high quality stocks

Here’s our three-part formula for how to invest in the stock market for above-average gains—and a bonus tip on how not to invest in the market

If you want to hold speculative investments, think carefully. Speculative stocks may offer significant returns to investors—but they will also carry considerable risk.

The best ETF selection strategies will focus on well-diversified funds holding top-quality stocks

Learn how to find up and coming stocks and how to avoid buying bad ones. To put it simply: the best up and coming stocks have a clear business plan that seems to be working. Most of these stocks have an established business and a history of sales gains, plus some earnings or cash flow, if not dividends.

We think foreign stocks can safely make up 10% of a conservative investor’s portfolio. One way is through the selection of exchange-traded funds (ETFs) with an overseas focus.


The best of those ETFs continue to offer very low management fees and well-diversified, tax-efficient portfolios of high-quality stocks.


Here’s a look at four international ETFs we see as suitable for new buying and two others we feel you should continue to hold.


ISHARES MSCI EMERGING MARKETS INDEX FUND $44.46 (New York symbol EEM; buy or sell through brokers) is designed to track the MSCI Emerging Markets Index.


The fund’s geographic breakdown is as follows: China, 31.4%; South Korea, 14.0%; Taiwan, 11.7%; India, 8.8%; South Africa, 6.6%; Brazil, 6.5%; Russia, 3.4%; Mexico, 3.1%; Malaysia, 2.4%; Thailand, 2.3%; Indonesia, 1.9%; and Poland, 1.2%.


Its top stocks are Tencent Holdings (China: Internet), 5.0%; Alibaba Group (China: e-commerce), 4.1 %; Samsung Electronics (South Korea), 3.8%; Taiwan Semiconductor (computer chips), 3.7%; Naspers (South Africa: media and Internet), 2.1%; China Construction Bank, 1.6%; Baidu (China: Internet), 1.3%; Industrial & Commercial Bank of China, 1.0%; China Mobile, 1.0%; and Ping An Insurance Group (China), 0.9%.


iShares launched the ETF on April 7, 2003....

When the markets are high, as they are today, you need to resist any urge you may feel to buy or sell on impulse. Instead, keep the mechanics of our three-part Successful Investor approach in mind:


Our first rule tells you to invest in high-quality stocks....

The Best Stock Analysts rely on a diverse range of investment criteria in their decision making—including diversification and with an emphasis on dividend-paying stocks

The six ETFs we update below mainly hold high-quality stocks that are widely traded on Canadian and U.S. exchanges. Each fund tracks the performance of a major stock market index. That’s different from ETFs focused on narrower indexes or themes such as cryptocurrencies or biotechnology.


Of course, you pay brokerage commissions to buy and sell these investments....

Strategies on how to find penny stocks should focus on pinpointing speculative stocks that above all have real value—and aren’t just promotions

Did you know that a stock market rise typically generates negative comments? Realizing that the market “climbs a wall of worry” and instead focusing on high-quality stocks is the best way to maximize your portfolio returns