investment

RIOCAN REAL ESTATE INVESTMENT TRUST $28 (Toronto symbol REI.UN; Aggressive Growth Portfolio, Manufacturing & Industry sector; Units outstanding: 263.4 million; Market cap: $7.4 billion; Price-to-sales ratio: 5.2; Dividend yield: 4.9%; TSINetwork Rating: Average; www.riocan.com) is ending its joint venture with Cedar Shopping Centers (New York symbol CDR). RioCan holds 80% of this venture, which owns 22 malls in the U.S. Under the terms of the deal, RioCan will buy Cedar’s 20% stake in 21 malls, while Cedar will buy RioCan’s 80% stake in another mall. RioCan will pay Cedar $39.0 million. That’s equal to 37% of its second quarter cash flow of $106.0 million, or $0.37 a unit. RioCan is a buy.

GREAT-WEST LIFECO INC. $22 (Toronto symbol GWO; Conservative Growth Portfolio, Finance sector; Shares outstanding: 949.8 million; Market cap: $20.9 billion; Price-to-sales ratio: 0.7; Dividend Yield: 5.6%; TSINetwork Rating: Above Average; www.greatwestlifeco.com) is Canada’s largest insurance company, with $523.6 billion of assets under administration. It also sells mutual funds and retirement planning and wealth management services. Power Financial Corp. (Toronto symbol PFC) owns 68.2% of Great-West. Top brands are a big plus In Canada, the company sells its products under several well-known banners, including Great West Life, Canada Life and Freedom 55. The Canadian division supplies 51% of Great-West’s earnings....

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 stock market advice that will help you develop a successful approach to 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: “Relying on just one or two indicators to help you choose stocks can increase your risk rather than diminish it.”...

Encana took its present form on December 1, 2009, after the old EnCana Corp. split itself into two new companies: the new Encana, which focuses on natural gas, and Cenovus Energy, which specializes in oil sands. Falling gas prices have pushed Encana’s shares down about 30% since the split. Oil prices have weakened lately, but Cenovus’ shares are up about 14%. ENCANA CORP (Toronto symbol ECA; www.encana.com) is one of North America’s largest natural gas producers. Its reserves should last over 11 years....

Last week I repeated my view that President Obama has done a number of things that scare investors and business, and that this has undermined capital investment in the U.S. This, in turn, has held down job growth, which has resulted in the weak economy of the past few years. Just for simplicity’s sake, let’s call this the Obama Economic Uncertainty Factor. Now, however, investors seem to be coming around to the view that Obama might lose the election. If they’re right, it would eliminate a lot of uncertainty. I think that’s why the market has been going up since summer. If Obama loses, I think it would touch off an immediate boom in the stock market, along with a quick revival of U.S. capital spending activity and the job growth that would come with it....

Liquor Stores N.A. Ltd., $18.73, symbol LIQ on Toronto (Shares outstanding: 22.9 million; Market cap: $428.9 million; www.liquorstoresna.com), is North America’s largest private liquor store operator, with 242 outlets. Of that total, 176 are in Alberta, 35 are in B.C., 20 are in Alaska and 11 are in Kentucky. Liquor Stores’ banners include Liquor Depot, Liquor Barn and Brown Jug. Alberta privatized retail liquor sales in 1993, prompting Irv Kipnes to found Liquor Depot and Henry Bereznicki to start Liquor World that year. Kipnes and Bereznicki, both Edmonton-based real estate developers, merged their companies and founded Liquor Stores Income Fund in 2004. The fund first sold units to the public at $10 and began trading on Toronto in September 2004. Liquor Stores Income Fund converted to a regular corporation on December 31, 2010, in response to Ottawa’s income trust tax....

SPDR Gold Trust, $167.29, symbol GLD on New York (Shares outstanding: 427.4 million; Market cap: $71.5 billion; www.spdrgoldshares.com), is an investment trust that aims to reflect the performance of the price of gold bullion minus the trust’s expenses. SPDR Gold Trust’s sole assets are gold bullion and, from time to time, cash. Unlike stocks, commodity investments such as gold bullion do not generate income. Instead they come with a continuing cash drain for management, insurance and so on. SPDR Gold Trust’s expenses are 0.4% of its assets per year. In general, we recommend staying away from buying gold bullion, coins (unless you collect them as a hobby) or certificates representing an interest in bullion....

Pat McKeough responds to many personal questions on potential stock picks and other investment topics from the members of his Inner Circle. 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 the Inner Circle. This week, an Inner Circle member asked about a stock that practices a form of socially responsible investing. This coffee maker emphasizes fair trade principles in its business dealings—and Pat assesses just how well the company is doing under those conditions. ...

Most experienced investors recognize that it’s hard to outperform the market on a regular basis over long periods. However, only the successful minority recognize as well that it’s all too easy to underperform the market, often by a wide margin. Our advice is that the best way to try to outperform is to apply our three key investing principles: invest mainly in well-established companies; spread your money out across the five main economic sectors (Manufacturing, Resources, Consumer, Finance and Utilities); and downplay or avoid stocks in the broker/media limelight, where unpleasant surprises can lead to brutal declines. But applying these principles to buying stocks requires a good deal of judgment and attention. Even then, you won’t beat the market every year....

Pennsylvania-based Vanguard Group is one of the world’s largest investment management companies. The group manages over $1.7 trillion U.S. in 170 mutual funds. Vanguard, which went into business in 1975, offers low-fee index mutual funds. Generally speaking, Canadians can’t buy units of mutual funds that are registered in the U.S. because they aren’t registered with provincial securities commissions. For that matter, some Canadian funds aren’t available in all provinces. Canadians can, however, buy Vanguard exchange traded funds (ETFs) that trade on stock exchanges. We don’t recommend all of Vanguard’s ETFs, but here are two we do see as low-fee buys....