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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IMPERIAL OIL $51.49 (Toronto symbol IMO; Shares outstanding: 847.6 million; Market cap: $43.6 billion; TSINetwork Rating: Average; Dividend yield: 0.9%; www.imperialoil.ca) is Canada’s largest integrated oil company. Imperial earned $0.95 a share in the three months ended December 31, 2010. That’s up 50.8%, from $0.63 a share a year earlier. The rise was mainly the result of higher oil and gas prices, and improved profits at Imperial’s refineries. Revenue rose 18.2%, to $6.9 billion from $5.9 billion. The company’s production is set to rise in the long term, thanks to its new oil-sands projects, including the $8-billion Kearl project, which is more than 50% complete. When it starts operating in 2012, Kearl should add 78,100 barrels of oil to Imperial’s daily production of 294,000 barrels. Imperial owns 71% of Kearl. ExxonMobil Corp. (New York symbol XOM) owns the remaining 29%. Exxon also holds a 69.6% interest in Imperial....
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 advice on investing money. Each Investor Toolkit update gives you a fundamental piece of investment strategy, and shows you how you can put it into practice right away. Tip of the week: “Our advice on 2 ways of investing money in the stock market” Most investors place two types of orders when buying stocks: “market orders” or “limit orders.”...
Some investors rely on technical analysis (or chart reading) when they’re looking to add high return investments to their portfolios. That’s because relying on charts seems much simpler than delving into and weighing a company’s fundamentals. We always do some technical analysis when we look for high return investments to recommend in our newsletters, including Stock Pickers Digest, our newsletter for aggressive investing. And some successful investors find it helps to know a little about charts. But if you rely on charts at all, you should view them as just one of many things to consider when you make investment decisions.
Technical analysis: Focusing exclusively on share prices will eventually cost you money
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We’ve long relied on these 3 stock market investing tips to find stocks to recommend in our investment newsletters and services. We think they can help you pick winners, too. (Our special report, “Stock Market Investing Strategy: Pat McKeough’s Conservative Investing Guide for Making Money and Cutting Risk,” is full of lower-risk investing strategies you can easily put into practice right away. Click here to download your copy now.)
- Think like a portfolio manager: Portfolio managers gather information from companies, industry studies and other sources. A good portfolio manager then tries to build his or her client a portfolio that makes money if things go well, but won’t lose too much if the opinions sometimes turn out to be faulty....
Visa Inc., symbol V on New York, operates the world’s largest retail electronic payments network. The company processes credit, debit, prepaid and commercial payments under the Visa, Visa Electron, Interlink and PLUS brands. The company generates revenue from fees it charges card issuers and merchants for using its network. These fees are based on payment volume, transactions processed and other factors. Visa continues to benefit from the global trend toward greater use of credit and debit cards. In its 2011 first quarter, which ended December 31, the company’s revenue rose 14.2%, to $2.24 billion from $1.96 billion a year earlier. Earnings rose 15.9%, to $884.0 million from $763.0 million....
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. Tip of the week: “Focus your investing strategy on quality and diversification—not economic forecasts.” Economic forecasts attract way more investor attention than they deserve, in view of the meagre advantage, if any, that they add to your investing strategy. In fact, most experienced, successful investors feel skeptical, if not downright cynical, about economic forecasts, for three reasons....
This time of year, you’ll often hear discussions about the proper “asset allocation”, or the mix of stocks, bonds and cash that you should hold in your portfolio at various stages of life. A Successful Investor Wealth Management client once asked a related question that rarely gets the attention it deserves. He asked where investing in real estate fits in your asset allocation.
Investing in real estate: More like running a business than owning stocks
In reality, owning investment real estate doesn’t quite fit within any of asset allocation’s pigeonholes. It’s more of a small business than a passive investment like stocks and bonds. (I call them “passive” because you don’t need and aren’t expected to help manage the companies you are investing in. Of course, you do have to manage your investment portfolio, or hire somebody to do it for you.)...
C.R. Bard Inc. (symbol BCR on New York) makes medical devices in four main areas: urology products, such as vascular products, including stents and catheters (28% of 2010 sales); oncology products that detect and treat various types of cancer (27%); drainage and incontinence devices (26%); and surgical tools and other products (19%). Bard is one of the stock market picks we analyze in our Wall Street Stock Forecaster newsletter. In 2010, Bard’s sales rose 7.3%, to $2.7 billion from $2.5 billion in 2009. Earnings rose 10.7%, to $509.2 million from $460.1 million a year earlier. Earnings per share climbed 15.7% to $5.32 from $4.60, on fewer shares outstanding. If you exclude unusual items, such as merger costs, earnings per share would have risen 10.0%, to $5.60 from $5.09....
Briggs & Stratton (symbol BGG on New York) is the world’s largest lawnmower engine maker. This business accounts for 62% of Brigg’s revenue. It gets the remaining 38% by making other home and garden equipment, such as portable and standby generators, pressure washers and snow blowers. In the three months ended December 26, 2010, sales rose 14.6%, to $450.3 million from $393.0 million a year earlier. Larger shipments of engines to European and Asian manufacturers boosted revenue, as did sales of snow blowers, lawn mowers and pressure washers. However, the company lost $1.3 million, or $0.03 per share, compared to earnings of $3.0 million, or $0.06 a share, a year earlier. The loss resulted in part from $4.6 million in restructuring and refinancing charges....
PRIMARIS RETAIL REAL ESTATE INVESTMENT TRUST $20.25 (Toronto symbol PMZ.UN; Units outstanding: 68.6 million; Market cap: $1.4 billion; TSINetwork Rating: Extra Risk; Dividend yield: 6.0%) owns large malls in medium-sized Canadian cities. It also owns major shopping centres in suburbs of large cities. In all, the trust owns 29 properties that contain 11.1 million square feet of leasable area. Primaris has a 97.0% occupancy rate. Its major tenants include Hudson’s Bay Company, Sears, Shoppers Drug Mart, Loblaw, Reitmans, Canadian Tire and Best Buy. In June 2010, Primaris raised $85.2 million in a unit issue. In August 2010, it used the funds to help pay for the Cataraqui Town Centre, an enclosed shopping mall in Kingston, Ontario....