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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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 how you to find the best investments for your portfolio. Each Investor Toolkit update gives you a fundamental piece of investment strategy, and shows you how you can put it into practice right away. Tip of the week: “While insider trading can sometimes be a useful indicator for investors, there are also occasions when it can be misleading.”...
Here’s a good general rule to follow when choosing investments: Simple is better. The easier an investment is to explain and understand, the less likely it is to harbour hidden risks and costs that can only work against you. As the old investor saying goes, “Stick with plain vanilla.” For the investment industry, the rule works in reverse: The more complicated, the better. Each new feature provides a profit opportunity for the institution that sponsors the investment. It’s particularly important to keep this in mind with exchange-traded funds (ETFs). These investments are highly efficient mutual funds. Fees are low because investors don’t pay for management. Instead, ETFs aim to mimic the performance of a market index, by holding the same securities in the same proportions used to calculate the market index. As a liquidity feature, ETFs generally sell newly created units whenever their unit prices develop a premium over the value of the stocks they hold. They buy back units (in large blocks only, to keep costs low) when the unit price gets too far below the value of their holdings....
In the latest issue of The Successful Investor, we analyzed each of Canada’s big five banks. All of the banks have now reported earnings, except for Bank of Nova Scotia, which reports its first-quarter earnings tomorrow, March 4....
VERIZON COMMUNICATIONS INC., $47.56, New York symbol VZ, has completed its purchase of the 45% of Verizon Wireless that it didn’t already own from U.K.-based Vodafone Group (Nasdaq symbol VOD). The company now owns 100% of Verizon Wireless, which sells wireless services to 102.8 million subscribers in the U.S. In 2013, it supplied 67% of Verizon’s revenue and 81% of its earnings. Verizon paid $130 billion in cash and shares for Vodafone’s stake. To put that in context, Verizon’s market cap (or the total value of all its outstanding shares) is $196.7 billion....
ROYAL BANK OF CANADA, $72.16, Toronto symbol RY, earned $2.1 billion in the quarter ended January 31, 2014, up 2.2% from $2.05 billion a year earlier. Per-share earnings rose 3.0%, to $1.38 from $1.34, on fewer shares outstanding. Excluding a loss on the sale of its Jamaican banking operations, Royal earned $1.44 share in the latest quarter, matching the consensus forecast. Overall revenue rose 7.6%, to $8.5 billion from $7.6 billion. Revenue at Royal’s retail banking division (which supplied 40% of the total) rose 6.9%. That’s partly due to its February 2013 purchase of Ally Financial’s Canadian operations for $3.7 billion. Ally, which provides car loans through 1,600 dealerships, contributed $62 million to Royal’s revenue and $22 million to its earnings in the latest quarter. Higher demand for mortgages and consumer and business loans also contributed to the improved results....
ACI WORLDWIDE INC., $59.84, symbol ACIW on Nasdaq, makes software that processes transactions involving credit cards, debit cards, automated teller machines, point-of-sale terminals and interbank payments. Its products also help cut fraud. In the quarter ended December 31, 2013, ACI’s revenue rose 26.4%, to $283.2 million from $224.1 million a year earlier. That’s mainly due to contributions from two acquisitions it made in 2013: Online Resources Corp., which it bought for $126.6 million, and Official Payments Holdings ($109.0 million). These moves helped ACI further expand into online banking and bill payments. Earnings per share rose 3.2% to $1.30 from $1.26....
Pat McKeough responds to many requests from members of his Inner Circle for specific advice and stock tips as well as questions on investment strategy and the economy. Every week, his comments and recommendations on the most intriguing questions of the past week go out to all Inner Circle members. And each week, we offer you one of the highlights from these Q&A sessions. While we reserve our buy-hold-sell advice for Inner Circle members, these excerpts provide a great deal of information and analysis on stocks we’ve covered for members of Pat’s Inner Circle....
Natural gas prices rebounded recently after almost three years of depressed prices. In those years, warm winters cut into gas used for heating, and that’s a major part of total gas use. As a result, gas in storage grew and prices stagnated. A glut of shale gas due to improved drilling technology also held prices down....
