buy stocks

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 stock market advice that will help you develop a successful approach to 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: “If you rely on one or two simple rules to cut your risk when you pick stocks, you may simply cut your profits.” Investors are always looking for simple ways to avoid risk in their investments. They want a rule that is easy to follow, foolproof, and compact enough to fit on a T-shirt....

Every Wednesday, we publish our “Investor Toolkit” series on TSI Network. Whether you’re a beginning or experienced investor, these weekly updates are designed to give you advice on specific investment advice. Each Investor Toolkit update gives you a fundamental piece of investing strategy, and shows you how you can put it into practice right away. Today’s tip: “Value investing’s good reputation owes a great deal to Warren Buffett, but he and other successful investors owe their success to much more than just one relatively narrow approach to the market.” In last week’s Investor Toolkit, I pointed out that learning what not to do can be the hardest and costliest part of an investor’s education (see the Toolkit here). I focused on how this applies to technical analysis—the practice of trying to base investment decisions on past trading and market history. This week I want to expand on what I said, since the idea applies to a wide range of narrow approaches to investing....

Pat McKeough responds to many requests from members of his Inner Circle for specific advice on buying stocks as well as questions on investment strategy and the economy. Every week, his comments and recommendations on the most intriguing questions of the past week go out to all Inner Circle members. And each week, we offer you one of the highlights from these Q&A sessions. While we reserve our buy-hold-sell advice for Inner Circle members, these excerpts provide a great deal of information and analysis on stocks we’ve covered for members of Pat’s Inner Circle. Recently an Inner Circle member asked us about a Canadian stock that is tapping into the economic growth of Western Canada. WesternOne operates through a series of smaller acquisitions that build up its business in construction heating, aerial equipment and modular buildings. Pat looks at the company’s expanding business and the potential risks and rewards of its growth-by-acquisition strategy in a very competitive market. Q: Pat, could you give me your opinion on WesternOne, please?...

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 advice on the stock market and other investment topics that will help you develop a successful approach to 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: “In theory, there is nothing wrong with hedge funds, but in practice it’s much more difficult to make money shorting bad stocks than it is buying good ones.”...

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 investment advice that will help you develop a successful approach to 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: “While many numbers and statistics frequently prove to be of limited value in judging stocks, there is one that is often undervalued: market cap.”...

Trying to buy a stock you like at a lower price can actually expose you to unnecessary risk. For a number of investors, there are two steps to buying a stock.

Many successful investors find that technical analysis or chart reading can be a help in making investment decisions. However, these investors understand that technical analysis only works as an aid to investing—not a standalone guide. Unsuccessful investors often make the mistake of relying on technical analysis alone. This, though, can pay off for short periods. It can lead you to make a series of successful trades (although these trades may only generate modest gains). When technical analysis fails you, however, the cost can be catastrophic. It can lead you to sell or go short in stocks that are about to reverse a falling pattern and shoot up. It can lead you to buy stocks with a rising pattern that are about to reverse course and collapse....

One of the more reassuring aspects of the rise now underway in the stock market is that the strength is concentrated in well-established companies. Investors are bidding up the prices of stocks with a history of sales and earnings, if not dividends. Speculative areas like penny stocks, new issues, junior techs and so on appear to be out of investor fashion. This contrasts sharply with, say, the income-trust boom of the mid-2000s. Back then, investors were plunging into new issue income trusts, many of which were of low investment quality. Today’s situation contrasts even more with the Internet stock mania of the late 1990s. Many of the new issue Internet stocks back then were little more than stock promotions. Chasing after low-quality investments like these becomes common when inexperienced investors enter the market. These newcomers lack the healthy sense of skepticism that you need to succeed as an investor. So they naturally zero in on the least desirable stocks on the market. Almost by definition, these are extremely risky and/or overpriced stocks that seem to offer high rewards with little risk. They generally deliver precisely the opposite....

A year ago, Pat McKeough was asked to contribute his “best financial tip” to the Blog for Financial Literacy. It proved to be one of our most popular daily posts of 2012. Thanksgiving Monday seems like a good time to re-visit this essential piece of investment advice from Pat. “My Best Financial Tip” is to take a sound fundamental approach to investing in stocks. That’s especially true at a time like today when interest rates are near historic lows and bonds and other fixed income investments offer sparse returns....

Last week I pointed out that learning what not to do can be the hardest and costliest part of an investor’s education. In that issue, I focused on how this applies to technical analysis—the practice of trying to base investment decisions on past trading and market history. This week I want to expand on what I said, since the idea applies to a wide range of narrow approaches to investing. To succeed as an investor, you have to take a broad view in making investment decisions. Technical analysis and other narrow views do sometimes seem to “work” for lengthy periods, of course. But they only work for a minority of the time, and they never work consistently. Instead, they run hot and cold. As with all random events, their successes occur in bunches. These bunches of successes come in random lengths, with random beginning and end points. It’s easy to see how this applies with technical analysis, which has an arcane air about it. But the same principle works for something as straightforward and commonsensical as, say, value investing....