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
ALLIED PROPERTIES REAL ESTATE INVESTMENT TRUST $34.31 (Toronto symbol AP.UN; Units outstanding: 69.5 million; Market cap: $2.4 billion; TSINetwork Rating: Extra Risk; Dividend yield: 4.1%; www.alliedpropertiesreit.com) owns 138 office buildings, mostly in major Canadian cities. These mainly Class I properties contain over 9.9 million square feet of leasable area. Class I refers to 19th- and early-20th-century light industrial buildings that have been converted to retail space. They usually feature exposed beams, interior brick and hardwood floors. The trust bought $400 million worth of properties in 2012 and $182.4 million more in 2013. So far in 2014, it has added five more for $101.7 million....
TRANSCANADA CORP. $51.93 (Toronto symbol TRP; Shares outstanding: 708.0 million; Market cap: $36.3 billion; TSINetwork Rating: Above Average; Dividend yield: 3.7%; www.transcanada.com) has agreed to build a $1.9-billion, 260-kilometre pipeline that would pump natural gas from northeastern B.C.’s Dawson Creek area to a proposed liquefied natural gas (LNG) plant at Kitimat, on the province’s coast. The plant is a joint venture between Chevron Corp. (New York symbol CVX) and Apache Corp. (New York symbol APA). Both are recommendations of Wall Street Stock Forecaster, our newsletter that focuses on U.S. stocks....
Exchange traded funds (ETFs) are set up to mirror the performance of a stock market index or sub-index. They hold a more or less fixed selection of securities that represent the holdings that go into the calculation of the index or sub-index. 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....
SPDR S&P CHINA ETF $76.51 (New York symbol GXC; buy or sell through brokers; www.spdrs.com) aims to track the S&P China BMI Index, which is made up of all publicly traded Chinese stocks available to foreign investors. Right now, this ETF holds 269 stocks. The $841.1-million fund’s top holdings are Tencent Holdings, 8.5%; China Construction Bank, 6.0%; Industrial & Commercial Bank, 5.3%; China Mobile, 5.2%; Baidu, 5.2%; Bank of China, 3.4%; CNOOC Ltd., 2.9%; PetroChina, 2.8%; China Petroleum & Chemical, 2.4%; and China Life, 2.0%. The ETF was launched on March 19, 2007. It has a 0.59% MER and yields 2.5%....
ENBRIDGE INC. $50.81 (Toronto symbol ENB; Shares outstanding: 834.8 million; Market cap: $4242 billion; TSINetwork Rating: Above Average; Dividend yield: 2.8%; www.enbridge.com) has won approval from Ottawa for its Northern Gateway pipeline. The line will pump crude from Alberta’s oil sands to Kitimat, B.C. From there, tankers would ship the oil to customers in Asia. It will cost $7.9 billion to build this project. However, that estimate is sure to rise as other oil sands and pipeline projects drive up labour and material costs....
PENGROWTH ENERGY $7.35 (Toronto symbol PGF; Shares outstanding: 527.5 million; Market cap: $3.9 billion; TSINetwork Rating: Average; Dividend yield: 6.5%; www.pengrowth.com) produces oil and natural gas in Western Canada and off the Nova Scotia coast. Gas accounts for 55% of its production; the other 45% is oil. Pengrowth produced 75,102 barrels a day (including gas) in the first quarter of 2014, down 16.3% from 89,702 a year earlier. That’s mainly because it sold several less important oil and gas properties in Western Canada. It’s investing the proceeds in more promising projects, including its Lindbergh oil sands development in Alberta’s Cold Lake region. The company’s cash flow fell 6.9%, to $0.27 a share from $0.29....
ENCANA CORP. $25.05 (Toronto symbol ECA; Shares outstanding: 741.0 million; Market cap: $17.8 billion; TSINetwork Rating: Average; Dividend yield: 1.3%; www.encana.com) has completed its plan to sell shares of subsidiary PrairieSky Royalty Ltd. (Toronto symbol PSK) to the public. Encana sold the shares at $28 each. They have since jumped 40%, to $39.23. PrairieSky Royalty owns the oil and natural gas rights to 5.2 million acres in Alberta. It will not drill wells or explore for new reserves. Instead, it will collect royalties from other oil and gas producers. That should generate steady cash flows for monthly dividends. The sale proceeds were $1.67 billion, and Encana now owns 54% of PrairieSky. In the future, it may hand out that stake as a special dividend to its shareholders....
POWER CORP. $30.40 (Toronto symbol POW; Shares outstanding: 412.4 million; Market cap: $14.2 billion; TSINetwork Rating: Above Average; Div. yield: 3.8%; www.powercorporation.com) is a diversified holding company. It holds its financial assets through 65.8%-owned Power Financial. These financial assets include 68.1% of Great- West Lifeco, one of Canada’s largest life insurers (see article on Great-West Lifeco in this issue), and 58.7% of IGM Financial, a leading Canadian mutual fund provider. Power Financial also owns 50% of holding company Parjointco, which holds 55.6% of Switzerland- listed Pargesa Holdings SA. Pargesa has 95% of its assets in five large European companies: Imerys (minerals), Total SA (oil), Pernod Ricard (wine and spirits), Suez Environnement (energy, water and waste services) and Lafarge (cement and building materials). Power Corp. also has investments in Asia....
NEWMONT MINING has completed the sale of its Jundee gold mine in Australia for $91 million.
One of my most valuable investing rules resembles something I learned decades ago, as a teenage poker player. When you sit down to play poker, the first thing you do is try to spot the sucker. This is the weakest player at the table who continually “feeds the pot”—throws more money in than he or she takes out. The better players quickly recognize the sucker(s) and try not to take too much advantage of them too quickly, to keep them in the game. Thanks to contributions from the suckers, the better players tend to break even or win more often than not....