Some of the country's top investing minds want to tell you exactly which stocks and mutual funds to buy.
Just subscribe to their newsletters and away you go.
There are 15 or so mainstream investing and financial newsletters for the Canadian market, most costing somewhere between $50 and $300 a year. Which are worth the money? Read on for five suggestions.
First, though, let's look at how to pick a good newsletter. An obvious start is to evaluate the source of the recommendations. How credible is this person? What's their background?
Next, there's the question of how useable the recommendations are. The emphasis for this evaluation is on funds, stocks, bonds, income trusts and such that may be of interest to a wide swath of retail investors.
A quality newsletter dishes out criticism as well as praise, including self-criticism in the case of those inevitable recommendations that go awry. At the very least, a newsletter has to tell you to "sell," and not just "buy" or "hold."
Finally, there's the tricky matter of performance. Many of the newsletters considered here focus on buy-and-hold investing, which means they're not concerned about returns generated over limited periods of time. Still, it's always welcome when a newsletter documents clearly how its picks have fared.
THE INVESTMENT REPORTER
COST: $97 per year introductory, then $297.
FREQUENCY: Weekly
HOW IT'S SENT: By mail.
PLUSES: Solid advice for building a safe-and-sound stock portfolio.
MINUSES: Could use more documentation of how its picks have fared.
CONTACT: 416-869-1177
THE SKINNY: This is the newsletter to get you going if you want to build a long-term stock portfolio from scratch, but you have no idea what to buy.
Simply written without being simplistic, The Investment Reporter offers both commentary on the broad markets and conservative, but still pointed, advice on stocks to both buy and avoid.
Have you been tempted by Cinram International, a producer of CDs and DVDs that has been on a tear lately?
The Investment Reporter put Cinram on a recent list of 25 stocks that will lag the market in the next six months.
"Cinram . . . seems fully valued," it said. "Debt is high and downloading from the Internet is a long-term threat."
The Investment Reporter's recommendations come from an anonymous investment planning committee that focuses on "key stocks" for building a portfolio.
Each month, some key stocks are listed as buys based on such factors as current share price and the economic outlook. You won't find anything even remotely exotic here.
Recent best buys have included income stocks such as BCE Inc., Dofasco Inc., Hudson's Bay and TransCanada Corp. and more growth-oriented plays such as Manulife Financial, Canada Bread and Dorel Industries.
The Investment Reporter has been around since 1941 and it's still the best of the eight or so investing newsletters published by MPL Communications Inc.
THE INCOME INVESTOR
COST: $44.95 per year
FREQUENCY: Monthly
HOW IT'S SENT: By e-mail, or view it on-line.
PLUSES: Detailed coverage of an overlooked, often complex investing niche.
MINUSES: More information on building income portfolios would be useful.
CONTACT: http://www.buildingwealth.ca 1-888-287-8229 or 905-830-1196
THE SKINNY: This monthly newsletter is one of the more recent offerings from Gordon Pape, probably Canada's top provider of reliable, unbiased advice for small investors. Mr. Pape is as much a savvy businessman as an investing expert, judging by his ever-expanding output of books, newsletters and such.
The Income Investor's title suggests something designed for retirees and those who can't tolerate stock market risk.
While there is some coverage of retirement-related matters, this is a newsletter for anyone who likes the idea of at least some of their gains coming in the form of regularly paid income as opposed to capital appreciation.
Investments surveyed here focus on ways to cope with volatile stock markets and low interest rates. Especially useful is the coverage of income trusts, preferred shares, bonds and debentures, all of which are difficult for investors to research on their own because of their complexity and a scarcity of resources.
With income trusts, for example, this newsletter covers tax implications, distribution policy, risks and other factors that might otherwise go unnoticed by unwary investors.
Accountability is another strength of this newsletter. Updates of previous recommendations are available, with the current price and the price when first recommended.
THE SUCCESSFUL INVESTOR
COST: $72 per year
FRQUENCY: Monthly
HOW IT'S SENT: By mail.
PLUSES: Sensible old-school stock-picking.
MINUSES: You rarely see a ''sell'' in this newsletter.
CONTACT: 416-756-0888 or 1-888-292-0296
THE SKINNY: There are three major producers of investing newsletters in Canada -- MPL Communications, Gordon Pape and The Successful Investor Inc., which is run by Patrick McKeough, a former broker and a one-time editor of The Investment Reporter.
Mr. McKeough oversees a few different publications, but The Successful Investor is the best because of a common sense approach that looks skeptically on fads and deviations from tried-and-true investing wisdom.
Each monthly issue includes a commentary from Mr. McKeough on investing issues of the day, and a selection of highlighted stocks, income trusts and, occasionally, mutual funds.
Blurbs for individual securities are brief but full of the sort of detail you need to know before buying an investment. There's also an "SI Rating" on each stock that suggests how risky it might be.
If you're looking for help in building a portfolio, The Successful Investor includes suggestions geared toward investors seeking either income or growth. Interestingly, Mr. McKeough doesn't include income trusts in his growth portfolio. "Generally, these investments should play only a small role in a conservative portfolio," he wrote in a recent issue.
INTERNET WEALTH BUILDER
COST: $99 per year
FREQUENCY: Weekly (44 issues per year)
HOW IT'S SENT: By e-mail, or view it on-line.
PLUSES: Tons of investing ideas, each well explained.
MINUSES: Adding a little mutual fund coverage would round this newsletter out nicely.
CONTACT: http://www.buildingwealth.ca 1-888-287-8229 or 905-830-1196
THE SKINNY: Another Gordon Pape production, this one aimed at savvier investors seeking opportunities in such areas as stocks, closed-end funds, income trusts and options trading.
There's no technology focus here, by the way. The name of the newsletter refers to the fact that it's distributed electronically.
Mr. Pape's commentary and recommendations are the backbone of this newsletter, but there are also contributions from Yola Edwards, a technical analyst; Tom Slee, who is billed as a veteran money manager and stock analyst; and Irwin Michael, a respected mutual fund manager.
The differing perspectives and specialties of these people give Internet Wealth Builder an eclectic feel that many other newsletters lack.
In recent issues, Ms. Edwards offered an outlook on gold prices in a recent issue using technical charting, while Mr. Slee commented on Manulife Financial and Mr. Pape looked at the prospects for RioCan Real Estate Investment Trust.
As with The Income Investor, there's a good level of accountability with this newsletter. You can also count on a steady stream of investing ideas, given you'll receive 44 issues a year.
THE FUNDLETTER
COST: $44.50 per year introductory, then $97
FREQUENCY: Monthly
HOW IT'S SENT: By mail
PLUSES: Opinionated views on funds and the markets, with lots of "sell" as well as "buy" calls.
MINUSES: Not much attention to portfolio-building.
CONTACT: 416-869-1177
THE SKINNY: With something like 5,400 mutual fund variations now available, a fund newsletter can really be useful in helping investors cut through the clutter.
This is the FundLetter's strength.
Each monthly issue mentions only a handful of funds, with recommendations to buy, sell or hold.
The recommendations are often put in the context of a broader market commentary by contributing editors such as the aforementioned Prof. Kirzner and Jon Kanitz, a first vice-president and investment adviser with CIBC Wood Gundy.
In the September issue, Mr. Kanitz forecast a significant stock market pullback and recommended investors liquidate positions in several previously recommended funds.
The market hasn't fallen yet, but Mr. Kanitz has to at least be credited with providing the kind of opinionated commentary that investing newsletters should offer subscribers.
The FundLetter includes a healthy portion of "sell" recommendations, notably when recommended sector funds have delivered big returns.
That's a sensible approach that you don't often see in fund advisories.
One other plus worth noting is that the FundLetter covers Canadian and U.S. exchange-traded funds.
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