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We display our TSINetwork ratings (Highest Quality, Above Average, Average, Extra Risk, Speculative and Start-up) next to every stock we recommend in our newsletters — including our flagship publication, The Successful Investor. We designed our TSINetwork ratings to help you quickly and easily identify great stock picks for long-term profits. These stocks have the asset size and investment quality to weather market downturns and changing industry conditions. Here are three factors we consider when we assign a rating to a stock....

Aéropostale, Inc. (symbol ARO in New York) is a specialty retailer of clothing and accessories. The company mainly targets 14- to 17-year-old women and men. Aeropostale also has 46 “P.S. from Aeropostale” stores, which are aimed at seven-to-12-year-old elementary-school students. The company is one of the aggressive stock investing picks we cover in our Stock Pickers Digest newsletter. Aéropostale has nearly 900 stores located in 49 U.S. states, and 36 in Canada. The company also sells its clothing through its web site, www.aeropostale.com. The company’s low prices are one of the main reasons why it has attracted a devoted customer base in an industry where fashion trends change quickly. In the three months ended October 30, 2010, the company’s overall sales rose 6.1% to $602.8 million from $567.8 million in the same period last year. Same-store sales for the period were essentially flat. Aeropostale earned $58.5 million, or $0.64 a share, down 6.5% from $62.6 million, or $0.62 a share, a year earlier....

ISHARES MSCI GERMANY FUND $23.40 (New York Exchange symbol EWG; buy or sell through brokers) is an ETF that aims to track the stocks in the MSCI Germany Index. This index aims to replicate the performance of 85% of the total market capitalization of the German stock market. The remaining 15% is unavailable for investment, partly due to limitations on foreign ownership. The fund’s top holdings are Siemens AG (engineering conglomerate), 10.3%; BASF (chemicals), 7.3%; Bayer (diversified chemicals), 6.8%; Daimler AG (automobiles), 6.6%; E.ON (energy), 6.2%; Allianz (insurance), 6.2%; Deutsche Bank AG, 6.0%; Deutsche Telekom, 4.7%; SAP (software), 4.5%; and RWE AG (energy and waste disposal), 3.5%....

We’ve long recommended that all Canadian investors own two or more of the big five Canadian bank stocks. That’s mainly because of their importance to Canada’s economy. The top five banks slumped deeply during the 2007-2009 market downturn, like most stocks. But since the market turnaround of March 2009, several of the top five have recovered and gone on (at least briefly) to all-time highs. Few other stock groups have done as well. (In the latest issue of Canadian Wealth Advisor, our newsletter for conservative investing, we update our buy/sell/hold advice on Bank of Nova Scotia, which is the third biggest of the big-five banks. Read on for further details.)...

ISHARES MSCI SOUTH KOREA INDEX FUND $55.63 (New York Exchange symbol EWY; buy or sell through brokers), is an exchange-traded fund that aims to track the MSCI Korea Index. The index aims to capture 85% of the total market capitalization of the South Korean stock market. The other 15% is unavailable for investment, partly due to limitations on foreign ownership. The fund’s top holdings are Samsung Electronics, 15.2%; Posco (steel), 5.6%; Hyundai Motor Co., 4.8%; Hyundai Mobis (auto parts), 3.5%; Shinhan Financial, 3.2%; KB Financial Group, 3.0%; LG Chemical, 3.0%; Hyundai Heavy Industries, 2.6%; Samsung Electronics preferred shares, 2.2%; and Hynix Semiconductor, 2.1%. The fund’s industry breakdown is as follows: Information Technology, 26.3%; Industrials, 16.5%; Financials, 15.6%; Consumer Discretionary, 15.3%; Materials, 14.0%; Consumer Staples, 4.7%; Telecommunication Services, 2.8%; Energy, 2.8%; Utilities, 1.6%; and Health Care, 0.5%....

ISHARES MSCI EMERGING MARKETS INDEX FUND $46.07 (New York symbol EEM; buy or sell through brokers), is an exchange-traded fund that aims to track the MSCI Emerging Markets Index. The fund’s geographic breakdown includes: China, 18%; Brazil, 15.9%; South Korea, 13%; Taiwan, 10.4%; South Africa, 7.8%: India, 7.1%; Russia, 6.4%; Mexico, 4.4%; Malaysia, 2.8%; and Indonesia, 2.6%. iShares MSCI Emerging Markets Index Fund’s top holdings are Petrobras (Brazil: energy), 3.4%; Samsung Electronics (South Korea: electronics), 2.1%; China Mobile (China: wireless), 1.6%; Vale SA (Brazil: mining), 1.6%; Gazprom (Russia: gas utility), 1.5%; Banco Itau (Brazil: banking), 1.5%; Taiwan Semiconductor (Taiwan: computer chips), 1.5%; America Movil (Brazil: wireless), 1.5%; and Infosys Technologies (India: software), 1.3%. The fund’s industry breakdown is as follows: Financials, 25.3%; Energy, 14.0%; Materials, 14.0%; Information Technology, 12.5%; Telecommunication Services, 8.2%; Industrials, 7.2%; Consumer Staples, 6.9%; Consumer Discretionary, 6.9%; Utilities, 3.5%; and Health Care, 0.9%....

Get my latest advice on how to cut your portfolio’s volatility — and maximize your stock market investing profits — absolutely FREE. If you’re like many investors, recent market volatility has made you more sensitive to risk. In fact, in light of all the bad news being reported in the mainstream media, you may be tempted to throw up your hands and sell all your stocks. But if you do, you’re likely to miss out on strong gains in the coming months and years....

ISHARES MSCI JAPAN INDEX FUND $10.48 (American Exchange symbol EWJ; buy or sell through a broker; us.ishares.com) is an exchange-traded fund that tries to match the return of the Morgan Stanley Capital International (MSCI) Japan index. The fund’s top holdings include: Toyota Motor, 4.4%; Honda Motor Co., 2.7%; Mitsubishi UFJ Financial Group, 2.7%; Canon, 2.4%; Sumitomo Mitsui Financial, 1.8%; Takeda Pharmaceutical Co., 1.6%; Tokyo Electric Power Co., 1.5%; Sony Corporation, 1.5%; Mitsubishi Corporation, 1.4%; and Mizuho Financial Group, 1.4%. The fund’s industry breakdown is as follows: Industrials, 20.0%; Consumer Discretionary, 19.1%; Financials, 16.7%; Information Technology, 13.3%; Materials, 7.6%; Utilities, 5.9%; Health Care, 5.6%. Consumer Staples, 5.3%; Telecommunication Services, 4.1%; and Energy, 1.5%....

POWER CORP. $27.66 (Toronto symbol POW; Shares outstanding: 409.3 million; Market cap: $11.3 billion; TSINetwork Rating: Above Average; Dividend yield: 4.2%) is a diversified holding company. It holds its financial assets through 66.1%-owned Power Financial. Power Corp.’s financial assets include 68.4% of Great-West Lifeco, one of Canada’s largest life insurers, and 56.6% of IGM Financial, one of the country’s leading mutual-fund companies. Power Financial also owns 50% of holding company Parjointco, which holds a 54.1% stake in Switzerland-listed Pargesa Holdings SA. Pargesa has 95% of its assets in five large European companies: Imerys (minerals), Total SA (oil), Pernod Ricard (wine and spirits), Suez (energy, water and waste services) and Lafarge SA (cement and building materials). Excluding one-time items, Power Corp.’s earnings rose 8.7%, to $274 million, or $0.58 a share, in the three months ended September 30, 2010. A year earlier, it earned $252 million, or $0.53 a share. The increase came from a higher contribution from Power Financial, which gained from its holdings in Great-West Lifeco and IGM Financial....

TERADATA CORP. $41 (New York symbol TDC; Aggressive Growth Portfolio, Manufacturing & Industry sector: Shares outstanding: 167.5 million; Market cap: $6.9 billion; Price-to-sales ratio: 3.7; No dividends paid; TSINetwork Rating: Average; www.teradata.com) makes computers and software that capture and store large amounts of a business’s data. Teradata then analyzes this information and identifies buying habits and trends. Teradata is taking advantage of the weak economy to hire new salespeople. That’s helping it enter new markets and offer more technology and services to its existing clients. These efforts should add $70 million to Teradata’s 2010 sales. As well, it continues to spend around 7% of its revenue on research. Resulting new products should also fuel its growth. In the three months ended September 30, 2010, earnings rose 19.0%, to $75 million from $63 million a year earlier. Earnings per share rose 22.2%, to $0.44 from $0.36, on fewer shares outstanding. Sales rose 15.1%, to $489 million from $425 million. The company has no debt, and holds cash of $741 million, or $4.42 a share....

HARTE-HANKS INC. $12 (New York symbol HHS; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 63.6 million; Market cap: $763.2 million; Price-to-sales ratio: 0.9; Dividend yield: 2.5%; TSINetwork Rating: Average; www.harte-hanks.com) gets two-thirds of its revenue by selling direct-mail and other marketing services to a wide variety of clients. The remaining third comes from publishing free, advertising-supported newspapers in Florida and California. In August 2010, the company paid $12.9 million for Information Arts (UK) Ltd., which provides data warehousing services to businesses in Europe. Right now, Harte-Hanks gets 90% of its sales from North America, so expanding overseas lowers its risk. In the three months ended September 30, 2010, revenue rose 3.5%, to $216.7 million from $209.3 million a year earlier. That’s mainly because Harte-Hanks won a large contract. However, the extra costs related to this job, as well as adding Information Arts’ employees, caused earnings to fall 1.7%, to $13.8 million from $14.1 million. Earnings per share were unchanged at $0.22....

Every Wednesday, we publish our “Investor Toolkit” series on TSI Network. Whether you’re a new or experienced investor, these weekly updates are designed to give you specific advice on successful investing, including retirement planning. Each Investor Toolkit update gives you a fundamental tip and shows you how you can put it into practice right away. Tip of the week: “Retirement planning calls for realistic calculations.” Suppose you’re 50 and want to retire at 65. You have $200,000 in your RRSP, and expect to add $15,000 yearly for the next 15 years. To determine if this is enough to retire on, you need to make assumptions about investment returns and income needs....

AGILENT TECHNOLOGIES INC. $36 (New York symbol A; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 346.0 million; Market cap: $12.5 billion; Price-to-sales ratio: 2.3; No dividends paid; TSINetwork Rating: Average; www.agilent.com) makes testing systems that help improve electronic products, such as cellphones and networking equipment. In May 2010, Agilent bought Varian Inc. for $1.5 billion. Varian makes a wide range of medical and drug-testing equipment, such as mass spectrometers that detect and measure substances in blood and other samples. Medical-equipment demand is less cyclical than testing products, so this move cuts Agilent’s risk. Thanks to Varian, Agilent earned $706 million, or $2.00 a share, in the year ended October 31, 2010. That’s up 152.1% from $280 million, or $0.80 a share, in fiscal 2009. These figures exclude costs to integrate the new operations. Revenue rose 21.5%, to $5.4 billion from $4.5 billion. The company spends around 11% of its revenue on research....

Higher commodity prices and an improving global economy have pushed up the prices of many junior mining stocks recently. That has prompted more members of our Inner Circle service to ask us for our recommendations on junior mines they are considering investing in. (See below for further details on a junior firm that explores for rare earth elements, which have attracted a lot of investor attention lately. We recently analyzed this company for a member of our Inner Circle service.)

Junior mining stocks have strong potential — but use caution

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BUCKEYE PARTNERS L.P. $67 (New York symbol BPL; Income Portfolio, Utilities sector; Units outstanding: 51.6 million; Market cap: $3.5 billion; Price-to-sales ratio: 1.3; Dividend yield: 5.8%; TSINetwork Rating: Average; www.buckeye.com) operates over 8,700 kilometres of pipelines in the northeastern and midwestern U.S. These lines pump gasoline, jet fuel and other petroleum products. Buckeye also owns oil and natural-gas storage terminals and other related businesses. In the three months ended September 30, 2010, Buckeye earned $0.93 a unit, up 4.5% from $0.89 a year earlier. Revenue rose 73.5%, to $734.9 million from $423.4 million. The partnership is transporting more fuel due to the improving economy. As well, Buckeye’s fee income varies with fuel prices, and oil prices, in particular, have risen sharply. Buckeye recently agreed to buy an oil-products storage terminal in Puerto Rico from Royal Dutch Shell plc, for an undisclosed price. This is Buckeye’s first expansion into the Caribbean region. However, the partnership has signed long-term deals to store Shell’s fuel at the Puerto Rican terminal. That cuts the risk of this investment....

We hardly ever recommend buying new issues when they are first sold to the public, and often stay away from them for months, if not years, afterward. That’s because new issues often come to market when it’s a good time for the company and/or its insiders to sell, but that’s not necessarily a good time for you to buy. Spinoffs are in many ways the opposite of new issues. Companies often do spinoffs when they feel it isn’t a good time to sell. Instead, they choose to hand out shares of the new firm to their shareholders. That often results in buying opportunities. (In a just-published issue of Wall Street Stock Forecaster, our newsletter for investing in the U.S. markets, we update our buy/sell/hold advice on a spinoff whose shares have risen over 21% since September. See below for further details on this tech stock’s outlook.)...

VERIGY LTD. $8.84 (Nasdaq symbol VRGY; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 60.0 million; Market cap: $530.4 million; Price-to-sales ratio: 1.1; No dividends paid; TSINetwork Rating: Extra Risk; www.verigy.com) designs and makes test systems that are used in the production of computer chips. The company recently agreed to acquire rival LTXCredence Corp. (Nasdaq symbol LTXC) in an all-stock deal. Verigy shareholders will own 56% of the combined company, which will keep the Verigy name and trading symbol. LTX investors will own the remaining 44%. The merger will let Verigy offer its customers a wider variety of testing systems, and expand its market share. As well, the company feels that combining manufacturing and other operations will save it $25 million a year....

CEDAR FAIR L.P. $15 (New York symbol FUN; Income Portfolio, Consumer sector; Units outstanding: 55.3 million; Market cap: $829.5 million; Price-to-sales ratio: 0.9; Dividend yield: 2.1%; TSINetwork Rating: Average; www.cedarfair.com) owns and operates 11 amusement parks, six outdoor water parks, one indoor water park and five hotels. Cedar Fair recently refinanced some of the loans it used to fund its $1.24-billion purchase of five theme parks in 2006. Its long-term debt of $1.6 billion is still a high 1.9 times its market cap, but the partnership now has up to six years to repay it. Thanks to the new financing, Cedar Fair will pay a $0.25-a-unit special distribution in December 2010. It will also resume regular quarterly payments of $0.08 a unit. The annual rate of $0.32 yields 2.1%....

MTS SYSTEMS CORP. $37 (Nasdaq symbol MTSC; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 15.3 million; Market cap: $566.1 million; Price-to-sales ratio: 1.6; Dividend yield: 1.6%; TSINetwork Rating: Average; www.mts.com) makes equipment and software that tests materials, machines and structures. This helps manufacturers lower their costs and improve the quality of their products. MTS recently paid $6.3 million, or $0.24 a share, to settle a patent-infringement lawsuit. Even so, the company’s earnings rose 6.8%, to $18.6 million, in the fiscal year ended October 2, 2010. In the prior year, MTS earned $17.4 million. Earnings per share rose 10.7%, to $1.14 from $1.03, on fewer shares outstanding....

These days, some of the most misleading ads you’ll see concern so-called “model portfolios.” All too many brokers use these model portfolios to build their money management business.

For instance, one recent ad claimed that its model portfolio turned $100,000 in 2000 into more than $1.7 million by 2009....

Many investors fear that today’s artificially low interest rates and high government budget deficits will spur a huge rise in inflation. These fears are prompting many investors to devote more of their money to investing in gold and gold investments, because they believe gold will provide them with additional security. That helps explain why the price of gold has risen more than 50% since the fall of 2008. We agree that a huge burst of inflation is a possibility in the next few years. But it’s a mistake to assume that vastly higher inflation is a certainty, as many who are investing in gold do today....

Every Wednesday, we publish our “Investor Toolkit” series on TSI Network. Whether you’re a new or experienced investor, these weekly updates are designed to give you specific advice on making successful stock market investments. Each Investor Toolkit update gives you a fundamental tip and shows you how you can put it into practice right away. Tip of the week: “In the long run, share buybacks can complement your dividend profits.” Stock market investments have two main ways to distribute their profits to shareholders. They can pay dividends, or they can buy back their own shares. Both dividends and buybacks pay off for investors. Here are 3 reasons why:...

The U.S. consumer sector is highly competitive. Independent stores and smaller chains continue to face rising competition from large discount retailers, like Wal-Mart and Costco. As well, retailers are more exposed to swings in the overall economy than companies in some other sectors, such as utilities. However, aggressive investing in consumer stocks also holds the potential for spectacular gains. To cut your risk and earn higher profits when aggressive investing in the junior retail segment, it’s especially important to focus on chains that can adapt quickly and prosper in the fast-changing retail landscape.

New stores push up this aggressive investing stock’s sales and earnings

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Over the past few months, we’ve periodically looked at common mistakes most investors make, and given you our investment advice on how to avoid them. Here are 3 more common errors all investors make from time to time.

1. Losing patience. Good chess players never “go for broke,” as the saying goes. Instead, they try to position their pieces so they can profit from the mistakes they expect from opponents who are less talented, less experienced or less patient. Successful investors follow a comparable approach. But the crucial difference is that they have no opponents who can be relied upon to make mistakes. Instead, successful investors try to arrange their portfolios so that they more-or-less automatically tap into the profit and long-term growth that inevitably comes to well-established companies operating in relatively free and stable economies.
   
   
2. Relying on brokers’ stock-price targets. Investors sometimes ask us why we don’t publish price targets in the investment advice we publish in our investment services and newsletters, including Canadian Wealth Advisor, our newsletter for conservative investing....

Tax-loss selling (or tax-loss harvesting) is a strategy for lowering your Canadian capital gains tax that involves selling a security at a loss in order to offset your capital gains. You can then deduct these losses against your taxable capital gains in the current tax year. For example, December 24 is the 2010 deadline for tax-loss selling on the Toronto Stock Exchange. If you sell at a loss on or before that date, you get to deduct your loss against your 2010 capital gains. If you still have capital losses left over, you can carry them back up to three years (2009, 2008 and 2007), or forward indefinitely to offset past or future capital gains....