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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....

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. ...

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. 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....

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 how to profit in Canadian mutual funds. Each Investor Toolkit update gives you a fundamental tip and shows you how you can put it into practice right away. Today’s tip: “These 3 rules can help you make higher profits in Canadian mutual funds with less risk.” Here are 3 rules we stick to when we’re researching mutual funds to recommend, including the 10 fund picks we’ve included in our special report “Mutual Funds Canada: Inside the Top 10 Canadian Mutual Funds.” While a mutual fund’s performance is never guaranteed, following these rules should help you avoid making poor choices....

On January 1, 2011, Ottawa will impose a tax on distributions of income trusts and royalty trusts. (Royalty trusts are a form of income trust. They profit from royalties associated with the sale of oil, natural gas or minerals.) The new tax will put income and royalty trusts on an equal tax footing with regular corporations. However, as we note in a just-published issue of The Successful Investor, one royalty trust has an enviable advantage when it comes to dealing with the new tax. ...

For many investors, every investment involves a two-part decision. First they decide what to buy, then they decide what price they’ll pay. Most are looking for bargain stocks, and want to buy, say, 5% to 10% below current prices. These investors often explain that they are simply looking to buy bargain stocks the way a smart consumer buys a car. But they overlook a key difference. Car prices do vary and some buyers do pay less than others, because they have better bargaining skills and more time to spend shopping around. But the stock market is more “efficient” than the car market, as an economist would put it. To get a lower price on a stock, you have to wait for its price to come down. ...

ISHARES DEX UNIVERSE BOND INDEX FUND $30.29 (CWA Rating: Income) (Toronto symbol XBB; buy or sell through a broker) mirrors the performance of the DEX Universe Bond Index. This index consists of a wide range of investment-grade Canadian government and corporate bonds with terms to maturity of more than one year. The 351 bonds in the portfolio have an average term to maturity of 9.04 years. The fund’s MER is 0.30%. The bonds in the index are 71.4% government and 28.6% corporate. The fund sticks with high-quality government bonds from issuers such as Canada Housing Trust, Government of Canada and Province of Ontario, plus high-quality corporate bonds from issuers such as Bank of Montreal, TransCanada Pipelines, Bank of Nova Scotia and Bell Canada....

ISHARES DEX SHORT TERM BOND INDEX FUND $29.15 (CWA Rating: Income) (Toronto symbol XSB; buy or sell through a broker) mirrors the performance of the DEX Short-Term Bond Index. This index consists of a wide range of investment-grade federal, provincial, municipal and corporate bonds with between one- and five-year terms to maturity. The fund holds 201 bonds with an average term to maturity of 2.92 years. Top issuers include the Government of Canada, Canada Housing Trust and the Province of Ontario. The bonds in the index are 72.1% government and 27.9% corporate. The fund’s MER is 0.25%....

PRIMARIS RETAIL REAL ESTATE INVESTMENT TRUST $20.15 (Toronto symbol PMZ.UN; Units outstanding: 68.5 million; Market cap: $1.4 billion; SI Rating: Extra Risk; Dividend yield: 6.1%) owns large malls in medium-sized Canadian cities. It also owns major shopping centres in suburbs of large cities. In all, the trust owns 29 properties that contain 11.1 million square feet of leasable area. Primaris has a 96.6% occupancy rate. Its major tenants include Hudson’s Bay Company, Sears, Shoppers Drug Mart, Loblaw, Reitmans, Canadian Tire and Best Buy. In the three months ended June 30, 2010, Primaris’s revenue rose 14.5%, to $76.4 million from $66.8 million a year earlier. Cash flow per unit rose 5.9%, to $0.36 from $0.34. the trust’s annual distribution of $1.22 gives the units a 6.1% yield....

Many Canadians dream of becoming snowbirds and exploring the southern U.S. “sunbelt” states, such as Arizona and Florida, in the winter. Some choose to buy vacation properties in those states, especially in light of the Canadian dollar’s continued strength against the U.S. dollar and lower U.S. house values. Making real estate investments in the sunbelt can be a great personal decision. However, before you consider such a move, you should first make sure that buying a vacation property doesn’t leave your investments overweighted in real estate. What’s more, there are a number of other special risks and costs involved with buying and owning vacation property in the U.S. ...

ALLIED PROPERTIES REAL ESTATE INVESTMENT TRUST $22.28 (Toronto symbol AP.UN; Units outstanding: 42 million; Market cap: $934.8 million; SI Rating: Extra Risk; Dividend yield: 5.9%) owns office buildings in Toronto, Montreal, Quebec City and Winnipeg. These mainly Class I properties contain over 5.9 million square feet of leasable area. Class I refers to 19th and early 20th-century light industrial buildings that have been restored and converted to office and retail space. These properties usually feature high ceilings, natural light, exposed beams, interior brick and hardwood floors. The trust has 53 mainly Class I properties in Toronto (these contain 50.7% of Allied’s leasable area). It also has nine Class I buildings in Montreal (36.7%), seven in Winnipeg (6.5%), five in Quebec City (3.1%), one in Kitchener-Waterloo (1.5%) and one in Calgary (1.5%)....

VANGUARD GROWTH ETF $55.16 (New York symbol VUG; buy or sell through brokers) aims to track the MSCI U.S. Prime Market Growth Index, a broadly diversified index that mainly consists of stocks of large U.S. companies. The fund has an MER of just 0.14%. The $15.2-billion fund’s top holdings are Microsoft, IBM, Apple Inc., Cisco Systems, Wal-Mart Stores, Google Inc., Exxon Mobil, Oracle Corp., Philip Morris International and PepsiCo. Vanguard Growth ETF is broken down by economic segment as follows: Information Technologies (32.9%), Consumer Discretionary (14.3%), Consumer Staples (12.9%), Health Care (10.6%), Industrials (10.3%), Energy (8.1%), Financials (5.1%), Materials (4.6%), Telecommunication Services (0.9%) and Utilities (0.3%)....

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 portfolio investing. Each Investor Toolkit update gives you a fundamental portfolio investing tip and shows you how you can put it into practice right away.

Today’s tip: “Base investments on value, not stock price flip-flops”

Stocks go up and down every day....