Norbert Preiner, 62, retired teacher and part-time basketball referee, Thorold, Ont.
What was your first stock?
I was 18 when I made my first investment. It was 1980 and I invested $500 in Gulf Canada options. I had a friend working as a co-op student there who told me it was being bought by Petro-Canada. I was excited at the prospect of making some easy money. However, I took so long to close that I had to call the options and lost about 20 per cent of my investment. I ended up owning Petro-Canada stock for a few years after that, but I didn’t make that much money.
After graduating from university in the summer of 1987, knowing I was about to start earning regular income, I took out a $10,000 loan from the bank to invest in a handful of stocks. I had a couple of friends who were brokers and looking for clients. They recommended some ‘hot tips’ – and I chose a few I heard about myself – assuming I could make enough money to pay off the loan in a year and continue investing. Then, a few months later, the market crashed. I lost 25 per cent of my portfolio on the first day and 50 per cent at the bottom of that bear market. I left the money in the account and made some of it back over the years. I learned valuable lessons about margin calls and speculative investing.
What was your investing experience after that?
After this experience, I started to educate myself about the market, including the benefits of investing for the long haul. I also started buying dividend-paying stocks such as TD Bank TD-T and TC Energy TRP-T. In more recent years, I’ve started buying exchange-traded funds (ETFs) to diversify my portfolio and to fund my kids’ registered education savings plans.
What advice would you give someone today buying their first stock?
If you’re starting with a smaller amount, say $10,000, I suggest investing in established, well-diversified ETFs so you can spread out your risk.
Once you start building your portfolio, consider buying high-quality, dividend-paying companies and reinvesting those dividends to take advantage of compound growth. I know people who have rolled the dice and did very well with companies such as Tesla or Shopify, but those stocks are volatile, and those results are few and far between.
Also, if someone gives you a ‘hot tip,’ it’s probably lukewarm when it gets to you. Make sure you understand the company and the risks of owning it before you buy.
This interview has been edited and condensed.