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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This is the latest in a series of video interviews in which Pat McKeough will give his advice on a variety of topics. Some will deal with his overall investment philosophy, others on specific investment strategies and still others will be comments on events that are affecting the markets and the economy. Asked about when he would advise buying bonds again in light of interest rates, Pat replies with a piece of advice that applies to stocks and bonds. Don’t make your buy or sell decisions with just one statistic in mind. Consider all the circumstances. In other words, “If you’re going to play the game, look at all your cards.” Below is the transcription of Pat’s comments. ...
Chinese stocks are up over 30% since September 2011. That’s largely because investors believe that a global recovery will raise China’s exports and improve its domestic economy. As well, the country’s inflation rate is easing. That gives it more options to boost growth, including cutting interest rates. Here are two Chinese exchange traded fund (ETF) recommendations. One invests in all publicly traded Chinese stocks available to foreign investors. The other holds small cap Chinese stocks. SPDR S&P CHINA ETF $68.38 (New York Exchange symbol GXC; buy or sell through brokers; www.spdrs.com) is an exchange traded fund that aims to track the S&P China BMI Index. This index is made up of all the publicly traded Chinese stocks that are available to foreign investors. Right now, SPDR S&P China ETF holds 184 stocks....
All of our real estate investment trust (REIT) recommendations have moved up in the past year, but we think they still have plenty of growth ahead—at relatively low risk. ALLIED PROPERTIES REAL ESTATE INVESTMENT TRUST $26.07 (Toronto symbol AP.UN; Units outstanding: 51.9 million; Market cap: $1.4 billion; TSINetwork Rating: Extra Risk; Dividend yield: 5.1%; www.alliedpropertiesreit.com) owns 100 office buildings, mostly in major Canadian cities. These mainly Class I properties contain over 7.8 million square feet of leasable area. Class I refers to 19th- and early-20th-century light industrial buildings that have been converted to office and retail space. They usually feature exposed beams, interior brick and hardwood floors....
The Bank of Canada is holding interest rates steady, even though the current inflation rate of 2.6% is above the bank’s 2% target. The bank doesn’t want to slow Canada’s economic growth with higher rates, or push the dollar any higher. Still, the long-term outlook is for higher interest rates. The heavy deficit spending of the past few years and the expansion of the money supply, which is still underway, increase the potential for higher inflation. We continue to advise against investing in bonds right now. Today’s low interest rates make them unattractive now, and rising interest rates would push down their future value....
When you decide you want to invest on your own in the stock market, you face a decision every investor has encountered. You have to choose whether to use a discount broker, a full-service stock broker, or a portfolio manager. This decision is no formality; it will play an important role in the way you approach your investments. Here is how the three choices stack up:...
When it comes to adding value to your investing efforts, one of the least productive things you can do is to try to “time” the market. By that, I mean attempting to sell good stocks at what looks to you like a price peak, in hopes of buying them back at lower prices. One of the hardest things about successful investing is that it’s easy to form a strong opinion on the market’s next price trend, and then find the market does something totally different from what you expected. That’s why you want to confine your buying mostly, if not entirely, to high-quality stocks. They tend to hold on to their value over long periods. Sometimes your strong opinions will turn out right. Other times, you’ll sell at what looks like a high price, only to find that some new information comes along that spurs the stock to much higher prices. Sometimes, you’ll sell a stock that looks “high,” then use the money to buy something else that looks cheap. But your cheap stocks get even cheaper while the rest of the market continues to rise....
Hi Pat: Can you give me your view on Merck & Co., or perhaps an alternative to this company? Thanks.
Merck & Co., $38.81, symbol MRK on New York (Shares outstanding: 3.0 billion; Market cap: $116.4 billion; www.merck.com), is a global health care company providing prescription medicines, vaccines, biologic therapies, animal health, and consumer care products. Merck’s top-selling drugs include Singulair (for treating respiratory illnesses), Remicade (arthritis), Zetia and Vytorin (high cholesterol), and Januvia (diabetes). In the three months ended December 31, 2011, Merck’s revenue rose 1.7%, to $12.3 billion from $12.1 billion a year earlier. Excluding one-time items, earnings rose 8.1%, to $3.0 billion from $2.8 billion. Earnings per share rose 10.2%, to $0.97 from $0.88, on fewer shares outstanding. Merck holds cash of $15.0 billion, or $5.00 a share. Its long-term debt of $15.5 billion is a low 13.3% of its market cap....
GuestLogix, $0.42, symbol GXI on Toronto, (Shares outstanding: 64.3 million; Market cap: $27.0 million; www.guestlogix.com), provides onboard retail and payment systems to airlines, railways and passenger ferries. The company sells the GuestLogix Mobile Virtual Store and the accompanying point-of-sale handheld device. GuestLogix was founded in 2002. It is based in Toronto, but it has sales offices in the U.S., U.K. and Singapore. The company estimates that its systems serve about 90% of airline passengers in North America and 40% worldwide. Its clients include American Airlines, Delta Air Lines, United/Continental Airlines, US Airways, Southwest Airlines, British Airways, KLM Royal Dutch Airlines, Ryanair, Qantas Airways and WestJet....
SCITI Trust, $13.69, symbol SIN.UN on Toronto (Shares outstanding: 21.4 million; Market cap: $293.0 million; www.scotiamanagedcompanies.com), first issued units at $10, and began trading on Toronto in April 2003. It was scheduled to wind up on April 29, 2008. However, unitholders voted to continue the trust in March 2008. SCITI Trust is now scheduled to wind up on August 13, 2013. The trust’s portfolio is based on the Scotia Capital High Yielding Equity Index, which tracks the highest yielding stocks and income trusts (mostly REITs) on the Toronto exchange. SCITI Trust now holds the top 50 highest-yielding issues in the index, on a roughly equal-weight basis. The trust’s top 10 holdings are Just Energy Group, Liquor Stores NA, Canexus Corp., Inter Pipeline Fund, Artis REIT, Cominar REIT, Dundee REIT, Poseidon Concepts, Sun Life Financial and Wajax Corp....
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 investment advice, including how to use financial ratios and other information in your stock research. Each Investor Toolkit update gives you a fundamental piece of investing strategy, and shows you how you can put it into practice right away. Today’s tip: “Use the price-to-sales ratio correctly and you can uncover stocks with strong growth potential.”...
