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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PRIMARIS RETAIL REAL ESTATE INVESTMENT TRUST $27.02 (Toronto symbol PMZ.UN; Units outstanding: 97.8 million; Market cap: $2.6 billion; TSINetwork Rating: Extra Risk; Dividend yield: 4.7%; www.primarisreit.com) has received a friendly $28-a-share takeover bid.
The offer is from H&R REAL ESTATE INVESTMENT TRUST $23.73 (Toronto symbol HR.UN; Units outstanding: 194.2 million; Market cap: $4.6 billion; TSINetwork Rating: Extra Risk; Dividend yield: 5.7%; www.hr-reit.com).
The H&R bids tops the $26-a-share in-cash hostile takeover bid from a consortium led by Canadian private equity firm Kingsett Capital. This group includes RioCan REIT $26.67.
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The offer is from H&R REAL ESTATE INVESTMENT TRUST $23.73 (Toronto symbol HR.UN; Units outstanding: 194.2 million; Market cap: $4.6 billion; TSINetwork Rating: Extra Risk; Dividend yield: 5.7%; www.hr-reit.com).
The H&R bids tops the $26-a-share in-cash hostile takeover bid from a consortium led by Canadian private equity firm Kingsett Capital. This group includes RioCan REIT $26.67.
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TRANSCANADA CORP. $48.17 (Toronto symbol TRP; Shares outstanding: 705.1 million; Market cap: $34.0 billion; TSINetwork Rating: Above Average; Dividend yield: 3.7%; www.transcanada.com) has won a contract from Progress Energy Canada to build and operate a new $5-billion, 750-kilometre pipeline that will pump natural gas from northeastern B.C.’s Montney region to Prince Rupert, B.C.
Progress is a wholly owned subsidiary of Petronas, Malaysia’s state-owned oil company. Progress plans to build a facility near Prince Rupert that will liquefy the gas and ship it by tanker to customers in Asia.
The Prince Rupert line should begin operating in 2018.
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Progress is a wholly owned subsidiary of Petronas, Malaysia’s state-owned oil company. Progress plans to build a facility near Prince Rupert that will liquefy the gas and ship it by tanker to customers in Asia.
The Prince Rupert line should begin operating in 2018.
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POWERSHARES QQQ ETF $67.02 (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. That index 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, Oracle Corp., Comcast Corp. and eBay.
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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, Oracle Corp., Comcast Corp. and eBay.
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SPDR DOW JONES INDUSTRIAL AVERAGE ETF $138.76 (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 Corp., 3M, Travelers Companies, Mc- Donald’s Corp., Johnson & Johnson, Caterpillar Inc., United Technologies and Boeing. The fund’s expenses are about 0.18% of its assets.
SPDR Dow Jones ETF is a buy.
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The fund’s top holdings are IBM, ExxonMobil, Chevron Corp., 3M, Travelers Companies, Mc- Donald’s Corp., Johnson & Johnson, Caterpillar Inc., United Technologies and Boeing. The fund’s expenses are about 0.18% of its assets.
SPDR Dow Jones ETF is a buy.
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ISHARES DOW JONES CANADA SELECT DIVIDEND INDEX FUND $22.24 (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 4.2%.
The fund’s top holdings are CIBC, 6.7%; Bonterra Energy, 6.0%; National Bank, 6.0%; TD Bank, 5.5%; Bank of Montreal, 5.4%; Royal Bank, 4.4%; Telus Corp., 4.4%; Bank of Nova Scotia, 4.1%; BCE Inc., 4.1%; and IGM Financial, 3.9%.
The fund holds 51.5% 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 CIBC, 6.7%; Bonterra Energy, 6.0%; National Bank, 6.0%; TD Bank, 5.5%; Bank of Montreal, 5.4%; Royal Bank, 4.4%; Telus Corp., 4.4%; Bank of Nova Scotia, 4.1%; BCE Inc., 4.1%; and IGM Financial, 3.9%.
The fund holds 51.5% 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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ISHARES S&P/TSX 60 INDEX FUND $18.50 (Toronto symbol XIU; buy or sell through brokers; ca.ishares.com) is a good low-fee way to buy the top stocks on the TSX. The units are made up of stocks that represent the S&P/TSX 60 Index, which consists of the 60 largest, most heavily traded stocks on the exchange. Expenses are just 0.17% of assets.
The index mostly consists of high-quality companies. However, as the fund must ensure that all sectors are represented, it holds a few stocks we wouldn’t include.
The index’s top holdings are Royal Bank, 7.8%; TD Bank, 6.7%; Bank of Nova Scotia, 6.0%; Suncor Energy, 4.6%; Bank of Montreal, 3.6%; CN Railway, 3.6%; Potash Corp., 3.3%; Enbridge, 3.1%; Trans- Canada Corp., 3.0%; BCE Inc., 3.0%; CIBC, 2.9%; Canadian Natural Resources, 2.9%; Barrick Gold, 2.9%; Goldcorp, 2.6%; Manulife Financial, 2.3%; Cenovus Energy, 2.2%; and Telus Corp., 1.9%.
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The index mostly consists of high-quality companies. However, as the fund must ensure that all sectors are represented, it holds a few stocks we wouldn’t include.
The index’s top holdings are Royal Bank, 7.8%; TD Bank, 6.7%; Bank of Nova Scotia, 6.0%; Suncor Energy, 4.6%; Bank of Montreal, 3.6%; CN Railway, 3.6%; Potash Corp., 3.3%; Enbridge, 3.1%; Trans- Canada Corp., 3.0%; BCE Inc., 3.0%; CIBC, 2.9%; Canadian Natural Resources, 2.9%; Barrick Gold, 2.9%; Goldcorp, 2.6%; Manulife Financial, 2.3%; Cenovus Energy, 2.2%; and Telus Corp., 1.9%.
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ENCANA CORPORATION $19.79 (Toronto symbol ECA; Shares outstanding: 735.4 million; Market cap: $14.6 billion; TSINetwork Rating: A v e r a g e ; D i v i d e n d y i e l d : 4 . 0 % ; www.encana.com) is selling its 30% stake in a proposed liquefied natural gas (LNG) terminal in Kitimat, B.C., to Chevron Corp. (New York symbol CVX).
LNG plants are not Encana’s area of expertise, so it has decided to let Chevron focus on building and operating the facility.
Chevron’s experience with similar LNG plants in Australia should help speed up the Kitimat project and let it conclude contract negotiations with Asian LNG buyers.
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LNG plants are not Encana’s area of expertise, so it has decided to let Chevron focus on building and operating the facility.
Chevron’s experience with similar LNG plants in Australia should help speed up the Kitimat project and let it conclude contract negotiations with Asian LNG buyers.
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INNERGEX RENEWABLE ENERGY $10.16 (Toronto symbol INE; Shares outstanding: 93.7 million; Market cap: $952.0 million; TSINetwork Rating: Extra Risk; Dividend yield 5.7%; www.innergex.com) operates 22 hydroelectric facilities, five wind farms and one solar-power plant in Quebec, Ontario, B.C. and Idaho. Innergex gets 55% of its power from hydroelectric plants. Wind farms supply 39% and solar generates 6%.
Like Algonquin, Innergex makes sure it has firm long-term power-purchase contracts in place before it makes acquisitions or starts building new facilities.
Innergex aims to keep increasing its hydroelectric and wind-power capacity; right now, it is developing or building eight projects.
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Like Algonquin, Innergex makes sure it has firm long-term power-purchase contracts in place before it makes acquisitions or starts building new facilities.
Innergex aims to keep increasing its hydroelectric and wind-power capacity; right now, it is developing or building eight projects.
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ALGONQUIN POWER & UTILITIES CORP. $7.42 (Toronto symbol AQN; Shares outstanding: 169.0 million; Market cap: $1.3 billion; TSINetwork Rating: Extra Risk; Dividend yield: 4.2%; www.algonquinpower.com) holds interests in 20 hydroelectric plants in Canada and the northeastern U.S. It also owns seven thermal energy facilities and five wind farms.
Algonquin’s subsidiary, Liberty Utilities, has operations in Arizona, California, Illinois, Iowa, Missouri, New Hampshire and Texas. These include 21 water-distribution and sewage-treatment plants, as well as four natural gas and two electricity distribution operations with over 257,000 customers.
Emera (Toronto symbol EMA), which is a recommendation of The Successful Investor, our conservative growth advisory, holds a 19.9% interest in Algonquin.
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Algonquin’s subsidiary, Liberty Utilities, has operations in Arizona, California, Illinois, Iowa, Missouri, New Hampshire and Texas. These include 21 water-distribution and sewage-treatment plants, as well as four natural gas and two electricity distribution operations with over 257,000 customers.
Emera (Toronto symbol EMA), which is a recommendation of The Successful Investor, our conservative growth advisory, holds a 19.9% interest in Algonquin.
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IMPERIAL OIL $43.85 (Toronto symbol IMO; Shares outstanding: 847.6 million; Market cap: $37.2 billion; TSINetwork Rating: Average; Dividend yield: 1.1%; www.imperialoil.ca) reported that its earnings per share jumped 20.8% in the three months ended September 30, 2012, to $1.22 from $1.01 a year earlier.
Cash flow per share rose 18.8%, to $1.52 from $1.28, while revenue gained 4.9%, to $8.3 billion from $7.9 billion.
Maintenance shutdowns and asset sales lowered production by 3.7%, to 285,000 barrels a day. However, earnings from oil refining and distribution (52% of the total) rose 97.1%.
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Cash flow per share rose 18.8%, to $1.52 from $1.28, while revenue gained 4.9%, to $8.3 billion from $7.9 billion.
Maintenance shutdowns and asset sales lowered production by 3.7%, to 285,000 barrels a day. However, earnings from oil refining and distribution (52% of the total) rose 97.1%.
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