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 successful investing. Each Investor Toolkit update gives you a fundamental tip and shows you how you can put it into practice right away. Tip of the week: “Short sellers make money fast when they win, but most wind up losing.” When you sell short, you borrow stock from a broker and then sell it. However, you eventually have to buy back the stock on the market to return it to its owner....

You can enhance your long-term investment results by following these 3 key tips for investing in the stock market. They’ve long been part of the advice we give in our investment services and newsletters, including Canadian Wealth Advisor, our advisory for conservative investing. 1. Treat all predictions with a healthy degree of skepticism: Thanks to the Internet, it’s possible to get hold of far more information than ever before. From there, it’s easy to fashion a theory or accept a conclusion that is missing just enough key material to be completely at odds with reality. This can happen to anybody. That includes teams of award-winning journalists and editors at major newspapers, top-paid investment analysts at the world’s biggest financial institutions — and you. That’s why you need to treat all predictions — yours and everybody else’s — with a healthy degree of skepticism. You can take them into account, let them influence your investment decisions, even skew your portfolio so you can profit if they hit the mark. But keep it within limits. Never let a prediction take the place of diversification....

When stock market trading, most investors place “market orders” or “limit orders.” (We cover all the main aspects of stock market trading, including placing an order, in our free report, “Canadian Stock Market Basics: How to Trade Stocks and Make Good Investments in Canada.” Click here to claim yours now.)

• Limit orders: With a limit order, you specify the highest price you are willing to pay to buy. The main risk here is that your order will go unfilled if there is no stock available at or below your price. This introduces a filtering mechanism that can cost you money, especially if you set your limit below the current market price.
  
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Here are three common mistakes most investors make when investing in stocks. By avoiding them, you can increase your portfolio’s long-term returns, and significantly cut your risk.

• Owning too many stocks. When you’re first starting out, you should aim to invest in a minimum of four or five stocks — one from each of most, if not all, of the five main economic sectors (Manufacturing & Industry; Resources; Consumer; Finance; and Utilities). But you can buy them one at a time, over a period of months or even years, rather than all at once. After that, you can gradually add new stocks to your portfolio as funds become available, taking care to spread your holdings out as we advise.
  
  When your portfolio gets into the $100,000 to $200,000 range, you should aim for perhaps 15 to 20 stocks. When you get above $200,000 or so, you can gradually increase the number of stocks you hold. When your portfolio reaches the $500,000 to $1 million range, 25 to 30 stocks is a good number to aim for.
  
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Members of Pat McKeough’s Inner Circle enjoy a double benefit when it comes to taking advantage of our stock investing advice. They get to address investment questions directly to me and my research associates; AND they get to see all other members’ questions, and the stock investing advice we give in our answers (of course, we eliminate any personal information). Inner Circle members ask us about a wide range of investment questions, including questions about specific stocks they are considering buying. For example, here’s a recent member question about a highly speculative oil and gas explorer that could be set to tap into a vast deepwater reserve. I hope you enjoy and profit from it. Q: Dear Pat: I saw a story about oil and gas off the shore of Namibia. It gave a name, Chariot, but no details. The oil and gas formation is supposed to be same as that off the shore of Brazil on the other side of the Atlantic. What is your stock investing advice on this? Regards....

ISHARES DEX UNIVERSE BOND INDEX FUND $30.29 (CWA Rating: Income) (Toronto symbol XBB; buy or sell through a broker) mirrors the performance of the DEX Universe Bond Index. This index consists of a wide range of investment-grade Canadian government and corporate bonds with terms to maturity of more than one year. The 351 bonds in the portfolio have an average term to maturity of 9.04 years. The fund’s MER is 0.30%. The bonds in the index are 71.4% government and 28.6% corporate. The fund sticks with high-quality government bonds from issuers such as Canada Housing Trust, Government of Canada and Province of Ontario, plus high-quality corporate bonds from issuers such as Bank of Montreal, TransCanada Pipelines, Bank of Nova Scotia and Bell Canada....

ISHARES DEX SHORT TERM BOND INDEX FUND $29.15 (CWA Rating: Income) (Toronto symbol XSB; buy or sell through a broker) 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 201 bonds with an average term to maturity of 2.92 years. Top issuers include the Government of Canada, Canada Housing Trust and the Province of Ontario. The bonds in the index are 72.1% government and 27.9% corporate. The fund’s MER is 0.25%....

PRIMARIS RETAIL REAL ESTATE INVESTMENT TRUST $20.15 (Toronto symbol PMZ.UN; Units outstanding: 68.5 million; Market cap: $1.4 billion; SI Rating: Extra Risk; Dividend yield: 6.1%) 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 96.6% occupancy rate. Its major tenants include Hudson’s Bay Company, Sears, Shoppers Drug Mart, Loblaw, Reitmans, Canadian Tire and Best Buy. In the three months ended June 30, 2010, Primaris’s revenue rose 14.5%, to $76.4 million from $66.8 million a year earlier. Cash flow per unit rose 5.9%, to $0.36 from $0.34. the trust’s annual distribution of $1.22 gives the units a 6.1% yield....

Many Canadians dream of becoming snowbirds and exploring the southern U.S. “sunbelt” states, such as Arizona and Florida, in the winter. Some choose to buy vacation properties in those states, especially in light of the Canadian dollar’s continued strength against the U.S. dollar and lower U.S. house values. Making real estate investments in the sunbelt can be a great personal decision. However, before you consider such a move, you should first make sure that buying a vacation property doesn’t leave your investments overweighted in real estate. What’s more, there are a number of other special risks and costs involved with buying and owning vacation property in the U.S.

5 risk factors to consider when making real estate investments in the sunbelt

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ALLIED PROPERTIES REAL ESTATE INVESTMENT TRUST $22.28 (Toronto symbol AP.UN; Units outstanding: 42 million; Market cap: $934.8 million; SI Rating: Extra Risk; Dividend yield: 5.9%) owns office buildings in Toronto, Montreal, Quebec City and Winnipeg. These mainly Class I properties contain over 5.9 million square feet of leasable area. Class I refers to 19th and early 20th-century light industrial buildings that have been restored and converted to office and retail space. These properties usually feature high ceilings, natural light, exposed beams, interior brick and hardwood floors. The trust has 53 mainly Class I properties in Toronto (these contain 50.7% of Allied’s leasable area). It also has nine Class I buildings in Montreal (36.7%), seven in Winnipeg (6.5%), five in Quebec City (3.1%), one in Kitchener-Waterloo (1.5%) and one in Calgary (1.5%)....