Daily Updates

A Top 10 Stock for 2012 Yielding 11.1%

Posted by Paul Tracy - Dividend Opportunities

on Wednesday, 28 December 2011 9:38

Without a doubt, it’s our most popular piece of research. Each year we publish our annual “Top 10 Stocks” list. Put simply, these are the 10 stocks my research staff and I think have the best chance of beating the market in the coming year.

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Interesting Charts

Posted by Don Vialoux: Timing the Market

on Wednesday, 28 December 2011 9:35

A Road Map for U.S and Canadian Equity Markets in 2012
North American equity markets in 2012 are expected to follow their traditional trends established during a U.S. Presidential Election year. The following 81 year seasonality chart on the Dow Jones Industrial Average compliments of www.EquityClock.com shows the picture.

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What Makes Platinum Precious Enough To Be Called Rich Man’s Gold.

About 2000 years ago, Aristotle explained why gold remained the ideal choice of money throughout major nations and civilizations. In words that are just as relevant today, he said “Gold is durable, not like wheat, divisible, not like diamonds, convenient, not like lead, constant, not like real estate, and best of all, as jewelry, it has intrinsic value”.

Among the most rare, valuable and sought after metals on Earth, platinum shares these same characteristics with gold. Platinum Guild International names platinum as the “most precious” of the precious metals based on its relative scarcity as well as for the following reasons:

I am often asked about the skills necessary to be a great trader. The answer to that question parallels the criteria for most pursuits where excellence is the goal. First, you have to learn the mechanics and then you must learn mental mastery.

The mechanics are the simple and straightforward part of the equation. Traders first need a set of criteria for identifying opportunities, the rules for entry. Some will develop technical analysis criteria, perhaps looking for a convergence of indicators that the traders tests to determine their effectiveness. Others will rely on fundamental valuations, looking to buy stocks that appear to be on sale in consideration of the company’s ability to make a profit. Some may combine research methods from both analytical disciplines.

With these rules established, the trader must work to develop a method for understanding and managing risk. I plan to lose on every trade I make, knowing the exact triggers that will make me exit a trade at a loss. For me, I rely on price barriers established by the past actions of traders. Others may use percentage drawdown or even time scale factors to know when to exit. For me, the amount of risk on the trade determines the position size that I take so I always know my exposure to loss going in. This all comes from the recognition that trading requires capital and losing it or tying it up in dead stocks is a quick way out of the trading game.

Then there is the question of when to exit. Again, the individual trader must develop their set of criteria to exit a trade, knowing the importance of sticking with winners and letting profits run. The winners have to pay for the inevitable losers so all exit strategies should factor in some understanding of expected value and probability theory. You can’t be right all of the time, but you can change what you do when you are right and when you are wrong.

Finally, since technology now plays a huge role in trading, there is the mastery of the tools that traders use to identify and execute trading opportunities. My primary tool is the Stockscores web site, but I also use real time quote feeds, spreadsheets, order entry tools and information sources to help in my trading decisions. Technology has given traders a lot more power, but also a lot more to think about. The challenge is to separate the significant from the minutiae and remain focused on using technology to make money.

These are some of the mechanics of trading. Just as a golfer must master the mechanics of the golf swing, the trader must master these areas if they are to ever succeed.

But mastery of the mechanics of trading only assures the trader occasional glory. As anyone who has ever seen me golf will attest, mechanics alone will barely get you down to the green. In golf, there are times when the threat of the woods or water call out to your subconscious mind, causing you to overpower your understanding of mechanics and leaving you in search of some small thing that seems to separate you from success.

Trading is no different.

The fear of losing money and the desire to feel the empowerment that comes with trading profits can lead many away from the execution of their trading plan. Learning the mechanics of trading can take mere months, but for some, mastery over their trading minds can never be achieved. For most of us, it is this second phase of our learning where the greatest amount of effort must be spent.

First you have to learn the rules that form the backbone of your trading approach. Then you have to work on understanding why you keep breaking those rules. Understanding that mechanics alone will not make you money is a revelation that often comes to traders long after their brokerage account balances have been depleted. Keep this in mind as you work to master the markets.

 

This week, we added a new filter to the Stockscores.com Market Scan. It is now possible to query the entire market for stocks paying a dividend. You can choose to query based on the yield range so if you want to find stocks yielding more than 5%, it is now possible.

When looking for stocks with strong yields, it is also important that the stocks are not going to go down. If a stock is in a sharp downward trend but has a high historical yield, it is quite likely that the dividend will be reduced. This past summer, I wrote a newsletter about this, highlighting how T.YLO and T.ARF were not likely to continue to pay their dividends. Both have since stopped their payouts.

Therefore, we want to find stocks with good charts and good yields. To help you with this, I have created two new Market Scans. Any of our Advanced or Pro members can apply these Market Scan strategies. From the preset strategy pull down, select Canadian Strong Yielders or US Strong Yielders.

I ran this scan this week, here are three stocks that have decent potential:

 

1. T.NPI
T.NPI historically pays a 6.3% yield and the stock is in a strong upward trend.

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2. T.EMA
T.EMA is breaking to new highs this week and has been strong for the past two years. Its historical yield is 4.1%

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3. HCP
HCP breaks through $40 this week and closed at a nearly 5 year high. The stock’s historical yield is 4.95%.

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References

 

 

The Santa Clause Rally & January Effect

Posted by Ryan Irvine: Keystocks

on Tuesday, 27 December 2011 9:10

Market Buzz – ‘Twas the Night Before Christmas (close enough…)”

The Toronto Stock Exchange finished Friday with a 50 point gain on holiday-volume, leaving it up about 290 points on the week. Having said this, the index’s rise still leaves it with a long way to go to reach the close of 13,371.20 on Dec. 23, 2010.

The benchmark S&P/TSX composite index is still more than 1,400 points, or over 10%, below the level it was a year ago.

But at this time of year, our thoughts, and the thoughts of the market, tend to turn to the holidays. We leave you with the following bit of prose.

‘Twas the night before Christmas, and all through the brokerage house,

Not a trader was stirring, not even a mouse;

All portfolios repositioned by the advisors with care,

In hopes that a sustainable rally soon would be there;

The clients were restless, fed-up in their beds,

While visions of positive returns danced in their heads;

And mamma with her calculator, and I in my cap,

Had just looked at our statement, and broke out into rap,

When there on the TV there arose such a clatter,

I sprang from my calculations to see whom I could batter.

Away to the set I flew like a flash,

Stepped on a skateboard and tripped over trash.

The reporters on CNBC so cheery and upbeat,

Made me sick to the stomach as I fell from my feet,

When, what to my frustrated eyes should appear,

But Fed Chairman Bernanke, and eight empty beer,

With a swig and a wink, so lively and quick,

I thought for a moment, “Who was this old prick?”

More rapid than eagles, his stimulus it came,

And he coughed, and wheezed, and called them by name;

“Now, QE 1! now, QE 2! now, QE 3 and More!

On, Apple! on Intel! on McDonald’s and Ford!

To the top of the index! There’s nowhere left to fall!

Now rally away! Rally away! Rally away all!”

And I heard him exclaim, as he drove out of sight,

“PROFITABLE INVESTING KEYSTONE CLIENTS, AND TO ALL A GOOD-NIGHT”

 

Loonyversity– The Santa Clause Rally & January Effect

The oft-spoken-of Santa Claus Rally refers to a surge in the price of stocks that can occur in the week between Christmas and New Year’s. There are numerous explanations for this phenomenon, including tax considerations, a generally jovial mood around Wall Street (Christmas bonuses), and the fact that the pessimists are usually on vacation this week.

Many consider the Santa Claus Rally to be a result of people buying stocks in anticipation a rise in stock prices during the month of January, otherwise known as the January Effect, which many postulate is the result of excessive tax-loss selling up until Christmas Eve.

For its part, the “January Effect” is a tendency of the stock market to rise between December 31 and the end of the first week in January. The January Effect occurs because many investors choose to sell some of their stock before the end of the year (early to mid December) in order to claim a capital loss for tax purposes. Once the tax calendar rolls over to a new year on January 1st these same investors quickly reinvest their money in the market, causing stock prices to rise. Although the January Effect has been observed numerous times throughout history, it is difficult for investors to profit from it since the market, as a whole, expects it to happen and therefore adjusts its prices accordingly. Having said this, savvy investors can find some potential opportunities in the lighter traded small-cap market.

 

Put It To Us?

Q. What factor, more than any other, will help me accumulate a sizable RRSP?

– Sadie Barry; Calgary, Alberta

A. Besides subscribing to our research, both for income and small-cap stocks, start early. The earlier you start, the more you’ll have when you retire.

The key to a accumulating a big-time RRSP is growth – growth through contributions and growth through investment earnings. The longer your money is invested, the more it will grow.

Here’s an example:

With a $100 per month contribution, at 8% return per year:

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