diversification
What is diversification?
Diversification involves the planned distribution of investments across various securities to minimize the risk exposure to a specific industry or geographic segment. However, the risk of over-diversification exists, in which an investor can at best expect to mirror the market returns, minus any brokerage fees or management expenses.
What is diversification?
Every Thursday we bring you one of our best U.S. stock picks. You get our specific recommendation on the stocks we profile, with a full explanation of how we arrived at our opinion. You will read about stocks making moves you should know about, most often from coverage in our newsletter on U.S. investing, Wall Street Stock Forecaster.
Newell uses oil to make its products, so it stands to gain from the almost 60% drop in crude prices since June 2014. And even when oil rebounds, it will continue to benefit from recent acquisitions and its high market share.
NEWELL RUBBERMAID INC. (New York symbol NWL; www.newellrubbermaid.com) makes plastic storage bins, tools, window blinds, pens and many other household goods.
The company makes most of its products from oil-based resins, so it stands to gain from the recent drop in oil prices.
Newell continues to streamline its manufacturing and distribution operations, which should cut $270 million from its annual costs by mid-2015. The company now feels it can save an additional $200 million a year by the end of 2017.
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Newell uses oil to make its products, so it stands to gain from the almost 60% drop in crude prices since June 2014. And even when oil rebounds, it will continue to benefit from recent acquisitions and its high market share.
NEWELL RUBBERMAID INC. (New York symbol NWL; www.newellrubbermaid.com) makes plastic storage bins, tools, window blinds, pens and many other household goods.
The company makes most of its products from oil-based resins, so it stands to gain from the recent drop in oil prices.
Newell continues to streamline its manufacturing and distribution operations, which should cut $270 million from its annual costs by mid-2015. The company now feels it can save an additional $200 million a year by the end of 2017.
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Every Thursday we bring you one of our best U.S. stock picks. You get our specific recommendation on the stocks we profile, with a full explanation of how we arrived at our opinion. You will read about stocks making moves you should know about, most often from coverage in our newsletter on U.S. investing, Wall Street Stock Forecaster.
C.R. BARD INC. (New York symbol BCR; www.crbard.com) makes over 15,000 medical devices in four main areas: oncology products that detect and treat various types of cancer (28% of 2013 sales); vascular products, like stents and catheters (27%); urology goods, such as drainage and incontinence devices (26%); and surgical tools (16%). Other medical products supply the remaining 3%.
The company’s products are typically only used once, so customers must continually buy new ones.
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C.R. BARD INC. (New York symbol BCR; www.crbard.com) makes over 15,000 medical devices in four main areas: oncology products that detect and treat various types of cancer (28% of 2013 sales); vascular products, like stents and catheters (27%); urology goods, such as drainage and incontinence devices (26%); and surgical tools (16%). Other medical products supply the remaining 3%.
The company’s products are typically only used once, so customers must continually buy new ones.
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Every Thursday we bring you one of our best U.S. stock picks. You get our specific recommendation on the stocks we profile, with a full explanation of how we arrived at our opinion. You will read about stocks making moves you should know about, most often from coverage in our newsletter on U.S. investing, Wall Street Stock Forecaster.
GENERAL ELECTRIC CO. (New York symbol GE; www.ge.com) recently agreed to form a major new alliance with France’s Alstom SA, a leading maker of electrical-transmission equipment and parts for power plants.
Under the deal, GE will form three 50/50 joint ventures with Alstom. One will combine the companies’ electrical grid operations, while a second will focus on products for renewable energy projects, like offshore wind farms. The third will hold Alstom’s nuclear-equipment division.
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GENERAL ELECTRIC CO. (New York symbol GE; www.ge.com) recently agreed to form a major new alliance with France’s Alstom SA, a leading maker of electrical-transmission equipment and parts for power plants.
Under the deal, GE will form three 50/50 joint ventures with Alstom. One will combine the companies’ electrical grid operations, while a second will focus on products for renewable energy projects, like offshore wind farms. The third will hold Alstom’s nuclear-equipment division.
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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. 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: “To get the maximum reward from rising stocks, it’s essential to pick stocks with clear growth prospects and not simply momentum stocks with uncertain futures.”
By definition, growth stocks are companies that have above-average growth prospects. They are firms whose earnings growth has been above the market average, and is likely to remain above average. It is often the case that they pay small dividends or none at all. Instead, they re-invest their cash flow in the business, to promote their growth.
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Today’s tip: “To get the maximum reward from rising stocks, it’s essential to pick stocks with clear growth prospects and not simply momentum stocks with uncertain futures.”
By definition, growth stocks are companies that have above-average growth prospects. They are firms whose earnings growth has been above the market average, and is likely to remain above average. It is often the case that they pay small dividends or none at all. Instead, they re-invest their cash flow in the business, to promote their growth.
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ISHARES MSCI EMERGING MARKETS INDEX FUND $40.89 (New York symbol EEM; buy or sell through brokers) aims to track the MSCI Emerging Markets Index.
Its geographic breakdown includes China, 19.9%; South Korea, 14.1%; Taiwan, 12.1%; Brazil, 9.8%; South Africa, 8.0%; India, 7.1%; Mexico, 5.2%; Russia, 4.3%; Malaysia, 3.7%; Indonesia, 2.6%; Thailand, 2.5%; and Turkey, 1.8%.
The fund’s top holdings are Samsung Electronics (South Korea), 2.9%; Taiwan Semiconductor (computer chips), 2.8%; Tencent Holdings (China: Internet), 2.1%; China Mobile, 1.9%; Naspers (South Africa: media and Internet), 1.3%; China Construction Bank, 1.3%; Industrial & Commercial Bank of China, 1.2%; Itau Unibanco Holding (Brazil: banking), 1.1%; and America Movil (Mexico: wireless).
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Its geographic breakdown includes China, 19.9%; South Korea, 14.1%; Taiwan, 12.1%; Brazil, 9.8%; South Africa, 8.0%; India, 7.1%; Mexico, 5.2%; Russia, 4.3%; Malaysia, 3.7%; Indonesia, 2.6%; Thailand, 2.5%; and Turkey, 1.8%.
The fund’s top holdings are Samsung Electronics (South Korea), 2.9%; Taiwan Semiconductor (computer chips), 2.8%; Tencent Holdings (China: Internet), 2.1%; China Mobile, 1.9%; Naspers (South Africa: media and Internet), 1.3%; China Construction Bank, 1.3%; Industrial & Commercial Bank of China, 1.2%; Itau Unibanco Holding (Brazil: banking), 1.1%; and America Movil (Mexico: wireless).
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We think conservative investors could hold up to 10% of their portfolios in foreign stocks. One way to do that is to buy carefully chosen exchange traded funds (ETFs) that have an overseas focus. The best ETFs offer very low management fees and well-diversified, tax-efficient portfolios of high quality stocks. Here’s a look at six global ETFs:...
Every Thursday we bring you one of our best U.S. stock picks. You get our specific recommendation on the stocks we profile, with a full explanation of how we arrived at our opinion. You will read about stocks making moves you should know about, most often from coverage in our newsletter on U.S. investing, Wall Street Stock Forecaster.
VISA INC. (New York symbol V; www.visa.com) operates the world’s largest electronic payments network, through which it processes credit, debit, prepaid and commercial transactions.
Visa gets most of its revenue from fees it charges the card issuers and merchants that use its network. It bases these fees on transaction volumes and other factors. The banks that issue the cards are responsible for evaluating customer creditworthiness and collecting payments, not Visa.
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VISA INC. (New York symbol V; www.visa.com) operates the world’s largest electronic payments network, through which it processes credit, debit, prepaid and commercial transactions.
Visa gets most of its revenue from fees it charges the card issuers and merchants that use its network. It bases these fees on transaction volumes and other factors. The banks that issue the cards are responsible for evaluating customer creditworthiness and collecting payments, not Visa.
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CANADIAN REIT $49.40 (Toronto symbol REF.UN; Units outstanding: 69.3 million; Market cap: $3.4 billion; TSINetwork Rating: Extra Risk; Dividend yield: 3.5%; www.creit.ca) owns 198 properties, including retail, industrial and office buildings, across Canada and in Chicago. These holdings contain almost 24.1 million square feet of leasable area. The trust’s occupancy rate is 95.3%.
In the three months ended June 30, 2014, Canadian REIT’s revenue rose 3.5%, to $102.0 million from $98.6 million a year earlier. Cash flow per unit gained 4.2%, to $0.74 from $0.71.
Canadian REIT added $191.1 million worth of new buildings in 2013. That followed $401.9 million of property purchases in 2012, including a 50% stake in Calgary Place, a 575,000-square-foot office and retail complex, for $156.0 million. So far this year, it has made one acquisition: a 261,000-square-foot industrial property near Toronto’s Pearson International Airport for $29.3 million.
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In the three months ended June 30, 2014, Canadian REIT’s revenue rose 3.5%, to $102.0 million from $98.6 million a year earlier. Cash flow per unit gained 4.2%, to $0.74 from $0.71.
Canadian REIT added $191.1 million worth of new buildings in 2013. That followed $401.9 million of property purchases in 2012, including a 50% stake in Calgary Place, a 575,000-square-foot office and retail complex, for $156.0 million. So far this year, it has made one acquisition: a 261,000-square-foot industrial property near Toronto’s Pearson International Airport for $29.3 million.
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ALLIED PROPERTIES REAL ESTATE INVESTMENT TRUST $35.46 (Toronto symbol AP.UN; Units outstanding: 74.6 million; Market cap: $2.7 billion; TSINetwork Rating: Extra Risk; Dividend yield: 4.0%; www.alliedreit.com) owns 138 office buildings, mostly in major Canadian cities. These mainly Class I properties contain over 9.9 million square feet of leasable area. Class I refers to 19th- and early-20th-century light industrial buildings that have been converted to retail space. They usually feature exposed beams, interior brick and hardwood floors. Allied bought $400 million of properties in 2012 and $182.4 million worth in 2013. In the first half of 2014, it added six more for $110.0 million....
Every Thursday we bring you “Best U.S. Stocks.” You get our specific recommendation on the stocks we profile, with a full explanation of how we arrived at our opinion. You will read about stocks making moves you should know about, from coverage in our newsletter on U.S. investing, Wall Street Stock Forecaster.
Tennant has risen steadily over the past few years. But even though it fell back slightly during the recent market slump, the outlook remains very positive for its environmentally friendly products.
TENNANT CO. (New York symbol TNC; www.tennantco.com) makes industrial floor-cleaning equipment, including scrubbers, sweepers and polishers. It also manufactures cleaning gear for garages, stadiums, parking lots and city streets.
In 2008, the company started selling equipment featuring its ec-H20 technology, which uses electricity to turn tap water into a chemical-free cleaning solution. This helps cut the machine’s operating costs.
Strong demand for this equipment increased the company’s sales by 9.4% in the three months ended June 30, 2014, to a record $219.1 million from $200.2 million a year earlier. Sales of ec-H2O gear rose 7.6% and account for about 20% of Tennant’s overall revenue.
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Tennant has risen steadily over the past few years. But even though it fell back slightly during the recent market slump, the outlook remains very positive for its environmentally friendly products.
TENNANT CO. (New York symbol TNC; www.tennantco.com) makes industrial floor-cleaning equipment, including scrubbers, sweepers and polishers. It also manufactures cleaning gear for garages, stadiums, parking lots and city streets.
In 2008, the company started selling equipment featuring its ec-H20 technology, which uses electricity to turn tap water into a chemical-free cleaning solution. This helps cut the machine’s operating costs.
Strong demand for this equipment increased the company’s sales by 9.4% in the three months ended June 30, 2014, to a record $219.1 million from $200.2 million a year earlier. Sales of ec-H2O gear rose 7.6% and account for about 20% of Tennant’s overall revenue.
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