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Theme investing can pay off from time to time. Today’s popular investment themes include alternative energy, such as solar wind and geothermal, and emerging markets, such as China and India. However, theme investing can turn out badly for investors, especially those who get in late or forget about investment quality. The reason why is straightforward. When you indulge in theme investing, you allow a theme or concept to take a central place in your investing decisions. Usually the theme or concept includes some prediction about the future that has some truth in it, and will make noticeable changes in society. You may assume that if you can just get aboard that theme or find an investment whose future is tied up with it, you are bound to make money....

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: “Investment success depends more on the quality of your investments than on the price you paid for them.” When you start investing, you may think the secret to investment profit is “buy low, sell high.” But that’s hard to do. You’ll often buy just before prices fall, or sell just before they rise. If you stick to high-quality value stock picks, however, your short-term gains and losses can average out and you’ll still profit greatly in the long run. Here are nine factors to look for when judging a value stock pick’s investment quality....

Smartphones have become increasingly popular in recent years. Aside from functioning as mobile phones, these devices have many computer-like functions, including Internet access and email. There are a couple of ways for investors to profit from rising use of smartphones. The obvious approach is to buy shares of companies that make these devices. Apple and Research in Motion are the most dominant smartphone makers. However, other firms, such as Motorola, Palm and Garmin, have introduced new smartphones in recent months, as well. Another way to profit from rising use of smartphones and other wireless devices is by holding stocks of wireless carriers. Many of these firms have more revenue sources than smartphone makers. Aside from wireless operations, they may provide traditional phone, Internet and television services. This diversity lowers their reliance on a single device. In addition, they get continuing revenue from their customers. This cuts their risk....

With interest rates still near historic lows, borrowing money to invest continues to look like an attractive portfolio investing strategy.

Today, you can borrow for as little as 3.5% if you use your home as collateral. Over long periods, the total return on a well-diversified portfolio of high-quality stocks runs to as much as 10%, or around 7.5% after inflation....

Hidden value is one of the key factors we look for when we choose stocks to recommend in our newsletters and investment services, including Wall Street Stock Forecaster, our advisory that covers the U.S. stock markets. (In a recent Wall Street Stock Forecaster hotline, we updated our buy/sell/hold advice on a technology stock that uses one of our favourite hidden assets to maximum effect. Read on for further details.) By hidden value, we mean valuable assets that are not getting the attention they deserve from investors. 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....

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: “Life-long dollar-cost averaging can increase your long-term retirement investing profits” Dollar-cost averaging involves investing equal amounts of money over a specific period ($200 a month, say). It’s a little like systematic saving, except that you put your money into stocks (or mutual funds) instead of a bank account....

The Canadian consumer sector is highly competitive. Aside from other domestic retailers, Canadian retailers face rising competition from large U.S. discount retailers, like Wal-Mart and Costco. As well, consumer stocks are more exposed to swings in the overall economy than companies in some other sectors, such as utilities. That’s especially true when you indulge in aggressive investing in consumer stocks and buy small retailers. They tend to be less well-established than larger companies, such as Canadian Tire. However, aggressive investing in consumer stocks also holds the potential for spectacular gains. (In a just-published issue of Stock Pickers Digest, our newsletter for aggressive investing, we update our buy/sell/hold advice on a retailer that has risen 36% for us in the past year — and could go even higher. Read on for further details.)...

Here are three easy-to-avoid errors that most investors make when investing money in the stock market. All three can seriously hinder your portfolio’s long-term results. 1. Taking an overly optimistic view of speculative investments: Some investors generally put too high a value on speculative ventures. They want to believe that innovations will succeed, and that they’ll get a fair chance to profit from investing money in these companies. Their innate politeness stops them from asking tough questions of smooth-talking promoters. Excess optimism plus a shortage of information leads them to pay too much. That’s why we focus on well-established companies rather than start-ups, even in Stock Pickers Digest, our advisory for investing money in aggressive stocks. Most of our Stock Pickers Digest buys are far better established than your average penny stock....

The price of uranium rose steadily from $7.10 U.S. a pound in December 2000 to as high as $138 U.S. a pound in June 2007. Prices have moved down from that speculative high to today’s price of about $40.00 a pound. But conditions look favourable for higher long-term uranium demand. ...

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 successfully investing in the stock market. Each Investor Toolkit update gives you a fundamental tip and shows you how you can put it into practice right away. Today’s tip: “It pays to stay aware of market risk, but don’t let it become an obsession.” As we saw in the past few years, stock prices do sometimes reach a market peak or “top,” then go into a deep slump that lasts a year or two, or even longer. However, some investors and advisors make a career out of analyzing past market tops and the declines that followed. These “top-stalkers” always seem to think the next such decline is just around the corner. Here are three common top-stalker categories:...

In response to the BP oil spill in the Gulf of Mexico, regulators will probably require offshore drillers to install more equipment aimed at preventing future spills. These extra costs would hurt the profits of companies that are active in the Gulf. That should spur more development of less-risky onshore oil and natural-gas deposits, particularly Canada’s oil sands. ...

Discover how you can make higher profits in gold investing — and minimize your risks Click here to immediately download our new free report, Gold Investing: 7 Profitable Strategies for Investing in Canadian Gold Stocks. When the economy is weak, gold’s popularity rises. As an informed Canadian investor, you’ve likely noticed that this has been the case in the wake of the 2008/09 stock-market crash and recession....

We’ve long relied on these three tips to find the best stocks to recommend in our investment services and newsletters, including our flagship advisory, The Successful Investor. We think they can help you pick winners, too. 1. Some of the best stocks have hidden assets: By hidden assets, we mean assets that are getting less investor attention than they deserve. When assets are wholly or partly hidden or ignored, a stock trades for less than it’s worth. So buyers get a bargain. These are also some of the best stocks for attracting takeover bids from corporate acquirers, who are usually looking to buy asset bargains, just like us.

Hidden assets can consist of real estate or underused brand names. For example, companies often carry their real-estate assets on the corporate books at its purchase price, even though its value has multiplied many times over the years.

Research and development spending by technology stocks is one of today’s best-hidden assets. High research and development budgets let tech stocks keep adding profitable new products to their lines and improving existing ones.

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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: “Beware of companies that are more interested in boosting their stock than in building their business.” Penny stock promoters love to make deals with major, household-name companies. That’s because they think the public is far more likely to buy penny stocks that have agreements with Teck Resources, BHP Billiton or some other major mining company to finance exploration of their mining claims. Or if Sony, Apple or some other household-name multinational has agreed to evaluate their computer program or electronic gadget. The link with a major gives them instant credibility, especially with investors who buy penny stocks....

We continue to think investors will profit most — and with the least risk — by buying shares of well-established companies with strong business prospects and strong positions in healthy industries. (In the current issue of Canadian Wealth Advisor, our newsletter for the conservative investor, we update our buy/sell/hold advice on a well-established company that has risen over 36% for us in the past year — and could go even higher. Read on for further details.) That’s not to say that there won’t be surprises that affect every company in a particular industry. But well-established, safety-conscious stocks have the asset size and the financial clout — including solid balance sheets and strong cash flow — to weather market downturns or changing industry conditions. That makes them good picks for a conservative investor....

We’ve had lots of success with the junior mining stocks we recommend in Stock Pickers Digest, our newsletter for aggressive investing. For example, in a recent issue of Stock Pickers Digest, we updated our buy/sell/hold advice on a junior mine that’s risen more than 300% for us in the past year. See below for further details on this up-and-coming diamond producer. ...

ISHARES FTSE/XINHUA CHINA 25 INDEX FUND $40.04 (New York Exchange symbol FXI; buy or sell through brokers) is an ETF that aims to track the FTSE/Xinhua China 25 Index, which is made up of the 25 largest and most liquid Chinese stocks. All of the stocks in the index trade on the Hong Kong exchange. Some also trade as American Depositary Receipts (ADRs) on the New York exchange. The fund’s top holdings are China Mobile, 10.3%; China Construction Bank, 9.4%; Industrial & Commercial Bank of China, 8.0%; China Life Insurance, 6.8%; CNOOC Ltd., 6.1%; China Unicom Hong Kong, 5.0%; Ping An Insurance Group, 4.4%; China Petroleum & Chemical, 4.1%; PetroChina, 4.0%; and Bank of China, 4.0%. The fund’s holdings give it the following industry breakdown: Financials, 45.6%; Telecommunications, 19.2%; Oil and Gas, 14.2%; Basic Materials, 9.4%; Industrials, 7.9%; Consumer Services, 1.8%; and Utilities, 0.8%. The ETF has an expense ratio of 0.73%. The dividend yield is 2.3%....

SPDR S&P CHINA ETF $68.56 (New York Exchange symbol GXC; buy or sell through brokers), is an exchange-traded fund that aims to track the S&P China BMI Index. This index is made up of all of the publicly traded Chinese stocks that are available to foreign investors. Right now, this ETF holds 137 stocks. The $545.7-million fund’s top holdings are: China Mobile, 8.2%; China Life Insurance, 6.2%; Industrial & Commercial Bank of China, 5.5%; China Construction Bank, 4.7%; CNOOC Ltd., 4.7%; Petro-China, 4.1%; Bank of China, 4.1%; Baidu Inc., 3.1%; China Petroleum & Chemical, 2.6%; and Tencent Holdings Ltd., 2.2%. The fund’s breakdown by industry is as follows: Financials, 31.0%; Oil and Gas, 16.1%; Telecommunication Services, 10.8%; Industrials, 10.6%; Information Technology, 10.5%; Consumer Discretionary, 6.7%; Consumer Staples, 5.5%; Basic Materials, 4.8%; and Utilities, 2.3%....

ISHARES MSCI CANADA INDEX FUND $25.44 (New York symbol EWC; buy or sell through brokers) is like a market-cap-based index fund, but its managers try to improve performance by tinkering with the index-fund formula. They do this through their proprietary Morgan Stanley Capital International Canada Index. The fund has an MER of 0.55%. The index’s top holdings are: Royal Bank, 7.1%; TD Bank, 5.6%; Suncor Energy, 4.5%; Bank of Nova Scotia, 4.4%; Barrick Gold, 3.9%; Canadian Natural Resources, 3.6%; Bank of Montreal, 3.1%; Goldcorp, 3.0%; Research in Motion, 2.9%; Potash Corp., 2.8%; Manulife, 2.8%; and CN Railway. If you want to own a Canadian index fund, you should buy the iShares S&P/TSX 60 Index Fund. You’ll pay about a third of the management fees....

POWERSHARES QQQ ETF $43.96 (Nasdaq symbol QQQQ; buy or sell through brokers), formerly called Nasdaq 100 Trust Shares, holds the stocks that represent the Nasdaq 100 Index. That index is made up of the 100 largest shares on the Nasdaq exchange based on market cap. The Nasdaq 100 Index contains firms from a number of major industries, including computer hardware and software, telecommunications, retail/wholesale trade and biotechnology. It does not contain financial companies. The fund’s expenses are about 0.20% of its assets. The index’s highest-weighted stocks are Apple, Microsoft, Qualcomm, Google, Cisco Systems, Intel, Amazon.com, Oracle Corp., Gilead Sciences and Teva Pharmaceuticals....

SPDR DOW JONES INDUSTRIAL AVERAGE ETF $100.29 (New York Exchange symbol DIA; buy or sell through brokers) holds the 30 stocks that make up the Dow Jones Industrial Average. The fund’s top holdings are IBM, Exxon Mobil, Chevron Corp., 3M, Procter & Gamble, McDonald’s Corp., Johnson & Johnson, Caterpillar Inc., United Technologies and Boeing Co. The fund’s expenses are about 0.18% of its assets. SPDR Dow Jones ETF is a buy.

SPDR S&P 500 ETF $106.11 (New York symbol SPY; buy or sell through brokers) holds the stocks in the S&P 500 Index, which consists of 500 major U.S. stocks that are chosen based on their market cap, liquidity and industry group. The index’s highest-weighted stocks are Exxon Mobil, Microsoft, Procter & Gamble, Apple, JP Morgan Chase & Co., Johnson & Johnson, IBM, Chevron, General Electric, Bank of America, Wells Fargo and AT&T. The fund’s expenses are just 0.10% of its assets. If you want exposure to the S&P 500 Index, SPDR S&P 500 ETF is a buy.

ISHARES DOW JONES CANADA SELECT DIVIDEND INDEX FUND $18.63 (Toronto symbol XDV; buy or sell through a broker) holds 30 of the highest-yielding Canadian stocks. Its selections are based on dividend growth, yield and payout ratio. The weight of any one stock is limited to 10% of assets. The fund’s MER is 0.50%. It yields 4.0%. The fund’s top holdings are CIBC, 7.7%; Bank of Montreal, 6.8%; TD Bank, 5.8%; National Bank, 5.3%; Telus, 5.1%; Manitoba Telecom, 4.7%; Bank of Nova Scotia, 4.6%; Royal Bank, 4.2%; IGM Financial, 4.0%; and TransCanada Corp., 3.5%. The fund holds 60.3% of its assets in financial stocks. Utilities are next, at 23.0%. The top Canadian finance stocks have sound prospects. However, if you invest in this ETF, be sure to adjust the rest of your portfolio so it won’t be overly concentrated in the financial sector....

ISHARES S&P/TSX 60 INDEX FUND $16.78 (Toronto symbol XIU; buy or sell through a broker) (units split 4-for-1 in August 2008) is a good, low-fee way to buy the top stocks and income trusts on the TSX. The units are made up of stocks that represent the S&P/TSX 60 Index, which consists of the 60 largest, most heavily traded stocks on the exchange. Expenses are just 0.17% of assets. Most of the stocks in the index are high-quality companies. However, as it must ensure that all sectors are represented, it holds a few we wouldn’t include, such as Yellow Pages Income Fund. The index’s top holdings are: Royal Bank, 7.5%; TD Bank, 6.1%; Bank of Nova Scotia, 5.2%; Suncor Energy, 5.1%; Barrick Gold, 4.8%; Canadian Natural Resources, 3.9%; Goldcorp, 3.5%; Bank of Montreal, 3.3%; CN Railway, 3.0%; Potash Corp., 2.8%; Manulife, 2.8%; CIBC, 2.7%; Research in Motion, 2.6%; and TransCanada Corp., 2.5%....

CANADIAN REIT $28.80 (Toronto symbol REF.UN; Units outstanding: 66.5 million; Market cap: $1.9 billion; SI Rating: Extra Risk; Dividend yield: 4.9%) owns over 158 properties. Its holdings include retail, industrial and office buildings located across Canada, and in the Chicago area. Canadian REIT’s occupancy rate is 95.6%. In the three months ended March 31, 2010, Canadian REIT’s revenue was $85.2 million. That’s up 1.5% from $83.9 million a year earlier. Cash flow per unit rose 1.8%, to $0.56 from $0.55. The trust raised its monthly distribution by 2.2%, to $0.1175 from $0.1150, with the June payment. This is the ninth consecutive year that the REIT has raised its distribution. The units now yield 4.9%....