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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ISHARES MSCI JAPAN INDEX FUND $9.50 (American Exchange symbol EWJ; buy or sell through brokers; us.ishares.com) is an exchange traded fund that tries to match the return of the Morgan Stanley Capital International (MSCI) Japan index.
The fund’s top holdings include Toyota Motor, 5.2%; Mitsubishi UFJ Financial, 2.8%; Honda Motor, 2.7%; Canon, 2.2%; Sumitomo Mitsui Financial, 2.1%; Mizuho Financial Group, 1.8%; Takeda Pharmaceutical, 1.7%; Softbank Corp., 1.5%; Fanuc Corp., 1.5%; and Mitsubishi Corporation, 1.5%.
The fund’s industry breakdown is as follows: Industrials, 20.4%; Consumer Discretionary, 19.9%; Financials, 17.4%; Information Technology, 11.9%; Materials, 6.7%; Health Care, 6.7%; Consumer Staples, 6.6%; Telecommunication Services, 4.4%; Utilities, 3.6%; and Energy, 1.6%.
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The fund’s top holdings include Toyota Motor, 5.2%; Mitsubishi UFJ Financial, 2.8%; Honda Motor, 2.7%; Canon, 2.2%; Sumitomo Mitsui Financial, 2.1%; Mizuho Financial Group, 1.8%; Takeda Pharmaceutical, 1.7%; Softbank Corp., 1.5%; Fanuc Corp., 1.5%; and Mitsubishi Corporation, 1.5%.
The fund’s industry breakdown is as follows: Industrials, 20.4%; Consumer Discretionary, 19.9%; Financials, 17.4%; Information Technology, 11.9%; Materials, 6.7%; Health Care, 6.7%; Consumer Staples, 6.6%; Telecommunication Services, 4.4%; Utilities, 3.6%; and Energy, 1.6%.
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RIOCAN REAL ESTATE INVESTMENT TRUST $27.87 (Toronto symbol REI.UN; Units outstanding: 285.0 million; Market cap: $8.0 billion; TSINetwork Rating: Average; Dividend yield: 5.0%; www.riocan.com) planned to spend $600 million on acquisitions in 2012. That’s equal to 8% of its $7.9-billion market cap. The trust spent $1 billion on acquisitions in 2011.
However, RioCan will likely spend less than it planned this year, due to the rising cost of properties in Canada’s big cities. Instead, the trust plans to upgrade its existing malls. Right now, it is focusing on projects in Toronto and Calgary.
The trust continues to pay monthly distributions of $0.115 a unit, for a 5.0% annualized yield. In light of its improving outlook, RioCan aims to raise its payout in 2013.
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However, RioCan will likely spend less than it planned this year, due to the rising cost of properties in Canada’s big cities. Instead, the trust plans to upgrade its existing malls. Right now, it is focusing on projects in Toronto and Calgary.
The trust continues to pay monthly distributions of $0.115 a unit, for a 5.0% annualized yield. In light of its improving outlook, RioCan aims to raise its payout in 2013.
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CANADIAN REIT $42.04 (Toronto symbol REF.UN; Units outstanding: 67.8 million; Market cap: $2.9 billion; TSINetwork Rating: Extra Risk; Dividend yield: 3.6%; www.creit.ca) owns over 190 properties, including retail, industrial and office buildings, located across Canada and in the Chicago area. These properties contain over 19 million square feet of leasable area. Its occupancy rate is 95.0%.
In the three months ended March 31, 2012, the real estate investment trust’s revenue rose 9.7%, to $89.2 million from $81.3 million a year earlier. Cash flow per unit rose 7.7%, to $0.56 from $0.52.
The trust bought $298.6 million of properties in 2011, including its June purchase of two fully leased malls in Mississauga, Ontario, for $174.4 million. In March 2012, it bought 50% of the 310,000- square-foot Altius Centre in Calgary for $92.3 million. In April, it paid $156.0 million for 50% of Calgary Place, a 575,000-square-foot office and retail complex.
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In the three months ended March 31, 2012, the real estate investment trust’s revenue rose 9.7%, to $89.2 million from $81.3 million a year earlier. Cash flow per unit rose 7.7%, to $0.56 from $0.52.
The trust bought $298.6 million of properties in 2011, including its June purchase of two fully leased malls in Mississauga, Ontario, for $174.4 million. In March 2012, it bought 50% of the 310,000- square-foot Altius Centre in Calgary for $92.3 million. In April, it paid $156.0 million for 50% of Calgary Place, a 575,000-square-foot office and retail complex.
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; Units outstanding: 55.9 million; MaALLIED PROPERTIES REAL ESTATE INVESTMENT TRUST $29.35 (Toronto symbol AP.UN rket cap: $1.6 billion; TSINetwork Rating: Extra Risk; Dividend yield: 4.5%; www.alliedpropertiesreit.com) owns 100 office buildings, mostly in major Canadian cities. These mainly Class I properties contain over 7.8 million square feet of leasable area.
Class I refers to 19th- and early-20th-century light industrial buildings that have been converted to office and retail space. They usually feature exposed beams, interior brick and hardwood floors.
In 2011, the trust bought 22 properties for $456 million. In the first quarter of 2012, it bought 10 more buildings for $185.2 million.
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Class I refers to 19th- and early-20th-century light industrial buildings that have been converted to office and retail space. They usually feature exposed beams, interior brick and hardwood floors.
In 2011, the trust bought 22 properties for $456 million. In the first quarter of 2012, it bought 10 more buildings for $185.2 million.
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TELUS $61.56 (Toronto symbol T.A; Shares outstanding: 324.9 million; Market cap: $20.0 billion; TSINetwork Rating: Above Average; Dividend yield: 4.0%; www.telus.com) gets 52% of its earnings from its growing wireless business, which now has 7.4 million subscribers across Canada.
The remaining 48% of Telus’s earnings come from its wireline division, which has 3.5 million traditional phone customers in B.C., Alberta and eastern Quebec. This business also has 1.3 million Internet users and 553,000 TV customers.
In the three months ended March 31, 2012, Telus’s earnings per share rose 6.0%, to $1.06 from $1.00 a year earlier. Rising demand for wireless and high-speed Internet services helped push up revenue by 4.0%, to $2.6 billion from $2.5 billion.
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The remaining 48% of Telus’s earnings come from its wireline division, which has 3.5 million traditional phone customers in B.C., Alberta and eastern Quebec. This business also has 1.3 million Internet users and 553,000 TV customers.
In the three months ended March 31, 2012, Telus’s earnings per share rose 6.0%, to $1.06 from $1.00 a year earlier. Rising demand for wireless and high-speed Internet services helped push up revenue by 4.0%, to $2.6 billion from $2.5 billion.
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A little over three months ago, Pat McKeough responded to the many concerns expressed over a possible real estate crash, especially in Canada’s largest markets. The video drew one of our largest viewing audiences. Today there’s still a great deal of media attention focused on the possibility of a real estate crash. Those fears are undoubtedly heightened by ongoing headlines about the European debt crisis and a slowdown in the global economy. Volatility in the stock market adds a further note of pessimism for many Canadians. That makes it all the more important to keep things in perspective, which makes this an ideal time to replay Pat’s original video. In real estate investments especially, he reminds his viewers, there is a lot of territory between boom and bust. A rising real estate market will always cool down, but that doesn’t mean catastrophe is around the corner....
Dividends don’t always get the respect they deserve, especially from beginning investors. A dividend stock’s yearly 2% or 3% or 5% yield barely seems worth mentioning alongside yearly capital gains of 10%, 20% or 30% or more. Yet dividends are far more reliable than capital gains. A stock that pays a dividend of $1 this year will probably do the same next year. It may even rise to $1.05....
Today’s market volatility and economic uncertainty around the globe is making some investors wonder how much cash they should hold. My investment advice is to look at the longer term and not just at current conditions, or at today’s headlines. Remember, much of what we read today remains speculation....
Pat McKeough responds to many personal questions on 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. As the population ages, many consider medical and biotech firms to be a promising stock market investment. This past week, an Inner Circle member asked Pat about one of the giants in the field, the world’s biggest maker of implantable biomedical devices....
This is the latest in a series of video interviews in which Pat McKeough will give his advice on a variety of topics. Some will deal with his overall investment philosophy, others on specific investment strategies, and still others will be comments on events that are affecting the markets and the economy. This time, the subject is real estate investing, as Pat replies to questions that followed his earlier video on the home as an investment. (View the post here: Do You Think of Your House as an Investment?) Several readers insisted that they saw their houses as a good source of building net worth, whether through its intrinsic value or as a source of collateral for buying stocks. Pat has a few words of caution on both of those points.
Real Estate Investing: Your House as a Source of Building Wealth ...
Real Estate Investing: Your House as a Source of Building Wealth ...