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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ISHARES FTSE/XINHUA CHINA 25 INDEXFUND $41.85 (New York symbol FXI; buy or sell throughbrokers) is an ETF that aims to track the FTSE/XinhuaChina 25 Index, which is made up of the 25 largestand most liquid Chinese stocks. All of the stocks inthe index trade on the Hong Kong exchange. Somealso trade as American Depositary Receipts (ADRs)on the New York exchange.
The fund’s top holdings are China ConstructionBank, 9.6%; China Mobile, 9.4%; Industrial &Commercial Bank, 8.8%; CNOOC, 6.5%; Bank ofChina, 6.2%; Agricultural Bank of China, 4.5%;China Overseas Land & Investment, 4.2%; ChinaPacific Insurance, 4.2%; China Petroleum andChemical; 4.1%; and PetroChina, 3.9%.
The fund’s holdings give it the following industrybreakdown: Financials, 59.2%; Telecommunications,15.7%; Oil and Gas, 14.5%; Basic Materials, 8.9%;and Industrials, 2.1%. Its expense ratio is 0.74%.
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The fund’s top holdings are China ConstructionBank, 9.6%; China Mobile, 9.4%; Industrial &Commercial Bank, 8.8%; CNOOC, 6.5%; Bank ofChina, 6.2%; Agricultural Bank of China, 4.5%;China Overseas Land & Investment, 4.2%; ChinaPacific Insurance, 4.2%; China Petroleum andChemical; 4.1%; and PetroChina, 3.9%.
The fund’s holdings give it the following industrybreakdown: Financials, 59.2%; Telecommunications,15.7%; Oil and Gas, 14.5%; Basic Materials, 8.9%;and Industrials, 2.1%. Its expense ratio is 0.74%.
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LOBLAW COMPANIES $42(Toronto symbol L; Sharesoutstanding: 281.6 million; Marketcap: $11.8 billion; TSINetworkRating: Above Average; Dividendyield: 2.1%; www.loblaw.ca) is upover 25% since December 6, 2012,when it said that it plans to form areal estate investment trust (REIT) tohold the bulk of its real estate assets.
The company currently owns 47million square feet of real estate witha value between $9 billion and $10billion.
Loblaw will transfer 35 millionsquare feet of these holdings—includingstores, warehouses andoffice buildings—to the REIT. In all,these assets are worth about $7billion. Loblaw will then rent theseproperties from the new trust.
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The company currently owns 47million square feet of real estate witha value between $9 billion and $10billion.
Loblaw will transfer 35 millionsquare feet of these holdings—includingstores, warehouses andoffice buildings—to the REIT. In all,these assets are worth about $7billion. Loblaw will then rent theseproperties from the new trust.
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GOOGLE INC. (Nasdaq symbol GOOG; www.google.com) is the world’s top Internet search engine, with about two-thirds of this market. The company makes money by selling advertising on its websites. Google gets 96% of its revenue from advertising....
Picking stocks whose share prices will rise is not the only goal that successful investors set for themselves. You also add a great deal of value to your portfolio when you select stocks that are prepared to distribute their profits to the shareholders. A company can share the wealth in two main ways—it can buy back its own shares, or it can pay dividends. Both pay off for investors, which is why a number of the best stocks we recommend have a history of doing both....
BELLATRIX EXPLORATION, $4.97, symbol BXE on Toronto, is up over 21% this week after it announced a joint venture agreement with an unnamed South Korea-based investment fund. This deal should speed up development of Bellatrix’s undeveloped Cardium shale oil deposits in west-central Alberta. The South Korean partner will pay $150 million for 33% of production from a planned 83-well drilling program. In addition, Bellatrix will now spend a total of $230 million to $240 million on exploration and development this year, up from its earlier forecast of $180 million. The company expects its daily production to average 24,000 to 25,000 barrels of oil equivalent (including natural gas) per day this year. It could also end 2013 with production as high as 30,000 to 31,000 barrels per day. To put that in perspective, Bellatrix likely ended 2012 with average production of 19,000 to 19,500 barrels a day....
AGRIUM INC., $115.36, Toronto symbol AGU, jumped 8% this week after the company increased its earnings forecast for the fourth quarter of 2012. Higher prices for grains and other crops are prompting farmers to apply more fertilizer. As a result, the company now expects to report fourth quarter earnings of slightly more than $2.00 a share (all amounts except share price in U.S. dollars). That’s well above its earlier forecast of $1.50 to $1.90 a share. Activist investment firm Jana Partners LLC continues to pressure Agrium to spin off its retail business as a separate company. Jana owns 6% of Agrium’s shares....
RIOCAN REAL ESTATE INVESTMENT TRUST $27(www.riocan.com) is raising its monthly distribution by 2.2% with the January 2013 payment, to $0.1175 a unit from $0.115. The new annual rate of $1.41 yields 5.2%. This is the first increase since 2008. Buy.
ENBRIDGE INC. $43 (Toronto symbol ENB;Conservative Growth Portfolio, Utilities sector;Shares outstanding: 799.9 million; Market cap: $34.4billion; Price-to-sales ratio: 1.4; Dividend yield: 2.9%;TSI Network Rating: Above Average;www.enbridge.com) has bought 50% of the Massifdu Sud wind project in Quebec. This is the company’s second wind power investment in that province.
Enbridge paid $170.0 million for its stake in this facility. That’s equal to 63.2% of the $269.0million, or $0.34 a share, that it earned in the three months ended September 30, 2012.
Wind farms don’t make money on their own, but operators profit from subsidies. This project has a20-year deal to sell its power to Hydro-Quebec.
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Enbridge paid $170.0 million for its stake in this facility. That’s equal to 63.2% of the $269.0million, or $0.34 a share, that it earned in the three months ended September 30, 2012.
Wind farms don’t make money on their own, but operators profit from subsidies. This project has a20-year deal to sell its power to Hydro-Quebec.
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CANADIAN IMPERIAL BANK OF COMMERCE$82 (Toronto symbol CM; Conservative Growth Portfolio, Finance sector; Shares outstanding: 403.7 million; Market cap: $33.1 billion; Price-to-sales ratio: 1.9; Dividend yield: 4.6%;TSI Network Rating: Above Average; www.cibc.com)has agreed to settle a lawsuit related to the 2008collapse of U.S. investment bank Lehman Brothers.
Bankruptcy trustees sued CIBC and other banks for failing to honor certain financial commitments they made to Lehman. After Lehman failed, CIBC felt it did not have to provide further funds and recognized a gain of $841 million U.S.
CIBC will pay $149.5 million U.S. to settle this lawsuit. To put that in context, the bank earned $3.3billion (Canadian) in fiscal 2012. That’s up 8.5%from $3.0 billion 2011. Earnings per share rose6.6%, to $8.07 from $7.57, on more shares outstanding.
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Bankruptcy trustees sued CIBC and other banks for failing to honor certain financial commitments they made to Lehman. After Lehman failed, CIBC felt it did not have to provide further funds and recognized a gain of $841 million U.S.
CIBC will pay $149.5 million U.S. to settle this lawsuit. To put that in context, the bank earned $3.3billion (Canadian) in fiscal 2012. That’s up 8.5%from $3.0 billion 2011. Earnings per share rose6.6%, to $8.07 from $7.57, on more shares outstanding.
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BANK OF NOVA SCOTIA $58 (Toronto symbol BNS; Conservative Growth Portfolio, Finance sector; Shares outstanding: 1.2 billion; Market cap: $69.6billion; Price-to-sales ratio: 2.4; Dividend yield: 3.9%;TSI Network Rating: Above Average;www.scotiabank.com) recently bought ING Direct, which offers a wide variety of no-fee banking services, mainly over the Internet. ING Direct has1.8 million customers and $30 billion of deposits.
At $3.1 billion, this was the biggest purchase in the bank’s history. The price is also equal to 48% of the $6.5 billion that it earned in fiscal 2012. That’s up 21.3% from $5.3 billion in 2011. Earnings per share rose 15.2%, to $5.22 from $4.53, on more shares outstanding. Revenue rose 13.8%, to $19.7billion from $17.3 billion.
Earnings at the Canadian division (30% of the total) rose 16%, thanks to strong loan demand and lower loan-loss provisions. International earnings (28%) rose18%, partly due to its purchase of 51% of Colombia’s fifth largest bank.
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At $3.1 billion, this was the biggest purchase in the bank’s history. The price is also equal to 48% of the $6.5 billion that it earned in fiscal 2012. That’s up 21.3% from $5.3 billion in 2011. Earnings per share rose 15.2%, to $5.22 from $4.53, on more shares outstanding. Revenue rose 13.8%, to $19.7billion from $17.3 billion.
Earnings at the Canadian division (30% of the total) rose 16%, thanks to strong loan demand and lower loan-loss provisions. International earnings (28%) rose18%, partly due to its purchase of 51% of Colombia’s fifth largest bank.
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