How to invest? Pat McKeough has been answering that question for Canadians for more than 30 years, making investing for beginners straightforward and profitable.
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 the beginner investor should cultivate two important qualities: a healthy sense of skepticism and patience.
All investors should approach all investing 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.
 How Successful Investors Get RICHLearn everything you need to know in ‘The Canadian Guide on How to Invest in Stocks Successfully’ for FREE from The Successful Investor. How to Invest In Stocks Guide: Find 10 factors that make your investments safer and stronger. |
The best stock market rules of thumb can help you make better investing decisions. Here’s a look at two of the best: The four-year rule and the sell-half rule
Stock market rules of thumb won’t guarantee investment success. But the best of them can be very… Read More
Use tax-loss selling, or tax-loss harvesting, to offset your taxable capital gains in Canada.
Tax-loss selling (or tax-loss harvesting) occurs when you deliberately sell a security at a loss in order to offset capital gains in Canada. With tax loss selling in Canada, you can then… Read More
Following these tips on how to start investing in Canada will help you avoid some of the guesswork that can lead to big portfolio losses
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Split-share corporations come with inherent drawbacks that can hand investors unexpected and unwelcomed costs sooner than they’d planned
Split-share corporations: they’re just one of the areas in which Pat McKeough’s Inner Circle can get our investment research. Members also get to ask investment questions of Pat… Read More
Tax shelters in Canada that can help you save money when you use them correctly
Tax shelters in Canada aim to reduce or eliminate your tax liability and protect your gains on quality stocks to buy. As such, we at TSI Network have always advised investors… Read More
Recognizing the significant added risks that investing in real estate vs stocks can lead to is key to making smart decisions
There are a variety of considerations when deciding on investing in real estate vs stocks. It’s easier to start investing in real estate and get… Read More
Discover types of stocks and other investments to keep outside your RRSP—and the types of investments that benefit from an RRSP tax shelter.
Registered retirement savings plans, or RRSPs, are the best-known and most widely used tax shelter in Canada. The tax treatment of RRSPs is… Read More
Worrying too much about the wrong things, like unpredictable stock market events, takes a toll on results and diminishes an investor’s intelligence
Many investors spend a lot of time worrying about the wrong things. In particular, they worry about things that are unpredictable. Even if they… Read More
Here’s what we think about real estate investing in Canada — and it may surprise you
We’re constantly asked about real estate investment in Canada (or investment in Florida real estate, for that matter), and we understand the appeal. Even though today’s house prices still remain… Read More
Investment climate indicators can be useful tools when evaluating the market. But they are just part of the big picture.
To succeed as an investor, you need to look at the overall picture, rather than confine your view to your favourite selection of easily accessible investment… Read More
Investors sometimes ask us why we don’t publish price targets on the stocks we recommend in our newsletters and investment services.
Focusing on stock-price targets puts too much emphasis on predictions
We don’t publish stock-price targets for several reasons. The main one is that they may lead… Read More
Theme investing, particularly when snatched from the latest headlines, may seem appealing—but more often than not will lead to poor returns
Theme investors zero in on something that’s going on in the world—in business, politics, technology or society as a whole—and try to cash in… Read More
What are the key differences between dividend and index investing?
Dividend investing focuses on stocks that pay regular cash distributions to shareholders, while index investing aims to replicate the performance of a broad market index by holding a diversified portfolio of securities.
One big advantage of index… Read More
The bottom line first
Canadian investors don’t need to wait for the U.S. dollar to strengthen before selling U.S. stocks to realize gains. Your stock gains and losses are proportionally the same regardless of exchange rate movements at the time of sale. However, currency fluctuations do… Read More
Successful investors generally understand that you have two basic ways to make investment decisions. They also understand that it pays to know which of the two you are using at any given time.
Investment professionals call these two approaches “bottom-up” and “top-down.” Using the bottom-up approach,… Read More
With share splits, a company is simply cutting itself up into a number of pieces, without changing its fundamental value. It wants its stock to trade in a price-per-share range that seems reasonable to investors. This can affect stock market trading in more ways than… Read More
Within the five economic sectors, should you also spread out funds over some percentage of value, growth, and small-company stocks?
We talk frequently about the five economic sectors of investing (Manufacturing & Industry; Resources & Commodities; Consumer; Finance; and Utilities). But, we often get asked to… Read More
Getting into the stock market for beginners can feel overwhelming, but only if you go at it without the tips we share in this article.
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Learn how to invest in DRIP stocks more effectively by considering these qualities of the top dividend-paying shares—and how they fit into your long-term portfolio
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ADRs (American Depository Receipts) are a great way for Canadian investors to invest in foreign stocks
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