high quality stocks

ISHARES MSCI BRAZIL INDEX FUND $50.15 (New York Exchange symbol EWZ; buy or sell through brokers) is an exchange traded fund that is designed to track the Brazilian stock market. The fund’s top holdings are Petrobras (oil and gas), 12.7%; Vale do Rio Doce (mining), 8.4%; Cia Itau Unibanco Holding (banking), 7.4%; Banco Brandesco (banking) preferred, 6.5%; Cia de Bebidas das Americas (beer and beverages), 5.5%; and BRF SA (food), 3.6%.

The ETF was launched on July 10, 2000. It has an expense ratio of 0.60%.

The fund’s focus on the resource sector and its concentration in certain stocks, such as Petrobras and Vale do Rio Doce, add risk. However, both are high-quality stocks.
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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 are two international ETFs that we follow regularly. ISHARES MSCI CHILE INVESTABLE MARKET INDEX FUND (New York Exchange symbol ECH; us.ishares.com; buy or sell through brokers) is an ETF that aims to track the MSCI Chile Investable Market Index, which consists of stocks that are mainly traded on the Santiago Stock Exchange....

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 are six international ETFs we like:

ISHARES MSCI JAPAN INDEX FUND $10.60 (New York Exchange symbol EWJ; buy or sell through brokers; us.ishares.com) is an exchange traded fund that tries to match the return of the Morgan Stanley Capital International (MSCI) Japan index.

The ETF’s top holdings include Toyota, 6.6%; Mitsubishi UFJ Financial, 3.0%; Honda Motor, 2.5%; Sumitomo Mitsui Financial, 2.1%; Softbank Corp., 1.9%; Mizuho Financial Group, 1.8%; Canon, 1.6%; Japan Tobacco, 1.5%; Takeda Pharmaceutical, 1.4%; and Hitachi, 1.3%.

The fund’s industry breakdown is as follows: Consumer Discretionary, 21.8%; Financials, 20.1%; Industrials, 18.9%; Information Technology, 10.7%; Consumer Staples, 6.5%; Health Care, 6.2%; Materials, 6.2%; Telecommunication Services, 4.7%; Utilities, 3.1%; and Energy, 1.3%.

iShares MSCI Japan Index Fund was launched on March 12, 1996....

Rising production of shale gas continues to depress prices. However, new projects would let producers ship more of their surplus gas overseas, where prices can be two or more times higher than in North America. As well, many utilities are converting their plants to burn gas instead of coal....

If you lost interest in the market last year and haven’t paid much attention to it since, you might think of today as a “pinch-me” moment—in other words, “Am I dreaming?” A lot of investors are in that position. In the past year or two, many have come to take it for granted that stock prices face years of stagnation or decline. This was quite different from our view—almost the opposite. The stock market hit bottom in 2009. Since then, we have felt the long-term outlook was for rising prices. In the meantime, stocks were providing dividend yields that beat bank or bond interest. Stocks presented an attractive buying opportunity, even if they often moved erratically in the past few years....

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. ISHARES MSCI SOUTH KOREA INDEX FUND (New York Exchange symbol EWY; buy or sell) is an exchange traded fund that aims to track the MSCI Korea Index....

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 are six international ETFs we like:

ISHARES MSCI JAPAN INDEX FUND $10.17 (New York Exchange symbol EWJ; buy or sell through brokers; us.ishares.com) is an exchange traded fund that tries to match the return of the Morgan Stanley Capital International (MSCI) Japan index.

The ETF’s top holdings include Toyota, 6.1%; Mitsubishi UFJ Financial, 3.1%; Honda Motor, 2.7%; Sumitomo Mitsui Financial, 2.4%; Mizuho Financial Group, 2.2%; Canon, 1.8%; Takeda Pharmaceutical, 1.8%; Softbank Corp., 1.5%; Fanuc Corp., 1.3%; and Japan Tobacco Inc., 1.2%.

The fund’s industry breakdown is as follows: Consumer Discretionary, 20.7%; Financials, 20.1%; Industrials, 20.0%; Information Technology, 10.8%; Health Care, 6.9%; Materials, 6.6%; Consumer Staples, 6.3%; Telecommunication Services, 4.4%; Utilities, 2.6%; and Energy, 1.6%.

iShares MSCI Japan Index Fund was launched on March 12, 1996....

ISHARES MSCI BRAZIL INDEX FUND $55.03 (New York Exchange symbol EWZ; buy or sell through brokers) is an exchange traded fund that is designed to track the Brazilian stock market. The fund’s top holdings are Cia Itau Unibanco Holding (banking), 8.1%; Vale do Rio Doce (mining) preferred, 7.2%; Petrobras common, 7.2%; Banco Brandesco (banking) preferred, 6.7%; Cia de Bebidas das Americas (beer and beverages), 6.7%; and Vale SA, 3.8%.

The fund’s focus on the resource sector and its concentration in certain stocks, such as Petrobras and Vale do Rio Doce, add risk. However, both are high-quality stocks.

Brazil’s economy is forecast to grow at a rate of 3.1% this year. Domestic consumption is recovering, although exports remain slow. Growth could be as high as 3.7% next year.

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Deciding when to sell is the trickiest part of investing. Our genes program us to run from danger, and every day the media brings new reasons to sell. But if you sell too often or too quickly, you’ll sell a lot of your best choices way too early, and you’ll never make any serious profits. You can find numerous rules of thumb that aim to tell you when to sell. Most are based on chart-reading or technical analysis. All work at times, but none work consistently. When they fail, the profits you miss out on are likely to overwhelm any risk they help you avoid. Our rule is that you can cut way down on times when you really need to sell by consistently buying well-established, high-quality stocks. These stocks can still drop sharply when the economy falters or bad news strikes, of course. But these are the stocks that snap back quickest and most reliably when the trend reverses and bad news comes less often. That’s why it generally pays to hold on to stocks like these through market setbacks. But you need to look at each case on its own, since there are exceptions....

In our first Inner Circle question of the week (see below), a member asks if Torstar is a “screaming buy” or a “value trap”. I don’t think either label fits. You might say the meaning of “screaming buy” is different for every investor. Some use it when they think a stock is virtually certain to go way up in a hurry when the stock market comes to its senses. A stock may seem like a screaming buy to some investors if it has gone up a great deal on good news, and the good news seems likely to continue. It may also seem like a screaming buy if it has dropped a great deal, and the drop seems out of proportion to whatever bad news seems to have caused the drop. Successful investors use the term “screaming buy” rarely—every few years, if that. That’s because they’ve learned from experience that in the stock market, things are never certain. That’s why we always advise you to build a balanced, diversified portfolio of high-quality stocks. (That’s why we advise against investing heavily in our #1 Stock of the Year selections, for that matter.)...