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.
[text_ad use_category="18"]
Read More
Close
Pat McKeough responds to many personal questions about specific stocks and other investment topics 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 question from an Inner Circle member on one of the prominent Canadian stocks in the agricultural industry. This firm specializes in grain handling and other equipment and does the greater part of its business overseas, in the U.S. and countries of the former Soviet Union. The company is buying up small firms and Pat examines whether these acquisitions and today’s sophisticated farming methods provide steady growth in an industry that is traditionally cyclical and fickle. ...
From time to time, investors ask us questions to which there is not a simple yes-or-no answer. One of these is whether buying stocks “on margin” is a good idea. That is, should investors borrow money from their brokers to buy securities?
This strategy is reasonable in some circumstances, but it carries more than the usual amount of risk.
The main cost involved with buying on margin is the interest on the money you borrow. Plus, when you sell a security that you’ve bought on margin, you must first pay back the loan from your broker.
...
This strategy is reasonable in some circumstances, but it carries more than the usual amount of risk.
The main cost involved with buying on margin is the interest on the money you borrow. Plus, when you sell a security that you’ve bought on margin, you must first pay back the loan from your broker.
...
Every Wednesday, we publish our “Investor Toolkit” series on TSI Network. Whether you’re a beginning or experienced investor, these weekly updates are designed to give you specific advice and insights, such as how we pick our top stocks. Each Investor Toolkit update gives you a fundamental piece of investing strategy, and shows you how you can put it into practice right away. Today’s tip: “Here are 5 more ways in which our exclusive ratings system helps investors make stock selections with a much better chance of success.”...
Pat McKeough responds to many personal questions about specific stock market advice and other investment topics 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, one Inner Circle member asked about a Canadian stock that plays a unique role in the transportation and utilities industries. Stella-Jones has established a niche as a maker of railroad ties and telephone poles, and Pat looks at its ambitious expansion program into the United States and the risks of this growth-by-acquisition strategy. ...
Every Wednesday, we publish our “Investor Toolkit” series on TSI Network. Whether you’re a beginning or experienced investor, these weekly updates are designed to give you specific advice and insights, such as how we select our top stocks. Each Investor Toolkit update gives you a fundamental piece of investing strategy, and shows you how you can put it into practice right away. Today’s tip: “By using our ratings system, investors can make informed stock selections with a much better chance of success.” When subscribers to one of our four investment newsletters read about the stocks we recommend, they see a rating displayed with each stock. These are our TSINetwork ratings: Highest Quality, Above Average, Average, Extra Risk, Speculative and Start-up....
ENBRIDGE INC. $39.81 (Toronto symbol ENB; Shares outstanding: 796.9 million; Market cap: $31.7 billion; TSINetwork Rating: Above A v e r a g e ; D i v i d e n d y i e l d : 2 . 8 % ; www.enbridge.com) has formed a new joint venture with Pennsylvania-based Canopy Prospecting Inc.
This new firm, called Eddystone Rail, will build and operate a $68-million railway and pipeline system. These new joint-venture assets will ship crude from Canopy’s shale oil property in North Dakota’s Bakken region to refineries near Philadelphia.
Enbridge will own 75% of this joint venture, and will operate it. The project is forecast to begin operating in the third quarter of 2013.
...
This new firm, called Eddystone Rail, will build and operate a $68-million railway and pipeline system. These new joint-venture assets will ship crude from Canopy’s shale oil property in North Dakota’s Bakken region to refineries near Philadelphia.
Enbridge will own 75% of this joint venture, and will operate it. The project is forecast to begin operating in the third quarter of 2013.
...
ISHARES DEX UNIVERSE BOND INDEX FUND $31.52 (CWA Rating: Income) (Toronto symbol XBB; buy or sell through brokers) mirrors the performance of the DEX Universe Bond Index. The 719 bonds in the portfolio have an average term to maturity of 9.78 years. The fund’s MER is 0.33%.
The bonds in the index are 71.1% government and 28.9% corporate.
The fund yields 3.2%, compared to the Short-Term Bond Fund’s 2.8%. Its yield to maturity is 2.29%, 0.72% above the Short-Term Fund. That reflects the added risk of holding long-term bonds.
...
The bonds in the index are 71.1% government and 28.9% corporate.
The fund yields 3.2%, compared to the Short-Term Bond Fund’s 2.8%. Its yield to maturity is 2.29%, 0.72% above the Short-Term Fund. That reflects the added risk of holding long-term bonds.
...
ISHARES DEX SHORT-TERM BOND INDEX FUND $28.91 (CWA Rating: Income) (Toronto symbol XSB; buy or sell through brokers) mirrors the performance of the DEX Short-Term Bond Index. This index consists of a wide range of investmentgrade federal, provincial, municipal and corporate bonds with between one- and five-year terms to maturity. The fund holds 347 bonds with an average term to maturity of 2.85 years. The bonds in the index are 66.5% government and 33.5% corporate. The fund’s MER is 0.28%.
iShares DEX Short-Term Bond Index Fund yields 2.8%. However, this high yield is due to the fact that some of the fund’s bonds pay above-market interest rates. As a result, they trade above their face value. When these bonds mature, holders will only get the bonds’ face value, which means the portfolio will incur predictable capital losses. These losses will offset some of the appeal of the above-market yields.
The key figure when looking at the long-term return of this fund is yield to maturity. This yield takes into account the series of capital losses the fund will experience as its above-market-rate bonds mature. iShares DEX Short-Term Bond Index Fund’s yield to maturity is around 1.57%—less than the 2.8% yield but still higher than the 1.08% you’d earn by investing in, say, a one-year T-bill.
...
iShares DEX Short-Term Bond Index Fund yields 2.8%. However, this high yield is due to the fact that some of the fund’s bonds pay above-market interest rates. As a result, they trade above their face value. When these bonds mature, holders will only get the bonds’ face value, which means the portfolio will incur predictable capital losses. These losses will offset some of the appeal of the above-market yields.
The key figure when looking at the long-term return of this fund is yield to maturity. This yield takes into account the series of capital losses the fund will experience as its above-market-rate bonds mature. iShares DEX Short-Term Bond Index Fund’s yield to maturity is around 1.57%—less than the 2.8% yield but still higher than the 1.08% you’d earn by investing in, say, a one-year T-bill.
...
NEWMONT MINING $47.31 (New York symbol NEM; Shares outstanding: 491.2 million; Market cap: $23.2 billion; TSINetwork Rating: Average; Dividend yield: 3.0%; www.newmont.com) operates gold mines in the U.S., Canada, Mexico, Australia, New Zealand, Peru, Indonesia and Ghana.
The company’s worldwide diversification, plus its strong cash flow and balance sheet, make it our favourite gold stock for safety-conscious investors.
In the three months ended September 30, 2012, Newmont’s cash flow fell 20.4%, to $849 million, or $1.72 a share, from $1.1 billion, or $2.12 a share, a year earlier. Lower gold prices and higher costs were the main reason for the decline. The company holds cash of $1.5 billion, or $3.07 a share.
...
The company’s worldwide diversification, plus its strong cash flow and balance sheet, make it our favourite gold stock for safety-conscious investors.
In the three months ended September 30, 2012, Newmont’s cash flow fell 20.4%, to $849 million, or $1.72 a share, from $1.1 billion, or $2.12 a share, a year earlier. Lower gold prices and higher costs were the main reason for the decline. The company holds cash of $1.5 billion, or $3.07 a share.
...
ISHARES MSCI EMERGING MARKETS EASTERN EUROPE INDEX FUND $24.70 (New York symbol ESR; buy or sell through brokers), is an ETF that aims to track the MSCI Emerging Markets Eastern Europe Index. The fund’s geographic breakdown is as follows: Russia, 72.2%; Poland, 18.6%; Czech Republic, 3.7%; and Hungary, 3.7%.
The fund’s top holdings are Gazprom (Russia: gas utility), 16.9%; Lukoil (Russia: oil), 11.0%; Sberbank (Russia: bank), 8.7%; Uralkali (Russia: potash), 3.5%; Rosneft Oil Company (Russia: oil and gas), 3.4%; Novatek (Russia: natural gas), 3.4%; Magnit OJSC (Russia: retailing), 3.3%; Tafneft (Russia: oil and gas), 3.2%; Mobile TeleSystems (Russia: wireless), 3.1%; and PKO Bank Polski SA (Poland: banking), 2.9%.
iShares MSCI Emerging Markets Eastern Europe Index Fund’s expense ratio is 0.68%.
...
The fund’s top holdings are Gazprom (Russia: gas utility), 16.9%; Lukoil (Russia: oil), 11.0%; Sberbank (Russia: bank), 8.7%; Uralkali (Russia: potash), 3.5%; Rosneft Oil Company (Russia: oil and gas), 3.4%; Novatek (Russia: natural gas), 3.4%; Magnit OJSC (Russia: retailing), 3.3%; Tafneft (Russia: oil and gas), 3.2%; Mobile TeleSystems (Russia: wireless), 3.1%; and PKO Bank Polski SA (Poland: banking), 2.9%.
iShares MSCI Emerging Markets Eastern Europe Index Fund’s expense ratio is 0.68%.
...