high quality stocks

Right now, lots of long-time holders of Canadian Pacific and Canadian Tire are developing what’s known as an “itchy trigger finger”. They are thinking of selling these two long-time mainstays of the Canadian stock market simply because they have been particularly strong performers in the past few years.

This impulse rarely pays off.

When you follow the stock market for a few years, it’s easy to assume a certain consistency that just isn’t there. You may get the idea that a particular stock is a slow-moving dog that will stagnate forever, or that another is a sure-fire growth stock that has decades of growth ahead.

If these stocks depart from the category you have assigned them to, it’s natural to assume the changes are temporary and things will eventually “go back to normal”. So, for instance, if a long-time income stock you own suddenly begins moving up and doubles in price over, say, three years, you may decide to sell all or part of it now, in hopes of buying it back “on a dip”, as investors say. Or, you may want to go on to something new that has not yet had a substantial rise.

The problem is that you are basing a sale decision mainly on a change in the price. But the price change almost certainly reflects other, more fundamental factors. If you only look at the price, you ignore the fundamentals.

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ISHARES MSCI CHILE INVESTABLE MARKET INDEX FUND $44.50 (New York Exchange symbol ECH; buy or sell through brokers) is an ETF that aims to track the MSCI Chile Investable Market Index, which consists of stocks that mainly trade on the Santiago Stock Exchange.

The fund’s top holdings are S.A.C.I. Falabella (retail), 9.6%; Enersis SA (electricity), 9.2%; Empresas Copec SA (conglomerate), 7.9%; Empresa Nacional de Electricidad (electricity), 6.7%; LATAM Airlines, 5.5%; Cencosud SA (retailer), 4.9%; Empresas CMPC (pulp and paper), 4.8%; Banco de Chile, 4.6%; Banco Santander Chile (banking), 4.5%; and Quimica y Minera de Chile (mining), 4.1%.

The fund’s industry breakdown is: Utilities, 25.1%; Financials, 17.8%; Consumer Discretionary, 13.2%; Materials, 12.9%; Consumer Staples, 10.0%; Industrials, 8.1%; Energy, 7.8%; Telecommunications, 2.4%; and Information Technology, 1.9%.

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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 highquality stocks. Here’s a look at six global ETFs:...

Switching to a discount broker makes sense for many investors. It’s sure to cut your per-trade commission costs. But high per-trade brokerage commissions are rarely if ever the sole reason for poor investment results. If you are unhappy with your results, you should check to see if you are making one or more of these four main investing mistakes:

1. Buying and selling too often
2. Buying too many low-quality investments
3. Failing to diversify, or
4. Buying too many stocks in the broker/media limelight.

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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 topics. 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: “Selling half of hot stocks that surge helps you guard your profits. But apply this rule only to more aggressive stocks, and not to the well-established stocks that may surprise you by going a lot higher in the long run.” As you probably know, our Successful Investor business model has two parts. We publish investment advice through The Successful Investor Inc., and we manage investor portfolios through Successful Investor Wealth Management Inc. (These two companies are affiliated by common ownership; I own both but set them up as separate companies for regulatory purposes.)...

ISHARES MSCI BRAZIL INDEX FUND $47.04 (New York Exchange symbol EWZ; buy or sell through brokers) is an ETF that is designed to track the Brazilian stock market.

Its top holdings are Petrobras (oil and gas), 10.3%; Cia Itau Unibanco Holding (banking), 8.7%; Vale do Rio Doce (mining), 8.1%; Cia de Bebidas das Americas (beer and beverages), 7.6%; Banco Brandesco, 6.4%; and BRF SA (food), 3.5%.

The ETF was launched on July 10, 2000. It has an expense ratio of 0.62%.

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We think most 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. Today we examine two international ETFs covered regularly in Canadian Wealth Advisor....

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 a look at six global ETFs:...

The Dow Jones Industrial Average dropped nearly 600 points in a little over a week. Speculative stocks such as Facebook are down around 20% from their peaks of the previous month. Meanwhile, Russia is concentrating its troops on Ukraine’s eastern border, and Ukrainian troops clashed with pro-Russian protesters who have occupied government buildings in the eastern part of the country. Meanwhile, China says it is restructuring its economy, and this is likely to cut its rate of economic growth. It has allowed its yuan to creep downward in foreign exchange markets in the past year, which will make its exports cheaper in world markets. In response, the European Central Bank has hinted that it may act to weaken the euro, to remain competitive. Many investors wonder what, if anything, they should do with their investments in response to any or all of these news items. The answer depends on what investments you already hold....

Here’s the text of the quarterly letter I recently sent to our Portfolio Management clients: “Many investors today feel uneasy about the future value of the U.S. dollar. The dollar is the key to the world monetary system. But its value is at the mercy of U.S. politicians, who can spend as many U.S. dollars as they wish. If they spend more than they collect in taxes, the U.S. can simply borrow or print the difference. It has been this way since President Nixon cut the link between gold and the dollar in the early 1970s. However, the vast U.S. budget deficits since 2008 have frayed investor nerves....