stock prices

Every Wednesday, we publish our “Investor Toolkit” series on TSI Network. Whether you’re a beginning or experienced investor, these weekly updates are designed to give you investment advice, including specific stock investing tips. Each Investor Toolkit update gives you a fundamental piece of investing strategy, and shows you how you can put it into practice right away....

Most U.S. markets have risen lately, while Canada’s resource-heavy Toronto Stock Exchange has lagged. But as always, both remain subject to unexpected downturns. Even so, the long-term outlook is for higher stock prices.

One way to profit from rising markets is to add exchange traded funds (ETFs) that track major stock indexes to your portfolio.

ETFs trade on stock exchanges, just like stocks....

At any age, it’s a good idea to arrange your affairs so that you have someone you trust to take charge of your finances and investments if you can’t handle them yourself. However, it’s best to choose someone you trust thoroughly, and give that person as much latitude as possible. The alternative—leaving fixed instructions—introduces a random element that can only hurt you. After all, it won’t add to your wealth to set up fixed instructions (such as “If I lose the ability to make sound investment decisions, then convert all my holdings into T-bills, and reinvest them as they mature in new T-bills, until my death or recovery”). But these or any fixed instructions may force your representative to make bad choices. This subject came up a while ago with a portfolio management client who is 82 and is now in excellent health. She recognizes that at her age, things can change quickly. So she asked about leaving fixed instructions to automatically convert her portfolio into bonds under certain circumstances....

Here’s the text of the quarterly letter I sent to our Portfolio Management clients in mid-March: “You can learn a lot about investing from studying the past. But you have to take a broad view, go back a long way, and examine a lot of past examples. History never quite repeats itself. But all too often, people fail to do in-depth studies. Instead they content themselves with “re-fighting the last war.” This is true of a number of investors and advisors today who are still getting over the last market plunge. Instead of trying to figure out what to do in today’s market, they are focusing on what they might have done differently in the mid-2000s, to have avoided the 2007-2009 market drop....

Every Wednesday, we publish our “Investor Toolkit” series on TSI Network. Whether you’re a beginning or experienced investor, these weekly updates are designed to give you specific investment advice. Each Investor Toolkit update gives you a fundamental piece of investing strategy, and shows you how you can put it into practice right away....

When investors base buy and sell decisions on short-term market forecasts, they often experience notably poor investment results, or even lose money. This may come as a shock to them. In hindsight, it may seem that past market trends, up or down, should have been easy to foresee. But in fact, nobody consistently foresees these trends. That’s why most investors hurt their returns if they let short-term market forecasts have much of an impact on their investment decisions. This year, investors may feel tempted to follow the long-time saying that you should, “Sell in May and go away.” This saying is based on the observation that, over the years, stock prices have often gone sideways or dropped between May and October. This year, the sell-in-May rule may seem particularly timely. The market was stronger this year than many observers expected, so they may see it as over-due for a setback. The problem with this kind of analysis is that it fails to distinguish between causation and correlation. The pattern of falling stock prices between May and October may simply be a coincidence, like the pattern that may appear in a series of coin tosses or spins of a roulette wheel....

When I step back from looking at the market’s day-to-day fluctuations, and instead try to figure out where stock prices might go in the next five or 10 years and beyond, I feel increasingly optimistic. For one thing, the stock market has generally been going sideways or making little progress for much of the past 10 or 15 years. You might say the market mainly stayed within a wide trading range in that time—up in some years, down in others. But starting from the low point of spring 2009, stock prices have generally gone up. They’ve risen in a jagged pattern, and the start of every downturn sparked a burst of pessimism. But after each downturn, the market eventually regained its footing. It then went on to a new, higher peak, above the level where the previous downturn began. These lengthy sideways phases have happened in the past. In the end, they always gave way to a new rise that carried prices far above the previous sideways movement. In my view, this latest sideways movement is likely to end the same way....

FEDEX CORP., $98.48, New York symbol FDX, reported lower-than-expected earnings this week. That’s because many of its customers are shipping their goods using slower but cheaper forms of transportation, such as trucks and ships, instead of FedEx’s more expensive overnight international air service. In its 2013 third quarter, which ended February 28, 2013, FedEx’s earnings per share fell 20.6%, to $1.23 from $1.55 a year earlier. These figures exclude several unusual items, such as the cost of replacing older planes with more efficient models and job cuts through voluntary buyouts. On that basis, the latest earnings missed the consensus estimate of $1.38 a share. However, revenue rose 3.7%, to $11.0 billion from $10.6 billion. The company now expects to earn $6.00 to $6.20 a share for all of fiscal 2013, down from its earlier prediction of $6.20 to $6.60. The stock trades at 16.1 times the midpoint of the lower range. That’s a reasonable p/e ratio, particularly because FedEx’s cost-cutting plan will put it in a strong position to increase its profits as the global economy recovers....

AMERICAN EXPRESS CO. $66 (New York symbol AXP, Conservative Growth Portfolio, Finance sector; Shares outstanding: 1.1 billion; Market cap: $72.6 billion; Price-to-sales ratio: 2.1; Dividend yield: 1.4%; TSINetwork Rating: Average; www.- americanexpress.com) has passed the Federal Reserve’s latest “stress test,” which measures how well banks and other financial firms would cope with a sharp jump in unemployment, falling stock prices and other unfavourable economic conditions.

As a result, the company raised its quarterly dividend by 15.0%, to $0.23 a share from $0.20....

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 a wide range of investing topics. Each Investor Toolkit update gives you a fundamental tip and shows you how you can put it into practice right away. Tip of the week: “The fact that the share price has gone up or down is one of the least important reasons for selling a stock.”...