How To Invest
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
The Bank of Canada is unlikely to raise interest rates any time soon. That’s because low prices for oil and other commodities will likely continue to offset higher exports due to a low Canadian dollar, as well as increased government spending. Even so, the long-term outlook is for higher interest rates. That’s because heavy deficit spending and the expansion of the money supply in the past few years make higher inflation more likely. We continue to advise against investing in bonds right now. That’s because today’s low interest rates make bonds unattractive, and rising rates would push down their future value....
PENN WEST $1.17 (Toronto symbol PWT; Shs. o/s: 502.2 million; Market cap: $582.5 million; TSINetwork Rating: Speculative; No dividends paid; www.pennwest.com) has sold oilproducing properties worth over $1 billion since the start of 2015. Even so, its debt is still a very high $1.9 billion, or 3.3 times its market cap. In the three months ended December 31, 2015, Penn West’s production fell 20.3%, to an average of 77,398 barrels per day from 97,143. Cash flow per share fell sharply, to just $7.0 million, or $0.01 a share, from $137.0 million, or $0.28 a share. Penn West may still need to sell more assets to meet scheduled debt repayments. But without significantly higher oil and gas prices, those sales will further cut its already low cash flow....
RIOCAN REAL ESTATE INVESTMENT TRUST $26.68 (Toronto symbol REI.UN; Units outstanding: 321.9 million; Market cap: $8.7 billion; TSINetwork Rating: Average; Dividend yield: 5.2%; www.riocan.com) owns all or part of 305 shopping centres in Canada, including 16 properties under development. The trust pays monthly distributions of $0.1175 a unit, for a 5.2% annual yield. These payouts accounted for 90.4% of RioCan’s cash flow in 2015. However, 31.5% of the trust’s investors take part in its distribution reinvestment plan, so they get units rather than cash. On this basis, RioCan’s cash payouts were a more reasonable 62.0% of its cash flow. (If you want the units instead of cash, you still have to pay income taxes on your distributions for the year when you receive them.) This week, RioCan announced that with the April 2016 distribution, it eliminated the 3.1% discount it offered to unitholders who reinvested their distributions....
GREAT-WEST LIFECO $35.17 (Toronto symbol GWO; Shares outstanding: 993.4 million; Market cap: $35.0 billion; TSINetwork Rating: Above Average; Yield: 3.9%; www.greatwestlifeco.com) is one of Canada’s largest insurance firms. It also offers mutual funds and wealth management. Power Financial owns 67.2% of Great-West. In the three months ended December 31, 2015, Great-West’s earnings rose 4.5%, to $0.69 a share from $0.66 a year earlier. As of December 31, 2015, the company had $1.2 trillion of assets under administration, up 14.0% from a year ago....
The comments on our website, TSINetwork.ca, give us a window on what our readers are thinking, and on how they interact with each other.
Recently, one reader wondered, “...what is a good entry point when purchasing a stock or an ETF? I always pay too much then the stock drops like Home Capital Group dropped from the $50 range to $30 range as soon as I bought it. Setting a limit price is difficult— does one choose a 50-day moving average, or…?”
Soon after, another reader addressed her question. He suggested that she look further into moving averages, and shared some of his views on how to profit from them.
Many investors make buy and sell decisions with the help of moving averages and other forms of technical analysis. I don’t know if this has any consistent impact on their long-term returns—for better or worse. It may be more reliable as a comfort factor than a source of improved profit.
After all, there’s a large random element in stock-price changes, especially in the short term. When you focus on timing buy and sell decisions to improve your investment results, you are trying to come up with a system that can outguess a random factor. But a random factor is something you can’t outguess.
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Recently, one reader wondered, “...what is a good entry point when purchasing a stock or an ETF? I always pay too much then the stock drops like Home Capital Group dropped from the $50 range to $30 range as soon as I bought it. Setting a limit price is difficult— does one choose a 50-day moving average, or…?”
Soon after, another reader addressed her question. He suggested that she look further into moving averages, and shared some of his views on how to profit from them.
Many investors make buy and sell decisions with the help of moving averages and other forms of technical analysis. I don’t know if this has any consistent impact on their long-term returns—for better or worse. It may be more reliable as a comfort factor than a source of improved profit.
After all, there’s a large random element in stock-price changes, especially in the short term. When you focus on timing buy and sell decisions to improve your investment results, you are trying to come up with a system that can outguess a random factor. But a random factor is something you can’t outguess.
...
Stellar Biotechnologies, $4.41, symbol KLH on Toronto (Shares outstanding: 8.4 million; Market cap: $47.7 million, www.stellarbiotechnologies.com), farms keyhole limpet hemocyanin (KLH). That’s a protein used in a range of therapeutic applications to stimulate the human immune system. Stellar’s KLH products can be used to create therapeutic vaccines, or immunotherapies. They are treatments that use the body’s own immune system to target and treat disease. KLH can also be used for immunodiagnostics. Those are tests that determine the health of a patient’s immune system before a new drug is used. KLH is refined from the “blood” of a rare clam-like snail—the giant keyhole limpet. That ocean dweller is found in the waters off Southern California and western Mexico. Its blood is called hemolymph and flows through its circulatory system....
General Dynamics Corp., $130.87, symbol GD on New York (Shares outstanding: 311.2 million; Market cap: $41.0 billion; www.generaldynamics.com), is the world’s fifth-largest aerospace and defense contractor by revenue. In 2015, the U.S. government accounted for 57% of its total sales. The company has four divisions: Information Systems and Technology (29% of its 2015 revenue, 21% of earnings) builds computer networks and data centres for the U.S. Department of Defense. Its clients also include other government agencies and large commercial buyers....
Western Copper & Gold Corp., $0.68, symbol WRN on Toronto (Shares outstanding: 94.2 million; Market cap: $65.9 million; www.westerncoppercorp.com), owns the Casino project in the Yukon. The mining site is Western Copper’s sole asset. It contains an estimated 8.9 million ounces of gold, 65 million ounces of silver, 4.5 billion pounds of copper and 483 million pounds of molybdenum. The company completed a feasibility study on the project in 2013. The operation would centre on an open-pit mine with a 22-year life expectancy. Western Copper is now two years into the permitting stage. It should take another two years to complete....
Waste Management Inc., $58.21, symbol WM on New York (Shares outstanding: 445.7 million; Market cap: $26.1 billion,www.wm.com), is the largest solid waste disposal company in North America. The company operates about 265 landfills, 300 transfer stations and 600 collection operations. Waste Management has moved up to new highs since reporting strong results in the three months ended December 31, 2015. Excluding one-time items, it earned $320 million, or $0.71 a share. That’s up from $278 million, or $0.60 a share, a year earlier. It also beats the consensus forecast of $0.68. The improvement came from Waste Management’s focus on controlling costs and pricing its new contracts high enough to protect its profit margins. The company has also increased its customer retention by providing better service....
Skyworks Solutions Inc., $77.10, symbol SWKS on Nasdaq (Shares outstanding: 191.7 million; Market cap: $14.8 billion; www.skyworksinc.com), makes a variety of chips and other electronic components for cellphones, tablet computers and other wireless devices. Foxconn—the maker of Apple’s iPhone and iPad—accounts for over 40% of Skyworks’ sales. Skyworks is also developing chips for other applications beyond mobile devices. They include smart meters that help electrical utilities cut fraud and make their grids more efficient. The company continues to benefit from the growing number of people who use mobile devices, such as smartphones, to communicate and access the Internet....