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Here are two simple retirement investing strategies that can help you maximize your investments in RRSPs.

High-risk retirement investing

Planning your retirement investing and picking stocks for your RRSPs can be difficult. It can be tempting to pick higher risk (and potentially higher return) stocks for your RRSPs. However, we believe these investments are generally unsuitable for this type of retirement investing, and that higher-risk stocks should be held outside of an RRSP. That’s because if higher-risk stocks lose money in your RRSPs, you have a triple loss:...

Short selling involves selling securities an investor doesn’t already own. A short sale is performed in the belief that the price of the security being sold will go down. The seller can then cover the sale by purchasing the security at a lower price, making a profit based on how far the price has fallen. Short sellers face specific regulations in the markets. Hedge funds buy good stocks and sell bad stocks “short” in hopes of making money regardless of the market’s direction. If the market goes up, the good stocks should rise more than the weak ones, so the gains on the good stocks should exceed losses on the short sales. If the market falls, the bad stocks should fall more than the good, so gains on the short sales should exceed losses. But profitable short selling requires superhuman timing, and the inevitable mistakes can be super expensive. In 1999 and 2000, a number of hedge funds collapsed because they shorted Internet stocks that went on to soar. The fund managers were “early rather than wrong,” as the saying goes, but they still lost huge sums. After all, short selling turns the traditional market odds upside down. When you buy, your profit potential is unlimited and the most you can lose is 100%. When you sell short, the most you can make is 100%, but your potential for loss is unlimited....

Growth stocks are companies that are expected to have earnings growth above the market average. Frequently, growth stocks pay little or no dividends, instead re-investing any extra money to promote further growth. These are not to be confused with momentum stocks. Momentum stocks are stocks that are moving higher in the market. While individual definitions may differ, the overall goal from momentum trading is to profit from shorter-term trades. Momentum investors are particularly keen on the so-called ‘positive earnings surprise’, when a company outdoes brokers’ earnings estimates. They view a ‘negative earnings surprise’ — lower-than-expected earnings — as a sell signal. They use a variety of computerized formulas to make buy and sell decisions, but all come down to “Buy on strength and sell on weakness.” So they tend to pile into the same stocks all at once, and the gains that follow are something of a self-fulfilling prophecy....

INDIA FUND $17.40 (New York symbol IFN; Shares outstanding: 38.6 million; Market cap: $672.3 million; CWA Rating: Aggressive) mainly invests in large-cap Indian stocks. Blackstone Group manages the fund. India’s economy has grown by more than 9% annually over the last few years. The global recession will hurt the country’s growth, but it could still expand by as much as 7% this year. The $671.1-million India Fund’s top holdings are: Reliance Industries (conglomerate), 12.3%; Infosys Technologies (software), 9.6%; Bharti AirTel (telecom), 7.4%; Hindustan Unilever (consumer products), 5.5%; ITC, Ltd. (various industries), 4.5%; Housing Development Finance, 4.0%; Oil & Natural Gas Corporation, 3.7%; Bharat Heavy Electricals (engineering and manufacturing), 3.6%; State Bank of India, 3.3%; HDFC Bank, 3.2%; and Power Finance Corp., 2%....

SINGAPORE FUND $7.10 (New York symbol SGF; Shares outstanding: 9.5 million; Market cap: $67.3 million; CWA Rating: Aggressive) is fully invested in Singapore-based stocks. The Development Bank of Singapore manages the fund. Singapore relies on exports for much of its growth. Major markets, like the U.S., China and Japan, are important to its economy. When these markets recover, Singapore’s prospects should improve. Singapore Fund’s top holdings are: Singapore Telecom, 14.7%; United Overseas Bank, 13.2%; Overseas-Chinese Banking, 8.9%; Singapore Airlines, 5.3%; Singapore Technologies Engineering (aircraft support services), 4.7%; Jardine Matheson (various industries), 4.7%; Keppel (various industries), 4.2%; Singapore Press Holdings (newspapers), 3.7%; Wilmar International (agribusiness), 3.5%; and SMRT (Singapore public transit), 3.3%....

NEW IRELAND FUND $4.26 (New York symbol IRL; Shares outstanding: 5.1 million; Market cap: $21.8 million; CWA Rating: Aggressive) invests in Irish companies. The Bank of Ireland manages the $50.9-million New Ireland Fund. The bank dates back to 1783. Lower housing prices and a struggling banking sector have hurt the Irish economy. However, the country is open to foreign investment, and has invested heavily in education and training. It is also part of the euro currency zone. These factors should benefit the Irish economy over the long term. The New Ireland Fund’s top holdings are: CRH plc (building materials), 25.0%; Ryanair Holdings (airline), 15.0%; DCC plc (business services), 7.3%; Kerry Group (food products), 5.0%; Elan Corp. (health-care services), 5.0%, Aryzta AG (agriculture and food), 4.3%; United Drug plc (health-care services), 3.3%; Allied Irish Banks, 3.2%; and FBD Holdings (financial services), 2.4%....

BCE INC. $26.01 (Toronto symbol BCE; Shares outstanding: 791.6 million; Market cap: $20.6 billion; SI Rating: Above Average) has over 7.5 million telephone and Internet customers in Ontario and Quebec. It also has 6.5 million wireless subscribers across Canada. In the three months ended December 31, 2008, BCE’s revenue fell 0.7%, to $4.49 billion from $4.52 billion. However, earnings per share before one-time items rose 19.6%, to $0.55 from $0.46. BCE’s cellphone revenue rose 7.6% in 2008, and subscribers grew by 4.5%. Wireless accounts for 25% of BCE’s revenue and 43% of its profit. Since mid-2008, BCE has laid off over 7% of its staff. It has also cut spending on consulting, eliminated 7,000 corporate credit cards and lowered the number of ad agencies it uses to 11 from 47. These moves should lower the company’s annual expenses by $400 million. BCE earned $1.8 billion in 2008....

SWISS HELVETIA FUND $8.96 (New York symbol SWZ; Shares outstanding: 33.3 million; Market cap: $297.8 million; CWA Rating: Conservative) invests mainly in large-capitalization Swiss stocks. Hottinger Group, which dates back to 1786, manages the fund. The Swiss government has moved quickly to restore confidence in the country’s banking system. It’s also lowering interest rates to ease credit and devalue the Swiss franc. The Swiss economy is heavily reliant on exports. A rise in world trade would greatly benefit the country’s industries. The $469.1-million Swiss Helvetia Fund’s top holdings are: Nestle SA (food and beverages), 19.9%; Roche Holdings (pharmaceuticals), 12.9%; Novartis AG (health care and pharmaceuticals), 9.3%; Addex Pharmaceuticals, 3.8%; Alpiq Holding (electric power), 3.4%; Acino Holding (pharmaceuticals and chemicals), 3.4%; Basilea Pharmaceutica (biopharmaceuticals), 3.2%; Actelion Limited (pharmaceuticals), 1.9%; and Galencia AG (pharmaceuticals), 1.4%....

RBC CANADIAN EQUITY FUND $18.03 (CWA Rating: Conservative) (RBC Funds, P.O. Box 7500, Station A, Toronto, Ontario. M5W 1P9. 1-800-463-3863; Web site: www.royalbank.com. No load — deal directly with the bank) mainly invests in larger-capitalization stocks, but may also buy small- and mid-cap stocks. The $3.1-billion fund’s largest holdings are Royal Bank, Manulife, EnCana, TD Bank, Potash Corp., Bank of Nova Scotia, Canadian Natural Resources, Suncor Energy, Research in Motion and BCE. The fund is heavily weighted (47.2%) toward the resource sector; 27% of its investments are in finance. Over the last 10 years, RBC Canadian Equity posted a 4.9% annual rate of return. That’s just over the S&P/TSX’s 4.6% gain. The fund lost 38.3% over the last year, compared to a loss of 38.2% for the S&P/TSX. The fund’s MER is 1.96%....

BMO EQUITY FUND $20.70 (BMO Mutual Funds, 77 King Street West, Suite 4200, Royal Trust Tower, Toronto, Ontario, M5K 1J5, 1-800-665-7700; Web site: www.bmo.com. No load — deal directly with the bank) (CWA Rating: Conservative) mostly invests in blue chip Canadian companies. The fund’s managers aim to identify stocks based on their analysis of the outlook for the industry the firms operate in, as well as their earnings records, management strength and growth potential. The $1.4-billion BMO Equity Fund’s 10 largest holdings are Bank of Nova Scotia, Royal Bank of Canada, Toronto-Dominion Bank, Canadian Natural Resources, Suncor Energy, EnCana Corporation, Barrick Gold, Manulife Financial, CIBC and Goldcorp. The fund currently holds 35.9% of its portfolio in the resource sector. Its next-largest segment is financial services, at 21.6%....

CIBC CANADIAN EQUITY FUND $16.61 (CWA Rating: Conservative) (CIBC Securities, 5140 Yonge Street, Suite 900, Toronto, Ontario M2N 6X7. 1-800-631-7008; Web site: www.cibc.com. No load — deal directly with the bank) looks at fundamentals like earnings, cash flow and debt level to identify companies that it sees as having above-average growth potential. The $317.2-million fund’s top holdings are: TransCanada Corp., EnCana, Research in Motion, Bank of Nova Scotia, CN Railway, Potash Corp., BCE Inc., Canadian Natural Resources and Royal Bank of Canada. CIBC Canadian Equity holds 39.4% of its portfolio in resource stocks and 27.1% in finance stocks....

SCOTIA CANADIAN GROWTH FUND $41.09 (CWA Rating: Conservative) (Scotia Securities, 40 King Street West, 6th Floor, Toronto, Ontario M5H 1H1. 1-800-268-9269; Web site: www.scotiabank.com. No load — deal directly with the bank) attempts to use an investment’s fundamentals to determine whether it has the potential for above-average growth. The $315.8-million Scotia Canadian Growth Fund’s largest stock holdings include EnCana Corp., Royal Bank, TD Bank, BCE Inc., Potash Corp., Canadian Natural Resources, Suncor Energy, Bank of Nova Scotia and Barrick Gold. Scotia Canadian Growth holds 43.3% of its portfolio in the resource sector. Its next-largest segment is financial services, at 24.9%....

There are, in some cases, ways of structuring your business affairs using offshore investing companies or trusts that can cut or defer your taxes. You may also be able to protect your assets from legal judgments rendered in Canada if you move them to accounts in certain foreign jurisdictions. Earnings in an “offshore account” are generally lightly taxed, or not taxed at all, by the country where the bank or brokerage account is located. This includes jurisdictions like Switzerland or the Cayman Islands. However, Canadian residents are obliged to report any income they earn through foreign investing on their Canadian tax returns. (You can only claim tax-exempt “non-resident” status without giving up your citizenship by staying outside of Canada for more than half of a tax year.)...

Commodity prices are down lately along with fears of lower demand due to a slowing global economy. That makes them a tempting investment for some investors bracing for a rebound. We like the long-term prospects for commodity investments, including metals and minerals, fertilizers and agricultural products. However, most if not all non-professionals who get involved in commodities trading wind up losing money. There are various structured products sold by brokers that give you exposure to commodity investments, while limiting risk. Most participants will ultimately lose money in these investments as well, or make a poor return in relation to their risk....

If you are interested in gold investing, we recommend staying away from buying gold bullion, coins (unless you collect them as a hobby) or certificates representing an interest in bullion. Unlike stocks, commodity investments like gold bullion do not generate income. Instead, they come with a continuing cash drain, for management, insurance and so on. However, if you do want to hold bullion as part of your gold investing, then SPDR Gold Shares are a relatively low-cost and liquid way to do it. SPDR Gold Trust, symbol GLD on New York, is an investment trust that aims to reflect the performance of the price of gold bullion, less the trust’s expenses. SPDR’s sole assets are gold bullion, and, from time to time, cash. Expenses for SPDR Gold Shares are 0.4% of assets per year....

YUM! BRANDS INC. $28 (New York symbol YUM; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 459.9 million; Market cap: $12.9 billion; Price-to-sales ratio: 1.2; WSSF Rating: Above Average) is the world’s largest fast-food operator, with over 36,000 outlets in more than 110 countries. (McDonald’s Corp. has fewer restaurants than Yum, but higher annual sales.) Its major chains include KFC (fried chicken), Pizza Hut, Taco Bell (Mexican food), Long John Silver’s (seafood) and A&W (root beer and hamburgers). Yum continues to aggressively expand in China, particularly its KFC fried-chicken restaurants. Yum’s China division, which includes Taiwan and Thailand, accounts for 30% of its sales and earnings. Yum’s U.S. operations provide 45% of its sales and 40% of its profit. Its international division (excluding China) supplies 25% of its revenue, and 30% of earnings. Thanks mainly to strong growth at the China division, Yum’s revenue rose 25.2%, from $9 billion in 2004 to $11.3 billion in 2008. Earnings rose 30.2%, from $721 million in 2004 to $939 million in 2008. Yum has bought back over $5.6 billion worth of its shares since 2004. As a result, per-share earnings rose 61.9%, from $1.18 in 2004 to $1.91 in 2008. Cash flow per share rose 61.4%, from $2.02 in 2004 to $3.26 in 2008....

AGILENT TECHNOLOGIES INC. $16 (New York symbol A; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 345.3 million; Market cap: $5.5 billion; Price-to-sales ratio: 0.2; WSSF Rating: Average) makes testing systems that help electronics manufacturers improve the quality of their products. Agilent also makes measurement equipment for medical research labs and drug companies. Demand for Agilent’s medical-related products remains steady, but the recession has hurt sales of cellphones and other electronic devices. As a result, manufacturers are spending less on the company’s testing equipment. In response, Agilent plans to drop some of its businesses and shrink its workforce by 3%. The company expects to pay $100 million in severance and other expenses. But these moves should lower Agilent’s costs by $150 million a year, and let it keep spending 14% of its sales on research. To put these amounts in context, Agilent’s earnings in its first fiscal quarter, which ended January 31, 2009, dropped 47.1%, to $72 million, or $0.20 a share. It earned $136 million, or $0.36 a share a year earlier (these figures exclude restructuring and other charges). Sales fell 16.3%, to $1.2 billion from $1.4 billion....

VERIGY LTD. $7.61 (Nasdaq symbol VRGY; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 58.2 million; Market cap: $442.9 million; Price-to-sales ratio: 0.8; WSSF Rating: Extra Risk) designs and makes test systems that are used in computer-chip production. Because of slowing computer sales brought on by the recession, Verigy lost $41 million, or $0.70 a share, in its first fiscal quarter, which ended January 31, 2009. It earned $33 million, or $0.53 a share, a year earlier. These figures exclude unusual charges, including severance costs related to an 18% cut in Verigy’s workforce. The plan should reduce Verigy’s costs by around $100 million a year, and help it break even on $110 million in quarterly revenue. Sales during the quarter fell 66%, to $68 million from $200 million. Verigy holds cash of $300 million, or $5.16 a share, and has no debt. Verigy’s research costs were unchanged at $25 million, but were a high 36.8% of sales. This was mainly because of a sharp drop in new orders. The company’s restructuring should help it maintain its high research spending. This will let it develop new products that will fuel future sales....

FEDEX CORP. $43 (New York symbol FDX; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 311.4 million; Market cap: $13.4 billion; Price-to-sales ratio: 0.4; WSSF Rating: Average) delivers packages and documents in the United States and over 220 other countries. In its third fiscal quarter, which ended February 28, 2009, FedEx’s earnings fell 75.3%, to $97 million, or $0.31 a share, from $393 million, or $1.26 a share, a year earlier. Revenue fell 13.8%, to $8.1 billion from $9.4 billion. Because of the recession, many of FedEx’s customers are shipping fewer packages. Moreover, many are switching from overnight to longer deliveries to save money. FedEx plans to cut an undisclosed number of jobs, and lower salaries and work hours. These actions will cost it $100 million. But, together with an earlier round of job cuts, they should lower the company’s costs by $1 billion in fiscal 2010....

ARKANSAS BEST CORP. $20 (Nasdaq symbol ABFS; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 25.3 million; Market cap: $506 million; Price-to-sales ratio: 0.3; WSSF Rating: Average) specializes in “less-than-truckload” shipping. This involves loading freight from a number of customers onto a single truck. Arkansas Best carries a wide range of goods, from food and textiles to clothing and furniture. As the economy began to slow in 2008, Arkansas Best decided to maintain its rates. It felt that its strong reputation would help it hang on to its customers. However, freight volumes fell 15% in the fourth quarter, and the company had to lower its rates in order to to stay competitive. In 2008, Arkansas Best’s earnings dropped 48.7%, to $29.2 million, or $1.15 a share, from $56.8 million, or $2.26 a share, a year earlier. Revenue fell 0.2%, to $1.83 billion from $1.84 billion. In response, Arkansas Best is cutting up to 8% of its workforce. It has frozen salaries, shrunk its fleet and closed some distribution facilities....

PETSMART INC. $21 (Nasdaq symbol PETM; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 127.1 million; Market cap: $2.7 billion; Price-to-sales ratio: 0.5; WSSF Rating: Above Average) sells pet food and supplies through 1,112 stores in the U.S. and Canada. PetSmart opened 112 new stores in its latest fiscal year, which ended February 1, 2009. It also opened 45 new in-store PetHotels, which look after pets while their owners are out of town. PetSmart now has 142 PetHotels. As a result of the expansion, sales rose 8.4%, to $5.1 billion from $4.7 billion in the previous year. Same-store sales rose 3.8%. PetSmart’s earnings fell 25.5%, to $192.7 million from $258.7 million. Its earnings per share fell 22.1%, to $1.52 from $1.95 on fewer shares outstanding. However, the prior year included a $95.4-million gain on the sale of an investment. If you disregard this, per-share earnings actually rose 4.1%....

IDEXX LABORATORIES INC. $36 (Nasdaq symbol IDXX; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 59.1 million; Market cap: $2.1 billion; Price-to-sales ratio: 2.2; WSSF Rating: Average) makes equipment that veterinarians use to detect diseases in animals. Idexx also makes systems that detect contaminants in water and milk. Idexx spends roughly 7% of its revenue on research, which hurts its profits. But this spending gives it plenty of new products to spur sales. Last year, Idexx launched new versions of its two top-selling systems: Catalyst Dx (which analyzes blood and urine), and SNAPshot Dx (which tests for thyroid and liver disorders). Thanks to strong demand for these new products, Idexx’s sales rose 11%, to $1 billion in 2008 from $922.6 million in the previous year. Earnings before several one-time items (mainly the sale of part of its animal drug business) rose 16%, to $118.3 million from $102 million. Earnings per share rose 20.3%, to $1.90 from $1.58 on fewer shares outstanding. Idexx ended 2008 with cash of $78.9 million, or $1.33 a share. Its long-term debt is just $5.1 million....

Uranium prices peaked at 1979 to $43 U.S. a pound, on fears of production shortages. Many nuclear power plants then began hoarding uranium. However, supply disruptions never materialized. As operators used up their uranium inventories in subsequent years, the price of uranium fell to as low as $7.10 U.S. a pound in December 2000. Prices moved up steadily after that, and got as high as $138 U.S. a pound in June 2007. Uranium prices have since moved down to around $42 U.S. a pound. However, longer term, uranium demand is still likely to grow and push up the value of some uranium stocks.

Uranium consumption will rise with nuclear power

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One way to minimize your investment risk is to diversify. For example, you can spread your investments out across the five main economic sectors. This way, you minimize the chances of a big loss in your portfolio from a setback in any one sector. Another way to diversify is to invest a portion of your portfolio in international stocks. There is no one “world stock market”. Instead, there are many stock exchanges around the world, and investing in many of them entails considerable risk. However, one simple strategy to gain international exposure, yet at the same time cut risk, is to invest in U.S. stocks. Many blue-chip U.S. stocks have operations in multiple countries. This will let them benefit from a recovering global economy, as well as a return to prosperity in the U.S....

Gold moved up from $300 an ounce in the early part of this decade to over $1,000 in 2008. It fell to $700 in November 2008 as the stock market bottomed out. Like the stock market, gold has regained some of its losses and now trades at around $900. We feel gold could eventually surpass its recent highs with a corresponding impact on many gold stocks. That’s mainly because investors fear that low interest rates and government stimulus spending will spur inflation. Gold prices, and gold investing, should continue to gain as the credit crisis makes it harder for gold companies to fund new projects and expand production. Regardless of what happens with gold investing in general, speculative and promotional gold stocks will make significant gains from time to time on hopes of a gold discovery. You can say something like that about any sort of speculative or promotional stocks, but most investors who dabble in them still wind up losing money. That’s because it is much easier to launch penny gold stocks than to find a gold mine....