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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Pat McKeough responds to many personal questions on buying 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 the Inner Circle. This week we received a question from an Inner Circle member about an American stock that is literally a household name. Like many large U.S. consumer stocks it now generates more sales internationally than at home. While it has moved forward with a new acquisition, it is also recovering from a number of product recalls....
LOBLAW COMPANIES LTD. (Toronto symbol L; www.loblaw.ca) recently formed a partnership with J.C. Penney (New York symbol JCP). Under this deal, Loblaw will build Joe Fresh casual-clothing boutiques inside 700 of Penney’s 1,100 department stores in the U.S. These outlets should open in April 2013. Penney will also sell Joe Fresh products through its website....
Pat McKeough responds to many personal questions on potential stock picks 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 the Inner Circle. This week, an Inner Circle member asked about a stock that practices a form of socially responsible investing. This coffee maker emphasizes fair trade principles in its business dealings—and Pat assesses just how well the company is doing under those conditions. ...
Most experienced investors recognize that it’s hard to outperform the market on a regular basis over long periods. However, only the successful minority recognize as well that it’s all too easy to underperform the market, often by a wide margin. Our advice is that the best way to try to outperform is to apply our three key investing principles: invest mainly in well-established companies; spread your money out across the five main economic sectors (Manufacturing, Resources, Consumer, Finance and Utilities); and downplay or avoid stocks in the broker/media limelight, where unpleasant surprises can lead to brutal declines. But applying these principles to buying stocks requires a good deal of judgment and attention. Even then, you won’t beat the market every year....
Pat McKeough responds to many personal questions on potential stock picks 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 the Inner Circle. This week, an Inner Circle member asked about a medical products stock that specializes in breathing and sleeping problems. This U.S. firm, which makes equipment to deal with respiratory disorders such as sleep apnea, is growing through acquisitions and the development of new products. ...
INNERGEX RENEWABLE ENERGY $10.77 (Toronto symbol INE; Shares outstanding: 81.3 million; Market cap: $882.7 million; TSINetwork Rating: Extra Risk; Dividend yield 5.4%; www.innergex.com) is buying the 77-megawatt Wildmare wind project from Finavera Wind Energy for $22 million. The project is located in northeastern B.C. and is currently at an advanced stage of permitting.
Innergex aims to start construction of a wind farm at Wildmare in late 2013, and plans to start generating power at the site in early 2015. The total cost to complete the project is estimated at $217 million.
Once the project is fully operational, its power will be sold to BC Hydro under a 25-year contract.
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Innergex aims to start construction of a wind farm at Wildmare in late 2013, and plans to start generating power at the site in early 2015. The total cost to complete the project is estimated at $217 million.
Once the project is fully operational, its power will be sold to BC Hydro under a 25-year contract.
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ISHARES DEX UNIVERSE BOND INDEX FUND $31.62 (CWA Rating: Income) (Toronto symbol XBB; buy or sell through brokers) mirrors the performance of the DEX Universe Bond Index. The 664 bonds in the portfolio have an average term to maturity of 9.81 years. The fund’s MER is 0.33%.
The bonds in the index are 69.6% government and 30.4% corporate.
The fund yields 3.2%, compared to the Short-Term Bond Fund’s 2.8%. Its yield-to-maturity is 2.27%, 0.67% above the Short-Term Fund. That reflects the added risk of holding long-term bonds.
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The bonds in the index are 69.6% government and 30.4% corporate.
The fund yields 3.2%, compared to the Short-Term Bond Fund’s 2.8%. Its yield-to-maturity is 2.27%, 0.67% above the Short-Term Fund. That reflects the added risk of holding long-term bonds.
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ISHARES DEX SHORT-TERM BOND INDEX FUND $28.99 (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 326 bonds with an average term to maturity of 2.90 years. The bonds in the index are 66.0% government and 34.0% 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. But 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.
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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 326 bonds with an average term to maturity of 2.90 years. The bonds in the index are 66.0% government and 34.0% 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. But 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.
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TORSTAR CORP. $9.10 (Toronto symbol TS.B; Shares outstanding: 79.9 million; Market cap: $727.1 million; TSINetwork Rating: Above Average; Dividend yield: 5.8%; www.torstar.com) reports that its earnings per share before one-time items fell 13.7% in the three months ended June 30, 2012, to $0.44 from $0.51.
The earnings drop is mainly due to weak advertising revenue at Torstar’s media division, which consists of over 100 newspapers, including its flagship newspaper, The Toronto Star, and related websites. This business accounts for 72% of the company’s revenue. The remaining 28% comes from its Harlequin book-publishing subsidiary.
Overall revenue fell 2.4%, to $383.9 million from $393.3 million. Revenue fell 2.2% at the media division and 2.9% at Harlequin.
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The earnings drop is mainly due to weak advertising revenue at Torstar’s media division, which consists of over 100 newspapers, including its flagship newspaper, The Toronto Star, and related websites. This business accounts for 72% of the company’s revenue. The remaining 28% comes from its Harlequin book-publishing subsidiary.
Overall revenue fell 2.4%, to $383.9 million from $393.3 million. Revenue fell 2.2% at the media division and 2.9% at Harlequin.
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ISHARES MSCI EMERGING MARKETS EASTERN EUROPE INDEX FUND $23.74 (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, 72.3%; Poland, 17.1%; Czech Republic, 3.7%; and Hungary, 3.5%.
The fund’s top holdings are Gazprom (Russia: gas utility), 18.1%; Lukoil (Russia: oil), 10.2%; Sberbank (Russia: bank), 8.6%; Novatek (Russia: natural gas), 3.8%; Mobile TeleSystems (Russia: wireless), 3.5%; Tafneft (Russia: oil and gas), 3.1%; Magnit OJSC (Russia: retailing), 3.0%; Rosneft Oil Company (Russia: oil and gas), 2.8%; MMC Norilsk Nickel (Russia: mining), 2.7%; and PKO Bank Polski SA (Poland: banking), 2.2%.
iShares MSCI Emerging Markets Eastern Europe Index Fund’s expense ratio is 0.68%.
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The fund’s top holdings are Gazprom (Russia: gas utility), 18.1%; Lukoil (Russia: oil), 10.2%; Sberbank (Russia: bank), 8.6%; Novatek (Russia: natural gas), 3.8%; Mobile TeleSystems (Russia: wireless), 3.5%; Tafneft (Russia: oil and gas), 3.1%; Magnit OJSC (Russia: retailing), 3.0%; Rosneft Oil Company (Russia: oil and gas), 2.8%; MMC Norilsk Nickel (Russia: mining), 2.7%; and PKO Bank Polski SA (Poland: banking), 2.2%.
iShares MSCI Emerging Markets Eastern Europe Index Fund’s expense ratio is 0.68%.
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