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KOREA FUND $31.74 (New York symbol KF; CWA Fund Rating: Speculative) is a closed-end fund that invests at least 80% of its assets in Korean equities. Currently, it is entirely invested in South Korean stocks. RCM Asia Pacific manages the fund. Korea Fund’s top holdings are Samsung Electronics at 14.1%; Posco (steel), 5.7%; LG Electronics, 5.1%; LG Corp. (conglomerate), 4.8%; Hyundai Engineering & Construction, 3.5%; Daewoo International (conglomerate), 3.2%; Shinhan Financial, 3.2%; LG Display Company (LCD screens), 3.1%; KB Financial Group, 3.1%; and NCsoft (online computer games), 3.0%. The stocks in the Korea Fund’s $307.2-million portfolio are in the following industries: information technology (24%), industrials (24%), financial services (14%), consumer discretionary (14%), materials (8%), consumer staples (6%), telecommunications services (4%), health care (1%), and energy (1%)....

CENTRAL EUROPE AND RUSSIA FUND $27.69 (New York symbol CEE; CWA Fund Rating: Speculative) is a closed-end fund that mostly invests in larger cap stocks from Russia and central Europe. The fund’s manager is Deutsche Asset Management. The $394-million fund’s holdings are invested in Russia (55%), Poland (13%), Turkey (13%), Czech Republic (11%), Hungary (4%), Austria (3%) and Kazakhstan (1%). The fund’s top holdings are Gazprom (a Russian gas utility) at 10.2%; Lukoil (Russia: oil and gas), 8.5%; Rosneft Oil (Russia: oil and gas), 6.7%; Sberbank (Russia: bank), 6.2%; CEZ (Poland: utility), 5.4%; Mobile TeleSystems (Russia: wireless), 3.9%; MMC Norilsk Nickel (Russia: mining), 3.8%; Surgutneftagaz (Russia: oil and gas), 3.7%; Telefonica O2 (Czech Republic: telecom), 3.5%; and Telekomunikacja Polska (Poland: telecom), 3.2%....

AIC DIVERSIFIED CANADA FUND $34.89 (CWA Rating: Conservative) mainly holds shares of Canadian companies of average or above-average quality. It also holds some U.S. stocks. The $1.0-billion fund’s 10 largest holdings are TD Bank, Shoppers Drug Mart, Power Financial, Canadian Oil Sands Trust, First Capital Realty, Thomson Reuters Corporation, Brookfield Asset Management, Royal Bank of Canada, C.I. Financial Corp. and EnCana Corporation. AIC Diversified Canada holds just 21 stocks. The fund holds 43.9% of its assets in financial-services stocks. The rest of the portfolio breaks down as follows: energy, 15.2%; consumer staples, 10.6%; consumer discretionary, 8.0%; health care, 7.4%; and information technology, 3.6%....

AIC AMERICAN ADVANTAGE FUND $4.04 (CWA Rating: Aggressive) (AIC Group of Funds, 1375 Kerns Road, Burlington, Ont., L7R 4X8, 1-800-263-2144; Web site: www.aicfunds.com. Buy or sell through brokers) invests mostly in U.S. stocks. It holds 99% of its assets in the financial-services area. The fund’s financial holdings break down as follows: wealth management, 26.8%; life and health insurance, 20.9%; investment banking and brokerage, 11.9%; property and casualty insurance, 11.7%; diversified financial services, 7.3%; diversified banks, 7.1%; multi-line insurance, 6.3%; and consumer finance, 4.8%. The $30-million AIC American Advantage Fund’s top 10 holdings are JP Morgan Chase, Wells Fargo, AFLAC, Hartford Financial Services, Franklin Resources, Goldman Sachs, Bank of New York Mellon Corp., MetLife, Prudential Financial and Morgan Stanley. This fund holds just 17 stocks....

A few weeks ago, we asked TSI Network visitors whether they trade stocks online. A full 88% answered that they did.

Why choose Internet stock trading?

Some investors have made the switch from a full-service broker to Internet stock trading through a discount broker because it offers lower commission fees. Others have switched because they examined their results and discovered that their own investment ideas worked better than those of their brokers.

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Many investors consider annuities when they are planning their retirement investing. There are basically three types of annuities: Term-certain annuities are payable to you, or your estate, for a fixed number of years. Your estate will receive the payments even if you die. You could outlive this type of annuity....

On his Wealthy Boomer web site, Financial Post personal-finance columnist Jonathan Chevreau recently made the link between the time you start saving for retirement and when you will be able to start your retirement in earnest. Click here to read the full article on the Wealthy Boomer. Chevreau has been the personal-finance columnist at the Financial Post since 1996, and is the author or co-author of eight financial books, including The Wealthy Boomer and Findependence Day, released last fall. His Wealthy Boomer blog features interviews with investment experts (including Pat McKeough)....

When Inner Circle members ask us about specific investments and growth stock picks they’re considering buying or selling, we start by putting all the important information we know about a company into perspective. That new invention may be a marvel, but how does it compare to what the competition is doing? The new project sounds impressive, but how much impact will it really have on the company’s profit? The debt sounds high — will the company be able to keep up its agreed-upon interest and principal repayments? Investors intuitively understand this, but they often find it hard to apply when they are looking for strong growth stock picks. You can tackle the job with financial ratios, but the answers you get can be ambiguous, if not misleading.

Financial ratios can mislead

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Some U.S. bank stocks have reported surprising profits lately, and some have even begun to repay loans received under the U.S. government’s Troubled Asset Relief Program. However, the sector itself remains volatile. While we recommend some high-quality U.S. bank stocks in our Wall Street Stock Forecaster newsletter, we feel that you can cut your risk by not just investing in top bank stocks, but by investing in other types of financial companies, as well. In our most recent issue of Wall Street Stock Forecaster, we update our advice on U.S. tax-preparer H&R Block (New York symbol HRB)....

One of the most concrete things about an investment is its dividend yield — the percentage you get when you divide its current yearly dividend payment by its price. It’s an indicator we pay especially close attention to when we select stocks to recommend in our Canadian Wealth Advisor newsletter. But yield, high yield especially, can give you a false sense of security. Investors in high dividend stocks have a natural tendency to think that all investment income is nearly as safe and predictable as bank interest. In fact, investment income can dry up in a heartbeat. Companies are sometimes unable to honour their commitments, and they sometimes spring the bad news on you with no warning. Rather than a sign of a bargain, high yield may be a danger sign. It may mean insiders are selling and pushing the price down. A falling price makes yield go up (because you use the latest dividend to calculate yield). When an investment does cut or halt its dividend, its yield collapses....

H&R BLOCK INC. $17 (New York symbol HRB; Conservative Growth Portfolio, Finance sector; Shares outstanding: 334.1 million; Market cap: $5.7 billion; Price-to-sales ratio: 1.4; WSSF Rating: Above Average) is the world’s largest provider of income-tax-preparation services. It operates 12,923 offices in the U.S., as well as 1,193 in Canada and 378 in Australia. Franchisees own 34% of H&R Block’s U.S. tax-preparation offices. The tax-services division accounts for 74% of the company’s revenue. The company gets 22% of its revenue by selling tax-consulting and accounting services to businesses though subsidiary RSM McGladrey Inc. The remaining 4% comes from banking services, including chequing accounts, loans and credit cards that H&R Block issues to its tax-preparation clients. H&R Block’s earnings fell from $1.88 a share (or a total of $635.9 million) in 2005 to $1.15 a share (or $374.3 million) in 2007. (H&R Block’s fiscal year ends April 30.) The drop was mainly caused by losses at its Option One subsidiary, which specialized in subprime mortgages to H&R Block’s tax clients and other borrowers. In 2008, the company sold Option One, along with its brokerage and wealth-management subsidiary, as part of its plan to focus on its more profitable tax and accounting operations. These moves helped H&R Block’s earnings improve to $1.53 a share (or $513.1 million) in fiscal 2009. The company’s revenue rose from $4.4 billion in 2005 to $4.9 billion in 2006, but dropped to $4.0 billion in 2007. It recovered to $4.4 billion in 2008, but fell to $4.1 billion in 2009....

GENERAL ELECTRIC CO. $12 (New York symbol GE; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 10.6 billion; Market cap: $127.2 billion; Price-to-sales ratio: 0.8; WSSF Rating: Above Average) is one of the world’s largest makers of industrial equipment. Products include aircraft engines, medical-imaging scanners and locomotives. GE is also a major supplier of electrical infrastructure equipment, such as turbines, voltage regulators and fuses. These accounted for 21% of its 2008 revenue, and 23% of its profit. Moreover, as a leading maker of windmills and nuclear-power plants, GE is in a good position to profit from new environmental rules that limit greenhouse-gas emissions. In the three months ended June 30, 2009, GE’s revenue fell 16.6%, to $39.1 billion from $46.8 billion a year earlier. Revenue fell 29% at GE Capital, the company’s struggling finance business, but just 7% at its industrial operations. Earnings fell 48.4%, to $2.9 billion, or $0.26 a share, from $5.6 billion, or $0.54 a share....

TOYOTA MOTOR CO. ADRs $83 (New York symbol TM; Conservative Growth Portfolio, Manufacturing & Industry sector; ADRs outstanding: 1.6 billion; Market cap: $132.8 billion; Price-to-sales ratio: 0.6; WSSF Rating: Above Average) recently overtook General Motors as the world’s largest carmaker. That was partly due to its success with gasoline-electric hybrid cars. Toyota started selling its Prius mid-sized hybrid car in 1997, and now dominates this market. Besides the Prius, the company has launched hybrid versions of its larger cars and trucks. Hybrids account for less than 10% of Toyota’s sales, but they generate much higher profit margins than its gasoline-powered cars. The company owns patents on over 2,000 hybrid-engine parts. That makes it difficult for other carmakers to develop their own hybrids. As a result, many have licensed the technology from Toyota. This generates royalty income for the company. For example, Japanese carmaker Subaru (16% owned by Toyota), uses Toyota’s hybrid technology, and the company may be close to a deal with Mazda, as well. However, Nissan plans to end its deal with Toyota and develop its own systems....

THE BOEING CO. $43 (New York symbol BA; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 726.4 million; Market cap: $31.2 billion; Price-to-sales ratio: 0.5; WSSF Rating: Above Average) is focusing on improving the fuel-efficiency of its passenger jets. That should help it increase sales to cost-conscious airlines. Boeing’s new 787 Dreamliner plane uses lightweight materials, like titanium and carbon fibre. That makes it 20% more fuel-efficient than current planes. The 787 also features new energy-efficient interior lighting systems, which will lower its operating costs further. However, Boeing had to delay the initial test flight last June because it found structural weakness where the plane’s wings connect to the body. The company feels it can fix this without redesigning the plane, and hopes to resume testing in the next few months. Despite this setback, Boeing still has 851 orders for the 787. These are worth around $151 billion....

FPL GROUP INC. $57 (New York symbol FPL; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 410.8 million; Market cap: $23.4 billion; Price-to-sales ratio: 1.4; WSSF Rating: Average) gets 70% of its revenue from wholly owned Florida Power and Light Co., a regulated utility with 4.5 million customers in eastern and southern Florida. FPL Group is also a leading producer of wind power. Its NextEra Energy Resources, subsidiary accounts for 25% of the U.S.’s wind-power capacity. NextEra also operates unregulated electrical-power plants in 25 states and Canada. It sells its power to wholesale customers, not individuals. In the three months ended June 30, 2009, FPL Group’s earnings rose 6.9%, to $400 million, or $0.99 a share, from $375 million, These figures do not include a charge the company incurred for losses on the hedging contracts it uses to lock in the price of fuel. FPL Group’s revenue rose 6.3%, to $3.8 billion from $3.6 billion. NextEra started up a number of new wind-power projects during the quarter; this increased its windpower capacity by 9%, and helped push up its earnings by $48 million. The new projects helped offset lower power output at its existing facilities due to lighter-than-normal winds. NextEra’s revenue rose 37.4% in the quarter....

ABB LTD. ADRs $17 (New York symbol ABB; Conservative Growth Portfolio, Manufacturing & Industry sector; ADRs outstanding: 2.3 billion; Market cap: $39.1 billion; Price-to-sales ratio: 1.2; WSSF Rating: Above Average) is a Swiss-based maker of transformers, transmission switches and other electricity-infrastructure equipment. In the three months ended June 30, 2009, ABB earned $728 million, or $0.29 per ADR. (Each American Depositary Receipt represents one ABB common share.) This figure included $120 million in restructuring costs. ABB aims to save a total of $2 billion a year by the end of 2010 by cutting an unspecified number of jobs, closing plants and buying more raw materials from low-cost countries. In the year-earlier quarter, ABB earned $1.1 billion, or $0.43 per ADR. Revenue fell 12.3%, to $7.9 billion from $9 billion. ABB holds cash of $8.1 billion, or roughly $3.55 per ADR. Its $2.1-billion long-term debt is just 5% of its market cap. That gives it plenty of flexibility to buy other related companies. In light of the recession, ABB could find some bargains. It’s particularly interested in China, where spreading industrialization has lifted demand for its products....

SUPERVALU INC. $14 (New York symbol SVU, Conservative Growth Portfolio, Consumer sector; Shares outstanding: 230 million; Market cap: $3.2 billion; Price-to-sales ratio: 0.1; WSSF Rating: Average) is the second-largest supermarket operator in the U.S. behind Kroger. Its 2,500 stores account for roughly 78% of its revenue. The remaining 22% comes from its food wholesale operations, which supply its own stores as well as more than 2,500 other grocery retailers. In its first fiscal quarter, which ended June 20, 2009, Supervalu earned $113 million, or $0.53 a share. That’s down 30.3% from $162 million, or $0.76 a share, a year earlier. Sales fell 4.7%, to $12.7 billion from $13.3 billion. Supervalu has been forced to lower its selling prices because of intense competition with large discount retailers like Wal-Mart. This has hurt its sales and profit margins. Separately, Supervalu will sell 36 of its stores in Utah. The company will realize a $150-million gain from the deal when it closes later this year. The company will probably earn $2.10 a share this year, and the stock trades at 6.7 times that estimate. The $0.70 dividend yields 5.0%....

SYSCO CORP. $23 (New York symbol SYY; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 589.9 million; Market cap: $13.6 billion; Price-to-sales ratio: 0.4; WSSF Rating: Average) sells food and kitchen supplies to over 400,000 restaurants, schools, hotels and hospitals in the U.S. and Canada. The company has about 16% of the North American food-service market. In its third fiscal quarter, which ended March 28, 2009, Sysco’s sales fell 4.5%, to $8.7 billion from $9.1 billion a year earlier. The drop came despite a 3.3% increase in food costs, which Sysco passed on to its customers. Earnings fell 6.1%, to $226.2 million from $240.9 million. Earnings per share fell 5%, to $0.38 from $0.40, on fewer shares outstanding. Some of Sysco’s customers are falling behind on their bills because of the recession. In the first nine months of fiscal 2009, Sysco wrote off $61.6 million of loans to its customers, up from $25.9 million a year earlier. In response to falling demand and the loan writeoffs, Sysco has cut its workforce by 6% in the past year....

One of the most common investment platitudes you’ll ever hear is that investors should “have a plan (or system) and stick to it.” This is good advice if your alternative is to invest without any sort of plan. However, unlike the time-tested value investing approach, many of today’s investment plans are not worth sticking with.

Value investing: Look beyond financial indicators

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Some investors get pessimistic about the stock market when they see selling by insiders in the U.S. blue chip stocks that they hold. The value of insider buying and selling as a market indicator seems self-evident. After all, company insiders — officers, directors, or owners of 10% or more of a company’s stock — are apt to know more than outsiders do about what’s going on in their business. Insiders in the U.S. have to report buying and selling to the Securities and Exchange Commission (SEC). Many advisors claim that they can detect valuable investment opportunities, including rising blue chip stocks, by studying insider data. But the deeper you look, the more you’ll find that this data leads to muddled conclusions at best....

Gold rose from $300 an ounce at the beginning of this decade to over $1,000 in early 2008. It fell below $700 late last year before rebounding back over $1,000 earlier this year. Today, it trades around $954. We feel that gold will eventually surpass its recent highs. That’s mainly because low interest rates and government spending will spur inflation. Still, investors should use caution when investing in gold, and avoid buying gold directly, or certificates that represent an interest in gold. Unlike stocks, commodity investments like these generate no income. Instead, they come with a continuing cash drain for management, insurance and so on....

With President Obama’s climate-change plan now before the U.S. Senate, a number of investors have been wondering if now is a good time to “green” their portfolios with environmentally friendly companies. Regardless of the Senate’s decision, we still think there are a number of green stocks with investment appeal. But you’ll want to use caution when looking for opportunities in this area. Many green stocks may need a long time to move from the research or concept stage to profitability. As well, the recession has cast doubt on the future of some government subsidies for green stocks. However, 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. We focus on those that have a sound base of other operations to offset these added risks....

Small caps are companies with a “market cap” (the value of shares they have outstanding) below $250 million, or some other arbitrary figure. Many investors think of the “small cap group” as the place to look for aggressive investments, such as junior companies that will develop into seniors and make huge gains for investors. Some small caps will indeed turn out that way, but they’re a minority. In fact, small caps are a widely varied bunch. The top small caps are well-established giants within small but growing fields. However, many small caps are start-ups that have yet to make their first profit. Some succeed brilliantly, and these are the hot small cap stocks we aim to help you spot in our Stock Pickers Digest newsletter, but lots of others go broke. Then too, some small caps are former large-cap companies that have terminal problems. They trade as small caps on their way to zero....

We’ve been asked a number of times over the years about how we manage in our investing advice to recommend so many stocks that get taken over at a big profit. Some readers, especially those of our Successful Investor newsletter, tell us that they never had a stock taken over at a profit until they began following our investing advice. And some of these takeovers have generated big profits, indeed: Fording Canadian Coal jumped 163.2% in five months on a takeover offer after we recommended it to Successful Investor readers in January 2008....

Recently, we’ve heard from some investors who sold most or all of their stocks and mutual funds during the recent downturn. Now, a number of these investors want to get back in, and many are considering Canadian mutual funds. But they wonder whether they should buy now or wait to see if the TSX, which has climbed over 40% from its March 2009 low, will fall again and offer lower prices.

Know your time horizon when buying Canadian mutual funds

In deciding whether to buy now or wait, however, many investors focus on the market outlook. But it’s the one factor that offers you the least advantage in making a decision. That’s because nobody knows for sure what the market will do.

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