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ETFs

What are ETFs?

ETF is an acronym for exchange traded fund. These exchange traded funds are used to track indexes as closely as possible, since investors cannot actually buy an index outright.

Exchange traded funds trade on stock exchanges, just like stocks. Investors can buy them on margin, or sell them short. The best exchange-traded funds offer well-diversified, tax-efficient portfolios with exceptionally low management ETF fees. They are also very liquid.

Investors use ETFs in a variety of ways, and some investors work only with ETFs and no other type of investment in portfolio creation.

An amazing aspect of ETFs is their diversity. Some investors may create an entire portfolio solely from a few well-diversified ETFs.

ETFs trade on stock exchanges, just like stocks. That’s different from mutual funds, which you can only buy at the end of the day at a price that reflects the fund’s value at the close of trading.

Prices of ETFs are quoted in newspaper stock tables and online. You pay brokerage commissions to buy and sell them, but their low management fees give them a cost advantage over most mutual funds.

As well, shares are only added or removed when the underlying index changes. As a result of this low turnover, you won’t incur the regular capital gains taxes generated by the yearly distributions most conventional mutual funds pay out to unitholders.

ETFs have a place in every investor’s portfolio, at TSI Network we also recommend using our three-part Successful Investor strategy:

Invest mainly in well-established companies;
Spread your money out across most if not all of the five main economic sectors (Manufacturing & Industry; Resources & Commodities; the Consumer sector; Finance; Utilities);
Downplay or avoid stocks in the broker/media limelight.

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ETFs Library Archives

ETFs

Ireland—Home to top global multinational companies

The roster of top global companies headquartered in Ireland is impressive.

Top of the list are medical equipment manufacturer, Medtronic, followed by IT consulting firm, Accenture. Other large companies include industrial gas company Linde, pharmaceutical company Allergan, and credit scoring company Experian....

1 min read

Pat McKeough

ETFs

Ireland’s low taxes are just one of its appeals

Ireland was once known as the Celtic Tiger for the high economic growth rates it achieved between 1995 and 2007. However, the global financial crisis of 2008 to 2009 set the country back significantly. Growth only returned several years later. Still, the country’s low corporate tax rates, duty-free access to the valuable European marketplace, and a well-educated workforce remain attractive to large, multinational corporations....

5 min read

Pat McKeough

ETFs

E-commerce will offer gains even after COVID

The year 2020 was a strong one for e-commerce as the pandemic forced consumers and businesses to increase their use of online transactions. However, this was an acceleration of a trend that has been developing for the past decade—and while growth may slow down as shoppers return to the malls, e-commerce will very likely continue to grow steadily....

4 min read

Pat McKeough

ETFs

Cybercrime: Risks and opportunities are both rising

Ransomware is a form of malicious software that encrypts an organization’s data, rendering it unusable until the ransom money is paid to cybercriminals.

According to data provided by the Harvard Business Review, ransom attacks were up by 150% in 2020 while ransom payments increased by 300%....

1 min read

Pat McKeough

ETFs

Pass on this ETF

HORIZONS ACTIVE A.I. GLOBAL EQUITY ETF $27.43 (Toronto symbol MIND) invests in major global equity indexes primarily available through North American-listed ETFs.

However, the fund’s portfolio manager is, in fact, a computer. It picks indexes through a process called “adaptive artificial intelligence.” Essentially, it aims to spot patterns in market indexes by continuously analyzing market data....

1 min read

Pat McKeough

ETFs

Cybersecurity is a big growth market

Cybercrime can have major consequences for individuals, corporations, and governments, alike; the recent, highly publicized cyberattacks on Colonial Pipeline and meat producer JBS provide good examples (see box on page 82). Meanwhile, more people working and gaming from home has also spurred a jump in cyberattacks....

3 min read

Pat McKeough

ETFs

China is now a hold

ISHARES CHINA LARGE-CAP ETF, $41.36, is now a hold for safety-conscious investors. The ETF (New York symbol FXI; buy or sell through brokers) tracks the 50 largest, most-liquid Chinese stocks. Investors pay a high 0.74% MER. The units yield 2.0%.

Top holdings for the $4.5 billion fund are Alibaba (e-commerce), 9.2%; Tencent (Internet), 9.2%; Meituan Dianping (group buying/food delivery), 8.6%; China Construction Bank, 5.4%; and Wuxi Biologics, 4.6%.

Chinese stocks are down lately as the government has introduced strict new regulations around fintech stocks, data sharing among tech firms and online platforms and, most recently, online learning firms.

These surprise regulations directed at private Chinese companies are aimed at promoting social policies and imposing more government control over various sectors....

1 min read

Pat McKeough

ETFs

Six low-fee ETFs for your global investing

All of the major global stock markets fell at the initial outbreak of COVID-19. But many top markets have since rebounded. We think the outlook remains positive for quality stocks, and one way to profit from that—while cutting your risk—is to invest in quality ETFs....

7 min read

Pat McKeough

ETFs

Small-cap stocks come with additional risks

Smaller companies can generate higher returns than their larger counterparts, but they are often riskier and less liquid, and may underperform for long periods.

Small stocks are also more volatile in times of unsettled or falling markets.

Still, if you focus on the best-quality small companies—or ETFs that hold those stocks—they can be a worthwhile addition to a well-balanced portfolio

Do small companies have an edge?

Small companies trading on U.S....

3 min read

Pat McKeough

ETFs

Cryptocurrency investments face challenges

Cryptocurrency is a form of digital, non-government-issued “money” that can be exchanged on the Internet without the intervention of a conventional bank or another intermediary.

In general, cryptocurrencies have underlying software code that enable their creation and allow users to verify and secure their transactions....

3 min read

Pat McKeough

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Cannabis

Spinoffs

One of the ways a company can try to unlock its own hidden value is by creating a separate company out of a corporate subsidiary. The parent company can either sell stock in the new company to the public, or spin it off—hand the stock out to its own investors.

Dividend Stocks

Dividend stocks make cash payouts that serve as a way for companies to share the wealth they’ve accumulated. These payouts are drawn from earnings and cash flow and paid to the shareholders of the company. Typically, these dividends are paid quarterly, although they may be paid annually or even monthly as well.

ETFs

What are ETFs?

ETF is an acronym for exchange traded fund. These exchange traded funds are used to track indexes as closely as possible, since investors cannot actually buy an index outright.

Value Stocks

What are value stocks?

One of the sweetest and most profitable pleasures of successful investing is to buy high-quality “value stocks” (or stocks that are reasonably priced, if not cheap, in relation to its sales, earnings or assets), then hold on to them as mainstream investors recognize the value and push up the share price.

Blue Chip Stocks

Blue chip stocks are big, well-established, dividend-paying corporations with strong business prospects. These are companies that also have sound management that should be able to make the right moves to keep competing successfully in a changing marketplace.

Penny Stocks

A penny stock in general trades for under five dollars a share, and as the name implies, sometimes for pennies. Most of the time they’re young companies, or start-ups in speculative markets like mining or technology.

Growth Stocks

Growth stocks are companies that are likely to have sales and earnings growth well above market average. Frequently they pay few, if any, dividends. Instead they typically reinvest any extra cash flow to promote further growth. Chosen wisely—according to Pat McKeough’s advice—high-quality growth-oriented stocks can be worthwhile additions to most well-diversified portfolios.

Wealth Management

Wealth management is the practice of putting your savings to work so that it continues to grow over your lifetime and will also benefit your heirs. Wealth management encompasses many different areas of investing like long term investment planning and retirement planning.

Mining Stocks

Mining stocks are investments in companies that produce or explore for minerals. Some of these minerals include uranium, coal, molybdenum (which is used in steelmaking), copper, silver and gold. They are affected by fluctuating commodity prices in addition to their own business and operating risks.

How To Invest

Pat McKeough has been making investing for beginners simple—and profitable—by helping investors make big gains for more than 25 years. His advice to beginning investors is the same as it is for all investors: buy high-quality, mostly dividend paying stocks (or ETFs that hold these stocks) and evenly spread your investments over the five main economic sectors (Resources, Manufacturing, Finance, Utilities and Consumer). Pat also believes investors should avoid stocks in the broker/media limelight and focus on those with hidden or little-noticed assets.

Energy Stocks

What are energy stocks?

Businesses that work in the extraction, refining and delivery of energy sources such as natural gas, oil, uranium and coal, are considered energy stocks.