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BCE INC. $33.76 (Toronto symbol BCE; Shares outstanding: 755.6 million; Market cap: $25.5 billion; SI Rating: Above Average; Dividend yield: 5.4%; www.bce.ca) provides telephone and Internet services in Ontario and Quebec. It also sells wireless and satellite-TV services across Canada. In the three months ended June 30, 2010, BCE’s revenue rose 3.3%, to $4.4 billion from $4.3 billion in the prior year. Before one-time items, earnings rose 32.8%, to $0.77 from $0.58. Strong demand for wireless and television services offset falling revenue from the company’s traditional telephone operations. As well, the company bought “The Source” chain of electronics stores in 2009, as well as the remaining 50% of the Virgin Mobile Canada joint venture. BCE is buying full control of CTVglobemedia, the private company that owns the 27-station CTV Television Network. CTVglobemedia also owns 30 specialty channels, 34 radio stations and The Globe and Mail newspaper. Right now, BCE owns 15% of CTVglobemedia. It will pay $1.3 billion for the remaining 85%. Following the purchase, BCE will sell 85% of The Globe and Mail to Woodbridge Co....

Gold hit yet another all-time high of $1,383.10 U.S. an ounce in yesterday’s trading. It closed the day at $1,381.00, up $45.50. A major factor in this latest gold-price rise was the Federal Reserve’s Wednesday announcement that it plans to inject $600 billion into the U.S. economy. That could spur inflation or further weaken the U.S. dollar. Continued low interest rates only add to inflation concerns. These fears are prompting more investors to buy gold and gold investments, because they believe gold will provide them with additional security....

A key part of our three-part investment approach is to stick with well-established, dividend-paying companies. (The other two parts are to spread your money out across the five main economic sectors, and downplay stocks in the broker/public-relations limelight.) Most well-established companies have built up strong reputations that can help them overcome the inevitable downturns. Their trusted brands also make it easier for them to launch new products, or expand into new markets.

Wall Street stocks: Heinz’s strong brands give it a solid foundation

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In just under two months, on January 1, 2011, you will gain an additional $5,000 of contribution room in your tax free savings account (TFSA). The federal government first made tax free savings accounts (TFSAs) available to investors in January 2009. These accounts let you earn investment income — including interest, dividends and capital gains — tax free. You could contribute $5,000 in 2009 to start your tax free savings account. Every year, you can contribute an additional $5,000 to your TFSA. If you contribute less than $5,000 to your TFSA in any given year, you can carry the difference forward. That means your TFSA contributions for 2009 and 2010 total $10,000, rising to $15,000 in 2011, $20,000 in 2012 and so on....

On Thursday, October 29, two directors of Maple Leaf Foods Inc. (symbol MFI on Toronto) from the Ontario Teachers’ Pension Plan resigned their positions. Maple Leaf is Canada’s largest food processor. It sells most of its products, which include fresh and prepared meats and poultry, under the Maple Leaf and Schneider brands. The company is one of the stock market picks we’ve long recommended in our Successful Investor newsletter.

Expiration of shareholders’ agreement brought big changes to Maple Leaf Foods

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LIMITED BRANDS INC. $29 (New York symbol LTD; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 322.8 million; Market cap: $9.4 billion; Price-to-sales ratio: 1.1; Dividend yield: 2.1%; WSSF Rating: Average) operates two main retail chains: Victoria’s Secret (lingerie) and Bath & Body Works (soaps and bath oils). It also operates the La Senza lingerie chain in Canada and 30 other countries. The company cut its inventories in response to the recession. That let it avoid costly clearance sales, and sell more of its goods at full price. In its fiscal 2011 second quarter, which ended July 31, 2010, Limited earned $120.6 million, up 100.1% from $60.3 million a year earlier. Earnings per share rose 89.5%, to $0.36 from $0.19, on more shares outstanding. The latest figure excludes a gain on the sale of its remaining 25% stake in the Limited clothing-store chain....

MACY’S INC. $23 (New York symbol M, Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 422.7 million; Market cap: $9.7 billion; Price-to-sales ratio: 0.4; Dividend yield: 0.9%; WSSF Rating: Average) operates 850 department stores under the Macy’s and Bloomingdale’s banners. It also sells goods over the Internet. The company recently let its store managers tailor more of their stores’ goods to local tastes. As well, Macy’s is selling more products promoted by celebrities, such as Martha Stewart. Both of these moves have helped attract more customers. In its fiscal 2011 second quarter, which ended July 31, 2010, Macy’s earned $0.35 a share. That’s up 75.0% from the $0.20 a share, excluding restructuring charges, that the company earned a year earlier. Sales rose 7.2% in the latest quarter, to $5.5 billion from $5.2 billion. Same-store sales rose 4.9%. Online sales jumped 28.1%....

NORDSTROM INC. $38 (New York symbol JWN; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 219.2 million; Market cap: $8.3 billion; Price-to-sales ratio: 0.9; Dividend yield: 2.1%; WSSF Rating: Average) mainly sells upscale clothing, accessories and footwear. The company owns and operates 200 outlets, including 115 department stores, in 28 U.S. states. In its fiscal 2011 second quarter, which ended July 31, 2010, Nordstrom’s revenue rose 12.7%, to $2.5 billion from $2.2 billion a year earlier. Same-store sales rose 8.4%, mainly due to strong demand for women’s clothing, shoes and jewellery. Nordstrom is also benefiting from recent investments in its web site: online sales rose 34.1%. Earnings per share rose 37.5%, to $0.66 from $0.48. Nordstrom benefits from its focus on upscale shoppers. That’s because these consumers are less affected by economic downturns. However, the company aims to attract more cost-conscious customers by opening between 30 and 45 of its Nordstrom Rack clearance stores over the next three years. It now has 82 of these stores....

THE JONES GROUP INC. $15 (New York symbol JNY; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 87.1 million; Market cap: $1.3 billion; Price-to-sales ratio: 0.5; Dividend yield: 1.3%; WSSF Rating: Average) is the new name of Jones Apparel Group. The company designs clothing, accessories and footwear. Jones sells most of its products through department stores. It also sells goods through its own retail stores. However, it plans to close 290 underperforming stores by the end of this year. That will leave it with around 800 outlets. If you exclude store-closure and severance costs, Jones earned $45.1 million in the three months ended September 30, 2010, up 20.3% from $37.5 million a year earlier. Earnings per share rose 17.4%, to $0.54 from $0.46, on more shares outstanding. Sales rose 19.4%, to $1.0 billion from $855.7 million a year earlier....

LIZ CLAIBORNE INC. $6.38 (New York symbol LIZ; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 94.5 million; Market cap: $602.9 million; Price-to-sales ratio: 0.2; No dividends paid since December 2008; WSSF Rating: Extra Risk) designs and sells clothing and accessories for men and women. Its top brands include Liz Claiborne, Juicy Couture and Kate Spade. Liz Claiborne continues to cut costs in response to falling sales: Liz Claiborne has closed 10 distribution centres since 2007. It has also sold less-profitable brands and closed stores. As well, the company hopes to spur growth with new licensing deals with J.C. Penney (see page 104) and the QVC TV shopping channel. The transition of the Liz Claiborne brands to J.C. Penney and QVC caused sales in the three months ended July 3, 2010 to fall 15.5%, to $569.8 million from $674.6 million a year earlier. The company lost $0.19 a share in the quarter, a 61.2% improvement over its year-earlier loss of $0.49 a share....

H.J. HEINZ CO. $49 (New York symbol HNZ; Income Portfolio, Consumer sector; Shares outstanding: 318.3 million; Market cap: $15.6 billion; Price-to-sales ratio: 1.5; Dividend yield: 3.7%; WSSF Rating: Above Average) makes a wide variety of processed foods, including condiments, sauces, soups, baked beans, pastas and infant food. Its flagship product, Heinz Ketchup, accounts for about 60% of U.S. ketchup sales. The company continues to expand its main brands, including Ore-Ida (frozen potatoes), Classico (pasta sauces) and Weight Watchers (diet foods). Heinz’s 15 top-selling brands each generate annual sales of over $100 million. Together, they supply 70% of Heinz’s total sales. Heinz’s sales rose 21.4%, from $8.6 billion in 2006 to $10.5 billion in 2010 (fiscal years end April 30)....

CAMPBELL SOUP CO. $36 (New York symbol CPB; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 335.7 million; Market cap: $12.1 billion; Price-to-sales ratio: 1.6; Dividend yield: 3.1%; WSSF Rating: Above Average) is the world’s largest maker of canned soups. It also makes Prego canned pasta and sauces, Pepperidge Farm cookies and V8 vegetable juices. The company gets 30% of its sales from international markets. Its biggest foreign markets are Australia and Europe. Campbell looks overseas for growth...

J.C. PENNEY CO. INC. $32 (New York symbol JCP; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 236.4 million; Market cap: $7.6 billion; Price-to-sales ratio: 0.4; Dividend yield: 2.5%; WSSF Rating: Average) operates 1,100 department stores in the U.S. and Puerto Rico. It also sells goods over the Internet. In its second quarter, which ended July 31, 2010, J.C. Penney reported sales of $3.9 billion, unchanged from a year earlier. Higher clothing sales offset the lost revenue from the shutdown of J.C. Penney’s catalogue business. On a same-store basis, sales rose 0.9%. Online sales rose 4.0%. The company earned $14 million, or $0.06 a share, in the latest quarter. That’s much better than the $1 million, or nil per share, it lost a year earlier. J.C. Penney is doing a good job of managing its inventories. That cuts the need for costly clearance sales....

Growth stocks are companies whose earnings growth has been above the market average, and is likely to remain above average. These firms often pay little or no dividends. Instead, they invest their free cash flow in furthering their growth.

These stocks can be highly volatile, but they often make good long-term investments....

Members of our Inner Circle service often ask for our advice on Canadian stock picks they are thinking of buying that we don’t cover in our newsletters. These companies range from the most speculative penny mines to large multinational corporations. For example, an Inner Circle member recently asked for our advice on athletic-clothing maker lululemon athletica. The Canadian stock pick’s revenue and earnings rose sharply in its latest quarter, but it operates in a very competitive market. To give you a sense of how the service works — and how you can profit from it — I’d like to share this question, and our answer, with you. I hope you enjoy and profit from it. Q: Pat: what do you think of lululemon as a stock? My wife loves their clothes....

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. 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: “Short sellers make money fast when they win, but most wind up losing.” When you sell short, you borrow stock from a broker and then sell it. However, you eventually have to buy back the stock on the market to return it to its owner....

You can enhance your long-term investment results by following these 3 key tips for investing in the stock market. They’ve long been part of the advice we give in our investment services and newsletters, including Canadian Wealth Advisor, our advisory for conservative investing. 1. Treat all predictions with a healthy degree of skepticism: Thanks to the Internet, it’s possible to get hold of far more information than ever before. From there, it’s easy to fashion a theory or accept a conclusion that is missing just enough key material to be completely at odds with reality. This can happen to anybody. That includes teams of award-winning journalists and editors at major newspapers, top-paid investment analysts at the world’s biggest financial institutions — and you. That’s why you need to treat all predictions — yours and everybody else’s — with a healthy degree of skepticism. You can take them into account, let them influence your investment decisions, even skew your portfolio so you can profit if they hit the mark. But keep it within limits. Never let a prediction take the place of diversification....

The improving U.S. economy is helping more consumers repay their loans on time. That’s pushing down loan losses at a number of U.S. banks, and improving their profits. However, the outlook for the U.S. banking sector remains uncertain. High unemployment continues to hurt demand for new loans, and the industry faces greater regulations under the Obama administration’s new financial reforms.

Stock investment advice: Diversification is the key to lowering your risk in the U.S. finance sector

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Many people come up with unrealistic answers to the question of how much risk is right for them. For instance, when they’re young and just starting out, many investors decide to move away from safe investing principles and speculate. They expect to build a small portfolio into a big one in a hurry, then shift their money into boring, but more dependable investments.

Heavy losses can be especially damaging for young investors

As a newcomer in any field, however, it’s easy to fall victim to ruses and snares that someone with more experience would spot right away. Later on, you’ll know better than to bid on an ugly painting just because it’s the work of a noted artist, or invest in a building that faces expensive repairs due to delayed maintenance, or buy a promotional stock due to rumours or touting.

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When stock market trading, most investors place “market orders” or “limit orders.” (We cover all the main aspects of stock market trading, including placing an order, in our free report, “Canadian Stock Market Basics: How to Trade Stocks and Make Good Investments in Canada.” Click here to claim yours now.)

• Limit orders: With a limit order, you specify the highest price you are willing to pay to buy. The main risk here is that your order will go unfilled if there is no stock available at or below your price. This introduces a filtering mechanism that can cost you money, especially if you set your limit below the current market price.
  
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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 the fundamentals of successful investing. Each Investor Toolkit update gives you a fundamental tip and shows you how you can put it into practice right away. Today’s tip: “Successful investors own big and small companies.” Shares of large, well-established companies have rebounded well after the 2007-2009 market crisis. Investors sometimes refer to these companies as “large cap stocks.” That’s because they have a market “cap” (that’s short for “capitalization,” or total value of shares outstanding) of several billion dollars or more....

High-quality foreign stocks are a great way to diversify your portfolio. Moreover, many fast-growing markets, like China and India, have positive outlooks. That’s because their people are generally younger than North Americans, and rising incomes are helping more of them advance into the middle class. Even so, world stock market investing remains riskier than investing in North America. That’s because many emerging countries have language barriers, weak investor-protection laws, less commitment to openness, fairness and so on. Here are 3 simple ways to tap into world stock market profits at lower risk:...

We continue to recommend a number of companies that are now involved in, or are planning to expand into, green technology and green power production. However, while green stocks appeal to a lot of investors on an emotional and conceptual level, many offer only limited investment potential. That’s because green stocks may need a long time to move from the research or concept stage to profitability. The weak economy has also cast doubt on the future of government subsidies for green stocks. To cut your risk in green stocks, we recommend focusing on established firms that have a sound base of other operations, or whose products have a number of different uses....

Here are three common mistakes most investors make when investing in stocks. By avoiding them, you can increase your portfolio’s long-term returns, and significantly cut your risk.

• Owning too many stocks. When you’re first starting out, you should aim to invest in a minimum of four or five stocks — one from each of most, if not all, of the five main economic sectors (Manufacturing & Industry; Resources; Consumer; Finance; and Utilities). But you can buy them one at a time, over a period of months or even years, rather than all at once. After that, you can gradually add new stocks to your portfolio as funds become available, taking care to spread your holdings out as we advise.
  
  When your portfolio gets into the $100,000 to $200,000 range, you should aim for perhaps 15 to 20 stocks. When you get above $200,000 or so, you can gradually increase the number of stocks you hold. When your portfolio reaches the $500,000 to $1 million range, 25 to 30 stocks is a good number to aim for.
  
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Members of Pat McKeough’s Inner Circle enjoy a double benefit when it comes to taking advantage of our stock investing advice. They get to address investment questions directly to me and my research associates; AND they get to see all other members’ questions, and the stock investing advice we give in our answers (of course, we eliminate any personal information). Inner Circle members ask us about a wide range of investment questions, including questions about specific stocks they are considering buying. For example, here’s a recent member question about a highly speculative oil and gas explorer that could be set to tap into a vast deepwater reserve. I hope you enjoy and profit from it. Q: Dear Pat: I saw a story about oil and gas off the shore of Namibia. It gave a name, Chariot, but no details. The oil and gas formation is supposed to be same as that off the shore of Brazil on the other side of the Atlantic. What is your stock investing advice on this? Regards....