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
UNIVERSAL FUTURE FUND $18.38 (CWA Rating: Aggressive) has about half of its holdings invested in technology or information-related firms. However, it cuts risk by picking large-capitalization, well-established companies in those fields. As well, the rest of Universal Future Fund’s portfolio is invested in high-quality, conservative stocks. The top holdings of this $567 million fund are Research in Motion, Texas Instruments, Rogers Commmunications, Cognos Inc., Sun Life Financial, SAP AG, Shoppers Drug Mart, Workbrain Corp., eBay and Celestica Inc. Universal Future Fund’s one-year gain is 5.6%. The Nasdaq composite index (in Canadian dollars) lost 1.8% over the same period. The fund has an MER of 2.47%....
UNIVERSAL CANADIAN GROWTH FUND $20.66 (CWA Rating: Conservative) (Mackenzie Financial Corp., 150 Bloor St. West, Toronto, Ont. M5S 3B5. Web site: www.mackenziefinancial.com. 1-800-387-0780; Load fund — available from brokers) holds companies with strong management and sound business prospects. The fund holds fewer than 40 stocks at all times. Top holdings include Bank of Montreal, Manulife Financial, Finning International, Avid Technology, Shoppers Drug Mart, Corus Entertainment, Industrial- Alliance Life Insurance, Edwards Lifesciences, Biosite Inc. and BCE Inc. The fund’s breakdown by economic sector is as follows: 19.3% in Financials, 17.9% in Information technology, 16.1% in Consumer discretionary, 9.2% in Health Care, 9.4% in Industrials, 5.7% in Energy, 6.0% in Consumer staples, 3.7% in Telecommunications and 2.1% in Materials....
RBC CANADIAN EQUITY FUND $24.09 (CWA Rating: Conservative)(RBC Funds, P.O. Box 7500, Station A, Toronto, Ontario. M5W 1P9. 1-800-463-3863; Web site: www.royalbank.com. No load — deal directly with the bank) invests mostly in larger-capitalization stocks, but also looks for opportunities in small and mid-cap stocks. The fund’s 10 largest holdings are TD Bank, Manulife Financial, Bank of Montreal, Bank of Nova Scotia, Royal Bank, EnCana Corporation, Petro- Canada, CN Railway, Suncor Energy and Manulife Financial. The $4.1 billion fund is reasonably well-balanced by industry sector. But it does hold a relatively high 31.7% of its holdings in Financial stocks. These stocks will benefit as the economy continues to recover, and it’s hard to match the big-five banks’ record of consistent earnings and dividend growth. But if you hold this fund, remember to adjust your overall portfolio to reflect the addition of a large Financial services component....
TD CANADIAN EQUITY FUND $29.13 (CWA Rating: Conservative) (TD Asset Management, P.O. Box 7500, Station A, Toronto, Ontario. M5W 1P9. 1-800-463-3863; Web site: www.tdcanadatrust.ca. No load — deal directly with the bank) uses a “bottom-up” approach (using fundamentals such as earnings, cash flow and low debt) to identify undervalued companies with strong growth potential.
TD Canadian Equity Fund’s 10 largest holdings are Manulife Financial, Suncor Energy, Royal Bank, EnCana, TD Bank, Petro-Canada, Rogers Communications, Bank of Nova Scotia, Falconbridge and Valero Energy.
The $2.4 billion fund currently holds about 31.8% of its portfolio in Financial services shares....
TD Canadian Equity Fund’s 10 largest holdings are Manulife Financial, Suncor Energy, Royal Bank, EnCana, TD Bank, Petro-Canada, Rogers Communications, Bank of Nova Scotia, Falconbridge and Valero Energy.
The $2.4 billion fund currently holds about 31.8% of its portfolio in Financial services shares....
FIDELITY FOCUS TECHNOLOGY FUND $9.19 (CWA Rating: Aggressive) (Fidelity Investments Canada, 483 Bay St., Suite 200, Toronto, Ont. M5G 2N7. 1-800-263-407 7; Web site: www.fidelity.ca. Load fund — available from brokers) invests mainly in technology companies. This includes computer services, computer software, computer systems, communications systems, electronics, office equipment, scientific instruments and semiconductors (computer chips). The fund expanded in June, 2003 from primarily a U.S. focus to a global scope in its stock selections. Right now, it sees the most attractive opportunities for technology investing in the U.S., Japanese and South Korean markets. The fund looks for stocks with strong earnings growth that appear undervalued....
FIDELITY FOCUS FINANCIAL SERVICES FUND $21.51 (CWA Rating: Aggressive) invests mostly in financial services companies in brokerage and investment management, investment banking, life insurance, personal loans, property and casualty insurance, and savings and loans. Fidelity Focus Financial Services Fund now holds a higher percentage of international stocks than in the past. Geographically, its holdings are allocated: the U.S., 22.8%; the UK, 16.3%; Japan, 12.3%; Germany 7.7%; Bermuda, 6.5%; Italy, 6.0%; Hong Kong, 4.0%; Switzerland, 4.0%; South Korea, 3.5%; and Brazil, 2.1%. The top holdings of this $71.9 million fund are Deutsche Boerse AG, British Land Company plc, HSBC Holdings, Unicredito Italiano, JP Morgan Chase, Sumitomo Mitsui, State Bank of India, Kookmin Bank, Standard Chartered plc, and PartnerRe....
FIDELITY FOCUS CONSUMER INDUSTRIES FUND $15.82 (CWA Rating: Aggressive) (Fidelity Investments Canada, 483 Bay St., Suite 200, Toronto, Ont. M5G 2N7. 1-800-263-4077; Web site: www.fidelity.ca. Load fund — available from brokers) invests mainly in U.S. consumer goods and services companies. This includes appliances, cars, clothing, cosmetics, entertainment, food and beverages, homes, household products, leisure, personal computers, restaurants and travel. Consumer spending is a key part of the U.S. economy, accounting for approximately two-thirds of activity. The fund uses a “bottom-up” approach (using fundamentals such as earnings, cash flow and low debt) to identify undervalued companies....
Flow-through funds are tax shelters that mainly invest in the flow-through shares issued by junior mining and oil companies. These companies spend the proceeds from the shares they sell on mineral exploration and development, an activity that qualifies for certain tax credits and tax deferrals. These tax benefits “flow through” to investors in the fund. To take advantage of these benefits, investors need to hold the funds for a fixed period, usually 18 months to two years. The problem with these tax shelters is that they may persuade you to make a risky investment you wouldn’t otherwise make. Moreover, a portion of the benefits are set aside for brokers and the fund’s organizers. What’s left may not be enough to pay you for taking on the extra risk, especially this year. These tax shelters may post excellent results from time to time. However, as the current climate for resources and commodities shows, booms don’t last forever....