stock pickers
Investors generally look to aggressive stocks for capital gains and to more conservative stocks, like utilities, for income. However, there are some aggressive stocks that pay dividends that are as high — or even higher — than more established companies. (We’ve updated our buy/sell/hold advice on a high-dividend aggressive stock in a just-published issue of Stock Pickers Digest. See below for further details.)
Dividends are a plus in aggressive investing — but focus on quality
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Our Stock Pickers Digest newsletter helps you find the aggressive investing stocks that could greatly enhance your portfolio’s results. These undervalued, often overlooked companies have the potential to explode for large returns of 50% or more in six months or less. It’s important to keep in mind that all aggressive investing stocks – including those we recommend in Stock Pickers Digest – expose you to a higher degree of risk than conservative selections. However, there are many ways to cut your risk in aggressive investing and still put yourself in position for large returns. Here are three key strategies you can easily apply to the part of your portfolio you devote to aggressive investments. They form the core of the advice we give you in Stock Pickers Digest....
Some investors follow a “sector rotation” approach to investing. That’s when you try to hop from sector to sector, underweighting or overweighting your holdings in certain sectors of the stock market depending on a forecast of the stage of the economic cycle, or other factors. This approach can work in any one year, say. However, it’s difficult if not impossible to produce consistent longer-term returns. Here are two reasons why:
- You need to guess right three times to profit in sector rotation: You have to pick the top sectors, then pick the stocks that will rise within those sectors, then sell before the sector stumbles. It’s virtually impossible to consistently succeed at all three over long periods. But that’s not the only problem with sector rotation.
- Sector rotation can overweight you in the worst-performing sectors: There are many theories about which sectors will outperform at any given stage of the economic cycle. But trying to pick winning sectors — and staying out of other sectors — seldom works over long periods. Investors who attempt to do so often wind up with heavy holdings in the worst-performing sectors. That would be devastating to your portfolio, even if you confine your investments to well-established companies.
In December, Nissan Motor Co. (symbol NSANY on Nasdaq) will ship the Nissan LEAF to selected U.S. dealers. The company aims to begin selling the car nationwide in 2011. The Nissan LEAF is the first electric car to be widely sold in the U.S. So far, 115,000 customers have paid a $99 reservation fee for the new car. The company aims to convert at least 25,000 of these reservations into firm orders by the time the car begins shipping. In light of recent developments surrounding this new electric car, we’ve updated our buy/sell/hold advice on Nissan in a just-published issue of Stock Pickers Digest, our newsletter for aggressive investing....
Standard & Poor’s and the TMX Group, which operates the Toronto Stock Exchange, recently launched the S&P/TSX Clean Technology Index. This new index consists of 21 TSX-listed green technology stocks that provide products and services that help solve environmental problems.
Focus on quality when investing in green technology stocks
A number of the companies on the S&P/TSX Clean Technology Index are speculative in nature. (However, the index does contain one established company that may have found a profitable niche in wind and solar-power generation. Read on for further details.)...
APACHE CORP., $105.44, New York symbol APA, has made two major purchases that will expand its offshore oil-drilling operations in the Gulf of Mexico. This week, the company agreed to buy Mariner Energy Inc. (New York symbol ME) for $2.7 billion in cash and stock. Mariner has reserves of 181 million barrels of oil equivalent (including natural gas). Besides offshore fields in the Gulf of Mexico, Mariner has onshore properties in Texas and New Mexico. Apache will also assume $1.2 billion of Mariner’s debt. The deal should close in the third quarter of 2010. Apache is also buying Devon Energy Corp.’s (New York symbol DVN) oil and gas reserves on the Gulf of Mexico Shelf for $1.05 billion. Devon is a recommendation of our Stock Pickers Digest newsletter. These fields hold 83 million barrels of oil equivalent. Apache aims to complete this purchase by the end of June....
AMAZON.COM INC., $142.17, symbol AMZN on Nasdaq, has received approval from the Canadian government to open a distribution centre in Canada. In 2002, the government let Amazon open a Canadian web site, www.amazon.ca, but would not let the company build a warehouse because of concerns about foreign ownership of Canadian cultural industries. Right now, Canadian orders are handled in the United States, and shipped into the country through a subsidiary of Canada Post. Amazon will invest $20 million in the new warehouse. It has also promised to invest $1.5 million to promote Canadian culture and authors, and make more Canadian content available to users of its Kindle electronic-book reader....
Our Successful Investor business model has two parts. We publish investment advice, and we manage investor portfolios. This two-business model has advantages for our subscribers. The stock market investing problems we encounter as money managers, and the solutions we come up with, help us give our readers unbiased, practical advice. This serves as a counterweight to advice you may encounter elsewhere that is based on misapplied theory, or tainted by conflicts of interest.
Selling half after a double is not always the best stock market investing strategy
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IBM $128.48 (New York symbol IBM; Shares outstanding: 1.3 billion; Market cap: $166.9 billion; SI Rating: Above Average; Dividend yield: 1.7%) has formed a long-term alliance with Broadridge Financial Services (New York symbol BR). Broadridge is a recommendation of two of our affiliated publications, Wall Street Stock Forecaster and Stock Pickers Digest. Broadridge serves the investment industry in three main areas: investor communications, securities processing and transaction clearing. Broadridge mails and processes 70% of all proxy votes. Under the terms of the 10-year deal, IBM will assume responsibility for all of Broadridge’s computer networks. IBM’s expertise will help Broadridge make its transaction-processing services more efficient. This alliance will also make it easier for Broadridge to develop new services....
Every year, you gain an additional $5,000 of contribution room in your tax free savings account (TFSA). That means you have $10,000 of contribution room in 2010, rising to $15,000 in 2011, $20,000 in 2012 and so on. You also get to carry forward unused contribution room from previous years. Tax-free savings accounts let you earn investment income — including interest, dividends and capital gains — tax free. But unlike registered retirement savings plans (RRSPs), contributions to tax free savings accounts are not tax deductible. However, withdrawals from a TFSA are not taxed. Here are three tips you can use to make sure you’re getting the most profit — and tax benefits —from your tax free savings account:...