high quality stocks

Two international ETFs offers low MERs and exposure to strong foreign markets through tax-efficient, high-quality portfolios.

We feel that investors will profit the most by holding a well-balanced portfolio of high-quality stocks. However, if you don’t want to build a portfolio, or you want to supplement your individual stock holdings, then ETFs can provide a great alternative. The main factors we use to evaluate ETFs are the stocks they hold, the diversification of their holdings across the five economic sectors and the fees (MERs) they charge. In general, investors holding mainly ETFs would want, say, 60% in Canadian ETFs and 20% to 30% in U.S. ETFs....

I recently exchanged investment ideas with an acquaintance who has worked in the investment business for the past several decades. After I explained how we choose stocks to recommend and how we manage client portfolios, he said, “I completely agree! I diversify for each one of my clients. My view is that if you buy a bunch of different stocks, one of them is bound to pop.” Many investors would no doubt agree. However, it takes more to succeed in diversifying your portfolio. If you just buy a bunch of different stocks, you may wind up with a grab bag of duds. But even if you stick with high-quality stocks, you may find that many of them respond to or are vulnerable to one particular type of risk. If this one factor moves against you, your entire portfolio can suffer....

The lower Canadian dollar has made it more expensive to buy U.S. stocks. However, the American market gives you access to the world’s leading companies. What’s more, U.S. dollar investments give you foreign currency diversification. We feel it’s more important than ever to build a varied portfolio of high-quality stocks. For 2016, we’ve chosen one from each of our portfolios (Aggressive, Conservative and Income). We think all three could post strong gains in the next two to five years. ALPHABET INC. (Nasdaq symbols GOOG $700 [class C: nonvoting] and GOOGL $718 [class A: one vote per share]; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 687.7 million; Market cap: $493.5 billion; Priceto- sales ratio: 7.0; No dividends paid; TSINetwork Rating: Above Average; www.abc.xyz) is the new parent company of Google’s Internet search business (still called Google) and other operations. Each of these subsidiaries functions independently....

The lower Canadian dollar has made it more expensive to buy U.S. stocks. However, the American market gives you access to the world’s leading companies. What’s more, U.S. dollar investments give you foreign currency diversification.

We feel it’s more important than ever to build a varied portfolio of high-quality stocks....

When the market is as volatile as it is today, it pays to keep the mechanics of successful investing in mind. For newcomers to our Inner Circle, let me start with a short explanation of our three-part Successful Investor approach to portfolio building: 1.Invest mainly in well-established, dividend-paying companies. Ideally, some of your picks should have hidden assets—that is, assets that many investors disregard or fail to appreciate....

PLEASE NOTE: One week from today, on January 29, 2016, shortly after the stock market closes at 4:00 p.m. Toronto time, we will reveal our top U.S. stocks for 2016 to subscribers of Wall Street Stock Forecaster.

You can be among the first to hear about our top picks for 2016....

We’re still positive on the long-term outlook for stocks. But in a time of rising market volatility, plunging commodity prices and international tension, it’s more important than ever to diversify, rather than focus on a single pick of the year. Moreover, we find lots of attractive long-term buys among the stocks we cover.

With that in mind, we’ve chosen to highlight three picks from our Stock Pickers Digest recommendations....

We’re still positive on the long-term outlook for stocks. But in a time of rising market volatility, plunging commodity prices and international tension, it’s more important than ever to diversify, rather than focus on a single stock of the year. Moreover, we find lots of attractive long-term buys among stocks we cover. With that in mind, we’ve chosen to highlight one pick from each of our portfolios (Conservative, Aggressive and Income) for 2016. All three of these high-quality stocks offer strong growth prospects and trade at reasonable multiples to earnings. CAE INC. $15 (Toronto symbol CAE; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 269.2 million; Market cap: $4.0 billion; Price-to-sales ratio: 1.8; Dividend yield: 2.0%; TSINetwork Rating: Average; www.cae.com) is the world’s leading maker of flight simulators, which help teach airline and military pilots how to take off, land and handle a variety of emergency situations....

Stock market cycles occur repeatedly—and there are any number of theories as to which sectors will outperform at any given short term stage of the cycle....