Pat McKeough has been making investing for beginners simple—and profitable—by helping investors make big gains for more than 25 years. 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 then beginner investors should cultivate two important qualities: a healthy sense of skepticism and patience.
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.
 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. |
Despite high interest rates, many of us are buying second homes in sunshine U.S. markets thinking further price increases are inevitable and will rival the returns on quality U.S. stocks.
A while back I was interviewed about this trend on CTV. Apparently I surprised everybody when… Read More
Discover four keys to successful investing, as well as the marketing practices you should be aware of when considering investments for your portfolio.
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We Think Now is a Bad Time to Buy Bonds…and Here’s Why
Recently a friend asked, “Pat, I see that several prominent Canadian investor advisors recently wrote articles that said it’s a bad time to buy bonds right now. Do you agree?”
He was surprised when I.. 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
Does a sector rotation strategy work? Rarely! That’s because you need to guess right three times to profit from a sector rotation investment strategy.
We have long advised focusing on conservative long term stock trading strategies and against practicing a top-down sector rotation strategy, and that… Read More
Learning where to invest money in Canada successfully will lead you to diversify between sectors while focusing on high-quality stocks
The answer to the question of where to invest money in Canada starts with this piece of advice: As we’ve often said, one key element in… Read More
Investors practicing bottom-up investing focus on a company’s fundamentals, and not predictions of what may happen in an industry or the economy
We think that most investors are far better off with “bottom-up investing” as opposed to “top-down investing.” Bottom-up is where you look closely at… Read More
Benefits of U.S. stocks – and does the exchange rate affect your gains?
I’ve been advising Canadian investors to include U.S. stocks in their portfolios for more than 30 years. I continue to recommend them today. The U.S. stock market offers the widest variety and highest… Read More
Will you have to pay capital gains tax for this tax year? Here’s how to calculate capital gains tax so you have the general path to figuring it out.
When you sell any stock held outside of an RRSP, RRIF or TFSA, you must pay capital… Read More
Understanding stock options will lead you to see them as highly speculative investments—and more like a gamble than a sure thing
While it’s possible to make money in stock options, it’s important to realize that there’s a large element of risk in these speculative investments—and you… Read More
When it comes to dual-class shares, the voting shares have certain advantages over non-voting shares
Aside from specific investments (such as U.S. and Canadian stocks, income trusts or exchange-traded funds), our Inner Circle members ask us about a wide range of investments. For example, I’ve been… Read More
Successfully playing the stock market — like chess—is never about going for broke.
Many investors like to use analogies from sports or the military to describe their investment approach, so they’ll often use the phrase playing the stock market. But if I had to compare our… 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
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
Invest in spinoffs and avoid IPOs when you look for new companies on the stock market. This should boost your long-term portfolio returns
The decision to go public or remain private depends on a number of factors that a company’s owners must evaluate from the unique… Read More
The dangers of online trading don’t get much play in the media when addressing how to buy stocks for dividend growth, but online trading does indeed carry hidden dangers that aren’t always evident at first.
The main risk comes from the fact that online trading may… 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
You can tell a lot about a couch by sitting on it, checking the price, the delivery schedule, the warranty, the… 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
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
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