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.

In addition, Pat thinks then beginner investors should cultivate two important qualities: a healthy sense of skepticism and patience.

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Investors should approach all investments with a healthy sense of skepticism. This can help keep you out of fraudulent stocks that masquerade as high-quality stocks. It will also keep you out of legally operated, but poorly managed, companies that promise more than they can possibly deliver.

If you are a new investor, you should also realize that losing patience can cause you to sell your best choices right before a big rise. All too often, investors buy a promising stock just as it enters a period of price stagnation. Even the best-performing stocks run into these unpredictable phases from time to time. They move mainly sideways in a wide range for months or years before their next big rise begins. (Stock brokers often refer to these stocks as “dead money.”)

If you lack patience, you run a big risk of selling your best choices in the midst of one of these phases, prior to the next big move upward. If you lose patience and sell, you are particularly likely to do so in the low end of the trading range, when stock prices have weakened and confidence in the stock has waned.

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How To Invest Library Archives
How To Invest
Q: Pat: What are the odds that within a couple of years we will see CP Rail and CSX Transportation shaking hands. Could be a good fit, and there is one common denominator—Hunter Harrison just left CP and joined CSX. Thanks.
A: CP Rail, $212.10, symbol CP on Toronto (Shares outstanding: 147.7 million; Market cap: $30.7 billion; www.cpr.ca), did discuss a potential merger with U.S. railway CSX Transportation (symbol CSX on New York) in early 2015. CSX had previously spurned a 2014 merger attempt by the company....
1 min read
Pat McKeough
How To Invest
Q: Dear Pat: I converted my RRSP into a RRIF last year when I turned 71, so I’m now required to take money out by the end of this year, in which I turn 72. What’s the best way to approach that? Should I start now in case the market drops this year? I might add that I need the money I take out to supplement my daily expenses, so I’d like to take advantage of the stocks being mostly up in my portfolio (and I hold almost all stocks that you recommend). Thanks.
A: You must convert your RRSP into a RRIF no later than the year you turn 71, as you did. When you hold a RRIF, you must withdraw a minimum each year and report that amount for tax purposes. (You may withdraw amounts above the minimum at any time.) In your case, as you mentioned, you need to make a withdrawal this year when you turn 72.


Revenue Canada sets your minimum withdrawal for each year according to a schedule that starts at 5.28% of the RRIF’s year-end value at age 71, moves to 5.40% at age 72, reaches 6.82% at age 80, and levels off at 20% at age 95.


We feel that the overall direction of the market is upward....
1 min read
Pat McKeough
How To Invest
What is Pat’s commentary for the week of May 2, 2017
Dear Inner Circle Member,


Today, many households and even some individuals have five or 10 separate investment accounts. These accounts may include RRSPs (regular and spousal), TFSAs and other registered accounts, personal and joint accounts, corporate accounts, LIRAs from past employment, children’s accounts, trust accounts and so on.


In addition, some investors have one or more of what you might call “legacy” accounts....
4 min read
Pat McKeough
How To Invest
Q: Hi Pat: Could you comment on True North Commercial REIT. It has a high yield. I’m looking for income and wondering if you would consider this equity for that purpose?
A: True North Commercial REIT, $6.25, symbol TNT.UN on Toronto (Units outstanding: 29.1 million; Market cap: $182.5 million; www.commercialtruenorth.com), owns light industrial properties across Canada.


As of December 31, 2016, the trust owned 30 buildings, which provide a total of 1.9 million square feet of leasable area....
1 min read
Pat McKeough
How To Invest
Q: Hi Pat: I’m hearing varying stories on the efficiency of carbon scrubbers in reducing the amount of carbon released into the atmosphere by coal-fired plants. Some say the reduction is as much as 90%. If this is true, I can’t believe the coal industry lobbyists wouldn’t be touting this at every greenhouse-gas convention and at every government conference on global warming. Also NRG Energy (NRG on New York) seems to be leading in this area. I’d appreciate your comments.
A: Carbon scrubbing, also called clean-coal technology, aims to reduce the amount of harmful emissions and particulates, such as sulfur dioxide and mercury, emitted from coal-fired power plants. The process for doing this involves treating low-quality coal before burning it, and installing special equipment to capture emissions before they enter the atmosphere.


However, carbon scrubbing does not remove carbon dioxide (CO2)....
3 min read
Pat McKeough
How To Invest
Q: Hi Pat: What do you think about Deutsche Bank. When is the right time to buy? Also, I do not understand the rights issue it is offering. Are the rights separate shares? Thank you very much for your insights.
A: Deutsche Bank AG (ADR), $18.52, symbol DB on New York (ADRs outstanding: 2.1 billion; Market cap: $35.1 billion; www.db.com), is a German global banking and financial services company with its headquarters in Frankfurt.


Deutsche Bank has been among the worst performers in the European banking industry....
1 min read
Pat McKeough
How To Invest
Q: Pat: What is your analysis of Glaukos Corp.? It was a new issue in 2015, and I know you don’t like those. Thank you; I appreciate any advice you can provide.
A: Glaukos Corporation, $46.65, symbol GKOS on NYSE (Shares outstanding: 34.3 million; Market cap: $1.6 billion; www.glaukos.com) first offered shares to the public in June 2015 at $18 per share; the share price rose 73.4% in its first day of trading.


Glaukos develops and markets medical devices and therapies to treat glaucoma....
2 min read
Pat McKeough
How To Invest
What is Pat’s commentary for the week of April 25, 2017
Dear Inner Circle Member,


Human nature puts the odds against you when you invest in new stock issues (also known as IPOs or Initial Public Offerings).


Insiders decide when to bring a new issue to market. They mostly do so only when it’s a good time for the company or its insiders to sell stock to the public....
2 min read
Pat McKeough
How To Invest
Q: Hello Pat: What is your opinion regarding Eastmain Resources (ER.TO)? I acquired it in December 2016 and wonder if it’s good to keep. Thank you.
A: Eastmain Resources, $0.47, symbol ER on Toronto (Shares outstanding: 175.4 million; Market cap: $82.4 million; www.eastmain.com), is a Canadian gold exploration company with a 100% interest in the Clearwater property (host to the Eau Claire deposit); it also holds 36.7% interest in the Eleonore South joint venture; and the former-producing Eastmain mine gold-copper project....
1 min read
Pat McKeough
How To Invest
Q: Dear Pat: May I have your opinion, please, on Alaris Royalty Corp. Thank you.
A: Alaris Royalty Corp., $22.58, symbol AD on Toronto (Shares outstanding: 36.4 million; Market cap: $819.6 million; www.alarisroyalty.com), lends money to its partners—private businesses—in exchange for royalties or distributions....
2 min read
Pat McKeough
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