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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BANK OF NOVA SCOTIA $57.83 (Toronto symbol BNS: Shares outstanding: 1.2 billion; Market cap: $69.2 billion; TSINetwork Rating: Above Average; Dividend yield: 4.2%, www.scotiabank.com) has acquired 50% of AFP Horizonte, which manages pension funds in Peru, for $260 million. This business has 1.4 million clients and $9 billion U.S. of assets under management. SURA Asset Management owns the other 50%.
Demand for pension fund services is growing quickly in Latin America. As well, Bank of Nova Scotia has a long history in this region, which cuts the risk of this investment.
The bank and SURA plan to divide AFP Horizonte in the next few weeks. Following the split, Bank of Nova Scotia will merge this business with its existing pension plan operations in Peru. The combined business will have 1.9 million clients and $10.3 billion U.S. in assets under management.
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Demand for pension fund services is growing quickly in Latin America. As well, Bank of Nova Scotia has a long history in this region, which cuts the risk of this investment.
The bank and SURA plan to divide AFP Horizonte in the next few weeks. Following the split, Bank of Nova Scotia will merge this business with its existing pension plan operations in Peru. The combined business will have 1.9 million clients and $10.3 billion U.S. in assets under management.
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VANGUARD EMERGING MARKETS ETF $43.30 (New York symbol VWO; buy or sell through brokers) aims to track the FTSE Emerging Transitions Index, which is made up of common stocks of companies located in developing countries around the world. The fund has an MER of just 0.18%.
Vanguard Emerging Markets ETF’s top holdings include Samsung Electronics (South Korea), China Mobile (China: wireless), Petroleo Brasileiro SA (Brazil: oil and gas), Taiwan Semiconductor (Taiwan: computer chips), Vale SA (Brazil: mining), Banco Bradesco (Brazil: banking), Gazprom (Russia: gas utility), China Construction Bank, Itau Unibanco Holding SA (Brazil: banking), Industrial & Commercial Bank of China and CNOOC Limited (China: oil and gas).
The $74.6-billion fund’s breakdown by country is as follows: China (18.6%), Brazil (14.3%), Taiwan (11.1%), India (8.1%), South Africa (8.1%), South Korea (7.7%), Russia (6.4%), Mexico (5.6%), Malaysia (4.1%), Indonesia (3.2%), Thailand (3.0%), Turkey (2.3%), Chile (2.2%), Poland (1.4%) and others (3.9%).
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Vanguard Emerging Markets ETF’s top holdings include Samsung Electronics (South Korea), China Mobile (China: wireless), Petroleo Brasileiro SA (Brazil: oil and gas), Taiwan Semiconductor (Taiwan: computer chips), Vale SA (Brazil: mining), Banco Bradesco (Brazil: banking), Gazprom (Russia: gas utility), China Construction Bank, Itau Unibanco Holding SA (Brazil: banking), Industrial & Commercial Bank of China and CNOOC Limited (China: oil and gas).
The $74.6-billion fund’s breakdown by country is as follows: China (18.6%), Brazil (14.3%), Taiwan (11.1%), India (8.1%), South Africa (8.1%), South Korea (7.7%), Russia (6.4%), Mexico (5.6%), Malaysia (4.1%), Indonesia (3.2%), Thailand (3.0%), Turkey (2.3%), Chile (2.2%), Poland (1.4%) and others (3.9%).
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VANGUARD GROWTH ETF $78.17 (New York symbol VUG; buy or sell through brokers) aims to track the CRSP U.S. Large Cap Growth Index, a broadly diversified index that mainly consists of shares of large U.S. companies. The fund’s MER is just 0.10%.
The $27.0-billion Vanguard Growth ETF’s top holdings are Apple, IBM, Google, Coca-Cola, Philip Morris International, Oracle, Wal-Mart, Schlumberger, Qualcomm and Home Depot.
The fund’s breakdown by industry is as follows: Information Technology (27.2%), Consumer Discretionary (20.3%), Consumer Staples (12.5%), Industrials (12.3%), Health Care (11.5%), Financials (6.4%), Energy (6.0%), Materials (3.1%), Telecommunication Services (0.6%) and Utilities (0.1%).
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The $27.0-billion Vanguard Growth ETF’s top holdings are Apple, IBM, Google, Coca-Cola, Philip Morris International, Oracle, Wal-Mart, Schlumberger, Qualcomm and Home Depot.
The fund’s breakdown by industry is as follows: Information Technology (27.2%), Consumer Discretionary (20.3%), Consumer Staples (12.5%), Industrials (12.3%), Health Care (11.5%), Financials (6.4%), Energy (6.0%), Materials (3.1%), Telecommunication Services (0.6%) and Utilities (0.1%).
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IBM $199.63 (New York symbol IBM; Shares outstanding: 1.1 billion; Market cap: $224.8 billion; TSINetwork Rating: Above Average; Dividend yield: 1.9%) reported lower-than-expected earnings and revenue for the latest quarter.
In the three months ended March 31, 2013, the company earned $3.00 a share before one-time items, up 7.9% from $2.78. The gain was mainly the result of IBM’s ongoing efforts to cut costs and improve productivity. Even so, the latest earnings missed the consensus estimate of $3.05 a share.
Revenue fell 5.1%, to $23.4 billion from $24.7 billion. That also fell short of the consensus estimate of $24.6 billion. IBM gets two-thirds of its revenue from overseas. If you adjust for foreign-exchange rates, overall sales would have declined by 3%.
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In the three months ended March 31, 2013, the company earned $3.00 a share before one-time items, up 7.9% from $2.78. The gain was mainly the result of IBM’s ongoing efforts to cut costs and improve productivity. Even so, the latest earnings missed the consensus estimate of $3.05 a share.
Revenue fell 5.1%, to $23.4 billion from $24.7 billion. That also fell short of the consensus estimate of $24.6 billion. IBM gets two-thirds of its revenue from overseas. If you adjust for foreign-exchange rates, overall sales would have declined by 3%.
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LOBLAW COMPANIES $44.75 (Toronto symbol L; Shares outstanding: 281.8 million; Market cap: $12.1 billion; TSINetwork Rating: Above Average; Dividend yield: 2.0%; www.loblaw.ca) is Canada’s largest food retailer, with about 1,000 stores.
In the three months ended March 23, 2013, Loblaw’s sales rose 3.8%, to $7.2 billion from $6.94 billion a year earlier. Overall sales at its supermarkets rose 3.4%, while same-store sales rose 2.8%. Revenue from its financial services division, which mainly issues credit cards, rose 27.9%. Before one-time items, earnings rose 11.6%, to $0.48 a share from $0.43.
As mentioned, Loblaw has announced a plan to form a REIT that will hold $7 billion of its properties. Right now, the company owns 47 million square feet of real estate with a market value of $9 billion to $10 billion. After this transaction closes in mid-2013, Loblaw will sell units of the REIT to the public. It will hang on to a majority stake.
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In the three months ended March 23, 2013, Loblaw’s sales rose 3.8%, to $7.2 billion from $6.94 billion a year earlier. Overall sales at its supermarkets rose 3.4%, while same-store sales rose 2.8%. Revenue from its financial services division, which mainly issues credit cards, rose 27.9%. Before one-time items, earnings rose 11.6%, to $0.48 a share from $0.43.
As mentioned, Loblaw has announced a plan to form a REIT that will hold $7 billion of its properties. Right now, the company owns 47 million square feet of real estate with a market value of $9 billion to $10 billion. After this transaction closes in mid-2013, Loblaw will sell units of the REIT to the public. It will hang on to a majority stake.
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MOLSON COORS CANADA INC. (Toronto symbols TPX.A and TPX.B; www.molsoncoors.com) is one of the world’s leading brewers. Its main brands include Coors Light, Molson Canadian and Carling. The company’s sales fell when it merged its U.S. brewing operations with those of rival SABMiller to form MillerCoors in 2008. Because it owns less than half of MillerCoors, accounting rules forced Molson Coors to stop including the sales from this business in its overall sales....
Members of my Inner Circle can ask me and my investment team financial questions of any kind. Aside from questions on specific investments like stocks and exchange-traded funds, members ask us many other questions about how they should be investing their money. One intriguing question came from a member who asked whether there is any advantage to investing in a prepaid funeral. I’d like to share this question, and our answer, with you....
Pat McKeough responds to many requests for specific advice on stock tips and other questions on investment and the economy from the members of his Inner Circle. Every week, his comments and recommendations on the most intriguing questions of the past week go out to all Inner Circle members. And each week, we offer you one of the highlights from these Q&A sessions. While we reserve our buy-hold-sell advice for Inner Circle members, these excerpts provide a great deal of information and analysis on stocks we’ve covered for members of Pat’s Inner Circle. This week, we had a request from an Inner Circle member about Accord Financial, a stock that did well for us a couple of years ago. We recommended selling Accord and taking profits in February 2011. Pat looks at the company’s prospects today. ...
More Americans own pets than ever before, and the trend looks set to keep rising. That should continue to increase the earnings of leading companies in the business. Today we examine whether PetSmart can continue the success it has enjoyed in recent years....
Pat McKeough responds to many requests for specific advice on stock market investing and other questions on investment and the economy from the members of his Inner Circle. Every week, his comments and recommendations on the most intriguing questions of the past week go out to all Inner Circle members. And each week, we offer you one of the highlights from these Q&A sessions. While we reserve our buy-hold-sell advice for Inner Circle members, these excerpts provide a great deal of information and analysis on stocks we’ve covered for members of Pat’s Inner Circle. This week, an Inner Circle member asked about the prospects for one of Canada’s leading natural gas processors and distributors. AltaGas profits from a number of fixed long-term contracts, but it is also growing by acquisition and diversifying into new sources of energy. Pat looks at the company’s ability to manage this added risk going forward....
