A year ago I started my own Tax Free Savings Account. The government lets us toss $5 000 a year into an account to play with how we please. We can use a variety of investment tools and whatever we make we can keep – tax free.

Normally there is a capital gains tax that must be paid when you trade securities and make money, so for amateur traders this is a great way to make some money and keep it away from the tax man.

So I dropped a few bucks into a Scotia iTrade account and started playing.

I bought Apple (AAPL), Lululemon (LLL) and ManuLife Financial (MFC) and started off great. I made gains my first few months and was impressed.

Despite those 20% gain in 3 months, I didnt things were moving fast enough. I was hoping to use the TFSA as a way to “win” vacation money and so my goal was a 50% gain for fall 2010. I wanted to try and hit a homerun to catch up to my goal, so I got fancy.

I took advice from friends, I chased riskier stocks and my portfolio dropped – hard. I owned uranium stocks right before the tsunami in Japan and I was deep into silver when it had a spring crash.

At the bottom, I had turned a 20% net gain into a 35% net loss. Yes, that was a nearly 50% drop from my peak to my valley.

Had I maintained my original 3 holdings and never traded for the past year, I’d have a portfolio gain of more than 40%. Instead I spent more than $1200 making 60+ trades at $20 each and sit with a portfolio worth that’s – 15% year-over-year.

The summer has been better. I’ve managed to make a 30% rise from my bottom to get back in the game. I still tried to chase the dragon during the past month’s roller coaster market and ended up even.

My current portfolio has oil (HOU.TO), silver (HZU.TO) and Lululemon (LLL). I’ve set stop limits for each order, a floor that will trigger a sell order should the bottom fall out. Every few days I raise the floor as the stock values increase to make sure I don’t get hit like I did in the spring.

Moral of the story? Don’t take tips from your dental hygienist. Do your homework and keep it simple. Buy low, sell high and think long.

Buzz

Dad. Broadcaster. Writer.
Three time Guinness World Record Holder.

I run the world for Team Diabetes.