Buying your first stock requires lots of research before you take the plunge

Buying your first stock requires lots of research before you take the plunge

When Robin Speziale entered Grade 10, his teacher dropped a business newspaper on a desk in front of his class and asked each student to circle a stock to spend the semester tracking.

While most classmates lost interest when the term ended, Speziale was enamoured. By 30, the Toronto man had built a stock portfolio worth $300,000 and written a book on “market masters.”

That’s not the norm, especially for millennials, who are often more concerned with covering rent than investing. All the numbers, unfamiliar terms and those jagged graphs can make navigating the market intimidating — and many professionals agree that buying individual stocks isn’t the best move for those new to investing.

Even billionaire Warren Buffett discourages average investors from buying an individual stock because they can be costly and high-maintenance to manage. He suggests index funds, whose value is based on the health of an index like the S&P 500 or the Dow Jones industrial average, because they are less expensive and aren’t tied to the success of a single company.

But if you’ve been dabbling in the market for awhile and are keen on bucking the Oracle of Omaha’s advice, Speziale shared a few basics on how anyone can learn to buy their first stock.

Before you even think about shelling out any money, Speziale stresses research is key.

He digs deep into business news stories and a company’s quarterly financial reports that he finds on the company’s investor relations website, through press releases or on SEDAR, an online platform offering access to securities documents.

“There will be a nice summary of the revenue that quarter and year-over-year and you’ll see the earnings per share and everything else,” Speziale says. “You’ll see the key highlights and everything like cash on hand. You have to make sure the balance sheet is strong.”

Once you’re confident in your research, it’s time to turn to a broker or an investment platform.

“Every bank in Canada has their own, what they call, online brokerage,” Speziale says. “You don’t need to call a broker, if you don’t want to. You can do it yourself online.”

Many people also use online investment managers, which help people buy exchange-traded funds.

Signing up for any investment platform or service will involve presenting some identification, but the process isn’t long or arduous. Once the account has been set up, you can transfer money to it and buy.

But have realistic expectations, Speziale warns.

He recalls that he first bought five stocks he had researched and “not all did well.”

“If you buy a basket of five or 10 or 15 or 20 stocks, not all of them are going up,” he says. “Don’t ever expect that you might get some winners early on.”

One of the most basic strategies he thinks new investors should use is diversification — having stocks in multiple companies to offset some of the lows a stock might face.

“Those glorious stories about someone putting all their money in Apple in 1995 and now they’re a millionaire, that’s few and far between,” Speziale warns.

Buying stocks in too many companies could become unmanageable and risky and certainly don’t ever believe you can predict what will happen to a stock with certainty, he says.

“Even Buffett would say we go through business cycles where there’s recessions that naturally occur in North America, and the stock market will lag. It will drop,” Speziale says.

“It’s a marathon. It’s not a sprint.”

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

As of Friday, Alberta has under 10,000 active COVID-19 cases. (Image courtesy CDC)
Alberta identifies 573 new COVID-19 cases, 13 deaths on Saturday

There are currently 9,727 active cases of the virus in the province

A firetruck sits in front of a home on Harvey Close in Red Deer Saturday afternoon. (Photo by Sean McIntosh/Advocate staff)
Firefighters respond to Red Deer fire

Red Deer firefighters responded to a blaze in the north part of… Continue reading

(Courtesy photo)
Red Deer rental prices drop slightly

Renting an apartment in Red Deer became slightly cheaper last month. Rentals.ca… Continue reading

Rylee Trippel was last seen Friday. (Photo contributed by RCMP)
Red Deer RCMP looking for missing teen

Police are looking for a teen who was last seen in the… Continue reading

The Red Deer Outreach Centre’s Adopt a Family program raised $60,000 in 2020. (Photo courtesy Red Deer Outreach Centre’s Facebook)
Red Deer Outreach Centre’s Adopt a Family program raised $60K in 2020

The executive director of the Red Deer Outreach Centre says she is… Continue reading

Former Alberta Premier Rachel Notley shakes hands with Joel Ward, former Red Deer College President and CEO, as Notley announces that the college is on the path to grant degrees. Red Deer-South MLA Jason Stephan says university status is not a necessary condition for offering degrees. (File photo by Advocate staff)
Future of Red Deer University increasingly uncertain

MLA’s college update says RDC more like SAIT and NAIT than a university

RCMP say missing teen Hope Tivendale has been found. (File photo by Advocate staff)
No foul play suspected after burned body of homeless person found in North Vancouver

VANCOUVER — A burned body, believed to be of a homeless person,… Continue reading

The central zone experienced a spike in the number of COVID-19 cases Thursday, rising from 454 to 508 active cases over the past 24 hours, with 10 people in hospital. (THE CANADIAN PRESS/Darryl Dyck)
Spartan Bioscience says Health Canada has approved its rapid COVID-19 test

TORONTO — An Ottawa company says it’s received approval from Health Canada… Continue reading

Conservative Leader Erin O'Toole holds a press conference on Parliament Hill, in Ottawa, Thursday, Dec. 10, 2020. THE CANADIAN PRESS/Sean Kilpatrick
Conservative Leader Erin O’Toole defends decision to back, then oust, Sloan

OTTAWA — Conservative Leader Erin O’Toole says he was once willing to… Continue reading

Quebec Premier Francois Legault pauses as he speaks during a news conference on the COVID-19 pandemic, Thursday, Jan. 21, 2021 at the legislature in Quebec City. THE CANADIAN PRESS/Jacques Boissinot
Non-essential travel ban would violate Constitution but courts might allow it: expert

MONTREAL — Fear that Quebecers will catch a new variant of COVID-19… Continue reading

A woman walks outside the Roberta Place Long Term Care home in Barrie, Ont. on Monday, January 18, 2021. The devastating toll of COVID-19 on long-term care residents in Canada has underscored the need for increased public funding for home care, advocates say. THE CANADIAN PRESS/Frank Gunn
COVID-19 deaths in long-term care reveal need for home supports: advocates

VANCOUVER — The devastating toll of COVID-19 on long-term care residents in… Continue reading

A Chinese flag is illuminated by sunshine in the Hall of Honour on Parliament Hill in Ottawa, Thursday, September 22, 2016. China is threatening retaliation against Canada after Prime Minister Justin Trudeau condemned a new security law giving Beijing more control over Hong Kong.. THE CANADIAN PRESS/Adrian Wyld
Diplomats contact Canadian held for over 2 years in China

BEIJING — Canadian officials have met online with former diplomat Michael Kovrig,… Continue reading

Marc Gold (centre) stands with senators André Pratte (left) and Peter Harder before being sworn in during a ceremony in the Senate on Parliament Hill, Thursday, Dec. 1, 2016 in Ottawa. THE CANADIAN PRESS/Justin Tang
Senator urges study of vexing barriers to using secret information in court cases

OTTAWA — A Senate committee should examine the hurdles that make it… Continue reading

In this file photo, a lotto Max ticket is shown in Toronto on Monday Feb. 26, 2018. (By THE CANADIAN PRESS)
Winnipeg ticket holder wins Friday night’s $60 million Lotto Max jackpot

TORONTO — A ticket holder from Winnipeg won Friday night’s whopping $60… Continue reading

Most Read