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 DEX SHORT TERM BOND INDEX FUND $28.94 (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 investment-grade federal, provincial, municipal and corporate bonds with between one- and five-year terms to maturity. The fund holds 295 bonds with an average term to maturity of 2.85 years. The bonds in the index are 64.2% government and 35.8% corporate. The fund’s MER is 0.26%.
iShares DEX Short Term Bond Index Fund yields 2.9%. 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 investment-grade federal, provincial, municipal and corporate bonds with between one- and five-year terms to maturity. The fund holds 295 bonds with an average term to maturity of 2.85 years. The bonds in the index are 64.2% government and 35.8% corporate. The fund’s MER is 0.26%.
iShares DEX Short Term Bond Index Fund yields 2.9%. 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. $10.75 (Toronto symbol TS.B; Shares outstanding: 79.9 million; Market cap: $858.9 million; TSINetwork Rating: Above Average; Dividend yield: 4.7%; www.torstar.com) owns 90% of a company that publishes free commuter newspapers under the Metro banner in major Canadian cities; Sweden’s Metro International SA owns the remaining 10%.
Torstar now plans to expand Metro to Saskatoon and Regina. It will also launch Internet versions for four more cities: Hamilton, Kitchener and Windsor, in Ontario, and Victoria, B.C. These free publications should help the company attract more younger readers, who tend to avoid traditional newspapers.
Torstar is a buy.
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Torstar now plans to expand Metro to Saskatoon and Regina. It will also launch Internet versions for four more cities: Hamilton, Kitchener and Windsor, in Ontario, and Victoria, B.C. These free publications should help the company attract more younger readers, who tend to avoid traditional newspapers.
Torstar is a buy.
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PRIMARIS RETAIL REAL ESTATE INVESTMENT TRUST $21.65 (Toronto symbol PMZ.UN; Units outstanding: 81.0 million; Market cap: $1.8 billion; TSINetwork Rating: Extra Risk; Dividend yield: 5.6%; www.primarisreit.com) owns large malls in medium-sized Canadian cities and suburban areas. In all, the trust owns 32 properties that contain 13.5 million square feet of leasable area.
Primaris has 44% of its properties in Ontario, followed by Alberta, 16%; B.C., 14%; Quebec, 13%; Saskatchewan, 9%; Manitoba, 3% and New Brunswick, 1%. Primaris has a 97.1% occupancy rate.
In the three months ended December 31, 2011, acquisitions pushed up Primaris’s revenue by 23.5%, to $104.1 million from $84.2 million. Cash flow rose 16.2%, to $34.7 million from $29.8 million. Cash flow per unit fell 3.2%, to $0.42 from $0.434, on more units outstanding. The trust yields 5.6%.
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Primaris has 44% of its properties in Ontario, followed by Alberta, 16%; B.C., 14%; Quebec, 13%; Saskatchewan, 9%; Manitoba, 3% and New Brunswick, 1%. Primaris has a 97.1% occupancy rate.
In the three months ended December 31, 2011, acquisitions pushed up Primaris’s revenue by 23.5%, to $104.1 million from $84.2 million. Cash flow rose 16.2%, to $34.7 million from $29.8 million. Cash flow per unit fell 3.2%, to $0.42 from $0.434, on more units outstanding. The trust yields 5.6%.
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ALLIED PROPERTIES REAL ESTATE INVESTMENT TRUST $26.07 (Toronto symbol AP.UN; Units outstanding: 51.9 million; Market cap: $1.4 billion; TSINetwork Rating: Extra Risk; Dividend yield: 5.1%; 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. It now has 57 buildings in Toronto (which contain 42.9% of Allied’s leasable area); 15 in Montreal (35.9%); nine in Calgary (5.3%); seven in Winnipeg (5.3%); five in Quebec City (2.4%); four in Vancouver/Victoria (3.3%); two in Edmonton (3.7%); and one in Kitchener-Waterloo (1.2%). Allied has an occupancy rate of 94.3%.
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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. It now has 57 buildings in Toronto (which contain 42.9% of Allied’s leasable area); 15 in Montreal (35.9%); nine in Calgary (5.3%); seven in Winnipeg (5.3%); five in Quebec City (2.4%); four in Vancouver/Victoria (3.3%); two in Edmonton (3.7%); and one in Kitchener-Waterloo (1.2%). Allied has an occupancy rate of 94.3%.
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ENBRIDGE INC. $39.42 (Toronto symbol ENB; Shares outstanding: 782.2 million; Market cap: $30.8 billion; TSINetwork Rating: Above Average; Div. yield: 2.9%; www.enbridge.com) continues to expand in the U.S.
In November 2011, the company agreed to buy half of the Seaway pipeline for $1.15 billion U.S. Enterprise Product Partners LP owns the other half and operates the pipeline.
Right now, Seaway pumps crude oil from Houston, Texas, to storage facilities in Cushing, Oklahoma. But the partners plan to reverse the line’s flow by mid-2012.
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In November 2011, the company agreed to buy half of the Seaway pipeline for $1.15 billion U.S. Enterprise Product Partners LP owns the other half and operates the pipeline.
Right now, Seaway pumps crude oil from Houston, Texas, to storage facilities in Cushing, Oklahoma. But the partners plan to reverse the line’s flow by mid-2012.
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BELL ALIANT INC. $27.50 (Toronto symbol BA; Shares outstanding: 227.8 million; Market cap: $6.3 billion; TSINetwork Rating: Above Average; Dividend yield: 6.9%; www.aliant.ca) sells telephone and Internet services to 2.8 million customers in Atlantic Canada, as well as rural parts of Ontario and Quebec. The company also sells wireless services through an alliance with BCE, which owns 43.8% of Bell Aliant.
The company faces strong competition from cable providers. In addition, many of its phone customers are switching to wireless devices. However, Bell Aliant’s wireless agreement with BCE plus upgrades to its high-speed Internet network, are helping it hold on to clients and attract new ones.
Bell Aliant’s high-speed fibre optic systems now reach 458,000 homes. The company plans to expand this to 650,000 homes by the end of 2012.
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The company faces strong competition from cable providers. In addition, many of its phone customers are switching to wireless devices. However, Bell Aliant’s wireless agreement with BCE plus upgrades to its high-speed Internet network, are helping it hold on to clients and attract new ones.
Bell Aliant’s high-speed fibre optic systems now reach 458,000 homes. The company plans to expand this to 650,000 homes by the end of 2012.
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BROOKFIELD RENEWABLE ENERGY PARTNERS L.P. $26.32 (Toronto symbol BEP.UN; Units outstanding: 104.7 million; Market cap: $2.8 billion; TSINetwork Rating: Extra Risk; Dividend yield: 5.2%; www.brpfund.com) has finished merging its assets with the extensive hydroelectric and wind power holdings of Brookfield Asset Management (symbol BAM on Toronto).
Brookfield Renewable now owns 170 hydroelectric generating stations, three wind farms and two natural-gas-fired plants. It has 4,536 megawatts of generating capacity in total.
Roughly 40% of Brookfield Renewable’s generating capacity is in Canada, with another 40% in the U.S. and 20% in Brazil. The company sells virtually all of its power under agreements that are an average of 24 years in length.
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Brookfield Renewable now owns 170 hydroelectric generating stations, three wind farms and two natural-gas-fired plants. It has 4,536 megawatts of generating capacity in total.
Roughly 40% of Brookfield Renewable’s generating capacity is in Canada, with another 40% in the U.S. and 20% in Brazil. The company sells virtually all of its power under agreements that are an average of 24 years in length.
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ENCANA CORP. $18.92 (Toronto symbol ECA; Shares outstanding: 735.4 million; Market cap: $13.9 billion; TSINetwork Rating: Average; Dividend yield: 4.3%; www.encana.com) uses hydraulic fracturing, or fracking, to recover natural gas from shale deposits. This process involves pumping a mix of water, chemicals and other materials into the shale formations. This fractures the rock and releases the gas.
In December 2011, the U.S. Environmental Protection Agency (EPA) published a draft report that claimed fracking chemicals at Encana’s Wyoming well contaminated local drinking water.
However, Encana disputes the findings. This week, the EPA announced that it would re-test the area’s aquifer as part of a larger study that it is conducting on the impact of fracking on drinking water.
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In December 2011, the U.S. Environmental Protection Agency (EPA) published a draft report that claimed fracking chemicals at Encana’s Wyoming well contaminated local drinking water.
However, Encana disputes the findings. This week, the EPA announced that it would re-test the area’s aquifer as part of a larger study that it is conducting on the impact of fracking on drinking water.
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MARKET VECTORS VIETNAM ETF $19.18 (New York symbol VNM; buy or sell through brokers; www.vaneck.com) holds shares of Vietnamese companies or foreign firms that get a significant amount of their revenue from Vietnam.
Market Vectors Vietnam ETF was launched on August 11, 2009. Its expense ratio is 0.76%.
The ETF’s top 10 holdings are Vietin Commercial Bank, 8.2%; Vincom Corp. (real estate), 7.9%; JSC Bank, 7.5%; Baoviet Holdings (Finance and insurance), 6.7%; PetroVietnam Fertilizer and Chemical, 5.4%; Premier Oil plc (a U.K. producer with a 53.1% stake in the huge Chim Sao oil project offshore southern Vietnam), 4.2%; Charoen Pokphand Foods (a Thailand-based food conglomerate), 4.1%; Oil & Natural Gas Corp. (an India-based oil and gas company), 4.0%; Gamuda Bhd (a Malaysia-based construction group); and Hoang Anh Gia Lai Group (real estate development), 3.8%.
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Market Vectors Vietnam ETF was launched on August 11, 2009. Its expense ratio is 0.76%.
The ETF’s top 10 holdings are Vietin Commercial Bank, 8.2%; Vincom Corp. (real estate), 7.9%; JSC Bank, 7.5%; Baoviet Holdings (Finance and insurance), 6.7%; PetroVietnam Fertilizer and Chemical, 5.4%; Premier Oil plc (a U.K. producer with a 53.1% stake in the huge Chim Sao oil project offshore southern Vietnam), 4.2%; Charoen Pokphand Foods (a Thailand-based food conglomerate), 4.1%; Oil & Natural Gas Corp. (an India-based oil and gas company), 4.0%; Gamuda Bhd (a Malaysia-based construction group); and Hoang Anh Gia Lai Group (real estate development), 3.8%.
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CANADIAN PACIFIC RAILWAY $75.47 (Toronto symbol CP; Shares outstanding: 170.9 million; Market cap: $12.9 billion; TSINetwork Rating: Average; Dividend yield: 1.6%; www.cpr.ca) continues to expand its rail network in the Bakken area, which could contain more than 500 billion barrels of oil. This region covers parts of Montana, North Dakota and Saskatchewan.
Texas-based U.S. Development Group LLC is almost finished building a new hub in North Dakota to handle Bakken’s rising production. This hub will transfer oil from trucks to trains, which will then ship it to market.
CP is the only railway that will connect to this hub. That puts it in a great position to profit as shale oil and gas production continues to increase: the company expects its shipments from Bakken to jump to 125,000 barrels a day from 23,000 in 2011.
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Texas-based U.S. Development Group LLC is almost finished building a new hub in North Dakota to handle Bakken’s rising production. This hub will transfer oil from trucks to trains, which will then ship it to market.
CP is the only railway that will connect to this hub. That puts it in a great position to profit as shale oil and gas production continues to increase: the company expects its shipments from Bakken to jump to 125,000 barrels a day from 23,000 in 2011.
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