OK, so noobie me used WealthSimple to gamble a few dollars to learn about how the stock market works.
So I bought 36 shares @ .28 cents apiece of some shitty little gold mining company called Argonaut.
Their value shot up to 39 cents yesterday because of news it's being eaten by a slightly bigger fish called Alamos.
Can someone ELI5 what this means?
News release, with stock stuff in it:
I get the sense that I'm about to be winning, but I'm not sure what to do.
If you hold on to the stock until the deal closes, you get 0.185 shares of the acquiring company Alamo for every one of your shares, so 36x0.185=0.666 shares of the new stock. In addition they are spinning off the mines owned in the US and Mexico to a new company, and you get 1 share per of that new company so, 36 shares.
Total value is supposed to be around 40 cents, so, as a result of this deal you should be about 12 cents per share better off. Meaning your 10 bucks should be worth about 14 now.
Yes, it closed at $14.22 yesterday.
The Alamos shares are worth a little over $19 as of yesterday closing.
Should I sell? Or hold on to them?
I probably would sell it just to not have to mess with. Maybe if I had more shares I'd think of it differently. If I wanted to keep the new company just get the $14 and go buy one share of Alamos.
Oh and to add, something I didn't think of but I've had happen. You may just be paid cash at the deal close for the 0.666 shares of Alamos, which at the moment would be about 9.69 cents, but depends on the value of Alamos at the time. I believe that's due to a broker policy, since you will have < 1 share of the Alamos stock.
Yes, I consider it little better than gambling.
I spread about $50 bucks around, including some doge and shiba coin. Also eth, but it seems to suck.
Also, this is one of the things I kind of have to mess around with to learn.
Yeah at least crypto doesn't have dark pools.
First time looking into this. This shit should be illegal. Reading the Investopedia article (trying to paint it in a good light) it sounds like one of those "this would be considered illegal if YOU did it but because we own everything, we get away with it" kind of things.
The article is all "Imagine the bind gigantic corporations would be in if they had to follow the rules like everyone else!" and I'm like, "ya".
If you want to just mess around with stock strategy purchases with little risk, I would suggest looking into paper trading. Something like ThinkOrSwim or Investopedia will give you money to 'trade' with and track your portfolio performance for 0 risk.
When Europe had natural gas supply problems in the coldest winter in 20 years but the energy commodities didn't go gangbusters, it just plainly revealed just how much manipulation there is in the market, even without bot trading.
Crippling tax penalties coerces normal people to put their life savings into the market to expose it to the wealthy and well connected and provide the opportunity for them to steal it. Just another economic cycle of Clown World.
The boilerplate investing advice is "just buy the S&P 500, bro." Yet people wonder why companies aren't going bankrupt from woke shit yet.
Forget ESG — Disney, Google, et al. already have your money. And you'll keep feeding them your retirement because "diversification," "muh inflation," "time in the market beats timing the market," or whatever investing pablum you can think of.
Serious investors make the point that strong stock market performance of the past 70ish years isn't guaranteed in the future. Diversification goes beyond 3/6 etf strategies, ideally including a rural estate, food rations, ammunition. Seems less fantastical than society taking the risk of a depression surpassing 1930s virtuously.
If you are going to buy stocks in a single company, you should do it with companies that you use and who make products or services that you like. It is still gambling, but your odds are much better. My Amazon stock has been making me a killing for the last ten years.
Penny stocks though are no better than buying lottery tickets.
If you are serious about investing, stick to mutual funds. If everyone just put their money into an S&P 500 fund, 99% of them would end up better off than from what they are currently doing. To beat the S&P 500, you need to be very lucky, or have the ability to see the future, like Paul Pelosi.
I can only really afford penny stocks at the moment, though it looks like one or two of those might be a bit ghosty, they just don't do anything.
I do have a mutual fund (and a TFSA) through the bank that I deposit a little bit into every month, been doing so for a few years now. I figured it was time to "diversify" a little bit, and there's no savings bonds here any more.
Then you should save up until you have enough to get into a mutual fund. For Fidelity, it is only $100 per fund IIRC. I use Vanguard, and their lower limit is $3000. But once the fund is opened, you can add to them in whatever amounts you want.
Or you could buy an ETF if the upfront cost of a mutual fund is too high. As long as it's not too esoteric, you'll probably find one mimicking a mutual fund, especially if it's normie shit like the S&P.
Buy solid, functioning companies stock and hold long term. Day trading means losing to the bots, probably.
Buy index funds and mutual funds. That's my only advice.
I have a managed mutual fund through my bank that I put $25 into every month. Also a TFSA, same amount.