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If you want to buy gold, we recommend staying away from buying gold bullion, coins (unless you collect them as a hobby) or certificates representing an interest in bullion. That’s because commodity investments such as gold bullion do not generate income. Instead, they come with a continuing cash drain for management, insurance, storage and so on. You either pay these costs directly or through a premium built into the price of, say, a futures contract. That’s why we recommend that you invest in gold through gold-mining stocks. Unlike bullion, gold-mining stocks at least have the potential to generate income. Newmont Mining, $58.32, symbol NEM on New York (Shares outstanding: 491 million; Market cap: $28.6 billion), is a relatively conservative choice if you want to buy a gold stock....

Kinder Morgan Energy Partners, L.P., $62.65, symbol KMP on New York (Shares outstanding: 207.3 million; Market cap: $13.0 billion), is the largest pipeline master limited partnership in the U.S. It owns about 26,000 miles (or 42,000 kilometres) of pipelines and 170 storage terminals. Kinder Morgan will benefit from a continued economic recovery. While its growth prospects are limited, it should be able to steadily increase its distributions by adding small extensions and compression stations to its pipelines. It could also buy smaller pipeline firms, or add new pipelines to move natural gas from new deposits in Texas and other areas to market. The units yield 6.7%. Kinder Morgan is okay to hold, mainly for income....

Registered Retirement Savings Plans (RRSPs) are a great way for investors to cut their tax bills and make more money from their retirement investing. RRSPs are a form of tax-deferred savings plan. RRSP contributions are tax deductible, and the investments grow tax-free. (Note that you can contribute up to 18% of your earned income from the previous year, to a maximum of $21,000, rising to $22,000 in 2010). March 1, 2010, is the last day you can contribute to an RRSP and deduct your contribution from your 2009 income. When you later begin withdrawing the funds from your RRSP, they are taxed as ordinary income....

One way to cut your tax bill in retirement is for you and your spouse to arrange the family finances so that you each have equal retirement income. That’s because, if one spouse earns more than the other, the higher-income spouse would, of course, be in a higher tax bracket. That means that any extra money the higher-income spouse earns on investments, such as through capital gains, interest or dividends, would be taxed at a higher rate. So, you can lower your family’s overall tax bill by aiming to have both spouses in the same tax bracket. The Canada Revenue Agency won’t let you lower your income tax by simply giving invested funds to a lower-income spouse. “Attribution” rules apply if you do that. That means the higher-income spouse must pay tax on any gains or investment income from those funds....

Ottawa’s new tax on income trusts comes into effect just over a year from now, on January 1, 2011. When it does, it will put trusts on an equal footing with regular corporations. Right now, 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. The new tax will eliminate these income-tax benefits. That will prompt some income trusts to convert to conventional corporations. Others may choose to remain as trusts. (For our latest advice on income trust investing, and how trusts should fit into your overall portfolio, be sure to download our free report, “Canadian Stock Market Basics: How to Trade Stocks and Make Good Investments in Canada.”)...

When you join my Inner Circle service, you get to ask me your own personal investment questions, plus you get to see what other Inner Circle members have asked, along with our answers. So you can see how the service works, and get a sense of how you could benefit from it, I’d like to share a recent member question about index-linked GICs. I hope you enjoy and profit from it. Q: Hi Patrick. I am interested in your opinion of index-linked GICs. The returns are interest based, so I think they are best bought in your RRSP. Recent stock market volatility has us wanting to safeguard a portion of our portfolio. Thanks....

Dividends that Canadians receive from U.S. corporations are subject to a 15% withholding tax. In most cases, however, you get a Canadian income-tax credit to offset that tax. U.S. securities held in an RRSP are not subject to withholding taxes, under terms of the tax treaty between the U.S....

TIM HORTONS INC. $31 (Toronto symbol THI; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 180.7 million; Market cap: $5.6 billion; Price-to-sales ratio: 2.5; SI Rating: Average) is one of Canada’s largest fast-food restaurant chains. Its 2,971 outlets mainly serve coffee and donuts. It also has 556 stores in the U.S., mostly near the Canadian border. Franchisees own 99% of the company’s outlets. Tim Hortons was a wholly owned subsidiary of U.S.-based Wendy’s International Inc. (now part of Wendy’s/Arby’s Group Inc., New York symbol WEN) until March 2006. That’s when it completed an initial public offering of common shares at $27.00 each. In September 2006, Wendy’s handed out its remaining 82.75% stake to its own shareholders as a special dividend. ...

This is part 1 of a two-part series on steps you and your spouse can take to cut your income-tax bills in retirement. We’ll publish the second part in our next issue. In many families, one spouse earns more money than the other. That, of course, puts the spouse with the greater income in a higher tax bracket. It also means that any extra money earned on investments, such as through capital gains, interest or dividends, is taxed at a higher rate. Revenue Canada won’t let the higher-income spouse simply give, or “gift,” money saved or invested to the lower-income spouse. “Attribution” rules apply if you do that. That means the higher-income spouse must pay tax on any gains or investment income from those funds....

FORT CHICAGO ENERGY PARTNERS L.P. $8.47 (Toronto symbol FCE.UN; Units outstanding: 136.3 million; Market cap: $1.1 billion; SI Rating: Extra Risk) owns and operates energy infrastructure across North America. One of its major holdings is a 50% interest in the Alliance natural-gas pipeline, which runs 3,000 kilometres from Fort St. John, B.C., to Chicago. Enbridge Inc. owns the other 50%. Fort Chicago and Enbridge also own 85.4% of the Aux Sable natural gas liquids plant. As well, Fort Chicago owns 100% of the 1,324-kilometre Alberta Ethane Gathering System. Fort Chicago has added to its power-plant holdings over the last couple of years. It now owns natural gas-fired cogeneration plants in Ontario, California and Colorado, plus power plants in Ontario and Prince Edward Island....