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CANALASKA URANIUM $0.17 (Toronto symbol CVV; SI Rating: Start-up) (1-800-667-1870; www.canalaska.com; Shares outstanding: 137.8 million; Market cap: $23.4 million) owns twenty uranium projects in Saskatchewan’s Athabasca Basin region. CanAlaska has added partners to help pay for exploration drilling. These include Japan’s giant Mitsubishi Corp., plus a consortium of Korean companies, including Hanwha Corporation, Korea Electric Power, Korea Resources and SK Energy. CanAlaska holds cash of $8 million, and has no debt. CanAlaska Uranium is a buy for highly aggressive investors....

BAFFINLAND IRON MINES $0.49 (Toronto symbol BIM; SI Rating: Start-up) (416-364-8820; www.baffinland.com; Shares outstanding: 255.3 million; Market cap: $123.8 million) is looking for a major partner for its main Mary River iron-ore project on Baffin Island. Baffinland still hopes to start building an open-pit mine at the site next year, and plans to finish it by 2014. It then aims to produce 18 million tonnes of ore per year for over 21 years. Baffinland holds a high cash balance of $26.1 million. Baffinland is a buy for highly aggressive investors....

One of the questions we often get from clients of Successful Investor Wealth Management involves financial contingency planning. That is, how do you set up your finances and investments so that someone else can handle them if you can’t? When you’re doing this kind of retirement planning, we think it’s always a good idea to have such an arrangement in place. The first step is to find someone you thoroughly trust to step in on your behalf. You should also resist the urge to leave fixed instructions. Instead, give that person as much latitude as possible. This goes against the first instinct of many investors. But there is good reason to take a more hands-off approach. ...

Simply put, a well-constructed stock portfolio will make your life easier and maximize your gains.

Early in their investing careers, many investors have only a vague idea of the value of a planned portfolio when investing in the stock market.

When you try to pick a handful of stocks that will all beat the market, you are asking a lot of yourself. No one, not even people that devote their entire lives to it, has ever been able to consistently pick stock-market winners over long periods.

On the other hand, it’s relatively easy to acquire a balanced, diversified portfolio of mainly high-quality dividend paying stocks, spread out across the five main economic sectors: Resources & Commodities, Finance, Manufacturing & Industry, Utilities and Consumer.

Spreading your holdings out across the five sectors helps you avoid overloading yourself with stocks that are about to slump because of industry conditions or a change in investor fashion. By diversifying across the sectors, you increase your chances of stumbling upon a market superstar – a stock that does two to three or more times better than the market average. These stocks come along every year. By nature, their appearance is unpredictable: if you could routinely spot them ahead of time, you’d quickly acquire a large proportion of all the money in the world, and nobody ever does that.

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Right now, Canadian income trusts pay out a high percentage of their cash flows to their unitholders. This lets them avoid paying corporate taxes. It also gives many of them significantly higher yields than a lot of dividend-paying common stocks. In 2011, the Canadian government will begin taxing income trusts (with the exception of real estate investment trusts or REITs)....

Long-time Successful Investor readers may recall that a decade or two ago, we regularly reminded them that dividends could contribute up to a third of their long-term investment returns, without even considering the tax-cutting effects of the dividend tax credit (see below). Earlier in this decade, yields of dividend paying stocks were generally too low to provide a third of investment returns. But now that yields of dividend paying stocks have moved back up to their current level, it’s realistic to assume they will once again contribute as much as a third of your total return. That’s a good thing for investors, since dividends are more dependable than capital gains as a source of investment income. ...

CANADA BREAD CO. LTD. $41 (Toronto symbol CBY; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 25.4 million; Market cap: $1 billion; Price-to-sales ratio: 2.5; SI Rating: Above Average) is Canada’s second-largest maker of fresh and frozen breads, rolls and bagels. (Weston Bakery is the largest). Canada Bread also makes pastas and sauces. Its main brands include Dempster, Tenderflake and Olivieri. As part of its long-term growth strategy Canada Bread plans to expand its overseas operations, which account for 25% of its sales. It’s now one of the largest makers of bagels and bakery products in the U.K. Canada Bread also owns three bakery plants in the U.S. In the first half of 2008, Canada Bread raised its prices to offset rising energy and wheat costs. Now that these costs have fallen, the company is starting to realize the benefits of this move. In the three months ended March 31, 2009, its earnings rose 22.9%, to $0.59 a share (or a total of $14.9 million) from $0.48 a share (or $12.2 million) a year earlier. These figures include unusual items, such as costs related to a fire at a bakery plant in the U.K. The company received $1.7 million in insurance proceeds to repair the damage. If you exclude these items, earnings per share rose 15.4%, to $0.60 from $0.52. Sales rose 7.9%, to $413.1 million from $382.9 million....

MAPLE LEAF FOODS INC. $8.70 (Toronto symbol MFI; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 129.3 million; Market cap: $1.1 billion; Price-to-sales ratio: 1.0; SI Rating: Average) is Canada’s largest food-processing company. It mainly produces fresh and prepared beef and poultry under the Maple Leaf and Schneider brands. Maple Leaf also owns 89.8% of Canada Bread. In the three months ended March 31, 2009, Maple Leaf’s sales rose 6.3%, to $1.3 billion from $1.2 billion a year earlier. Ingredient costs rose during the quarter, but Maple Leaf was able to pass these on by raising the prices on some of its products. As well, Maple Leaf gets 30% of its sales from outside of Canada, so the lower Canadian dollar helped its results. Earnings soared to $2.9 million, or $0.02 a share, from a loss of $10,000, or nil per share, a year earlier. If you disregard costs related to the company’s restructuring plan, earnings per share would have risen to $0.05 from $0.04....

SAPUTO INC. $22 (Toronto symbol SAP; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 207.1 million; Market cap: $4.6 billion; Price-to-sales ratio: 0.8; SI Rating: Average) is Canada’s largest producer of dairy products such as milk, butter and cheese. It also has operations in the United States, Argentina and Europe. Last December, Saputo bought Neilson Dairy, the dairy division of Weston Foods, for $465 million. Neilson makes a wide variety of dairy products in Ontario, and generates $600 million a year in sales. Thanks to Neilson, as well as Saputo’s earlier acquisition of a Wisconsin-based cheese maker for $161 million, its revenue rose 14.5% in the fiscal year ended March 31, 2009, to $5.8 billion from $5.1 billion in the prior year....

IGM FINANCIAL INC. $42 (Toronto symbol IGM; Conservative Growth Portfolio, Finance sector; Shares outstanding: 262.5 million; Market cap: $11 billion; Price-to-sales ratio: 4.2; SI Rating: Above Average) is Canada’s largest independent mutual-fund company. It manages $108.5 billion of assets. Power Financial (Toronto symbol PWF) owns 56.4% of IGM. The sharp drop in stock prices has hurt IGM’s profits. In the three months ended March 31, 2009, its earnings fell 36.8%, to $133.5 million from $211.2 million a year earlier. Earnings per share fell 35.4%, to $0.51 from $0.79, on fewer shares outstanding. Revenue fell 21.7%, to $559.1 million from $714.2 million. The company continues to do a good job of hanging onto its clients. In the first quarter, the redemption rate at its main Investors Group division was 7.7%, among the lowest in the industry, and down from 7.9% in the last quarter of 2008....

GREAT-WEST LIFECO INC. $23 (Toronto symbol GWO; Conservative Growth Portfolio, Finance sector; Shares outstanding: 944 million; Market cap: $21.7 billion; Price-to-sales ratio: 1.0; SI Rating: Above Average) is Canada’s second-largest insurance company after Manulife Financial Corp. (Toronto symbol MFC). The company also offers wealth-management services and owns Putnam Investments, a major U.S.-mutual fund company. Power Financial Corp. (Toronto symbol PWF) owns 68.7% of Great-West’s shares. The stock market downturn cut Great-West’s assets under administration by 14.7%, to $332.9 billion as of March 31, 2009, from $390.5 billion a year earlier. Great-West’s fees rise and fall with the value of the securities it manages, so the drop hurt its earnings: In the first quarter of 2009, earnings fell 33.9%, to $326 million from $493 million a year earlier. Earnings per share dropped 41.7%, to $0.35 from $0.60, on more shares outstanding. Great-West holds $2 billion in notes and other securities issued by U.K. and European banks. If conditions worsen, the company may have to write down some of these. However, government support of these banks lowers the likelihood of a big loss....

Green stocks have a lot of conceptual and emotional appeal, but may offer limited investment potential. Investments in environmental or green stocks may need a long time to move from the research or concept stage to profitability in the face of high initial costs and uncertain government subsidies. So they may not be profitable for investors. It’s hard to set up any company that grows into a profitable business. It’s even harder to profit in pioneering fields like those that green stocks generally focus on. But it’s relatively easy to launch a stock promotion that purports to have answers to social problems, or ways to profit from emerging green technology. That’s why stock promotions, of green stocks or anything else, are always more common than legitimate start-ups. Still, even the legit start-ups mostly wind up going broke. Green stocks should never make up more than a modest part of your portfolio. Our view is that if you want to invest so that you make money and help the environment, your best bet is to build a portfolio of well-established companies, spread out across the five main economic sectors. Then, donate some of your profits to worthwhile socially conscious organizations....

We continue to recommend that all investors own at least two of Canada’s big-five banks – Bank of Montreal, Royal Bank, CIBC, TD Bank and Bank of Nova Scotia. These are key safe investments for a portfolio. But these should not be the extent of your financial holdings. It is also essential to diversity within each economic sector. Other types of financial investments, such as non-bank financial companies, should play a role in your portfolio. Non-bank financial companies include property and casualty insurance companies, mutual fund companies, wealth management companies, mortgage lenders and more. It also includes life insurance companies. The best of these can be safe investments in a well-balanced portfolio. Recently, Canadian life-insurance stocks have been held back by investor concerns that the recession will continue to hurt their profits....

Government efforts now underway are likely to solve today’s financial crisis. But the cure will likely only come at a cost of much higher inflation, starting possibly in the next decade. We’ve been asked by a number of investors how this should influence their investing. Many have asked specifically about resource stocks. As a general rule, resource stocks will provide a hedge against inflation, because they gain directly from rising prices for the commodities they produce....

GREAT-WEST LIFECO $22.43 (Toronto symbol GWO; Shares outstanding: 944.2 million; Market cap: $21.2 billion; SI Rating: Above Average) is a leading Canadian insurance company, with $332.9 billion in assets under administration. It also sells wealth management and other financial services, and also operates in the U.S. and Europe. Power Financial controls 72.7% of Great-West. Excluding one-time items, Great-West’s earnings fell 34.5% in the three months ended March 31, 2009, to $326 million, or $0.35 a share, from $493 million, or $0.55. Falling stock markets cut sharply into the fees it earns from assets it manages, including Putnam’s mutual funds. Great-West shored up its already strong capital base by issuing $1 billion in common shares and $230 million in preferred shares last December. This will help it deal with any challenges ahead from the recession, and gives it plenty of flexibility to buy companies at bargain prices. Great-West is also actively cross-promoting its products to Putnam’s large client base....

ALTAMIRA SCIENCE & TECHNOLOGY FUND $6.68 (CWA Rating: Aggressive) (Altamira Investment Services, The Exchange Tower, 130 King Street West, Suite 900, Toronto, Ont. M5X 1K9. 1-800-263-2824; Web site: www.altamira.com. No load — deal directly with the company) invests mostly in U.S. companies in the telecommunications, biotechnology, environmental-technology, health-care and computer industries. Altamira Science & Technology’s top holdings include: Apple, Microsoft, Nokia, Hewlett-Packard Co., Oracle Corporation, Nvidia Corp., Micron Technology, Google, Research in Motion, Qualcomm, Baidu, First Solar, Broadcom and Juniper Networks. The $41.7-million fund lost 14.3% (in Canadian dollars) in the year ended April 30, 2009. The Nasdaq index lost 15.8% (also in Canadian funds). The fund’s MER is 2.65%....

ARC ENERGY TRUST $17.53 (Toronto symbol AET.UN; Units outstanding: 234 million; Market cap: $4.1 billion; SI Rating: Speculative) produces oil and gas in western Canada. ARC’s average daily production of 64,325 barrels of oil equivalent (this measurement includes natural gas) is weighted 50% to oil and 50% to natural gas. ARC’s revenue fell 44.8% in the three months ended March 31, 2009, to $225.2 million from $407.9 million. Cash flow per unit fell 44.9%, to $0.54 from $0.98. Lower oil and natural-gas prices were the main reason for the declines. The trust’s debt remains low, at 17% of its market cap. ARC has just lowered its monthly distribution by 16.7%, to $0.10 from $0.12. The units now yield 6.9%. ARC flowed only 70% of its cash flow through to its unitholders as distributions in the latest quarter. The units trade at 8.2 times ARC’s estimated 2009 cash flow of $2.15 per unit....

PENGROWTH ENERGY TRUST $9.33 (Toronto symbol PGF.UN; Units outstanding: 257.8 million; Market cap: $2.4 billion; SI Rating: Average) produces oil and gas in western Canada and off the Nova Scotia coast. Its average daily production of 80,284 barrels of oil equivalent is weighted 51% to oil and 49% to natural gas. Pengrowth’s revenue fell 29.4% in the three months ended March 31, 2009, to $323 million from $457.6 million. Cash flow per unit fell 57.5%, to $0.37 from $0.87. Low oil and gas prices also prompted Pengrowth to cut production. Pengrowth’s $1.7-billion long-term debt is a somewhat high 71% of its market cap. But it’s just over three years’ cash flow. The trust distributed 82% of its cash flow as distributions in the latest quarter, but it should average about 62% this year. The units trade at 4.2 times Pengrowth’s estimated 2009 cash flow of $2.20 per unit. The trust yields 12.9%....

PENN WEST ENERGY TRUST $14.88 (Toronto symbol PWT.UN; Units outstanding: 414.2 million; Market cap: $6.2 billion; SI Rating: Speculative) is the largest oil and gas trust in North America. In the first three months of 2009, lower oil and gas prices pushed down Penn West’s revenue by 47.7%, to $625 million from $1.2 billion. Cash flow per unit fell 50.6%, to $0.87 from $1.76. The trust’s $4.1-billion long-term debt is 66% of its market cap, but just 3.1 times its annual cash flow. Penn West has average daily production of 180,096 barrels of oil equivalent (weighted 41% to natural gas and 59% to oil). The units yield 11.8%. Penn West pays out around 60% of its cash flow as distributions. It trades at 4.1 times its estimated 2009 cash flow of $3.60 per unit....

ISHARES CANADIAN SHORT BOND INDEX FUND $29.34 (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 iShares Canadian Short Bond Index Fund currently holds 152 bonds with an average term to maturity of 2.9 years. Top issuers include the Government of Canada, Canada Housing Trust, Bank of Nova Scotia, the Province of Ontario and the Province of Quebec. The bonds in the index are 68.4% government and 31.6% corporate....

ISHARES CANADIAN BOND INDEX FUND $29.23 (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 221 bonds in the fund’s portfolio have an average term to maturity of 8.7 years. The bonds in the index are 71.2% government and 28.8% 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, Great-West Lifeco and Bell Canada....

JAPAN EQUITY FUND $4.79 (New York symbol JEQ; CWA Rating: Aggressive) mostly invests in large-capitalization stocks on the Tokyo Stock Exchange. The fund’s top holdings include: Toyota Motor, Mitsubishi UFJ Financial Group, Honda Motor, Sony Corp., Sumitomo Corp....

JAPAN SMALLER CAP FUND $6.95 (New York symbol JOF; CWA Rating: Aggressive) mainly invests in less-widely followed Japanese over-the-counter stocks. The fund’s top holdings are: The Chiba Bank, Hitachi High-Technologies Corp., Moshi Moshi Hotline, Inc., Daibiru Corp., Fuyo General Lease Co. and Taiyo Yuden Co. The fund sells for a 13% discount to the value of its assets. Japan Smaller Cap Fund is a buy....

IVY GROWTH AND INCOME FUND $17.86 (CWA Rating: Conservative) (Mackenzie Financial Corp., 150 Bloor Street West, Toronto, Ontario M5S 3B5. 1-800-387-0780; Web site: www.mackenziefinancial.com. Load fund — available from brokers) is a balanced fund. As such, it holds a mix of stocks, bonds and cash. Ivy Growth and Income Fund has returned 2.9% annually for the 10 years ended April 30, 2009. Over the last year, the fund lost 16.6%. Its MER is 2.08%. The fund’s top stock holdings are: Thomson Reuters Corp., Shoppers Drug Mart, Imperial Oil, Tim Hortons, Bank of Nova Scotia, Becton Dickinson, Colgate-Palmolive, McDonald’s Corporation, Nestle SA and Reckitt Benckiser Group plc. The $1.8-billion Ivy Growth and Income Fund holds 25% of its assets in bonds. In Canada, interest rates on bonds are between 2% and 4% annually. That’s the total return that a bond can provide from today until the day it matures. However, bonds leave investors at the mercy of inflation, which shrinks the purchasing power of all fixed-return investments. In fact, an upsurge in inflation could wipe out all returns on bonds, as well as some of their principal....

IVY FOREIGN EQUITY FUND $25.26 (CWA Rating: Conservative) gained 2.1% over the past 10 years, which was better than 3.1% loss posted by the Morgan Stanley benchmark international index. Over the last year, Ivy Foreign Equity Fund lost 10.7%. The fund invests in companies based outside of Canada, but cuts its risk by avoiding direct investment in emerging markets. The $1.9-billion fund holds 52.8% of its assets in the U.S., 10.4% in France, 10.1% in Switzerland, 8.9% in the U.K., 3.2% in Sweden and 3.0% in Denmark. It holds 11% of its assets in cash. Ivy Foreign Equity is one of our top foreign-fund recommendations. Still, we think non-U.S. international funds should make up no more than 10% of a conservative investor’s portfolio....