How To Invest

Pat McKeough has been making investing for beginners simple—and profitable—by helping investors make big gains for more than 25 years. His advice to beginning investors is the same as it is for all investors: buy high-quality, mostly dividend paying stocks (or ETFs that hold these stocks) and evenly spread your investments over the five main economic sectors (Resources, Manufacturing, Finance, Utilities and Consumer). Pat also believes investors should avoid stocks in the broker/media limelight and focus on those with hidden or little-noticed assets.

In addition, Pat thinks then beginner investors should cultivate two important qualities: a healthy sense of skepticism and patience.

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Investors should approach all investments with a healthy sense of skepticism. This can help keep you out of fraudulent stocks that masquerade as high-quality stocks. It will also keep you out of legally operated, but poorly managed, companies that promise more than they can possibly deliver.

If you are a new investor, you should also realize that losing patience can cause you to sell your best choices right before a big rise. All too often, investors buy a promising stock just as it enters a period of price stagnation. Even the best-performing stocks run into these unpredictable phases from time to time. They move mainly sideways in a wide range for months or years before their next big rise begins. (Stock brokers often refer to these stocks as “dead money.”)

If you lack patience, you run a big risk of selling your best choices in the midst of one of these phases, prior to the next big move upward. If you lose patience and sell, you are particularly likely to do so in the low end of the trading range, when stock prices have weakened and confidence in the stock has waned.

Discover 5 top stocks you should consider for your portfolio this month—when you access the FREE report 5 Long-term Stock Picks to Buy in October right now!

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How To Invest Library Archives

Q: Pat, when balancing economic sectors in my portfolio, where do I assign these two ETFs that you recommend as buys: XDV and SPY? Thank you.

A: Both of these ETFs hold stocks in most or all of the five main economic sectors: Finance, Utilities, Resources, Consumer and Manufacturing.

The iShares Canadian Select Dividend Index ETF, $29.59, symbol XDV on Toronto (Units outstanding: 58.4 million; Market cap: $1.7 billion; www.blackrock.com/ca), holds 30… Read More

Q: Pat, what are your top picks for natural gas producers, and do you have a current recommendation on Tourmaline Oil?

A: Tourmaline Oil Corp., $44.05, symbol TOU on Toronto (Shares outstanding: 326.1 million; Market cap: $14.3 billion; www.tourmalineoil.com), is a Canadian oil and natural gas exploration, development, and production company. Its properties are concentrated in central Alberta and northeast B.C.

In the three months ended June… Read More