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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Every Wednesday, we publish our “Investor Toolkit” series on TSI Network. Whether you’re a new or experienced investor, these weekly updates are designed to give you specific investment advice. 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: “How to invest in the stock market with less risk” Many people come up with unrealistic answers to the question of how much risk is right for them. For instance, when they’re young and just starting out, many investors decide to move away from a conservative investment strategy and speculate. They expect to build a small portfolio into a big one in a hurry, then shift their money into boring, but more dependable investments. Key points to remember:...
Real estate investment trusts (REITs) resemble income trusts, but with a key difference: REITs invest in income-producing real estate, such as office buildings and hotels. High-quality real estate investment trusts can make attractive, lower-risk additions to your portfolio. Even so, we continue to advise against overindulging in REITs. But if you’re thinking of investing in some of Canada’s top REITs, here are 2 reasons why now is a great time to do so:...
These 3 tips for finding the best Canadian stocks have long been part of the advice we give you in our investment services and newsletters, including Canadian Wealth Advisor, our newsletter for conservative investing. We think they can help you spot the best Canadian stocks for your portfolio, too.
- No stock can ever be so undervalued or desirable that it overcomes a lack of integrity on the part of company insiders: If you have any doubts about the integrity of insiders, sell immediately. There are no limits to the ways in which unscrupulous operators can and will cheat you.
However, to enhance your long-term returns, not just avoid loss, you need to apply this tip in a moderate fashion. You need to distinguish between lack of integrity on the one hand, and naivete or poor judgment on the other. Many of the best Canadian stocks eventually run afoul of tax rules or regulatory decisions, for instance. If you take that as a sign of low integrity, you can wind up selling solid investments at market lows.
FirstService Corp., symbol FSV on Toronto, serves the following areas of the real-estate market: commercial real estate; residential property management; and property improvement. FirstService is one of the stocks we cover in Stock Pickers Digest, our newsletter for aggressive investing. In the three months ended December 31, 2010, the real estate investment’s revenue jumped 18.5%, to $552.1 million from $465.8 million a year earlier. (All figures except share prices in U.S. dollars.) Earnings per share rose 37.0%, to $0.37 from $0.27....
Cintas Corp., Nasdaq symbol CTAS, designs, makes and sells uniforms to about 800,000 business, mainly in North America. Cintas also offers related services, including office cleaning and document shredding. Cintas is one of the U.S. stocks we analyze in our Wall Street Stock Forecaster newsletter. In the three months ended February 28, 2011, the company’s sales rose 8.8%, to $937.8 million from $861.8 million a year earlier (all figures in U.S. dollars). Earnings rose 20.6%, to $59.1 million from $49.0 million. Earnings per share rose 28.1%, to $0.41 from $0.32, on more shares outstanding. The latest earnings easily beat the consensus estimate of $0.36 a share....
PRT Forest Regeneration Income Fund, Toronto symbol PRT.UN, is the largest producer of container-grown forest seedlings in North America. It grows its seedlings in 13 greenhouses and open outdoor compounds. PRT expects to produce about 170 million seedlings in 2011. In the three months ended December 31, 2010, PRT reported cash flow of $0.07 per unit, compared to $0.12 per unit a year earlier. The fund received payment for an insurance claim in early 2010, and used a portion of the funds to pay off its $3.7-million bank debt. That significantly lowered its interest costs. However, that was not enough to offset a 9.4% drop in revenue, to $6.8 million from $7.5 million....
Alimentation Couche-Tard, symbol ATD.B on Toronto, is the largest convenience store operator in Canada, with over 2,000 outlets. It also has over 3,500 U.S. stores. The Canadian stores operate under the Couche-Tard and Mac’s banners, while the U.S. stores mainly use the Circle K brand. The fuel pumps at most of the Canadian stock’s stores provide 68.0% of the company’s sales. In the three months ended January 30, 2011, Couche-Tard’s earnings rose 29.6%, to $71.0 million, or $0.38 a share, from $54.8 million, or $0.29 a share, a year earlier (all figures except share prices in U.S. dollars). The latest earnings beat the consensus earnings forecast of $0.37 a share. The Canadian stock’s revenue rose 13.7%, to $5.6 billion from $4.9 billion. Same-store merchandise sales climbed 3.9% in the U.S., and 0.4% in Canada. U.S. sales make up 77.9% of total sales. Revenue from gasoline and diesel fuel rose 18.5%, mainly due to rising prices. The company also installed fuel pumps at more of its outlets....
Every Wednesday, we publish our “Investor Toolkit” series on TSI Network. Whether you’re a new or experienced investor, these weekly updates are designed to give you specific investment advice. 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: “Base your investing strategy on these 3 good investor attitudes.” To succeed as an investor, you need to cultivate three personal mental strengths:...
Pulse Seismic, symbol PSD on Toronto, buys, sells and licenses seismic data to clients in western Canada. The company is one of the aggressive stock investing picks we analyze in our Stock Pickers Digest newsletter. Pulse’s main business is seismic-data licensing. It has built a library of seismic research that it licenses to clients, mostly oil and gas companies. Pulse usually buys seismic-survey data from oil and gas firms. It also performs what it calls “participation seismic surveys.” Oil and gas producers pay Pulse to participate in these surveys in return for a perpetual, non-exclusive licence to use the newly generated data. Pulse owns the data the surveys generate, and adds it to its library. Oil and gas firms, which may use different scientific models in their exploration, can then lease various selections and combinations of the data....
Over 400 investors are now following our TSI Network Facebook page. If you haven’t yet visited the page — www.tsinetwork.ca/facebook — you really should. By joining these 400 investors and “liking” our page (more on how to do that below), you’ll give yourself even better access to our free, risk-cutting investment advice. I guarantee it will make you a better investor. Here’s what you get when you “like” our page:...