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Many investors see asset allocation funds as an easy and profitable way to diversify between stocks, bonds and cash equivalents.

What you get when you buy units of asset allocation funds

Asset allocation funds are mutual funds that can shift their portfolio allocations between stocks, bonds and cash in order to capitalize on perceived investment opportunities in any one of those classes.

For example, if the managers feel that the bond market is depressed and poised for an upswing, they may invest heavily in fixed-income investments for a few months to take advantage of the change.

Some managers make their own judgments when choosing between stocks, bonds and cash....

Endeavour Silver Corp., symbol EDR on Toronto, operates the Guanacevi and Guanajuato silver/gold mines in Mexico. We analyze Endeavour in Stock Pickers Digest, our newsletter for investing in aggressive stocks—including junior mining stocks. In the three months ended June 30, 2011, the junior mining stock’s revenue rose 84.7%, to $36.4 million from $19.7 million a year earlier (all amounts except share prices in U.S. dollars). The company earned $0.20 a share in the latest quarter, compared to a loss of $0.05 a share. Cash flow rose 125.0%, to $0.27 a share from $0.12 a share....

In the August 5, 2011, Wall Street Stock Forecaster hotline, we updated our buy/sell/hold advice on one of our long-time top stock picks, Kraft Foods Inc. (symbol KFT on New York). Kraft is the world’s second-largest food company, after Switzerland-based Nestle. Its owns many well-known brands, including Philadelphia cream cheese, Maxwell House coffee, and Oscar Mayer meats

Top stock picks: Kraft breakup could unlock hidden value

Kraft just announced plans to break itself into two separate, publicly traded companies. One company will sell snack foods, such as Oreo cookies, Cadbury chocolates, Trident gum and Tang powdered beverages. This business will have annual sales of $32 billion, with 42% of that coming from fast-growing markets, such as China, Brazil and India....

Texas Instruments Inc., symbol TXN on New York, is shifting its focus from digital chips for cellphones to faster-growing analog chips, which convert sound and images into digital signals that computers can understand. We analyze Texas Instruments in Wall Street Stock Forecaster, our newsletter that recommends companies for investors who invest in stocks in the U.S. markets. Revenue and earnings declined in the 2011 second quarter compared with a year earlier. This was mainly due to the disruption caused by the Japanese earthquake/tsunami in March. The earthquake reduced production at the company’s Japanese factories, and cost it $50 million to repair the damage....

Micromet Inc., $4.82, symbol MITI on Nasdaq is focused on discovering, developing and marketing new antibody-based cancer treatments.

Stanley Black & Decker Inc., New York symbol SWK, makes power and hand tools and security devices. It took its current form on March 12, 2010. That’s when Stanley Works bought the Black & Decker Corp. for $3.5 billion in stock. Stanley shareholders own 50.5% of the combined company, and Black & Decker investors own the remaining 49.5%. We analyze Stanley in Wall Street Stock Forecaster, our investing newsletter that recommends stocks in the U.S. markets. The company now expects efficiencies achieved by merging plants, distribution networks and purchasing systems will save it $450 million by the end of 2012....

We’ve had a lot of success over the years with the high return investments we recommend in Stock Pickers Digest, our newsletter for aggressive investing. Of course, aggressive picks have the potential to give you bigger gains than your conservative selections. Still, aggressive stocks are best suited to investors who can accept substantial risk in the portion of their portfolios that they devote to these types of investments. You can be wrong on any of your stock picks, of course. But when you’re wrong on a speculative stock, your losses are likely to be bigger than they would be with a well-established company....

Canadian National Railway Co., Toronto symbol CNR, operates Canada’s largest freight-rail network and serves 16 U.S. states. We analyze CN Rail in The Successful Investor, our investment advisory that recommends the best Canadian stocks for conservative investors. In the three months ended June 30, 2011, the Canadian stock’s earnings rose 0.7%, to $538.0 million from $534.0 million. Earnings per share rose 4.4%, to $1.18 from $1.13, on fewer shares outstanding....

Beta ratings are a measure of stock-market volatility. Stocks with a beta of 1.0 have exactly the same degree of volatility as the market

Domino’s Pizza Inc., symbol DPZ on New York, is the world’s largest chain of pizza stores that offer takeout and delivery. Domino’s operates 9,379 stores in the U.S. and over 70 other countries. Franchisees run most of these outlets. Domino’s is one of the growth stock picks we analyze in Stock Pickers Digest, our newsletter for aggressive investing. In the three months ended June 19, 2011, the growth stock pick’s earnings rose 11.5%, to $25.2 million, or $0.40 a share. A year earlier, it earned $22.6 million, or $0.37 a share. Sales rose 6.2%, to $384.9 million from $362.4 million. Same-restaurant sales rose 4.5% in the U.S. and 7.4% internationally. The consensus estimates were for earnings of $0.36 a share on sales of $372 million....

During times of market turbulence like we’ve seen in the past few days, it’s easy for investors to panic and make mistakes. Here are three common ones we’ve noticed over the years:

1. Overanalyzing: During the recent market turbulence, the media has been full of economic statistics and analyses of government economic policies. You may feel tempted to try to figure out what the economy will do next, and invest accordingly. But economic forecasting is hard enough. When you try to forecast market trends based on economic forecasts, you are virtually certain to fail. As Peter Lynch (the world’s top mutual-fund manager from the 1970s through the early 1990s) wrote, if you spend 12 minutes a year worrying about the economy, you’ve wasted 10 minutes.
   Our general view is that if the U.S. tries to tax its way out of the economic hole it’s in, it might relieve uncertainty about its debt, but it would also depress growth potential. That’s because higher taxes would further scare off business investment. We could fall into 1970s-style stagflation—high interest rates, weak growth and high unemployment....

3M Company, New York symbol MMM, makes over 55,000 consumer and industrial products, including Post-it notes, Scotch tape, Scotch-Brite cleaning products, Scotchguard fabric protection and Thinsulate insulation.

3M is one of the large cap stocks we analyze in Wall Street Stock Forecaster, our newsletter that recommends stocks for the part of your portfolio you devote to U.S....

We continue to recommend a number of companies that are now involved in, or are planning to expand into, green power production, including solar and wind energy. However, while alternative energy investments appeal to a lot of investors on an emotional and conceptual level, many offer only limited investment potential. That’s because they may need a long time to move from the research or concept stage to profitability. In addition, many governments around the world are cutting subsidies for alternative energy investments as they look for ways to deal with their ballooning budget deficits....

Chipotle Mexican Grill, symbol CMG on New York, is a Denver-based Mexican-restaurant chain. In the three months ended June 30, 2011, Chipotle’s revenue rose 22.4%, to $571.6 million from $466.8 million a year earlier. The company’s restaurants attracted more customers during the quarter. That pushed up its same-restaurant sales by 10.0%. As well, Chipotle opened 39 new outlets. It now has a total of 1,131 locations. We analyze Chipotle in Stock Pickers Digest, our newsletter that gives you stock investment tips for the part of your portfolio you devote to aggressive investments....

As stock markets have pulled back from their recent highs, you may have wondered about using stop-loss orders to protect your profits. However, before you try this approach, you should keep in mind that stop-loss orders have a number of risks that can cost you money. Read on and we’ll take you inside this investing strategy, and point out some of the dangers that stop-loss orders can expose you to. We also give you some simple, easy-to-implement stock trading advice that offers a far better way of protecting—and growing—your profits....

American Express Co., New York symbol AXP, gets most of its revenue from the fees it charges merchants when consumers use its credit and charge cards. It also provides travel-agency services. American Express is one of the blue chip stocks we analyze in Wall Street Stock Forecaster, our newsletter for investing in the U.S. stock markets. The company continues to set aside less money to cover bad loans as more of its cardholders pay their bills on time....

One of the key issues we examine in this new stock market investing report is how to decide whether you should invest through a full service stock broker

ACI Worldwide, symbol ACIW on Nasdaq, makes software used to process transactions involving credit cards, debit cards, automated teller machines, point-of-sale terminals and interbank payments.

We analyze ACI in Stock Pickers Digest, our newsletter that recommends investments for the aggressive part of your stock portfolio.

In March 2011, ACI bought ICD Corp....

The main benefit of annuities is that they offer stable, predictable income. That may make them suitable for part of your assets, depending on your age and investment experience.

Aastra Technologies, symbol AAH on Toronto, develops and markets products and systems for accessing communication networks, including the Internet. Its technology is centred around business telephone systems, and includes products that integrate land lines and mobile phones. Aastra is one of the companies we analyze in Stock Pickers Digest, our newsletter that recommends stocks that may be appropriate for your aggressive portfolio. In the three months ended June 30, 2011, Aastra’s sales rose 2.2%, to $174.1 million from $170.3 million a year earlier. That’s mainly because the euro and Swiss franc rose against the Canadian dollar (the company gets three-quarters of its sales from Europe.)...

Hidden value is one of the key factors we look for when we’re looking for winning stock picks to recommend in our investment advisories, including Wall Street Stock Forecaster, our newsletter for investing in the U.S. markets. By hidden value, we mean valuable assets that are not getting the attention they deserve from investors. Here’s how that can translate into making winning stock picks: When a company’s assets are wholly or partially hidden, the stock trades for less than it’s really worth, so you get to buy at a bargain price....

I hope you are enjoying and profiting from our free TSI Network daily updates. Our dailies aim to educate you on the best practices in investing. They cover a range of investment topics—from how to make the best value stock picks to gold investing and capital gains tax—and explain conservative investment strategies you can use to grow your wealth with less risk.

Look to our investment newsletters for advice on specific value stock picks

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Genuine Parts Co., New York symbol GPC, distributes auto parts to over 4,800 independent stores in North America. The company also operates about 1,000 auto parts stores under the NAPA banner. Auto parts account for roughly 50% of its sales, and 52% of its earnings. The company also distributes industrial parts (33% of sales, 32% of earnings), office furniture (13%, 12%), and electrical equipment (4%, 3%). Genuine Parts’ exposure to a variety of businesses helps protect it from slowdowns in certain industries. Genuine is one of the companies we analyze in Wall Street Stock Forecaster newsletter, our newsletter for U.S.A stock market investing. In the three months ended June 30, 2011, Genuine Parts earned $151.8 million. That’s up 22.0% from $124.5 million a year earlier. Earnings per share rose 23.1%, to $0.96 from $0.78. That easily beat the consensus forecast of $0.89 a share. Sales rose 11.9%, to $3.2 billion from $2.8 billion. All of the company’s divisions reported higher sales, led by the electrical division, with a 28% rise....

When you learn more about stock market investment, you’ll realize there are two main ways a company can distribute its profits to shareholders. It can buy back its own shares, or it can pay dividends. Both dividends and buybacks pay off for investors. Here are 3 reasons why:

1. A company boosts its per-share profit by buying back its shares back, because profits get divided among fewer shares.
2. Boosting per-share profits can also push up share prices. Plus, buybacks let you defer taxes on those capital gains. That’s because you only pay capital-gains taxes when you sell. What’s more, you’ll pay tax at half the rate on capital gains than you would on ordinary income. And you can offset capital gains with capital losses.
3. Dividends have tax advantages. You’ll pay tax on dividends in the year you get them, if you hold the shares outside your RRSP. However, dividends on Canadian companies receive favourable tax treatment in Canada, thanks to the dividend tax credit.

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Yum! Brands Inc., New York symbol YUM, operates 38,000 fast-food restaurants in over 110 countries. Its main banners include KFC (fried chicken), Pizza Hut and Taco Bell (Mexican food). Yum is also a leader in investing in China. It was the first fast-food company to enter the country, in 1987. We analyze Yum in Wall Street Stock Forecaster, our newsletter for investing in the U.S. markets. In the three months ended June 11, 2011, Yum’s revenue rose 9.4%, to $2.8 billion from $2.6 billion a year earlier. Earnings rose 10.5%, to $316 million, or $0.65 a share, from $286 million, or $0.59 a share. Excluding unusual items, mostly gains and losses on sales of restaurants to franchisees, earnings per share would have risen 13.8%, to $0.66 from $0.58. That beat the consensus estimate of $0.61 a share....