No matter what kind of investing approach you follow, we feel that you can improve your overall results — and cut your risk — by avoiding these 5 common investment errors.
1. Failing to follow a realistic stock market trading strategy: Some investors, particularly newcomers, plan to buy a few hot …read more »
To cut your investing risk, we recommend following our three-part system: Hold mostly high-quality, dividend-paying stocks, spread your money out across the five main economic sectors (Manufacturing & Industry; Resources; Consumer; Finance; Utilities) and avoid or downplay stocks in the broker/public relations limelight.
How “in-the-limelight” stocks can hurt your portfolio
Even well-established …read more »
The p/e ratio (the ratio of a stock’s price to its per-share earnings) is one of many handy investing tools.
Typically, you calculate p/e’s using a stock’s current price and its earnings for the previous 12 months. The general rule is that the lower a stock’s p/e, the better. And …read more »
Discover how to structure your investment portfolio in a way that could save you thousands of dollars
Click here to immediately download our new free report, Capital Gains Canada: 7 Secrets for Managing your Canadian Capital Gains Tax Liabilities.
As you consider how to manage your tax bill for the current income-tax …read more »
We think investors will profit most — and with the least risk — by buying shares of well-established, dividend-paying stocks with strong business prospects.
These are companies that have strong positions in healthy industries. They also have strong management that will make the right moves to remain competitive in a …read more »
When clients join our Successful Investor Wealth Management service, they often ask us whether they should hold bonds or focus more heavily on stocks. This is a particularly important question for investors who rely on their portfolios for income.
It’s important to note that there is no single “best portfolio” for …read more »
The U.S. restaurant industry has faced tough challenges over the past 18 months. That’s because the economic downturn has prompted more consumers to eat at home, or to spend less when they dine out.
The best U.S. restaurants have done a good job of cutting costs during the slowdown. Some have …read more »
Investors sometimes ask us how to select the best investments for young children. If children are under the age of 18, they cannot yet invest as adults. However, there are a couple of savings and investment options available.
The first option is for you (or the child) to open a bank account in the child’s name. Interest paid on small balances may range from zero to, say, 0.75% annually, paid monthly. All of the major banks have special bank accounts for children, usually without service fees on basic transactions. However, once the child has accumulated $500, he or she could move the money into an interest-paying guaranteed investment certificate (GIC).
If you want to build up an investment portfolio for a child, then an informal in-trust account is a low-cost and flexible option. (Investments or investment accounts in the name of a child must be set up in trust because minors are not allowed to enter into binding financial contracts.) An adult must be responsible for providing the investment instructions and signing the contract on the child’s behalf.
Don't take chances with your retirement nest egg. Protect and grow your portfolio with expert advice from Pat McKeough, cited by The Wall Street Journal as "one of only four investment newsletter advisors who have managed to serve their readers well over the long haul." Click here to learn how you can profit from Pat McKeough's The Successful Investor newsletter.An informal in-trust account has a donor (or “settlor”) who contributes funds to the trust. The trustee is the person in charge of the account, and is responsible for managing the funds for the child (the “beneficiary”). The settlor should not act as the trustee. The settlor’s spouse can be a trustee, however.
The money belongs to the child, but only the trustee can make withdrawals if the child is under the age of 18. Once the child reaches 18, the money is theirs to do with as they wish.
Interest and dividend income earned in an in-trust account is attributed to the contributor until the child turns 18, unless the contributor is not related to the child. However, all realized capital gains are directly attributable to the child. So it’s best to downplay investments that mainly provide interest or dividends, and instead hold stocks or mutual funds that will earn capital gains.
(Our latest free report, “Canadian Stock Market Basics: How to Trade Stocks and Make Good Investments in Canada,” includes all you need to know to set up an investment portfolio. The report also includes strategies you can use to select the best investments for your financial goals. Click here to download your copy and get started right away.)
Secondary income, or income earned on income from investments in the trust, will be taxed in the hands of the child. All income earned on Canada Child Tax Benefit payments put into the account is taxed in the hands of the child, without attribution to the contributor.
With the first contributions to the in-trust account, exchange-traded funds are some of the best investments to choose as a starting point. If you start out in exchange-traded funds, we recommend putting two-thirds of your contributions into a Canadian exchange-traded fund and the remaining third into a U.S. exchange-traded fund.
However, there’s nothing wrong with buying individual stocks with smaller sums, say under $12,000. You just have to accept a bigger proportional commission expense when you get started. To further cut your commission costs, consider buying the shares through a discount broker, rather than a full-service broker. That’s because discounters generally charge much lower minimum commissions.
As a member of TSI Network, you may have already seen Canadian Stock Market Basics: How to Trade Stocks and Make Good Investments in Canada. If you haven’t yet read this new free report, click here to download your copy today. I’d also encourage you to share the report with a friend by forwarding this email to them. It’s my “thank you” just for signing up for my free daily updates.
Permalink: http://www.tsinetwork.ca/?p=37872
Tags: account, best, Canada, canadian, Capitalization, dividend, income, invest, investing, investments, management, option, portfolio, rights, start, stocks
Related
In today's economy, it's more important than ever to have clear investment advice that is tailored to your own personal goals. This is where Pat McKeough's conservative safe-investing philosophy comes in. Through TSI Network, you get access to reports, monthly newsletters and premium services that go beyond the daily headlines to give you all the advice and information you need to build a portfolio with long-term growth potential. Simply click on the links below to discover which service is right for you.