investment
An investment is an asset or property acquired to generate income or gain appreciation. Appreciation is the increase in the value of an asset over time. It requires the outlay of a resource today, like time, effort, and money, for a greater payoff in the future or for generating a profit.
An investment involves using capital in the present to increase an asset’s value over time.
Investments may include bonds, stocks, real estate, or alternative investments.
Investments can be diversified to reduce risk, though this may reduce the amount of earning potential.
In business contexts, investments are financial; however, consider how some people spend time to make higher incomes in the future (i.e. invest in a college education).
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A big online gaming deal may pay off for NYX Gaming, but it still breaks many of our investment rules and remains a high risk investment.
In recent years, Great-West has bought companies in Ireland and the U.S. that have added new business lines and boosted its profits. Growth by acquisition can be risky, but Great-West’s large size lets it take advantage of opportunities with strong chances of success. GREAT-WEST LIFECO $36.57 (Toronto symbol GWO; Shares outstanding: 997.4 million; Market cap: $36.7 billion; TSINetwork Rating: Above Average; Yield: 3.6%; www.greatwestlifeco.com) is one of Canada’s largest insurance firms. It also offers mutual funds and wealth management. Power Financial owns 67.1% of Great-West. In the three months ended March 31, 2015, Great-West’s earnings per share rose 18.6%, to $0.70 from $0.59 a year earlier....
RIOCAN REAL ESTATE INVESTMENT TRUST $27.20 (Toronto symbol REI.UN; Units outstanding: 317.8 million; Market cap: $8.7 billion; TSINetwork Rating: Average; Dividend yield: 5.2%; www.riocan.com) is Canada’s largest real estate investment trust (REIT), with interests in 338 shopping malls containing over 92 million square feet of leasable area. That total includes 48 U.S. malls with over 13 million square feet. In the three months ended March 31, 2015, RioCan’s revenue rose 7.7%, to $331.0 million from $307.4 million a year earlier. Cash flow per unit gained 4.8%, to $0.44 from $0.42. The trust’s latest acquisitions increased its rental space by 1.7%. It’s also doing a good job of renewing current tenants at higher rates: rents on renewals rose 9.8% in Canada and 8.3% in the U.S....
ARC RESOURCES $21.14 (Toronto symbol ARX; Shares outstanding: 340.0 million; Market cap: $7.4 billion; TSINetwork Rating: Speculative; Dividend yield: 5.7%; www.arcresources.com) produces oil and natural gas in Western Canada. Its average daily output of 120,354 barrels of oil equivalent is 64% gas and 36% oil. In the quarter ended March 31, 2015, ARC’s cash flow per share fell 38.7%, to $0.57 from $0.93 a year earlier. Production gained 13.9%, but its realized oil price fell 49.0% and its gas price declined 45.5%. Like many oil and gas producers, ARC is cutting back on exploration and development spending. This year, it will devote $550.0 million to this purpose, down sharply from $945.5 million in 2014....
LOBLAW COMPANIES $63.46 (Toronto symbol L; Shares outstanding: 412.6 million; Market cap: $26.3 billion; TSINetwork Rating: Above Average; Dividend yield: 1.6%; www.loblaw.ca) has sold 38 of its stores to Choice Properties Real Estate Investment Trust (Toronto symbol CHP.UN). Loblaw received $201.3 million, which is equal to 66.9% of the $301.0 million, or $0.73 a share, it earned in the three months ended March 28, 2015. That total included $102.2 million worth of Choice Properties’ units. As a result, Loblaw now owns 83.1% of this REIT. It also accounts for 91.0% of Choice’s earnings....
SUN LIFE FINANCIAL $41.43 (Toronto symbol SLF; Shares outstanding: 612.1 million; Market cap: $25.6 billion; TSINetwork Rating: Above Average; Dividend yield: 3.7%; www.sunlife.ca) sells life insurance, savings, retirement and pension products to individuals and corporations. It has $812.6 billion of assets under management and mainly operates in Canada, the U.S. and the U.K. It’s also expanding in Asia. In the three months ended March 31, 2015, Sun Life’s revenue rose 2.2%, to $3.72 billion from $3.64 billion a year earlier. Earnings per share gained 16.7%, to $0.84 from $0.72. The company continues to expand its asset management business, which generates high profit margins and requires little capital investment. It recently paid $560 million for Bentall Kennedy Group, which manages more than $27 billion in real estate for over 550 institutional clients across the U.S. and Canada....
Meta Description: Thanks to a key European acquisition and new fleet of planes, FedEx maintains its position as one of our best stocks to buy in the U.S.
Here’s the text of the quarterly letter I recently sent to our Portfolio Management clients:
“Most investors find they improve their investment results when they invest conservatively. Speculating can pay off from time to time. But the gains are generally too small and/or too rare to offset the losses, and still provide a reasonable rate of return. More often, investors find they have a net loss on their speculative activities over a period of years. However, it is possible to get lucky.
Mr. W., one of our portfolio-management clients, loves his job as a high-school guidance counselor. But he recognized early in his career that it was never going to finance the lifestyle he wanted to provide for his family. So for the first couple of decades of his investing career, he tried to make his fortune as a speculator. He tried buying penny stocks, selling short, options trading and futures trading. That worked out as it does for most investors. His gains were enough to keep him in the game, but too little to provide a worthwhile financial return, much less justify the time he spent.
In middle age, he quit speculating and began dabbling in various small business ventures. Gains were irregular here as well. Then he bought a downtown Toronto rooming house. A couple of years later, an offer from a property developer put a highly rewarding end to his sideline as a rooming house operator. He then hired us to build and manage a conservative investment portfolio for him.
Then lightning really struck. Mr. W. has just acquired a large holding in a well-known Canadian gold mining company. He got the stock as a result of the success of an investment he made in a grubstaking syndicate after he sold the rooming house. When added to his portfolio, the stock made up 20% of its total value. This left Mr. W. with a dilemma: Should he hold on to the stock, even though it left him with an inappropriate and risky portfolio balance? Or should he sell all or part of it, and pay capital-gains tax?
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“Most investors find they improve their investment results when they invest conservatively. Speculating can pay off from time to time. But the gains are generally too small and/or too rare to offset the losses, and still provide a reasonable rate of return. More often, investors find they have a net loss on their speculative activities over a period of years. However, it is possible to get lucky.
Mr. W., one of our portfolio-management clients, loves his job as a high-school guidance counselor. But he recognized early in his career that it was never going to finance the lifestyle he wanted to provide for his family. So for the first couple of decades of his investing career, he tried to make his fortune as a speculator. He tried buying penny stocks, selling short, options trading and futures trading. That worked out as it does for most investors. His gains were enough to keep him in the game, but too little to provide a worthwhile financial return, much less justify the time he spent.
In middle age, he quit speculating and began dabbling in various small business ventures. Gains were irregular here as well. Then he bought a downtown Toronto rooming house. A couple of years later, an offer from a property developer put a highly rewarding end to his sideline as a rooming house operator. He then hired us to build and manage a conservative investment portfolio for him.
Then lightning really struck. Mr. W. has just acquired a large holding in a well-known Canadian gold mining company. He got the stock as a result of the success of an investment he made in a grubstaking syndicate after he sold the rooming house. When added to his portfolio, the stock made up 20% of its total value. This left Mr. W. with a dilemma: Should he hold on to the stock, even though it left him with an inappropriate and risky portfolio balance? Or should he sell all or part of it, and pay capital-gains tax?
...
When you look to buy Canadian dividend stocks, dividend yield is an important consideration but in some cases the yield can be misleading.
CONAGRA FOODS INC., $44.56, New York symbol CAG, plans to sell its private-label food business, which makes packaged foods for grocery, warehouse club and drug stores. The company entered this business in January 2013 when it paid $4.75 billion for Ralcorp Holdings, the largest private-label food maker in the U.S. However, the purchase hasn’t worked out as well as ConAgra hoped, as strong competition and higher ingredient costs hurt Ralcorp’s sales and earnings. As a result, ConAgra has had to write down this investment by $2.1 billion. In its fiscal 2015 fourth quarter, which ended May 31, 2015, ConAgra’s overall sales rose 3.7%, to $4.10 billion from $3.96 billion a year earlier. That missed the consensus forecast of $4.14 billion....