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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ISHARES CANADIAN UNIVERSE BOND INDEX ETF $31.99 (Toronto symbol XBB; buy or sell through brokers) mirrors the performance of the Canadian Universe Bond Index. The 892 bonds in the portfolio have an average term to maturity of 10.35 years. The fund’s MER is 0.33%.
The bonds in the index are 68.5% government and 31.5% corporate.
The fund yields 2.8%, compared to the Short- Term Bond Fund’s 2.5%. Its yield to maturity is 1.82%, 0.69% above the Short-Term Fund. That reflects the added risk of holding long-term bonds.
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The bonds in the index are 68.5% government and 31.5% corporate.
The fund yields 2.8%, compared to the Short- Term Bond Fund’s 2.5%. Its yield to maturity is 1.82%, 0.69% above the Short-Term Fund. That reflects the added risk of holding long-term bonds.
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ISHARES CANADIAN SHORT-TERM BOND INDEX ETF $28.73 (Toronto symbol XSB; buy or sell through brokers) mirrors the performance of the DEX Short-Term Bond Index.
This index consists of a range of investment-grade federal, provincial, municipal and corporate bonds with one- to five-year terms to maturity. The fund holds 407 bonds with an average term to maturity of 2.87 years. The bonds in the index are 64.2% government and 35.8% corporate. The fund’s MER is 0.27%.
The iShares Canadian Short-Term Bond Index Fund yields 2.5%, but this high yield is due to the fact that some of the fund’s bonds pay above-market interest rates. As a result, they trade above their face value. When these bonds mature, holders will only get the bonds’ face value, meaning the portfolio will incur predictable capital losses. These losses will offset some of the appeal of the above-market yields.
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This index consists of a range of investment-grade federal, provincial, municipal and corporate bonds with one- to five-year terms to maturity. The fund holds 407 bonds with an average term to maturity of 2.87 years. The bonds in the index are 64.2% government and 35.8% corporate. The fund’s MER is 0.27%.
The iShares Canadian Short-Term Bond Index Fund yields 2.5%, but this high yield is due to the fact that some of the fund’s bonds pay above-market interest rates. As a result, they trade above their face value. When these bonds mature, holders will only get the bonds’ face value, meaning the portfolio will incur predictable capital losses. These losses will offset some of the appeal of the above-market yields.
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CANADIAN PACIFIC RAILWAY LTD. $232.62 (Toronto symbol CP; Shares outstanding: 164.2 million; Market cap: $38.5 billion; TSINetwork Rating: Average; Div. yield: 0.6%; www.cpr.ca) has reported record first-quarter results.
In the three months ended March 31, 2015, the company earned $375 million, up 49.4% from $251 million a year earlier. Per-share profits jumped 59.2%, to $2.26 from $1.42, on fewer shares outstanding. Revenue rose 10.3%, to $1.67 billion from $1.51 billion.
CP saw strong gains from shipping grain, fertilizers, coal, forest products, chemicals and consumer goods. That offset fewer shipments of crude oil, automotive products and metals.
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In the three months ended March 31, 2015, the company earned $375 million, up 49.4% from $251 million a year earlier. Per-share profits jumped 59.2%, to $2.26 from $1.42, on fewer shares outstanding. Revenue rose 10.3%, to $1.67 billion from $1.51 billion.
CP saw strong gains from shipping grain, fertilizers, coal, forest products, chemicals and consumer goods. That offset fewer shipments of crude oil, automotive products and metals.
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VANGUARD GROWTH ETF $108.87 (New York symbol VUG; buy or sell through brokers) aims to track the Center for Research in Security Prices (CRSP) U.S. Large Cap Growth Index, a broadly diversified index that mainly consists of large U.S. companies. The fund’s MER is just 0.09%.
The $47.8-billion Vanguard Growth ETF’s top holdings are Apple, Google, Coca-Cola, Facebook, Oracle, Home Depot, Comcast, Amazon.com, Gilead Sciences and Walt Disney Co.
The fund’s breakdown by industry is as follows: Technology, 24.0%; Consumer Services, 21.3%; Health Care, 13.4%; Financials, 13.0%; Industrials, 11.7%; Consumer Goods, 9.4%; Oil and Gas, 5.3%; Materials, 1.5%; Telecommunication Services, 0.3%; and Utilities, 0.1%.
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The $47.8-billion Vanguard Growth ETF’s top holdings are Apple, Google, Coca-Cola, Facebook, Oracle, Home Depot, Comcast, Amazon.com, Gilead Sciences and Walt Disney Co.
The fund’s breakdown by industry is as follows: Technology, 24.0%; Consumer Services, 21.3%; Health Care, 13.4%; Financials, 13.0%; Industrials, 11.7%; Consumer Goods, 9.4%; Oil and Gas, 5.3%; Materials, 1.5%; Telecommunication Services, 0.3%; and Utilities, 0.1%.
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ISHARES CDN REIT SECTOR INDEX FUND $17.31 (Toronto symbol XRE; buy or sell through brokers; ca.ishares.com) holds the 15 Canadian real estate investment trusts in the S&P/TSX Capped REIT Index.
iShares CDN REIT’s expenses are 0.60% of its assets. The fund yields 4.7%.
The ETF’s largest holding is RioCan REIT at 20.0%, followed by H&R REIT (13.5%), Canadian REIT (7.1%), Canadian Apartment REIT (7.0%), Allied Properties REIT (6.6%), Calloway REIT (6.6%), Dream Office REIT (6.4%), Cominar REIT (4.4%), Boardwalk REIT (5.0%), Chartwell REIT (4.5%), Artis REIT (4.3%), Granite REIT (4.3%), Crombie REIT (2.2%), Pure Industrial REIT (2.1%) and Northern Property REIT (1.7%).
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iShares CDN REIT’s expenses are 0.60% of its assets. The fund yields 4.7%.
The ETF’s largest holding is RioCan REIT at 20.0%, followed by H&R REIT (13.5%), Canadian REIT (7.1%), Canadian Apartment REIT (7.0%), Allied Properties REIT (6.6%), Calloway REIT (6.6%), Dream Office REIT (6.4%), Cominar REIT (4.4%), Boardwalk REIT (5.0%), Chartwell REIT (4.5%), Artis REIT (4.3%), Granite REIT (4.3%), Crombie REIT (2.2%), Pure Industrial REIT (2.1%) and Northern Property REIT (1.7%).
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PENGROWTH ENERGY $4.09 (Toronto symbol PGF; Shares outstanding: 534.6 million; Market cap: $2.1 billion; TSINetwork Rating: Average; Dividend yield: 5.9%; www.pengrowth.com) produces oil and natural gas, mostly in Western Canada. It recently started up its Lindbergh oil sands project in eastern Alberta, which should produce 16,000 barrels a day by the end of 2015.
In the three months ended December 31, 2014, Pengrowth’s cash flow rose 10.0%, to $0.22 a share from $0.20. The company sharply cut its operating costs, offsetting a 7.2% production decline, to 71,802 barrels of oil equivalent a day from 77,371.
The company will spend $200 million on exploration and development in 2015, down 74.0% from $770 million last year. Even so, it expects to produce 73,000 to 75,000 barrels a day in 2015, up about 1.5% from 2014.
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In the three months ended December 31, 2014, Pengrowth’s cash flow rose 10.0%, to $0.22 a share from $0.20. The company sharply cut its operating costs, offsetting a 7.2% production decline, to 71,802 barrels of oil equivalent a day from 77,371.
The company will spend $200 million on exploration and development in 2015, down 74.0% from $770 million last year. Even so, it expects to produce 73,000 to 75,000 barrels a day in 2015, up about 1.5% from 2014.
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BONAVISTA ENERGY $8.02 (Toronto symbol BNP; Shares outstanding: 203.8 million; Market cap: $1.7 billion; TSINetwork Rating: Extra Risk; Dividend yield: 5.2%; www.bonavistaenergy.com) explores for oil and natural gas in Alberta, Saskatchewan and British Columbia. Its production is 70% gas and 30% oil.
In the three months ended December 31, 2014, Bonavista’s cash flow per share rose 1.6%, to $0.63 from $0.62 a year earlier.
The company’s output gained 14.3%, to 85,810 barrels of oil equivalent a day from 75,072. However, lower oil prices mostly offset the production increase and higher realized gas prices.
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In the three months ended December 31, 2014, Bonavista’s cash flow per share rose 1.6%, to $0.63 from $0.62 a year earlier.
The company’s output gained 14.3%, to 85,810 barrels of oil equivalent a day from 75,072. However, lower oil prices mostly offset the production increase and higher realized gas prices.
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LOBLAW COMPANIES $62.05 (Toronto symbol L; Shares outstanding: 412.5 million; Market cap: $25.8 billion; TSINetwork Rating: Above Average; Dividend yield: 1.6%; www.loblaw.ca) is testing a new home-delivery service with San Francisco-based Uber Technologies, which offers users rides from private drivers in 300 cities.
Users of Loblaw’s Click & Collect online service can order groceries from three of the company’s Toronto supermarkets. They can then pick up their goods at their local store and get a free ride home from Uber.
This is a limited-time promotion, but if it’s successful, Uber may offer Loblaw customers a discounted fare. That could prompt them to buy more groceries than they normally would.
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Users of Loblaw’s Click & Collect online service can order groceries from three of the company’s Toronto supermarkets. They can then pick up their goods at their local store and get a free ride home from Uber.
This is a limited-time promotion, but if it’s successful, Uber may offer Loblaw customers a discounted fare. That could prompt them to buy more groceries than they normally would.
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MARKET VECTORS VIETNAM ETF $18.22 (New York symbol VNM; buy or sell through brokers) holds Vietnamese companies or foreign firms that get a significant amount of their revenue from Vietnam.
The ETF’s top holdings are Vincom Corp. (real estate), 8.2%; Masan Group (a food, resources and banking conglomerate), 7.6%; Bank for Foreign Trade of Vietnam, 7.2%; Saigon Thuong Tin Commercial Bank, 6.4%; Hansae Co. (a South Korean clothing maker), 5.6%; Charoen Pokphand Foods (a Thailand-based food conglomerate), 5.1%; Hoang Anh Gia Lai Group (conglomerate), 4.7%; and Premier Oil (a U.K.-based producer with stakes in the huge Cuu Long basin off southern Vietnam), 4.6%.
The Market Vectors Vietnam ETF’s industry breakdown is as follows: Financials, 42.5%; Consumer Staples, 16.8%; Energy, 15.7%; Consumer Discretionary, 11.1%; Industrials, 6.6%; Materials, 4.6%; and Utilities, 2.6%. Its MER is 0.76%.
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The ETF’s top holdings are Vincom Corp. (real estate), 8.2%; Masan Group (a food, resources and banking conglomerate), 7.6%; Bank for Foreign Trade of Vietnam, 7.2%; Saigon Thuong Tin Commercial Bank, 6.4%; Hansae Co. (a South Korean clothing maker), 5.6%; Charoen Pokphand Foods (a Thailand-based food conglomerate), 5.1%; Hoang Anh Gia Lai Group (conglomerate), 4.7%; and Premier Oil (a U.K.-based producer with stakes in the huge Cuu Long basin off southern Vietnam), 4.6%.
The Market Vectors Vietnam ETF’s industry breakdown is as follows: Financials, 42.5%; Consumer Staples, 16.8%; Energy, 15.7%; Consumer Discretionary, 11.1%; Industrials, 6.6%; Materials, 4.6%; and Utilities, 2.6%. Its MER is 0.76%.
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ISHARES CHINA LARGE-CAP ETF $51.98 (New York symbol FXI; buy or sell through brokers) is an exchange traded fund that aims to track the Financial Times Stock Exchange (FTSE) China 50 Index, which is made up of the 50 largest, most liquid Chinese stocks. All of the companies in the index trade on the Hong Kong exchange. Some also trade as American depositary receipts (ADRs) on New York.
The fund’s top holdings are Tencent Holdings, 8.8%; China Mobile, 8.0%; China Construction Bank, 7.5%; Industrial & Commercial Bank, 6.8%; Bank of China, 5.9%; Ping An Insurance, 4.5%; China Life, 4.4%; CNOOC Ltd., 3.9%; PetroChina, 3.8%; China Petroleum and Chemical, 3.4%; and China Overseas Land & Investment, 2.5%.
The fund’s holdings give it the following industry breakdown: Financials, 48.1%; Telecommunications, 11.7%; Oil and Gas, 11.6%; Technology, 11.1%; Industrials, 6.2%; Consumer Goods, 6.4%; and Utilities, 2.1%. Its expense ratio is 0.74%.
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The fund’s top holdings are Tencent Holdings, 8.8%; China Mobile, 8.0%; China Construction Bank, 7.5%; Industrial & Commercial Bank, 6.8%; Bank of China, 5.9%; Ping An Insurance, 4.5%; China Life, 4.4%; CNOOC Ltd., 3.9%; PetroChina, 3.8%; China Petroleum and Chemical, 3.4%; and China Overseas Land & Investment, 2.5%.
The fund’s holdings give it the following industry breakdown: Financials, 48.1%; Telecommunications, 11.7%; Oil and Gas, 11.6%; Technology, 11.1%; Industrials, 6.2%; Consumer Goods, 6.4%; and Utilities, 2.1%. Its expense ratio is 0.74%.
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