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 DEX UNIVERSE BOND INDEX FUND $31.03 (Toronto symbol XBB; buy or sell through brokers) mirrors the performance of the DEX Universe Bond Index. The 833 bonds in the portfolio have an average term-to-maturity of 10.03 years. The fund’s MER is 0.33%.
The bonds in the index are 68.2% government and 31.8% corporate.
The fund yields 3.0%, compared to the Short-Term Bond Fund’s 2.5%. Its yield-to-maturity is 2.37%, 0.80% 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 68.2% government and 31.8% corporate.
The fund yields 3.0%, compared to the Short-Term Bond Fund’s 2.5%. Its yield-to-maturity is 2.37%, 0.80% above the Short-Term Fund. That reflects the added risk of holding long-term bonds.
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ISHARES DEX SHORT-TERM BOND INDEX FUND $28.55 (Toronto symbol XSB; buy or sell through brokers) mirrors the performance of the DEX Short- Term Bond Index.
This index consists of a wide range of investmentgrade federal, provincial, municipal and corporate bonds with between one- and five-year terms to maturity. The fund holds 400 bonds with an average term to maturity of 2.86 years. The bonds in the index are 61.0% government and 39.0% corporate. The fund’s MER is 0.27%.
iShares DEX Short-Term Bond Index Fund yields 2.5%. However, 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, which means 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 wide range of investmentgrade federal, provincial, municipal and corporate bonds with between one- and five-year terms to maturity. The fund holds 400 bonds with an average term to maturity of 2.86 years. The bonds in the index are 61.0% government and 39.0% corporate. The fund’s MER is 0.27%.
iShares DEX Short-Term Bond Index Fund yields 2.5%. However, 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, which means the portfolio will incur predictable capital losses. These losses will offset some of the appeal of the above-market yields.
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GLOBAL X SILVER MINERS ETF $8.23 (New York symbol SIL; buy or sell through brokers; www.globalxfunds.com) tracks the Solactive Global Silver Miners Index.
This index includes 25 international companies that mine, refine or explore for silver. It was developed by Germany-based Structured Solutions AG.
Canadian firms make up 58.9% of the fund’s holdings, but it also includes miners in the U.S. (13.6%) and Mexico (4.2%). Its MER is 0.65%.
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This index includes 25 international companies that mine, refine or explore for silver. It was developed by Germany-based Structured Solutions AG.
Canadian firms make up 58.9% of the fund’s holdings, but it also includes miners in the U.S. (13.6%) and Mexico (4.2%). Its MER is 0.65%.
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ISHARES S&P/TSX GLOBAL GOLD INDEX FUND $8.06 (Toronto symbol XGD; buy or sell through brokers; ca.ishares.com) aims to mirror the performance of the S&P/TSX Global Gold Index.
This index is made up of 40 gold stocks from Canada and around the world. The iShares S&P/TSX Global Gold Index Fund’s MER is 0.61%. It began trading on March 23, 2001.
The fund’s top holdings are Goldcorp at 16.2%; Barrick Gold, 14.7%; Newmont Mining, 9.9%; Franco Nevada, 7.8%; Randgold Resources (ADR), 5.7%; Agnico-Eagle Mines, 5.3%; Eldorado Gold, 4.2%; Royal Gold, 4.0%; Yamana Gold, 3.7%; and AngloGold Ashanti (ADR), 3.5%.
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This index is made up of 40 gold stocks from Canada and around the world. The iShares S&P/TSX Global Gold Index Fund’s MER is 0.61%. It began trading on March 23, 2001.
The fund’s top holdings are Goldcorp at 16.2%; Barrick Gold, 14.7%; Newmont Mining, 9.9%; Franco Nevada, 7.8%; Randgold Resources (ADR), 5.7%; Agnico-Eagle Mines, 5.3%; Eldorado Gold, 4.2%; Royal Gold, 4.0%; Yamana Gold, 3.7%; and AngloGold Ashanti (ADR), 3.5%.
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BANK OF NOVA SCOTIA $67.34 (Toronto symbol BNS; Shares outstanding: 1.2 billion; Market cap: $81.7 billion; TSINetwork Rating: Above Average; Dividend yield: 3.9%, www.scotiabank.com) may be planning to sell its 35 bank branches and related operations in Puerto Rico. That’s because the island’s sluggish economy and high unemployment continue to hurt loan demand.
Selling this business could raise $600 million U.S., which is equal to 1.0% of Bank of Nova Scotia’s $81.7-billion (Canadian) market cap (or the value of all of its outstanding shares).
The bank would probably invest the proceeds from the sale of the Puerto Rican assets in more promising areas of Latin America, such as Chile and Colombia.
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Selling this business could raise $600 million U.S., which is equal to 1.0% of Bank of Nova Scotia’s $81.7-billion (Canadian) market cap (or the value of all of its outstanding shares).
The bank would probably invest the proceeds from the sale of the Puerto Rican assets in more promising areas of Latin America, such as Chile and Colombia.
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INNERGEX RENEWABLE ENERGY $10.80 (Toronto symbol INE; Shares outstanding: 100.4 million; Market cap: $1.1 billion; TSINetwork Rating: Extra Risk; Dividend yield 5.6%; www.innergex.com) operates 26 hydroelectric plants, six wind farms and one solar power facility in Quebec, Ontario, B.C. and Idaho. The company gets 73% of its power from hydroelectric plants. Wind supplies 26% and solar generates 1%. In contrast to Brookfield, Innergex is growing slowly, mostly by building its own hydroelectric and wind facilities, rather than through acquisitions. Right now, it has five projects under construction.
But like Brookfield, Innergex makes sure it has firm long-term power-purchase contracts in place before it starts building new facilities.
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BROOKFIELD RENEWABLE ENERGY PARTNERS L.P. $34.33 (Toronto symbol BEP.UN; Units outstanding: 265.2 million; Market cap: $9.2 billion; TSINetwork Rating: Extra Risk; Dividend yield: 5.1%; www.brookfieldrenewable.com) owns 196 hydroelectric generating stations, 11 wind farms and two natural-gas-fired plants. In all, it has 6,700 megawatts of generating capacity.
Roughly 31% of that capacity is in Canada, with another 52% in the U.S. and 17% in Brazil.
In the quarter ended September 30, 2014, Brookfield’s cash flow per share fell 46.3%, to $0.22 from $0.41 a year earlier. That’s because below-normal rainfall slowed the company’s hydroelectric production. However, rainfall averages out over time: in the nine months ended September 30, cash flow per share fell just 4.1%, to $1.65 from $1.72.
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Roughly 31% of that capacity is in Canada, with another 52% in the U.S. and 17% in Brazil.
In the quarter ended September 30, 2014, Brookfield’s cash flow per share fell 46.3%, to $0.22 from $0.41 a year earlier. That’s because below-normal rainfall slowed the company’s hydroelectric production. However, rainfall averages out over time: in the nine months ended September 30, cash flow per share fell just 4.1%, to $1.65 from $1.72.
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IBM $161.82 (New York symbol IBM; Shares outstanding: 997.6 million; Market cap: $197.9 billion; TSINetwork Rating: Above Average; Dividend yield: 2.7%; www.ibm.com) is handing over its computer chip manufacturing operations to Globalfoundries Inc. IBM will not receive any payment for these assets. Instead, it will pay Globalfoundries $1.5 billion to take over this money-losing business. IBM has also agreed to buy chips from Globalfoundries for the next 10 years.
This move is part of IBM’s plan to focus on its more profitable computer services and software divisions, which should spur its earnings as the economy rebounds. Meanwhile, its $4.40-ashare dividend seems safe and yields 2.7%.
IBM is a buy.
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This move is part of IBM’s plan to focus on its more profitable computer services and software divisions, which should spur its earnings as the economy rebounds. Meanwhile, its $4.40-ashare dividend seems safe and yields 2.7%.
IBM is a buy.
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CANADIAN REIT $49.40 (Toronto symbol REF.UN; Units outstanding: 69.3 million; Market cap: $3.4 billion; TSINetwork Rating: Extra Risk; Dividend yield: 3.5%; www.creit.ca) owns 198 properties, including retail, industrial and office buildings, across Canada and in Chicago. These holdings contain almost 24.1 million square feet of leasable area. The trust’s occupancy rate is 95.3%.
In the three months ended June 30, 2014, Canadian REIT’s revenue rose 3.5%, to $102.0 million from $98.6 million a year earlier. Cash flow per unit gained 4.2%, to $0.74 from $0.71.
Canadian REIT added $191.1 million worth of new buildings in 2013. That followed $401.9 million of property purchases in 2012, including a 50% stake in Calgary Place, a 575,000-square-foot office and retail complex, for $156.0 million. So far this year, it has made one acquisition: a 261,000-square-foot industrial property near Toronto’s Pearson International Airport for $29.3 million.
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In the three months ended June 30, 2014, Canadian REIT’s revenue rose 3.5%, to $102.0 million from $98.6 million a year earlier. Cash flow per unit gained 4.2%, to $0.74 from $0.71.
Canadian REIT added $191.1 million worth of new buildings in 2013. That followed $401.9 million of property purchases in 2012, including a 50% stake in Calgary Place, a 575,000-square-foot office and retail complex, for $156.0 million. So far this year, it has made one acquisition: a 261,000-square-foot industrial property near Toronto’s Pearson International Airport for $29.3 million.
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ALLIED PROPERTIES REAL ESTATE INVESTMENT TRUST $35.46 (Toronto symbol AP.UN; Units outstanding: 74.6 million; Market cap: $2.7 billion; TSINetwork Rating: Extra Risk; Dividend yield: 4.0%; www.alliedreit.com) owns 138 office buildings, mostly in major Canadian cities. These mainly Class I properties contain over 9.9 million square feet of leasable area.
Class I refers to 19th- and early-20th-century light industrial buildings that have been converted to retail space. They usually feature exposed beams, interior brick and hardwood floors.
Allied bought $400 million of properties in 2012 and $182.4 million worth in 2013. In the first half of 2014, it added six more for $110.0 million.
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Class I refers to 19th- and early-20th-century light industrial buildings that have been converted to retail space. They usually feature exposed beams, interior brick and hardwood floors.
Allied bought $400 million of properties in 2012 and $182.4 million worth in 2013. In the first half of 2014, it added six more for $110.0 million.
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