dow

BMO Equal Weight U.S. Health Care Hedged to CAD Index ETF, $22.62, symbol ZUH on Toronto (Units outstanding: 615,000; Market cap: $13.9 million; www.etfs.bmo.com), holds 48 U.S. health care stocks. Its top holdings are Boston Scientific at 2.7%; Life Technologies, 2.6%; Calgene Corp., 2.5%; Cigna, 2.5%; Aetna, 2.5%; Thermo Fisher Scientific, 2.5%; Allergan, 2.4%; Gilead Sciences, 2.4%; DaVita HealthCare, 2.4%; and Mylan Inc., 2.4%. BMO Equal Weight U.S. Health Care Hedged to CAD Index ETF is hedged against movements of the U.S. dollar against the Canadian dollar. Its value rises and falls solely with the stocks in its portfolio. So it would not give you U.S. dollar exposure....

Most stock markets have risen lately. But as always, they remain subject to unexpected downturns. Even so, we feel the long-term outlook is for higher stock prices. One way to profit from rising markets is to add exchange traded funds (ETFs) that track major stock indexes to your portfolio. ETFs trade on stock exchanges, just like stocks. Prices are quoted in newspaper stock tables and online. You must pay brokerage commissions to buy and sell ETFs, but their low management fees still give them a cost advantage over most mutual funds....

Most stock markets have risen lately. But as always, they remain subject to unexpected downturns. Even so, the long-term outlook is for higher stock prices.

One way to profit from rising markets is to add exchange traded funds (ETFs) that track major stock indexes to your portfolio.

ETFs trade on stock exchanges, just like stocks....

This is a good time for me to say “Thanks!” to all my Inner Circle members. It’s a pleasure to receive the many compliments and expressions of gratitude you send with your questions. That’s especially true when I recognize a member’s name from decades ago, whether from the early days after the 1994 startup of The Successful Investor, or from the two previous decades that I spent at The Investment Reporter. It’s also great to see that our Successful Investor philosophy and practice seem to strike a chord with many younger investors. I wish you all a great year-end holiday and a healthy, happy and prosperous New Year. +++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++...

Corning Inc., $11.35, symbol GLW on New York (Shares outstanding: 1.5 billion; Market cap: $17.0 billion; www.corning.com), started making glass products in 1851. The company has a long history of innovation, including making glass bulbs for Thomas Edison’s first electric lights in 1879. In 1947, Corning became the first company to mass produce cathode-ray tubes for TV sets. Today, the company makes advanced materials for a wide range of products at 80 plants in 13 countries. It gets about 60% of its sales from Asia. Corning has five divisions:...

In this space last week, I said the Dow Jones Industrial Average could fall another 1,000 points, beyond the 300 points it had already dropped in response to President Obama’s re-election. The next day, it dropped 120 points more. Since then it has flattened out. Note that this wasn’t a prediction. I was setting a limit on how far I felt the market could drop. However, although the market has gone sideways for the past three days, the “fiscal cliff” deadline is the end of the year. (This newly coined term refers to the higher taxes and federal spending cuts that are set to go into force automatically, if the U.S. fails to take action on its federal spending deficit and debt.) The two U.S. political parties have until then to bluster and posture and generally demonstrate to their supporters (particularly their donors) how they are defending their interests. This could make for some scary moments for short-term traders who pay close attention to every 100-point lunge in the Dow. I think now would be a bad time to sell. Investors on the whole are already highly pessimistic, because they don’t like the Obama approach to taxes and business, they are worried about Europe’s debt problems, they think slow economic growth will stifle corporate profits, and so on. However, these problems are old news; investors have had plenty of time to adjust to them. More important, stock prices are attractive right now on an historical basis—that is, in relation to earnings. They are even cheaper in light of today’s low interest rates. Note that with Obama re-elected, interest rates are likely to stay low at least until 2015....

It appears investors weren’t especially happy with the results of Tuesday’s U.S. presidential election, judging by the 300-point drop in the Dow Industrials on Wednesday morning. However, we could have done a lot worse. The worst possible election outcome would have been a failure to produce a clear winner, leaving it up to the courts to say who won. That could have vastly heightened the level of divisiveness that occurred during the campaign, possibly even leading to civil unrest. This would have sent today’s high level of uncertainty through the roof. It might have stopped the two political parties from sidestepping the “fiscal cliff” (see below). It might have sparked a crisis to rival the 2008 failure of Lehman Brothers. Right now, the main negative we see for the North American economy and stock market is the high level of uncertainty among business people, which is leading to high uncertainty among investors....

SPDR DOW JONES INDUSTRIAL AVERAGE ETF $134.68 (New York symbol DIA; buy or sell through brokers; www.spdrs.com) holds the 30 stocks that make up the Dow Jones Industrial Average.

The fund’s top holdings are IBM, ExxonMobil, Chevron Corp., 3M, Wal-Mart Stores, McDonald’s Corp., Procter & Gamble, Caterpillar Inc., United Technologies and Boeing. The fund’s expenses are about 0.18% of its assets.

SPDR Dow Jones ETF is a buy.

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ISHARES DOW JONES CANADA SELECT DIVIDEND INDEX FUND $20.77 (Toronto symbol XDV; buy or sell through brokers; ca.ishares.com) holds 30 of the highest-yielding Canadian stocks. Its selections are based on dividend growth, yield and payout ratio. The weight of any one stock is limited to 10% of its assets. The fund’s MER is 0.50%. It yields 4.6%.

The fund’s top holdings are CIBC, 7.1%; National Bank, 5.8%; TD Bank, 5.6%; Bank of Montreal, 5.3%; Bonterra Energy, 4.8%; Royal Bank, 4.6%; Telus Corp., 4.6%; Bank of Nova Scotia, 4.3%; BCE Inc., 4.1%; and AG Growth International, 4.0%.

The fund holds 54.4% of its assets in financial stocks. Utilities are next, at 21.2%. The top Canadian finance stocks have sound prospects. However, if you invest in this ETF, be sure to adjust the rest of your portfolio so it won’t be overly concentrated in the financial sector.

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From time to time, companies set up one or more of their divisions or subsidiaries as an independent company, then hand out shares in that company to their own shareholders, as a special dividend or “spinoff”. Many investors seem to view spinoffs as a nuisance, because they leave you with a tiny holding in a stock you didn’t choose and that you know little about. They may dump them as soon as they get a chance. On the other hand, a number of studies have shown that after an initial adjustment period of a few months, spinoffs tend to outperform groups of comparable stocks for several years....