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.
[text_ad use_category="18"]
Read More
Close
MANULIFE FINANCIAL $39.37 (Toronto symbol MFC; SI Rating: Above-average) sells life and other forms of insurance, as well as mutual funds and investment management services. It operates in 19 countries and territories worldwide. Manulife has assets under administration of $396.3 billion....
TEMPLETON EMERGING MARKETS FUND $20.55 (New York symbol EMF; CWA Fund Rating: Speculative) is a closed-end fund that invests in equities from emerging economies. The fund’s manager is Franklin Templeton. Templeton Emerging Market Fund provides broad geographic diversification. Although volatile, it provides access to fast-growing economies such as Brazil, China, India and others. The $418.1 million fund’s regional allocation is Asia (58.9%), Europe (17.2%) and Latin America (23.9%)....
NEW GERMANY FUND $15.92 (New York symbol GF; CWA Fund Rating: Speculative) is a closed-end fund that invests mostly in middle-market (small and mid-cap) German equities. The fund’s manager is Deutsche Asset Management. The $451 million fund’s 50 holdings are currently in Germany (93%) and the Netherlands (6%). The New Germany Fund’s focus on mid-tier German stocks provides investors with access to some of Germany’s fastest-growing companies. The New Germany Fund’s top holdings are K+S (chemicals), 6.9%; Fresenius (health care equipment & supplies), 5.6%; Q-Cells (solar cell manufacturing), 5.3%; European Aeronautical Defense (Dutchbased aerospace and defense), 4.7%; SGL Carbon (electrical equipment), 3.8%; GEA Group (chemicals), 3.7%; Solarworld (solar power manufacturing), 3.4%; IVG Immobilien (real estate), 3.2%; United Internet (Internet service provider), 3.1%; and Software (software), 3.0%....
KOREA FUND $24.05 (New York symbol KF; CWA Fund Rating: Speculative) is a closed-end fund that invests at least 80% of its assets in Korean equities. Currently, 99% of its assets are in South Korean stocks. The fund’s manager is RCM Asia Pacific. The fund’s top holdings are Samsung Electronics at 7.3%; Posco (steel), 7.0%; Hyundai Heavy Industries (shipbuilding), 6.6%; Shinhan Financial, 4.3%; GS Engineering and Construction, 3.4%; Shinsegae Co. Ltd. (investment and credit research), 3.3%; NHN Corporation (online media & web sites), 3.1%; Daewoo Shipbuilding & Marine, 3.1%; KT&G Corporation (cigarette maker), 3.0%; and LG Corporation (conglomerate), 2.9%. The industry exposure of the 38 stocks in the fund’s $832 million portfolio is as follows: Industrials, 37%; Financials, 16%; Information technology, 14%; Materials, 10%; Consumer staples, 6%; and Consumer discretionary, 5%....
CENTRAL EUROPE AND RUSSIA FUND $48.14 (New York symbol CEE; CWA Fund Rating: Speculative) is a closed-end fund that invests mostly in larger cap stocks from Russia and central Europe. The fund’s manager is Deutsche Asset Management International. The $880.2 million fund’s 60 holdings are currently invested in Russia (55%), Poland (17%), Turkey (11%), Czech Republic (6%), Hungary (5%), Austria (2%) and Bermuda (1%). Central Europe and Russia Fund’s top holdings are Gazprom (a Russian gas utility) at 14.9%; Lukoil (Russian oil and gas), 6.3%; Norilsk Nickel (Russian metals and mining), 5.6%; Rosneft Oil Company (Russian oil and gas), 5.0%; Powszechna Kasa Oszczednosci (Polish bank), 4.6%; Sberbank (Russian bank), 4.6%; Bank Pekao (Polish bank), 3.6%; Telekomunikacja Polska (Polish telecom), 3.6%; and Turkiye Garanti Bankasa (Turkish bank), 2.8%....
ISHARES CDN REIT SECTOR INDEX FUND $13.65 (Toronto symbol XRE; buy or sell through a broker) holds the 12 Canadian real estate investment trusts (REITs) in the S&P/TSX Capped REIT Index. The weight of any one REIT in the value of the S&P/TSX Capped REIT Index is limited to 25%. RioCan REIT makes up 25% of the index’s value; H&R REIT, 15.1%; Canadian REIT, 9.4%; Boardwalk REIT, 8.9%; Calloway REIT, 8.1%; Canadian Apartment Properties REIT, 6.0%; Primaris Retail REIT, 6.0%; Chartwell Seniors Housing REIT, 5.0%; Innvest REIT, 4.2%; Cominar REIT, 4.3%; Extendicare REIT, 4.1%; and Dundee REIT, 2.7%. We’re glad to see that the top holding is RioCan, one of our favorite REITs. In fact, three of the top six holdings are among our recommendations. Note that iShares CDN REIT holds a couple of REITs we don’t recommend....
H&R REAL ESTATE INVESTMENT TRUST $19.90 (Toronto symbol HR.UN; SI Rating: Extra risk) holds interests in 35 office properties, 125 industrial properties and 141 retail properties. Over half are in the Greater Toronto Area. The rest are elsewhere in Ontario, in Quebec, western Canada and the U.S. The company now has an industry-leading portfolio occupancy rate of 99.7%. Revenue in the three months ended December 31, 2007 was $149.5 million, up 4.6% from $142.9 million a year earlier. Cash flow per unit rose 1.0%, to $0.431 from $0.427. H&R recently increased its annual distributions by 5.1%, to $1.44 from $1.37. Its units now yield 7.2%. H&R REIT is a buy.
CANADIAN REIT $27.71 (Toronto symbol REF.UN; SI Rating: Extra Risk) owns a portfolio of more than 140 income properties consisting of retail, industrial and office properties across Canada and in the Chicago, Illinois area. Occupancy is at 96.5%. CREIT’s revenue in the three months ended December 31, 2007 was $75.8 million, up 5.6% from $71.9 million a year earlier. Cash flow per unit rose 8.2%, to $0.53 from $0.49. The units yield 4.8%. CREIT focuses on acquiring properties in prime locations, usually near major metropolitan centres, that attract strong tenants, maintain high occupancy rates and deliver a reliable stream of rental income....
RIOCAN REAL ESTATE INVESTMENT TRUST $21.43 (Toronto symbol REI.UN; SI Rating: Average) is Canada’s largest REIT. RioCan has ownership interests in a portfolio of 214 retail properties across Canada, including 14 under development. These properties contain over 55 million square feet of leasable area. Portfolio occupancy stands at 97.6%. RioCan’s revenue in the three months ended December 31, 2007 was $165.2 million, up 9.3% from $151.2 million a year earlier. Cash flow per unit rose 7.7%, to $0.42 from $0.39. RioCan’s annual distribution of $1.35 gives the units a yield of 6.3%. RioCan is still a buy.
IVY ENTERPRISE FUND $4.24 invests in small and medium-sized companies. The $160.4 million fund has an MER of 2.40%. The fund’s overall choice of stocks doesn’t inspire our confidence. Its top holdings are Richie Brothers Auctioneers, National Instruments, Resources Connection, Idexx Laboratories, Astral Media, Canadian Western Bank, Daktronics Inc., Henry Schein and Stratasys Inc. We think investors can do better by buying some of the other small-cap funds we recommend in Canadian Wealth Advisor....