such as Canada Pension Plan (CPP).
This reminds me of this case study on my site: Age 60, can this retiree actually retire on a lower income?
Dale Roberts from Cut The Crap Investing reminded us that some dividend ETFs did not perform very well in 2020.
Family Money Saver shared some tips to recognize stock manias.
Reader question of the week (adapted slightly for the site!)
So Mark, thanks for your newsletters and insights.
I think you mentioned you owned a handful of ETFs, such as XAW, QQQ, and VTI.
I looked at those returns, for all those funds, and those long-term returns ALL have better 1/3/5 year returns than any of the funds I’m in.
When I looked at QQQ (in particular), it has 42.4%, 23.7% and 25.8% returns respectively.
That is absurd!
So, the big question I do have for you, Mark – are these funds the ones you’ll stick with long-term? What are some signs or trends you look for that say it’s time to move “funds” around?
Thanks again for your answers!
Well, first of all, thanks for researching my site including what I own!
Kidding aside, those are funds I do own and I will share more in the coming weeks why.
While I cannot predict the future, how my mind might change over time including how I invest, I can offer these comments below to you and all readership.
- I now own a few hundred shares of iShares fund XAW and I have made the decision to own XAW to diversify beyond Canada’s borders in a tax-free way. I will continue to add more XAW units over time.
- I’ve owned the Invesco fund QQQ for just over six months now, I actually didn’t own any QQQ until summer-time 2020, until I caught the market ride up from COVID-19 market lows from March 2020. I decided to own QQQ for a small tech-growth kicker. So, by owning QQQ I don’t have to choose between Apple, Microsoft, Amazon and the list goes on – who will outperform who! I own them all, indirectly, via the fund.
- Last but not least, Vanguard’s VTI. What should I say or write? I’ve owned a very small portion of VTI for some time but I recently made the decision to more go, all-in. Meaning, I sold a bunch of Vanguard’s VYM that I had for VTI last year. Why? I’ll share more in a future post but essentially, total return matters and more diversification matters with VTI that owns >3,600 U.S. stocks as I progress to semi-retirement to “live off dividends and distributions” in the coming years.
In terms of, “are these funds the ones you’ll stick with long-term? What are some signs or trends you look for that say it’s time to move “funds” around?” – stay tuned. I’m going to write a separate blogpost soon on the 3 ETFs I want to buy more of in 2021.
Thanks for your questions and keep them coming!
Save, Invest, Prosper!
Thanks to my passion for personal finance and investing, some great companies want to offer deals. As always, never an obligation…
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Also, after sharing their thoughts on when to sell a stock after a dividend cut, the guys at StockTrades.ca are offering a Premium Membership at 30% off. Check out that dividend cut post for details.