wall street

On October 22, Microsoft will launch its new Windows 7 operating system. If the release goes smoothly, Microsoft stands to gain from sales of the new software. That’s because many computer users put off upgrading from earlier versions because of complaints about its previous Windows release, Vista. The company has also timed the launch of Windows 7 to coincide with the beginning of the Christmas shopping season.

Other technology stocks stand to gain from Windows 7

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In spite of the weak economy, governments around the world continue to invest heavily in wind projects and electrical-power grids. On Monday, for example, the Ontario government committed $2.3 billion over the next three years to expand and strengthen the province’s grid.

Antiquated power grids can hold back wind power stocks

Upgrades to power grids are important to wind power stocks because, while most power plants are located near big cities to keep transmission costs down, wind farms tend to be in more remote areas with steady winds. As well, low transmission capacity, or none at all, has hurt the ability of wind power stocks to build new projects.

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We still think now is a good time to add some U.S. stocks to your portfolio. And we continue to feel that a well-diversified portfolio of high-quality stocks (like those we recommend as buys in our Wall Street Stock Forecaster newsletter) will outperform index funds over the long term. But we do recommend some low-fee index funds in Canadian Wealth Advisor: 1) S&P Depository Receipts, symbol SPY on the American exchange, hold the stocks in the S&P 500 Index. This index is made up of 500 major U.S. stocks chosen for market size, liquidity and industry group. Expenses are just 0.12% of assets. This is our favourite of the three U.S. ETFs, and it’s a buy. 2) Diamond Trust Shares, symbol DIA on the American exchange, hold the 30 stocks that make up the Dow Jones Industrial Average. Expenses are about 0.18% of assets. It’s a buy, as well....

There has recently been good news on the U.S. housing front: Single-family home sales jumped 7.2% in July from June. That’s the biggest month-over-month rise that the country has seen in 10 years. Sales had been rising for the previous three months, but July’s result was much higher than expected. Now, investors on both sides of the border are wondering how best to invest in a U.S. housing rebound. Some are looking to U.S. large cap stocks related to the housing sector. [ofie_ad]...

Unilever plc ADRs, $27.45, symbol UL on New York (ADRs outstanding: 2.9 billion; Market cap: $79.6 billion), is one of the world’s largest makers and marketers of branded and packaged consumer goods. Asia and Africa account for 37% of Unilever’s sales, followed by the Americas (33%) and western Europe (30%). Unilever operates through two divisions: Foods and Home and Personal Care. 1) The foods division manages brands in two groups: Savoury Dressings and Spreads, and Ice Cream and beverages....

Forecasts are now popping up regularly in the media predicting that the H1N1 virus (also known as “swine flu”) will flare up in North America when the flu season begins in just a few weeks. There is still a wide difference of opinion on the subject, and it’s far from certain that H1N1 will pose a significant threat. Nonetheless, health authorities around the world are mostly erring on the side of caution. In the United States, the Centers for Disease Control and Prevention (CDC) is working with federal and state agencies on an H1N1 vaccine-distribution effort that will include as many as 90,000 sites across the country. This massive H1N1 vaccination effort is benefitting McKesson Corp. (New York symbol MCK), one of the drug stocks we zero in on in the most recent issue of our Wall Street Stock Forecaster newsletter....

Japan is heading into an election on August 30. Polls show the Democratic Party of Japan stands a good chance of defeating Prime Minister Taro Aso’s Liberal Democratic Party in the Japanese parliament’s lower house.

To spur economic activity, the Democratic Party of Japan plans to push for more aggressive stimulus spending, such as allowances for families with children, free public high-school education and cuts to the gasoline tax.

Stimulus spending drives rebound

Government stimulus spending has already played a big role in the country’s recent turnaround. In the latest quarter, ended June 30, 2009, Japan’s economy posted an annualized growth rate of 3.7%. The turnaround comes after four quarters of steep contraction, and is one reason why investors are wondering if Japan is now a good place for offshore investing.

Under Prime Minister Aso, Japan’s government is spending 25 trillion yen ($284.6 billion Canadian) to help the economy grow. As in many other developed countries, this is taking the form of infrastructure spending, direct handouts to consumers and incentives for environmentally friendly products.

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Your neighbour should spread the stock portion of her holdings out across most, if not all, of the five economic sectors. Choose from our Buys and Best Buys in The Successful Investor and Wall Street Stock Forecaster. Holding 50% in liquid assets sounds about right, if these are the only liquid assets she has. The best way to protect cash is to keep it in cash equivalents, such as T-bills or other short-term government obligations, or in guaranteed investment certificates (GICs). High-yield savings accounts, such as those offered by President’s Choice or ING Direct, are good choices, as well....

Some U.S. bank stocks have reported surprising profits lately, and some have even begun to repay loans received under the U.S. government’s Troubled Asset Relief Program. However, the sector itself remains volatile. While we recommend some high-quality U.S. bank stocks in our Wall Street Stock Forecaster newsletter, we feel that you can cut your risk by not just investing in top bank stocks, but by investing in other types of financial companies, as well. In our most recent issue of Wall Street Stock Forecaster, we update our advice on U.S. tax-preparer H&R Block (New York symbol HRB)....

Some investors get pessimistic about the stock market when they see selling by insiders in the U.S. blue chip stocks that they hold. The value of insider buying and selling as a market indicator seems self-evident. After all, company insiders — officers, directors, or owners of 10% or more of a company’s stock — are apt to know more than outsiders do about what’s going on in their business. Insiders in the U.S. have to report buying and selling to the Securities and Exchange Commission (SEC). Many advisors claim that they can detect valuable investment opportunities, including rising blue chip stocks, by studying insider data. But the deeper you look, the more you’ll find that this data leads to muddled conclusions at best....