We’ve long relied on these three tips to find the best stocks to recommend in our investment services and newsletters, including our flagship advisory, The Successful Investor. We think they can help you pick winners, too.

1. Some of the best stocks have hidden assets: By hidden assets, we mean assets that are getting less investor attention than they deserve. When …read more »

One key aspect of a marketer’s job is to describe the features of whatever he or she is selling as a benefit to the potential buyer. Understanding this process can help you get past the marketing and get better value when you make consumer purchases. It can be an even bigger help in keeping you out of bad financial investments. …read more »

Every Wednesday, we publish our “Investor Toolkit” series on TSI Network. Whether you’re a new or experienced investor, these weekly updates are designed to give you fundamental stock market investing tips. Each Investor Toolkit update gives you a specific tip and shows you how you can put it into practice right away.

Today’s tip: “The value of a company as …read more »

Every Wednesday, we publish our “Investor Toolkit” series on TSI Network. Whether you’re a new or experienced investor, these weekly updates are designed to give you specific stock trading tips on the fundamentals of successful investing. Each Investor Toolkit update gives you a fundamental tip and shows you how you can put it into practice right away.

Today’s tip: “By …read more »

Every Wednesday, we publish our “Investor Toolkit” series on TSI Network. Whether you’re a new or experienced investor, these weekly updates are designed to give you specific advice on the fundamentals of successful investing. Each Investor Toolkit update gives you a fundamental tip and shows you how you can use it to increase your chances of making winning stock picks. …read more »

Buying and selling stock options is different from regular stock transactions. You can make money in options investing, of course, but to be successful in this complex, often risky area, it’s crucial to have a firm grasp of how options investing works (and how to avoid the pitfalls that can expose you to serious risk).

How options investing works

An option …read more »

Attractive opportunities for short selling stocks come along from time to time, but it’s a hard way to make money. That’s because short sellers face a number of unique disadvantages that don’t apply to buyers.

(See below for three risks to be aware of if you’re considering short selling stocks as an investment strategy.)

How short selling works

When you sell short, …read more »

Many investors buy bonds to make their portfolios less volatile. But high-quality utility stocks, like the five we analyze in this issue, have several advantages over bonds.

One advantage of utility stocks is that there is no set limit to the returns they provide. That can help protect you from inflation. Bonds can’t provide this protection, because they’re fixed-return investments.

Utility stocks …read more »

Our Successful Investor business model has two parts. We publish investment advice, and we manage investor portfolios.

This two-business model has advantages for our subscribers. The stock market investing problems we encounter as money managers, and the solutions we come up with, help us give our readers unbiased, practical advice. This serves as a counterweight to advice you may encounter elsewhere …read more »

As part of our investing strategy, we put a lot of importance on the amount of goodwill that a company carries as an asset on its balance sheet.

Goodwill is an accounting entry that reflects the price that the company paid for its acquisitions, minus the value of the tangible assets, like land and equipment, that it received as part …read more »

These days, we see lots of ads for books, seminars and software that purport to show you how you can consistently make returns of 50% to 100% (or more) yearly in forex investments. Some even go so far as to say you can do it in a few minutes a day.

Forex investments involve dealing in foreign currency futures and options. …read more »

Members of Pat McKeough’s Inner Circle enjoy a double benefit when it comes to taking advantage of our investment research. They get to address investment questions directly to Pat and his research associates; AND they get to see all other members’ questions, and our answers (of course, we eliminate any personal information). Members usually ask about stocks they own or …read more »

Small cap stocks are companies with a “market cap” (the value of shares they have outstanding) below $2 billion, or some other arbitrary figure.

(In a recent Wall Street Stock Forecaster, we updated our buy/sell/hold advice on a U.S. small cap stock that’s up nearly 63% since March 2009. See below for further details.)

Small cap stocks have the potential for …read more »

One of our key rules for successful investing is to diversify — spread your money out across most, if not all, of the five main economic sectors: Manufacturing & Industry; Resources & Commodities; Consumer; Finance; and Utilities.

So you can get a sense of how you can put this investing strategy to work on your portfolio, I’d like to share …read more »

One part of our three-pronged investing program is to spread your money out across the five main stock sectors of the economy (Manufacturing & Industry; Resources; Consumer; Finance; Utilities). (The other two parts are to hold mostly high-quality, dividend paying stocks, and downplay stocks in the broker/public-relations limelight.)

How we place stocks in the appropriate stock sectors

Many stocks clearly fit in …read more »

We’ve chosen CGI Group is our “Stock of the Year” for 2010. It differs from past #1 picks in that it’s not a dividend payer and we rate it as Extra Risk. But we’ve followed it a long time and feel it may have set off on a rise that lasts years beyond 2010.

The company took its present form in …read more »

Trading Canadian stock options generates a lot of brokerage commissions, which is why many young, aggressive brokers specialize in it.

But many of these brokers wind up dropping out of the investment business or choosing another specialty. That’s because it’s impossible to build a lasting clientele by trading Canadian stock options, since you place your clients in investments that will …read more »

On January 15, Stock Picker’s Digest, our newsletter for aggressive investing, will unveil a stock that’s well positioned for explosive profits in 2010 — and if you hold it for a couple of years, there’s a great chance that it could skyrocket even further. In fact, we think this company’s prospects are so bright we’ve named it Stock Picker’s Digest’s …read more »

Pat McKeough, host of TSI Network (www.tsinetwork.ca) was recently featured in an article in The Globe and Mail written by Rob Carrick.

Entitled “Stop-loss? Limit? The orderly world of stock trades,” the article covers some of the common methods of buying and selling equities. It also includes Pat’s opinions on trading tools, such as stop-loss and limit orders, and how they …read more »

Stop-loss orders are a stock trading strategy investors use to sell a stock if it falls to a specific price.

For example, if you own a $12 stock, you might tell your broker to sell it “on stop” if it hits $10. This may limit your losses if you paid more than $10. If you paid less, it may preserve …read more »

If you feel stocks have become overpriced lately, you might want to take advantage of this by short selling stocks — that is, selling borrowed shares in hopes of a drop in price. We advise against this strategy, mainly because of the perennial drawbacks of short selling.

Short selling is when you borrow stock from a broker and then sell it. …read more »

With the Canadian dollar trading near $0.97 U.S., and outperforming many of the world’s major currencies, interest in forex (or foreign exchange) investments has picked up lately.

Forex investments involve dealing in foreign currency futures or options. This can make sense for a business that is forced to take on unacceptable currency risk. Futures or options let the business pass that …read more »

You’ll find one of our six Successful Investor ratings displayed next to every stock we cover in each of our four investment newsletters.

These ratings are a key guide we use to manage the portfolios of clients of our Successful Investor Wealth Management service. And they can give you a leg up in adding winning stock picks to your portfolio, too.

Our …read more »

With the market rebounding while interest rates remain near historic lows, borrowing money to invest still looks attractive.

That’s especially true if you borrow to buy some of Canada’s best dividend stocks, or funds that invest in these stocks. These include the funds we recommend in Canadian Wealth Advisor. These investments will give you regular dividend income and cash flow to …read more »

When you join my Inner Circle service, you get to ask me your own personal investment questions, plus you get to see what other Inner Circle members have asked. So you can see how the service works, and get a sense of how it might be able to help your portfolio, I’d like to share a recent member question about …read more »

An investor recently asked us a question that touches on several stock market investing concepts that we cover in our Canadian Wealth Advisor newsletter.

He said, “Due to a corporate reorganization, I now have the option of cashing in $279,000 from insurance-company mutual funds, then transferring the money into my brokerage RRSP account. I prefer to invest the money directly …read more »

Many investors consider investing in alternative investments, like art. It’s an interesting area that we’ve talked about from time to time with my Inner Circle members.

Our view is that you can’t really invest in art. An investment is something that may one day produce income — dividends from stocks, interest from bonds, rent from real estate, and so on. Art …read more »

Here are four classic, profit-killing errors that all investors make from time to time. All can seriously hinder your stock market returns.

1. “Averaging down” without reconsidering whether you should have bought in the first place.

Many investors have made lots of money by “averaging in” to the stock of a well-established, well-managed company — that is, buying more as funds became …read more »

Investor response to bad economic news often seems like an allergic reaction to a bee sting. Many investors take each new tidbit of economic news as the sure sign of an ominous new trend. But in fact, there’s a large random element in the economic news.

Economic statistics vary between one reporting period and the next, due to a variety of …read more »

When the economy is volatile, there seems to be more advertisements for forex (foreign exchange) investment products, or strategies for making forex investments.

Dealing in forex investments through foreign currency futures or options can make sense for a business that has been forced to take on unacceptable currency risk. Futures and options let the business pass that risk on to speculators …read more »

Many aggressive investors find stock option investing hard to resist. However, the vast majority of investors lose money with options.

An option is a contract between a buyer and a seller that is based on an underlying security, usually a stock. The buyer pays the seller a fee, or premium, for certain rights to the stock. In exchange for the …read more »

It pays to stay out of new stock issues. Most come to market when it’s a good time for the company and its insiders to sell. This may not be, and often isn’t, a good time for you to buy.

New stock issues start out with a big marketing push by the firm that sponsors them. When the initial hoopla ends, …read more »

Short selling involves selling securities an investor doesn’t already own. A short sale is performed in the belief that the price of the security being sold will go down. The seller can then cover the sale by purchasing the security at a lower price, making a profit based on how far the price has fallen. Short sellers face specific regulations …read more »

When making investment decisions, it pays to take a wide range of relevant facts — positive and negative — into account. Unfortunately, it’s all too easy to zero in on a scrap of information that reinforces your wildest trading impulses or deepest economic fears.

It’s particularly risky if the scrap of information appears in a headline, especially on the front page. …read more »

As you’ll see inside, many companies we follow have piled up hoards of cash. So have individual investors who dumped stocks late in February, when the market fell below November’s lows.

Cash on the sidelines is a powerful market and economic indicator. It represents latent buying power that can go to work in a heartbeat, when investors and businesses regain confidence. …read more »

When stock prices go down as much as they have lately, it generally means the stock market offers some highly attractive buying opportunities. But many investors now wonder if we are headed for a period of years of weak stock markets.

In fact, we’ve already gone through more than a decade of unsettled stock markets. Stock prices have dropped more than …read more »

A stop is an order to sell a stock if it falls to a specific price. If an investor owns an $18 stock, for example, they might tell their broker to sell it “on stop” if it hits $16. This may limit their losses if they paid more than $16; if they paid less, it may preserve some of their …read more »

partly because so many commentators are talking about the risk of a 1930s-style depression.

That kind of talk is common in any deep stock market setback. But this time it’s closer to home, due to plunging house prices and the troubles of the auto industry.

To top it off, President Obama has taken to warning that we risk a new depression if …read more »

When making investment decisions, chart reading seems much simpler than delving into and weighing the fundamentals. It appears to be a winning combo of moneymaker and time saver.

Some successful investors find it helps to know a little about charts. But if you rely on charts at all, you should look on them as just one of many things to consider …read more »

Economic turmoil over the past few months, and the sharp drop in stock prices, have rekindled investor interest in bonds. This is understandable, since bonds provide steady income streams and a guarantee to repay the principal at maturity.

However, bond prices will likely fall over the next few years as interest rates inevitably rise again. Big government budget deficits could spur …read more »

Canadian banks have recently issued new preferred shares to raise capital. To attract investors in a time of weak stock markets, they’ve issued these preferreds on especially attractive terms.

The preferreds pay dividends that give them yields of 6.25% to 6.50%. That’s higher than current Government of Canada long-term bond yields of 4% or so.

What’s more, preferred dividends are treated the …read more »

Some investors base buy and sell decisions in part on p/e ratios (the ratio of a stock’s price to its per-share earnings). When we provide a p/e, we try to eliminate all one-time items from earnings. These include writedowns, investment gains or restructuring charges. This gives you a clearer, truer view of a company’s profitability.

For decades, investors have used p/e’s …read more »

In a bear market, or stock market downturn like the one we are now in, investors spend a lot of time wondering about “the bottom”.

Sometimes, the market seems to turn around overnight, and the indexes quickly shoot upward. Other times, the indexes bump along near the bottom for months or even years.

Here are two consistent things about bottoms:

1. You …read more »

We are always happy to expand the information we provide to you, but only if it improves the ease and value of using our service.

For instance, some investors base buy and sell decisions in part on p/e ratios (the ratio of a stock’s price to its per-share earnings). When we provide a p/e, we try to eliminate all one-time items …read more »

At times like this, when deciding what to do with your portfolio, you should resist the urge to dump high-quality investments just because you think they may get dragged down by a further decline in the market.

After all, when things look bleakest (as they do today), the market often turns around and begins rising. That’s especially true of high-quality stocks …read more »

Investors today often focus on two key questions: When is the market likely to turn around and start to rise again, and which stocks are likely to lead the way upward?

On the first question, my view is that the rise could start any time from now through May. Many stocks are cheap at current prices, even in view of the …read more »

The $50 billion Madoff affair no doubt qualifies as the swindle of the year for 2008, and rivals Enron in financial history. If so, let’s hope investors look closely to see where the money went.

So far, media accounts reflect brokers’ views that Mr. Madoff’s stated investment strategy was sound, and that it only failed because he had too much money …read more »

Conservative investors have little need to dabble in risky stocks these days, since many conservative favourites are unduly cheap.

BCE Inc. plunged last month after its $42.75 takeover by a private consortium fell through. That happened because BCE failed the ’solvency test’, which was a condition of the deal.

Analysis showed that, post-takeover, BCE’s tangible assets (that is, excluding goodwill or ‘value-as-a-going-concern’) …read more »

If you want to invest in index funds, we think you should stick with exchange-traded funds (ETFs) like those we recommend as buys.

ETFs are like open-ended index funds in that they trade at net asset value. But ETFs trade on stock exchanges, just like stocks.

You’ll have to pay brokerage commissions to buy ETFs. But you’ll make that back quickly with …read more »

Investors worry that President Obama will hurt the economy by raising taxes and working against free trade.

However, Obama may turn out to be more conservative in action than you’d guess from looking at his circle of friends and associates, or some of his earlier writings.

U.S. politicians are rarely as bad or extreme in office as you’d expect, based on their …read more »