I have an extra special treat for you guys today. I recently decided to be brave and ask my investing course instructor to do an interview for MakintheBacon. Perhaps you may know her? She’s Ellen Roseman, personal finance columnist for the Toronto Star and one of my personal personal (haha) finance idols. I hope you enjoy reading her responses as much as I did. 🙂
1. How did you get into investing?
My grandmother gave us one Bell Canada share on each birthday. Too bad I didn’t keep them but cashed out when I needed money. Later, when I started working, I set up an RRSP and invested in GICs. Interest rates were high at the time. Bought my first mutual fund in the late 1980s. It took me a few more years and a stockbroker’s help to get into stocks in a serious way.
2. What made you decide to write about personal finance?
I started my journalism career as a student at the McGill Daily. When I graduated, I got an M.A. in philosophy at the University of Toronto. Since jobs were scarce for philosophers, I fell back on journalism and got hired at Maclean-Hunter’s trade magazine division. That led me to newspapers and the business beat (which I really enjoyed). From there, covering personal finance was a natural.
3. What`s your take on personal finance blogs?
I’m a fan. I subscribe to about 10 personal finance and investing blogs. I think it’s important to hear from people struggling with money and the learning curve that comes with financial mastery. Financial service providers should not dominate the conversation. They have a strong vested interest in conveying messages that fatten their bottom lines. We need independent voices.
4. What do you think caused the surge in popularity for personal finance and personal finance blogs?
I think the surge started in the late 1990s when technology stocks were hot, hot, hot. Bookstores were bulging with guides on how to invest in tech stocks. When the dot.com crash came (a surprise to many investors), the Internet started becoming a place to go to talk about money, saving, spending and investing. That led to a proliferation of blogs. I started mine in March 2007, which was ahead of some people but behind others such as Canadian Capitalist and Million Dollar Journey).
5. What do you think are the most common reasons that people don’t invest?
Many people hate math and think they need to know math to be a good investor. Others can’t handle risk and don’t want to lose capital, even if it means accepting puny interest rates. Some people worry about the time it takes to follow their investments since they already have super busy lives. Some people avoid investing because they can’t handle their emotions (fear and greed). Some people dislike or distrust the financial services industry and want to stay far away from it.
6. Do you feel that the world of investment is still mainly male-dominated industry?
Yes, there aren’t enough women on corporate boards and in the ranks of CEOs. I’m glad to see the Ontario Securities Commission and other regulators try to promote more diversity in the business world. When I go to an investing event, I see very few women there. I often get speaking engagements because they need a token woman at the podium.
7. What are some of your favourite stocks and why?
Canadian bank stocks have good yields, dividend growth and capital growth. They can produce double-digit annual returns over a 10-year period, a better return than most mutual funds sold by banks. These stocks are currently out of fashion, but they will come back. I like pipelines and utilities (such as Enbridge, Inter Pipeline, Emera). I started an investment club and lucked into some good stocks that way (such as Constellation Software, ticker symbol: CSU and Dollarama).
8. What would you consider to be your biggest investment mistake?
Selling my grandmother’s Bell shares was my first big mistake. I also make mistakes by selling stocks quickly when they run into bad news. I always think there’s more bad news to follow. That worked with Nortel (which I sold before losing money), but not with Teck Resources, which collapsed after the 2008-09 crash and then recovered. When a stock does well, I hold it for a long time. I don’t rebalance enough.
9. Who are some people that you admire in the personal finance or investing industry?
I like U.S. journalist Helaine Olen, author of Pound Foolish: Exposing the Dark Side of the Personal Finance Industry. I like David Chilton, who showed me the first couple of chapters of his Wealthy Barber manuscript in the late 1980s and didn’t mind when I said it was boring. Why did the characters keep talking about baseball? (I’m not a sports fan.) Later, we both laughed at my inability to recognize a bestseller. I like Preet Banerjee’s book, Stop Over-Thinking Your Money, as well as his newspaper articles and his blog. Finally, I think Rob Carrick does a great job at the Globe and Mail, standing up for financial consumers. I hired him when I was an editor there in 1996 and getting ready to come to the Toronto Star.
10. What is one piece of advice you would give to people who are just starting out in investing or thinking about getting started?
You can invest in stocks or ETFs on your own. It’s not that hard. It doesn’t require math skills. All you need is to consult free resources on the Internet, such as Karen’s blog*, to prepare yourself for the journey. Don’t wait too long. The more experience you have, the better. Investing is a skill that can be learned, just like riding a bicycle, and will stay with you. Make it a habit to save part of your income, so you will have more money to invest in your RRSP or TFSA.
*Editor’s note: I didn’t ask her to put in a plug for my blog in her response, but am quite flattered she did. 🙂