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We think investors will profit most — and with the least risk — by buying shares of well-established, dividend-paying companies with strong business prospects. These are companies that have strong positions in a healthy industry. They also have strong management that will make the right moves to remain competitive in a changing marketplace.

A company with a long-term record of paying …read more »

Should you stick with your current stock broker or switch to a discounter? To answer that question, you need to consider your own experience and abilities, and those of your stock broker.

Brokers, good and bad

A good stock broker (one who is experienced, knowledgeable, and oriented toward the long term) is worth the top commissions you are likely to pay. For …read more »

Asset allocation funds are mutual funds that distribute their assets in accordance with all investors’ goals (consistent returns, diversified investments, etc.). Unlike balanced funds, they can shift their portfolio allocations between stocks, bonds and cash in order to capitalize on perceived investment opportunities in any one of those classes.

If a fund’s name includes the term “asset allocation,” it means …read more »

An RRSP meltdown is a strategy some financial advisors suggest as a way to withdraw money from an RRSP while paying little or no income tax.
In the simplest form, you set up an investment loan and make the interest payments from RRSP withdrawals (the withdrawals must be equal to the interest payment). Since the interest on the loan is tax-deductible, …read more »

These are difficult times for income-seeking investors. Bonds yield around half of what they did 10 years ago, yet more and more investors are nearing retirement, when many pay close attention to investment income. Many also see income as a sign of investment quality. These factors have kept up investor interest in income trusts.
Despite Ottawa’s plan to start taxing trust …read more »

Dividend reinvestment plans (or DRIPs) are plans offered by some companies that let shareholders receive additional shares in lieu of cash dividends.

DRIPs can be a good way to slowly build wealth over a long period, for a number of reasons. First, they eliminate the nuisance of receiving small cash dividend payments. Second, some of them let you reinvest your …read more »

Royalty trusts involve far more risk than most investors realize. This is why we’ve recommended so few of them (and why we’ve managed to find some real gems among the ones we have recommended).
Ottawa has enacted new rules for royalty trusts that take effect in 2011. These have changed the outlook for many. However, the basic tests we use to …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 »

Growth stocks are companies that are expected to have earnings growth above the market average. Frequently, growth stocks pay little or no dividends, instead re-investing any extra money to promote further growth.

These are not to be confused with momentum stocks. Momentum stocks are stocks that are moving higher in the market. While individual definitions may differ, the overall goal from …read more »

Bond funds are mutual funds that specifically invest in different government and corporate bond offerings.

Many bond funds posted strong results in the past, with yields of 6%, 8% or 10% over five or 10 years. This, though, was a function of the trend in interest rates; at the start of those periods, the funds were buying bonds with …read more »