high quality stocks

If you’re looking for stock-market bargains, December is the best time of year to find them. Here’s why: Investors love to sell stocks for a profit, but they hate to sell at a loss. That’s why many investors spread their selling-for-a-profit throughout the year, while holding on to stocks that have dropped. Toward year-end, it occurs to these investors that they’ll have to pay taxes on their capital gains, regardless of whether they made money overall. This leads some investors to dump their losers near year-end, simply to establish a capital loss for tax purposes, to offset a capital gain....

The quality of exchange-traded funds (ETFs) varies widely. All too many exist to tap into popular, but risky, themes and fads. So you need to be highly selective with your ETF holdings. ETFs offer very low management fees. In addition, the best ETFs offer well-diversified, tax-efficient portfolios of high-quality stocks. Here are five foreign ETFs we like:...

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 a specific advice on successful investing, including tips on portfolio management. Each Investor Toolkit update gives you a fundamental tip and shows you how you can put it into practice right away....

These days, many investors who are approaching retirement worry that their retirement planning won’t generate enough income once they’ve stopped working. (Our Successful Investor Wealth Management clients’ retirement planning goals are always one of our top considerations when we manage their portfolios. Click here to learn more about how you can profit from our portfolio management services.) ...

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 advice on successful investing. Each Investor Toolkit update gives you a fundamental tip and shows you how you can put it into practice right away. Today’s tip: “Selling your stock market picks costs money, and that’s why successful investors do it as little as possible.” Investors often ask, “When should I sell my stocks? If I sell now, I’ll nail down big profits. But I’ll have to pay heavy capital gains taxes.”...

The investment industry has created all sorts of exchange-traded funds (ETFs) in recent years. However, quality varies. All too many exist to tap into popular, but risky, themes and fads, so you need to be highly selective with your ETF holdings. ETFs offer very low management fees. In addition to low fees, the best ETFs offer well-diversified, tax-efficient portfolios of high-quality stocks. Here are five foreign ETFs we like:...

With interest rates still near historic lows, borrowing money to invest continues to look like an attractive portfolio investing strategy.

Today, you can borrow for as little as 3.5% if you use your home as collateral. Over long periods, the total return on a well-diversified portfolio of high-quality stocks runs to as much as 10%, or around 7.5% after inflation....

AGF Elements Yield Portfolio Fund uses a number of different managers. The fund aims to give investors “diversification” by combining different investment-management styles. We think this approach is inferior to management by an experienced and proven individual. As well, the fund is a balanced fund, and holds 70.5% of its portfolio in bonds. We don’t generally recommend balanced funds. That’s because bonds are unlikely to perform as well in the next few years as they have in the last few, if only because interest rates are likely to rise. That means the fund would only earn interest income on its bonds; instead of capital gains, its bond holdings could produce capital losses. We don’t recommend the AGF Elements Yield Portfolio....

On Thursday, May 6, 2010, the Dow Jones Industrial Average opened at around 10,860. Later that afternoon, it suddenly fell 9.2%, to 9,869.62. In the space of just a few minutes, it had recovered most of these losses, and closed at 10,520.32. It’s now back to its pre-crash level of around 10,860. The Securities and Exchange Commission (SEC) is investigating the drop, but an exact cause has not yet been found. No matter what caused the crash, some of the trades that occurred between 2:40 p.m. and 3:00 p.m. eastern time have already been cancelled. The New York and Nasdaq exchanges have cancelled all trades that occurred during that window that were more than 60% higher or lower than the stock’s price just before the plunge....

Some investors follow a “sector rotation” approach to investing. That’s when you try to hop from sector to sector, underweighting or overweighting your holdings in certain sectors of the stock market depending on a forecast of the stage of the economic cycle, or other factors. This approach can work in any one year, say. However, it’s difficult if not impossible to produce consistent longer-term returns. Here are two reasons why:

1. You need to guess right three times to profit in sector rotation: You have to pick the top sectors, then pick the stocks that will rise within those sectors, then sell before the sector stumbles. It’s virtually impossible to consistently succeed at all three over long periods. But that’s not the only problem with sector rotation.
2. Sector rotation can overweight you in the worst-performing sectors: There are many theories about which sectors will outperform at any given stage of the economic cycle. But trying to pick winning sectors — and staying out of other sectors — seldom works over long periods. Investors who attempt to do so often wind up with heavy holdings in the worst-performing sectors. That would be devastating to your portfolio, even if you confine your investments to well-established companies.

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