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.
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China’s ambitions for regional or global domination, and its impact on global investors through trade growth, military threats in the South China Sea, plus the long-threatened Taiwan takeover
Lately we’ve been talking about investor worries–and here’s one that we feel has passed its best-before date. In… Read More
The term “investment synergy” entered common investor use during the takeover craze of the 1960s — but we see a new synergy that’s a big plus for investors.
The term “synergy” entered common investor use during the takeover craze of the 1960s, when businesses started to… Read More
Conservative investors: Follow our three-part Successful Investor if you want to maximize your portfolio returns with the least amount of risk
The surest way for conservative investors to make money in stocks is to start out by following our three Successful Investor rules for sound investing. They… Read More
What are ADRs and what are the fees investors pay
Recently one of our Inner Circle members asked, “You mentioned recently that TSI recommends a handful of ADRs (American Depositary Receipts) providing exposure to European and Japanese stocks. One question: What are the ADR fees charged… Read More
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
Top-quality stocks tend to lose less of their value in the kind of significant setback the market experienced with COVID-19 and… Read More
Ignore stock market anxiety and negative stock predictions and instead focus your investing strategy on diversification and portfolio balance
The current state of the world is generating stock market anxiety, as it often does. My guess is that the Israel-Hamas war is just getting started and… Read More
Seizing Double-Barrelled Buying Opportunities Amidst Investor Fear and Hidden Market Value
I began using the term “double-barrelled buying opportunity” in the 1980s, and most recently wrote about it in my 2017 book, Pat McKeough’s Successful Investor Toolkit. It occurs when the two conditions below come together in a.. Read More
Investing advice when Putin’s at war against Ukraine. Plus, Putin and the Israel-Hamas War
Russia launched the war in 2014, during the second Obama term, when it invaded Ukraine’s Crimean Peninsula. At the time, the U.S. and NATO were still unsure about how to react to… Read More
The pendulum theory grew out of Sir Isaac Newton’s 17th-century studies of gravity and physics, particularly his second law of motion. Yet the theory turns up in all sort of discussions. This includes investors’ efforts to understand the stock market.
You could sum up the investment… Read More
Investors often go for the easy gains, but resist the urge to dump your best stock picks for a quick profit
Here’s a quote from one of the first highly successful investors I ever had the privilege of meeting. While talking about the stock market, he… Read More
You can get a sense of a company’s share-price volatility based on its stock beta score, but the data can be misleading and it does not really help in selecting stocks for long-term success
Beta ratings are a measure of stock’s volatility in relation to the… Read More
Are you trying to succeed with investments? Our Successful Investor approach is a highly successful investment strategy we teach to our subscribers.
Successful investors try to arrange their portfolios so that they more-or-less automatically tap into the profit and long-term growth that inevitably comes with well-established… Read More
North America’s supply chains present challenges for investors, but also opportunities
Recenty, we’ve talked about three of the fears that investors are facing right now: Artificial Intelligence, Putin’s war against Ukraine, and China.
But there’s a fourth: Supply chain issues worry investors for a couple of reasons… Read More
ESG funds are a potential source of conflicts of interest for investors
As I’ve often mentioned, the biggest risk you face as an investor is hidden or unrecognized conflicts of interest. It’s not because any one conflict of interest can do great damage to your finances… Read More
Here’s a Look at the Best Investments to Hold in a TFSA–and Why
We recently had a question from a member of Pat McKeough’s Inner Circle that asked:
“Pat, I hold Intel in a non-registered account with a capital loss showing and am thinking of transferring it… Read More
Here’s a look at the benefits of geographic diversification for your portfolio
One key factor in successful investing—apart of course from picking good stocks (or ETFs that invest in those stocks)—is to diversify your portfolio.
Our main suggestion would be to make sure that your holdings are… Read More
“Strategic acquisitions” make more business sense than growth by acquisition
Our long-time readers and clients know we’ve developed a number of rules to evaluate stocks and the actions of companies. These rules are all based on what we think of as “financial physics.” They grow out… Read More
Here’s a Look at the Dogs of the Dow Investment Strategy
1. The Traditional Dogs of the Dow Approach
The Dogs of the Dow approach involves buying the highest-yielding stocks in the Dow Jones Industrial Average. It’s based on the idea that a high dividend yield is… Read More
Diversification, investment quality, and a focus on dividends are key when you’re wondering, “how do I start investing in stocks?”
So you’re wondering, “how do I start investing in stocks?”
We continue to think investors will profit most—and with the least risk—by buying shares of well-established companies… Read More
In Canada, tax on capital gains is at a lower rate than tax on interest. You can take advantage of favourable capital gains tax rates (Canada)—and substantially cut your tax bill—by structuring your investments so that more of your income is in the form of… Read More
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