We developed our TSINetwork ratings to help investors quickly and easily identify stocks with the asset size and investment quality to weather market downturns and changing industry conditions. Stocks of this quality are the best investments for long-term profits.

You will find our TSINetwork ratings (Highest Quality, Above Average, Average and Extra Risk) next to each stock we recommend in our newsletters. Obviously, we take a number of factors into account before we assign these ratings. Many involve a company’s financial profile.

But we also consider three key factors that give us a broad view of the company’s future:

1. The ability to profit from secular trends: The best investments in this category are companies that can take advantage of trends that go far beyond mere business cycles and reflect ongoing changes in society. Examples include economic liberalization, the impending retirement of the baby boomers, and the productivity gains available from continually evolving computer and communications technology.
   
   A company that would score highly here is Baxter International (symbol BAX on New York), one of the companies we cover in our Wall Street Stock Forecaster newsletter. Baxter gets most of its revenue by making medical equipment, such as intravenous equipment and systems, as well as dialysis equipment. That puts it in position to profit as the North American population ages.
2. The ability to serve all shareholders: The most dependable investments in this category are firms that are free of heavy-handed government regulation, free of too much dependence on a single supplier, and free from abuse by insiders.

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3. Industry prominence—or even better, industry dominance: Companies that are prominent, or dominant, in their industries are among the most attractive stocks you can invest in. They are especially well positioned to weather economic downturns and fend off new competitors. BCE Inc. (symbol BCE on Toronto), Canada’s largest telephone service provider, is a good example.
   
   BCE is facing rising competition from new wireless providers, cable companies and web-based phone services.
   
   However, BCE’s diverse operations continue to give it an advantage in its fast-changing industry, through satellite TV, land lines, high-speed Internet and wireless services. What’s more, BCE has taken steps to profit from the growing demand for cloud computing services. It recently entered into an agreement to acquire 30% of Q Networks, which provides data-storage and web-hosting services. BCE already operates six data centres and is opening more.

Knowledge of these little-appreciated pluses can give your portfolio an enormous boost in the course of an investing career.

COMMENTS PLEASE—Share your investment knowledge and opinions with fellow TSINetwork.ca members

We discuss several “secular” factors in this article, such as the aging of the baby boomer generation, or the swift evolution of technology. Is there another such social, economic or political trend that you think investors will have to come to grips with in the years ahead? Let us know what you think in the comments section below. Click here.