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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RIOCAN REAL ESTATE INVESTMENT TRUST $27.04 (Toronto symbol REI.UN; Units outstanding: 285.0 million; Market cap: $7.7 billion; TSINetwork Rating: Average; Dividend yield: 5.1%; www.riocan.com) has a joint venture with U.S.-based Tanger Factory Outlet Centers to build between 10 and 15 discount shopping malls in major Canadian cities.
RioCan and Tanger have now agreed to team up with privately held Orlando Corp. to build factory outlet stores on the grounds of Orlando’s Heartland Town Centre mall in Mississauga, Ontario. This could lead to similar deals to develop more of Orlando’s Toronto properties.
RioCan is still our #1 safety-conscious buy for 2012.
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RioCan and Tanger have now agreed to team up with privately held Orlando Corp. to build factory outlet stores on the grounds of Orlando’s Heartland Town Centre mall in Mississauga, Ontario. This could lead to similar deals to develop more of Orlando’s Toronto properties.
RioCan is still our #1 safety-conscious buy for 2012.
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H&R REAL ESTATE INVESTMENT TRUST $24.19 (Toronto symbol HR.UN; Units outstanding: 180.8 million; Market cap: $4.4 billion; TSINetwork Rating: Extra Risk; Dividend yield: 4.8%; www.hr-reit.com) owns stakes in 40 office buildings, 117 industrial properties and 133 retail properties across Canada. H&R has a 99.1% occupancy rate.
In the three months ended December 31, 2011, the REIT’s revenue rose 10.9%, to $178.2 million from $160.7 million a year earlier. Cash flow rose 10.1%, to $67.8 million from $61.6 million. Cash flow per unit fell 2.4%, to $0.40 from $0.41, on more units outstanding.
The REIT recently made two major purchases in the U.S. In October 2011, it bought Two Gotham Center in New York City for $415.5 million U.S. The newly built, 22-storey tower is leased to the City of New York for 20 years.
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In the three months ended December 31, 2011, the REIT’s revenue rose 10.9%, to $178.2 million from $160.7 million a year earlier. Cash flow rose 10.1%, to $67.8 million from $61.6 million. Cash flow per unit fell 2.4%, to $0.40 from $0.41, on more units outstanding.
The REIT recently made two major purchases in the U.S. In October 2011, it bought Two Gotham Center in New York City for $415.5 million U.S. The newly built, 22-storey tower is leased to the City of New York for 20 years.
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CANADIAN REIT $38.74 (Toronto symbol REF.UN; Units outstanding: 67.6 million; Market cap: $2.6 billion; TSINetwork Rating: Extra Risk; Dividend yield: 3.7%; 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 24 million square feet of leasable area. Its occupancy rate is 94.4%.
In the three months ended December 31, 2011, the real estate investment trust’s revenue rose 8.9%, to $90.0 million from $82.6 million a year earlier. Cash flow per unit rose 6.9%, to $0.62 from $0.58.
The REIT bought $264.5 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 $89.9 million. In April, it paid $156.0 million for 50% of Calgary Place, a 575,000-square-foot office and retail complex, also in Calgary.
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In the three months ended December 31, 2011, the real estate investment trust’s revenue rose 8.9%, to $90.0 million from $82.6 million a year earlier. Cash flow per unit rose 6.9%, to $0.62 from $0.58.
The REIT bought $264.5 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 $89.9 million. In April, it paid $156.0 million for 50% of Calgary Place, a 575,000-square-foot office and retail complex, also in Calgary.
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GLOBAL X COPPER MINERS ETF $13.56 (New York symbol COPX; buy or sell through brokers; www.globalxfunds.com) tracks the Solactive Global Copper Miners Index, which includes between 20 and 40 international companies that mine, refine or explore for copper. Germany-based Structured Solutions AG created this index.
Canadian companies make up 38.1% of the fund’s holdings. It also includes companies based in the U.S. (10.7%), Australia (6.9%) and Mexico (6.2%), Global X Copper Miners ETF’s MER is 0.65%.
Its top 10 holdings are Lundin Mining Corporation at 6.8%; Xstrata plc, 6.1%; Grupo Mexico, 6.1%; Southern Copper Corporation, 5.9%, Antofagasta plc, 5.4%; First Quantum Minerals, 5.2%, Jiangxi Copper Company, 5.2%; Vedanta Resources, 5.2%; HudBay Minerals, 5.2%; and Freeport Copper, 5.1%.
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Canadian companies make up 38.1% of the fund’s holdings. It also includes companies based in the U.S. (10.7%), Australia (6.9%) and Mexico (6.2%), Global X Copper Miners ETF’s MER is 0.65%.
Its top 10 holdings are Lundin Mining Corporation at 6.8%; Xstrata plc, 6.1%; Grupo Mexico, 6.1%; Southern Copper Corporation, 5.9%, Antofagasta plc, 5.4%; First Quantum Minerals, 5.2%, Jiangxi Copper Company, 5.2%; Vedanta Resources, 5.2%; HudBay Minerals, 5.2%; and Freeport Copper, 5.1%.
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GLOBAL X SILVER MINERS ETF $20.96 (New York symbol SIL; buy or sell through brokers; www.globalxfunds.com) tracks the Solactive Global Silver Miners Index.
This index includes between 20 and 40 international companies that mine, refine or explore for silver. Germany-based Structured Solutions AG developed this index.
Canadian companies make up 45.6% of the fund’s holdings, but it also includes companies based in Mexico (14.5%) and the U.S. (9.0%). The ETF’s MER is 0.65%.
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This index includes between 20 and 40 international companies that mine, refine or explore for silver. Germany-based Structured Solutions AG developed this index.
Canadian companies make up 45.6% of the fund’s holdings, but it also includes companies based in Mexico (14.5%) and the U.S. (9.0%). The ETF’s MER is 0.65%.
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ISHARES S&P/TSX GLOBAL GOLD INDEX FUND $19.17 (Toronto symbol XGD; buy or sell through brokers; ca.ishares.com) aims to mirror the performance of the S&P/TSX Global Gold Index.
This index is made up of 64 gold stocks from Canada and around the world. The fund’s MER is 0.55%. iShares S&P/TSX Global Gold Index Fund began trading on March 23, 2001.
The fund’s top 10 holdings are Barrick Gold at 17.0%; Goldcorp., 13.0%; Newmont Mining, 9.9%; AngloGold Ashanti (ADR), 5.5%; Yamana Gold, 4.6%; Kinross, 4.3%; Eldorado Gold, 4.2%; Gold Fields (ADR), 3.9%; Compania de Minas Buenaventura SA, 3.8%; and Randgold Resources, 3.4%.
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This index is made up of 64 gold stocks from Canada and around the world. The fund’s MER is 0.55%. iShares S&P/TSX Global Gold Index Fund began trading on March 23, 2001.
The fund’s top 10 holdings are Barrick Gold at 17.0%; Goldcorp., 13.0%; Newmont Mining, 9.9%; AngloGold Ashanti (ADR), 5.5%; Yamana Gold, 4.6%; Kinross, 4.3%; Eldorado Gold, 4.2%; Gold Fields (ADR), 3.9%; Compania de Minas Buenaventura SA, 3.8%; and Randgold Resources, 3.4%.
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ISHARES FTSE/XINHUA CHINA 25 INDEX FUND $38.31 (New York symbol FXI; buy or sell through brokers) is an ETF that aims to track the FTSE/Xinhua China 25 Index, which is made up of the 25 largest and most liquid Chinese stocks. All of the stocks in the index trade on the Hong Kong exchange. Some also trade as American Depositary Receipts (ADRs) on the New York exchange.
The fund’s top holdings are China Mobile, 10.3%; China Construction Bank, 8.7%; Industrial & Commercial Bank, 7.9%; CNOOC, 6.9%; Bank of China, 6.0%; Ping An Insurance, 4.2%; Petrochina, 4.1%; China Merchants Bank, 4.1%; and China Life Insurance, 4.1%.
The fund’s holdings give it the following industry breakdown: Financials, 53.9%; Telecommunications, 18.0%; Oil and Gas, 14.8%; Basic Materials, 10.3%; and Industrials, 2.2%; The ETF has an expense ratio of 0.72%.
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The fund’s top holdings are China Mobile, 10.3%; China Construction Bank, 8.7%; Industrial & Commercial Bank, 7.9%; CNOOC, 6.9%; Bank of China, 6.0%; Ping An Insurance, 4.2%; Petrochina, 4.1%; China Merchants Bank, 4.1%; and China Life Insurance, 4.1%.
The fund’s holdings give it the following industry breakdown: Financials, 53.9%; Telecommunications, 18.0%; Oil and Gas, 14.8%; Basic Materials, 10.3%; and Industrials, 2.2%; The ETF has an expense ratio of 0.72%.
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ISHARES MSCI EMERGING MARKETS EASTERN EUROPE INDEX FUND $26.38 (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, 76.4%; Poland, 15.8%; Czech Republic, 3.9%; and Hungary, 3.5%.
The fund’s top holdings are Gazprom (Russia: gas utility), 19.7%; Lukoil (Russia: oil), 10.0%; Sberbank (Russia: bank), 8.9%; Novatek (Russia: natural gas), 3.9%; Rosneft Oil Company (Russia: oil and gas), 3.7%; Uralkali (Russia: potash), 3.4%; Mobile Tele- Systems (Russia: wireless), 3.2%; Tafneft (Russia: oil and gas), 2.8%; MMC Norilsk Nickel (Russia: mining), 2.7%; and Magnit OJSC (Russia: retailing), 2.5%. iShares MSCI Emerging Markets Eastern Europe Index Fund’s expense ratio is 0.68%.
The fund’s concentration in Russia adds risk. But the long-term outlook for resource prices, including oil, is positive. That’s a big plus for Russia’s largely resource-based economy, which is forecast to grow by 4% in 2012.
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The fund’s top holdings are Gazprom (Russia: gas utility), 19.7%; Lukoil (Russia: oil), 10.0%; Sberbank (Russia: bank), 8.9%; Novatek (Russia: natural gas), 3.9%; Rosneft Oil Company (Russia: oil and gas), 3.7%; Uralkali (Russia: potash), 3.4%; Mobile Tele- Systems (Russia: wireless), 3.2%; Tafneft (Russia: oil and gas), 2.8%; MMC Norilsk Nickel (Russia: mining), 2.7%; and Magnit OJSC (Russia: retailing), 2.5%. iShares MSCI Emerging Markets Eastern Europe Index Fund’s expense ratio is 0.68%.
The fund’s concentration in Russia adds risk. But the long-term outlook for resource prices, including oil, is positive. That’s a big plus for Russia’s largely resource-based economy, which is forecast to grow by 4% in 2012.
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ISHARES S&P INDIA NIFTY 50 INDEX FUND $22.40 (Nasdaq symbol INDY; buy or sell through brokers; us.ishares.com) is an ETF that aims to track the S&P CNX Nifty Index, which represents the 50 largest, most liquid Indian securities.
The fund’s top holdings are ITC Ltd. (conglomerate), 8.3%; Reliance Industries Ltd. (conglomerate), 7.8%; Infosys Technologies (software), 7.1%; Housing Development Finance, 6.2%; ICICI Bank, 6.2%; HDFC Bank, 6.1%; Larsen & Toubro Ltd. (conglomerate), 4.1%; Tata Consultancy Services (information technology), 3.8%; and State Bank of India, 3.5%.
The fund’s industry breakdown includes Banks, 19.0%; Computers, 13.0%; Refineries, 8.3%; Cigarettes, 8.3%; Automobiles, 6.6%; Housing, 6.3%; Pharmaceuticals, 4.4%; Engineering, 4.1%; Power, 3.9%; and Oil Exploration, 3.7%. The ETF has an expense ratio of 0.89%.
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The fund’s top holdings are ITC Ltd. (conglomerate), 8.3%; Reliance Industries Ltd. (conglomerate), 7.8%; Infosys Technologies (software), 7.1%; Housing Development Finance, 6.2%; ICICI Bank, 6.2%; HDFC Bank, 6.1%; Larsen & Toubro Ltd. (conglomerate), 4.1%; Tata Consultancy Services (information technology), 3.8%; and State Bank of India, 3.5%.
The fund’s industry breakdown includes Banks, 19.0%; Computers, 13.0%; Refineries, 8.3%; Cigarettes, 8.3%; Automobiles, 6.6%; Housing, 6.3%; Pharmaceuticals, 4.4%; Engineering, 4.1%; Power, 3.9%; and Oil Exploration, 3.7%. The ETF has an expense ratio of 0.89%.
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TRANSCANADA CORP. $43.44 (Toronto symbol TRP; Shares outstanding: 704.2 million; Market cap: $30.6 billion; TSINetwork Rating: Above Average; Dividend yield: 4.1%; www.transcanada.com) gets 9% of its revenue from its minority stake in the Bruce nuclear power complex in central Ontario.
Two of the plant’s eight reactors have been out of service since 1995, and the company and its partners are nearly finished upgrading them. The partners plan to restart both by September 30, 2012. The plant will then supply 25% of Ontario’s power. Right now, Bruce’s six operating reactors provide 19% of the province’s electricity.
TransCanada is a buy.
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Two of the plant’s eight reactors have been out of service since 1995, and the company and its partners are nearly finished upgrading them. The partners plan to restart both by September 30, 2012. The plant will then supply 25% of Ontario’s power. Right now, Bruce’s six operating reactors provide 19% of the province’s electricity.
TransCanada is a buy.
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