stocks to buy
The best gold stocks will generate positive cash flow even with low gold prices and also offer rising production outlooks.
Our view on Potash Corp. of Saskatchewan and whether its high dividend can stand up to weaker demand and lower prices.
Decades ago, it used to make some sense to try to profit by moving back and forth between bonds and stocks. That’s because bonds and stocks had something of a seesaw relationship.
When the economy was strong, business profits and stock prices would go up. However, interest rates and inflation would go up as well. The rise in interest rates meant that new bonds would come on the market with higher interest rates. That would push down prices of existing bonds that carried low interest rates.
As this process continued, some investors would sell some of their stocks, in part because stock prices had gone up. They would re-invest the money in bonds, because bond prices had fallen, and bond yields had gone up. This trading strategy gave investors a sense of safety and accomplishment, but it had drawbacks.
For one, you had to pay taxes in gains on your stocks if you held them in taxable accounts. You also had to pay brokerage commissions on the stock sales, and absorb the costs of buying bonds. (Bond trading costs were often built in to the price of bonds, rather than being charged separately as they are with stocks.) In addition, timing was crucial.
The appeal of selling stocks that had gone up, and buying bonds that had become cheaper, only goes so far. It shrinks quickly if your stocks keep going up after you sell, and your bonds keep going down after you buy.
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When the economy was strong, business profits and stock prices would go up. However, interest rates and inflation would go up as well. The rise in interest rates meant that new bonds would come on the market with higher interest rates. That would push down prices of existing bonds that carried low interest rates.
As this process continued, some investors would sell some of their stocks, in part because stock prices had gone up. They would re-invest the money in bonds, because bond prices had fallen, and bond yields had gone up. This trading strategy gave investors a sense of safety and accomplishment, but it had drawbacks.
For one, you had to pay taxes in gains on your stocks if you held them in taxable accounts. You also had to pay brokerage commissions on the stock sales, and absorb the costs of buying bonds. (Bond trading costs were often built in to the price of bonds, rather than being charged separately as they are with stocks.) In addition, timing was crucial.
The appeal of selling stocks that had gone up, and buying bonds that had become cheaper, only goes so far. It shrinks quickly if your stocks keep going up after you sell, and your bonds keep going down after you buy.
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Speculative stocks are always a risk, understanding the nature of those risks is key
In the 18th century, pioneering economist Adam Smith said that the public tends to overvalue “speculative ventures”. We think this makes excellent investing advice for present day investors in speculative stocks.
When a speculative stock is losing money, it has a great deal of freedom to ponder on its future. With a little imagination, it can always show that anything’s possible, based on a logical series of events that it says will take place as it advances inevitably toward profitability. Meanwhile, it doesn’t need to worry that its price-to-earnings or p/e ratio is too high, since it doesn’t have one—it has no “e”.
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While drilling equipment company McCoy Global has dropped to the penny stock range, we see it as a bargain for aggressive investors
Our take on Nordic American Tanker, an energy stock that has had surprisingly good results despite the low price of oil.
Securities lending by mutual funds can add to their overall returns.
The lending institution or fund receives all the dividends and interest it was entitled to as an investor in the security, plus a fee for making the securities loan.
There is negligible risk of losing money on the loan, since the borrower puts up collateral of at least 102% of the borrowed securities’ value. This collateral typically consists of cash, T-bills or highly rated short-term debt instruments. The borrower is liable for any shortfall between the value of the collateral and the value of the securities. If the value of the securities rises, the borrower has to add to the collateral on a daily basis to maintain coverage at 102%.
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Cenovus Energy’s oil sands projects and integrated operations make it one energy stock we feel will bounce back stronger when oil recovers
We recommend that investors diversify up to 30% of their portfolios into U.S. stocks and as much as 10% into international securities. One attractive way for safety-conscious investors to do this is with exchange-traded funds (ETFs). Today we look at several ETFs from a U.S. firm that offer a low-fee way to achieve this diversification. We profile two Vanguard ETFs that track a U.S. large-cap index and an emerging market index.
Pennsylvania-based Vanguard Group is one of the world’s largest investment management companies. In all, it administers almost $3 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.
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Pennsylvania-based Vanguard Group is one of the world’s largest investment management companies. In all, it administers almost $3 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.
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