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Thursday, August 16, 2018

Me and my margin account

I purchased a brand new purse from Amazon and it arrived today. It look exactly as the picture so if it happen by any chance that you see a hot chick in Montreal holding on tight to that purse, it might be your lucky day, and I could be the Dividend Girl. Or maybe not. But please, try to control yourself at least and don't start screaming at me because I hate you as much as you hate me. There's just no way to know for sure. I like those kind of big purses and I had problem to find any in Montreal at a good price. I like the Lole purse, but they are super expensive and I don't practice yoga.

I received some new PPL shares - resulting from the DRIP, and in result my dividend income is at $8 665.85. My RRSP dividend income is currently at $1 221.78, for a big total of $9 887.63. And knowing this amount exceed the interest of my margin, and because I declare my interest rate, my margin situation don't really bother me but at this point of my journey - this poor girl just don't know what to invest in anymore. Not that my portfolio is complete and close, but at the time being, its currently my situation. And only God knows that yes, I had tried really hard to find new stocks to invest in. And I had find some. But when came time to invest, I didn't place my move. I am just willing to let things as they are right now. And in result, my money is just going to decrease the usage of my margin. With tomorrow paycheque, its $2 186 that I will have to decrease my margin (I already put previously a $850). This will reduce my margin account to $98 035.74. Still high, but under the 100k at least.

I understand the concern of this reader and I am certainly not here to promote investing using a margin account, but its just the way it had been to me. I had been on a margin for many years now, I know what I have to do in order to keep it safe. No situation is totally safe but me and my margin, its a perfect match. It take a bitch to handle another one.

My dividend income is of $9 887.63.
Interest on my margin: $4 902.885 - and I deduct it on my tax declaration.

I don't feel any disconfort, if it not that I don't have the vibes to invest in something right now, but at least I have a brand new purse now - birthday gift to the bitch from the bitch. Remember the date: August 27. Just 11 days to go sexy count down.


Anonymous said...

In regards to your TD margin account.

I am with TD as well and once had a margin account a long time ago. That was to take advantage of the stock boom of the early and late 90s, where the internet bubble was brewing. At the time, I was good friends with my local TD branch bank manager. She was kind, sweet and very attentive to my needs and worked there for decades. This was when you have a familiar face to say hello to year after year. Nowadays, you may see a new face change every year or even 6 months and young bank managers have this young millennial aspirations and seemed to think that the stock and real estate will rise forever!

At that time, like yourself, I didn't know the consequences of what would happen with a margin call during an economic downturn. But I remembered seeing on TV that so many people were making so much money, even with one guy bragging that he made $10,000 with his margin account through TD with his investments in Nortel and JDS Uniphase; 2 hot stocks at the time. I was so jealous of them. Why couldn't I make as much money as them?!? Ah perhaps, I didn't have a margin account that's why! Tempted, I margined almost my entire account of a couple hundred thousands and my bank manager at the time helped and encouraged me to do that. She told me the internet boom will continue to go up forever and rest assured that you will not get a margin call even if there is an economic crash. The internet stocks are so valuable that TD would never call me and sell those stocks, because when the economy recovers, the internet stocks will continue its meteoric ascent. And then she referenced me to real estate, where these stocks are like houses. They are safe. With these assurances, I did it. And just like you, I experienced huge gains as that time, Nortel was going up and up and up. I bought Nortel at $9, so with a margin account it magnified any gains it had with Nortel. I was so happy and I thought I was dumb not to into a margin account in the first or otherwise I would have been richer!

Then I think I told my dad about it. He is a seasoned investor and just like the last reader, he was shocked to see that I basically margined my entire savings. Eventually he convinced me to margin half of my account and so I did. Then the inevitable came in 1999 and 2000. The internet boom was over, but at BNN news, I kept hearing experts after experts told me that it's just a short blip as it won't be long that it will go up again. So stupid I was, I bought more of Nortel. Basically trying to catch a falling knife.

Anyhow, one day I got a margin call from my friendly bank manager. I said -- "You told me TD would never do that because internet stocks was like gold, like real estate". I remembered we argued a bit, but finally she won and she basically told me that TD would withdraw funds from my savings to cover the shortfall. I was so naive, but also devastated.

I wished I had a time machine and if I could go back and undo the damage. If I didn't margin any of that and did what my dad told me to do, I would have retired by now. The lost set me back about 15 years from my retirement goal. Anyhow great website!!

Anonymous said...

Been following you for a long while,2016. What d you think of pot stocks ? Or there spin off companies. Like Tilray Inc

Anonymous said...

I'm the reader that wrote that comment on the margin account.

The market wizards all think that the stock market is in a topping formation. What we got in February was just a correction (which we recovered from) what's coming next is a major drop and a recession/bear market. Interest rates hikes lead to a recession, always.

Just take some profits. If your big winners like Premium Brand doubled, sell half. At least you'll be playing with the house's money. (it means you get back your initial investment and therefore you cannot lose anything - ignoring taxes)

Anonymous said...

Thank-you, anonymous, for writing about your experience with investing with a margin account. As a new investor, I am constantly reading about other people's successes with investing. As a result, it is easy to jump on the band wagon without being mindful of the risks involved. You rarely hear about an investor's bad experiences with investing because no one wants to talk about the money they lost. Thanks for sharing your experience.

Sunny said...

Regarding pot stock: pot stocks are really volatile. They don't react quite well to bad financial news. I have APH in my portfolio, and I think its the best pot stock, but even this one is quite volatile. Be careful. Don't invest too much in pot stock.


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