How To Invest
In addition, Pat thinks then beginner investors should cultivate two important qualities: a healthy sense of skepticism and patience.
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.
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GUGGENHEIM CHINA SMALL CAP ETF $23.14 (New York Exchange symbol HAO; buy or sell through brokers; www.guggenheimfunds.com) aims to track the AlphaShares China Small Cap Index, which is made up of all Chinese stocks that are legal for foreign investors and have market caps between $200 million and $1.5 billion.
The $184.3-millon fund’s top holdings are Youku Tudou, 2.0%; Tsingtao Brewery, 1.4%; Xinyi Glass Holdings, 1.3%; Sino Biopharmaceutical, 1.3%; China Everbright International, 1.2%; BYD Co., 1.2%; GCL Poly Energy International, 1.2%; Sohu- .com. 1.2%; Semiconductor Manufacturing International, 1.1%; and China Resources Gas Group, 1.1%.
As China’s economy matures and wages rise, domestic spending should continue to increase. As well, China’s leaders will likely need to spend more on programs to ease the growing gap between the rich and poor. Guggenheim China Small Cap ETF is well positioned to benefit from both of these trends.
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The $184.3-millon fund’s top holdings are Youku Tudou, 2.0%; Tsingtao Brewery, 1.4%; Xinyi Glass Holdings, 1.3%; Sino Biopharmaceutical, 1.3%; China Everbright International, 1.2%; BYD Co., 1.2%; GCL Poly Energy International, 1.2%; Sohu- .com. 1.2%; Semiconductor Manufacturing International, 1.1%; and China Resources Gas Group, 1.1%.
As China’s economy matures and wages rise, domestic spending should continue to increase. As well, China’s leaders will likely need to spend more on programs to ease the growing gap between the rich and poor. Guggenheim China Small Cap ETF is well positioned to benefit from both of these trends.
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PENGROWTH ENERGY $5.84 (Toronto symbol PGF; Shares outstanding: 516.1 million; Market cap: $3.0 billion; TSINetwork Rating: Average; Dividend yield: 8.2%; www.pengrowth.com) has sold several of its less important oil and gas properties in Western Canada for $700 million.
Including the company’s earlier $316-million sale of its 10.02% interest in the Weyburn oil project in Saskatchewan, Pengrowth has now reached its goal of raising $1 billion through asset sales in 2013.
The cash will help Pengrowth develop its $590-milllion Lindbergh oil sands project in Alberta. It will also help the company pay down its long-term debt, which stood at $1.6 billion on June 30, 2013. That’s equal to 52% of Pengrowth’s $3.1-billion market cap. The monthly dividend of $0.04 a share still seems safe and gives the stock an 8.2% yield.
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Including the company’s earlier $316-million sale of its 10.02% interest in the Weyburn oil project in Saskatchewan, Pengrowth has now reached its goal of raising $1 billion through asset sales in 2013.
The cash will help Pengrowth develop its $590-milllion Lindbergh oil sands project in Alberta. It will also help the company pay down its long-term debt, which stood at $1.6 billion on June 30, 2013. That’s equal to 52% of Pengrowth’s $3.1-billion market cap. The monthly dividend of $0.04 a share still seems safe and gives the stock an 8.2% yield.
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CRESCENT POINT ENERGY CORP. $37.79 (Toronto symbol CPG; Shares outstanding: 386.1 million; Market cap: $14.9 billion; TSINetwork Rating: Extra Risk; Dividend yield: 7.3%; www.crescentpointenergy.com) produces oil and natural gas in western Canada. Its output is weighted 90% toward oil and 10% to gas.
The company continues to focus on its Bakken light oil development in southeastern Saskatchewan.
In the three months ended June 30, 2013, Crescent Point’s cash flow rose 30.6%, to $504.4 million from $386.3 million a year earlier.
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The company continues to focus on its Bakken light oil development in southeastern Saskatchewan.
In the three months ended June 30, 2013, Crescent Point’s cash flow rose 30.6%, to $504.4 million from $386.3 million a year earlier.
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BONAVISTA ENERGY $12.98 (Toronto symbol BNP; Shares outstanding: 181.5 million; Market cap: $2.5 billion; TSINetwork Rating: Extra Risk; Dividend yield: 6.5%; www.bonavistaenergy.com) explores for oil and gas in Alberta, Saskatchewan and B.C. Its production is 62% gas and 38% oil.
In the three months ended June 30, 2013, Bonavista’s cash flow per share rose 28.6%, to $0.63 from $0.49 a year earlier. Gas prices increased 67.0%, to $3.64 per thousand cubic feet from $2.18. Production rose 4.4%, to 72,554 barrels of oil equivalent a day (including gas) from 69,506.
Bonavista cut its monthly dividend by 41.7% in January 2013, to $0.07 from $0.12. That’s helping it save cash for exploration and development. The new annual rate of $0.84 a share still yields a high 6.5%. As well, Bonavista now pays out just 37% of its cash flow as dividends, so more cuts are unlikely.
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In the three months ended June 30, 2013, Bonavista’s cash flow per share rose 28.6%, to $0.63 from $0.49 a year earlier. Gas prices increased 67.0%, to $3.64 per thousand cubic feet from $2.18. Production rose 4.4%, to 72,554 barrels of oil equivalent a day (including gas) from 69,506.
Bonavista cut its monthly dividend by 41.7% in January 2013, to $0.07 from $0.12. That’s helping it save cash for exploration and development. The new annual rate of $0.84 a share still yields a high 6.5%. As well, Bonavista now pays out just 37% of its cash flow as dividends, so more cuts are unlikely.
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IBM $188.56 (New York symbol IBM; Shares outstanding: 1.1 billion; Market cap: $209.2 billion; TSINetwork Rating: Above Average; Dividend yield: 2.0%; www.ibm.com) reports that its earnings per share before one time items rose 8.0% in the three months ended June 30, 2013, to $3.91 from $3.62. That easily beat the consensus forecast of $3.77.
Revenue fell 3.3%, to $24.9 billion from $25.8 billion. That fell short of the consensus estimate of $25.4 billion. IBM gets two-thirds of its revenue from overseas. If you adjust for foreign exchange rates, its sales would have declined by 1%.
Demand for the company’s software remains strong, because it helps businesses analyze large amounts of data and improve their efficiency. However, the uncertain economy continues to slow sales of mainframe computers and services. Still, IBM’s computer services business ended the quarter with a backlog of $141 billion, up 3% from a year earlier.
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Revenue fell 3.3%, to $24.9 billion from $25.8 billion. That fell short of the consensus estimate of $25.4 billion. IBM gets two-thirds of its revenue from overseas. If you adjust for foreign exchange rates, its sales would have declined by 1%.
Demand for the company’s software remains strong, because it helps businesses analyze large amounts of data and improve their efficiency. However, the uncertain economy continues to slow sales of mainframe computers and services. Still, IBM’s computer services business ended the quarter with a backlog of $141 billion, up 3% from a year earlier.
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BCE INC. $42.55 (Toronto symbol BCE; Shares outstanding: 775.9 million; Market cap: $33.0 billion; TSINetwork Rating: Above Average; Dividend yield: 5.5%; www.bce.ca) has completed its $3.2-billion purchase of Astral Media.
Astral owns 22 TV stations, 84 radio stations and several pay TV and specialty channels, such as the Movie Network, Family Channel and Teletoon.
To win approval for the takeover, BCE agreed to sell several of Astral’s specialty TV channels and radio stations. Still, the new operations should immediately add to the company’s earnings.
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Astral owns 22 TV stations, 84 radio stations and several pay TV and specialty channels, such as the Movie Network, Family Channel and Teletoon.
To win approval for the takeover, BCE agreed to sell several of Astral’s specialty TV channels and radio stations. Still, the new operations should immediately add to the company’s earnings.
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POWERSHARES QQQ ETF $76.42 (Nasdaq symbol QQQQ; buy or sell through brokers; www.invescopowershares- .com), formerly called Nasdaq 100 Trust Shares, holds stocks that represent the Nasdaq 100 Index, which consists of the 100 largest shares on the Nasdaq exchange, based on market cap.
The Nasdaq 100 Index contains shares of companies in a number of major industries, including computer hardware and software, telecommunications, retail/wholesale trade and biotechnology. It does not contain financial companies. The fund’s expenses are about 0.20% of its assets.
The index’s highest-weighted stocks are Apple, Microsoft, Qualcomm, Google, Cisco Systems, Intel, Amazon.com, Gilead Sciences, Comcast Corp. and Amgen.
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The Nasdaq 100 Index contains shares of companies in a number of major industries, including computer hardware and software, telecommunications, retail/wholesale trade and biotechnology. It does not contain financial companies. The fund’s expenses are about 0.20% of its assets.
The index’s highest-weighted stocks are Apple, Microsoft, Qualcomm, Google, Cisco Systems, Intel, Amazon.com, Gilead Sciences, Comcast Corp. and Amgen.
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SPDR DOW JONES INDUSTRIAL AVERAGE ETF $154.54 (New York symbol DIA; buy or sell through brokers; www.spdrs.com) holds the 30 stocks that make up the Dow Jones Industrial Average.
The fund’s top holdings are IBM, ExxonMobil, Chevron, 3M, Travelers Companies, McDonald’s, Johnson & Johnson, Caterpillar, United Technologies and Boeing. The fund’s expenses are about 0.17% of its assets.
SPDR Dow Jones ETF is a buy.
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The fund’s top holdings are IBM, ExxonMobil, Chevron, 3M, Travelers Companies, McDonald’s, Johnson & Johnson, Caterpillar, United Technologies and Boeing. The fund’s expenses are about 0.17% of its assets.
SPDR Dow Jones ETF is a buy.
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SPDR S&P 500 ETF $169.18 (New York symbol SPY; buy or sell through brokers; www.spdrs.com) holds the stocks in the S&P 500 Index, which consists of 500 major U.S. stocks that are chosen based on their market cap, liquidity and industry group.
The index’s highest-weighted stocks are Apple, ExxonMobil, Microsoft, Procter & Gamble, Johnson & Johnson, J.P. Morgan Chase, IBM, Chevron, General Electric, Pfizer, Berkshire Hathaway, Google, AT&T and Wells Fargo. The fund’s expenses are just 0.10% of its assets.
If you want exposure to the S&P 500 Index, the SPDR S&P 500 ETF is a buy.
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The index’s highest-weighted stocks are Apple, ExxonMobil, Microsoft, Procter & Gamble, Johnson & Johnson, J.P. Morgan Chase, IBM, Chevron, General Electric, Pfizer, Berkshire Hathaway, Google, AT&T and Wells Fargo. The fund’s expenses are just 0.10% of its assets.
If you want exposure to the S&P 500 Index, the SPDR S&P 500 ETF is a buy.
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ISHARES DOW JONES CANADA SELECT DIVIDEND INDEX FUND $22.31 (Toronto symbol XDV; buy or sell through brokers; ca.ishares.com) holds 30 of the highest-yielding Canadian stocks. Its selections are based on dividend growth, yield and payout ratio. The weight of any one stock is limited to 10% of its assets. The fund’s MER is 0.50%. It yields 4.5%.
The fund’s top holdings are Bonterra Energy, 6.5%; CIBC, 6.3%; National Bank, 5.9%; TD Bank, 5.7%; Bank of Montreal, 5.3%; Royal Bank, 4.5%; IGM Financial, 4.4%; Telus Corp., 4.2%; Bank of Nova Scotia, 4.1%; and BCE Inc., 4.0%.
The fund holds 53.4% of its assets in financial stocks. The top Canadian finance stocks have sound prospects. However, if you invest in this ETF, be sure to adjust the rest of your portfolio so it won’t be overly concentrated in the financial sector.
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The fund’s top holdings are Bonterra Energy, 6.5%; CIBC, 6.3%; National Bank, 5.9%; TD Bank, 5.7%; Bank of Montreal, 5.3%; Royal Bank, 4.5%; IGM Financial, 4.4%; Telus Corp., 4.2%; Bank of Nova Scotia, 4.1%; and BCE Inc., 4.0%.
The fund holds 53.4% of its assets in financial stocks. The top Canadian finance stocks have sound prospects. However, if you invest in this ETF, be sure to adjust the rest of your portfolio so it won’t be overly concentrated in the financial sector.
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