The Intelligent Investor Top 10: Growth and Income.

The Intelligent Investor Top 10:

As a new addition to the Intelligent Investor Blog, I am adding a top ten stock holdings list. Updates and news on the top ten companies to own for the longer-term will be regularly and continually updated. As a measure of personal conviction, and for full-disclosure, I will personally have a position in each and every company on the list. 


The list will be for growth and income oriented investors who wish to generate above-average total returns through both capital appreciation and rising dividends. Questions and comments on the businesses, or the list as a whole, are both invited and appreciated as it forces investors, including myself, to defend and reinforce their ownership. As an intelligent investor, if you cannot present a rational and prudent reason for owning a business, SELL IT! 


Some positions in the list are for there for defensive reasons, while others are for growth. It is always important to possess a little bit of both. No matter how right we think we are, it is important to remember that even the Intelligent Investors can never be right 100 percent of the time.


THE INTELLIGENT INVESTOR PORTFOLIO:

1. I SHARES SHORT-TERM BOND ETF XSB
2. RIOCAN REAL ESTATE REI.UN
3. I SHARES S&P 500 ETF - CDN CURRENCY XSP
4. SUNCOR ENERGY SU
5. SHOPPERS DRUG MART SC
6. BANK OF MONTREAL BMO
7. GENERAL ELECTRIC GE
8. IMPERIAL OIL IMO
9. TMX GROUP X
10. JOHNSON AND JOHNSON JNJ

Other personal positions will be added to the list when, and if, they replace one of the Top 10 holdings.


Happy Investing : ) 

A Lesson in Diversification, Precious Metals, and Insurance.

On February 9th, $750,000 in silver bars were stolen from a 52 year old man's home in British Columbia. The man said that the silver stored in his house constituted the majority of his life's savings and that he attributes the fault of the theft to one of his friend's or family members who he says must have told the robbers about his stash. 

Clearly, this man needed a lesson in diversification, precious metals investing, and insurance:

• One single commodity, whether it is gold, silver, oil, corn, etc. should never constitute the majority of your life savings and investment portfolio. One speculative commodity, ie. commodities that do not produce an income stream, should ideally not be more than five to ten percent of your portfolio. Their prices are historically very volatile and investors can get burnt quite easily.
• There are also other ways to own precious metals than possessing the physical hard asset, which requires both storage space and an increased level of security to ensure no theft. Numerous exchange traded funds such as the Gold ETF (NYSE:GLD) or Silver ETF (NYSE:SLV) enable the intelligent investor to efficiently buy and sell commodities at a moment's notice and without the hassle of transportation and storage. In addition, since they are exchange traded funds, close to the current market price of the commodity can be obtained without too much hassle, just with the click of a mouse or a telephone call to your broker. 
• Remember to NEVER have a large amount of savings or valuables stored at your residence. Not only are you risking the loss of your money, but you are clearly risking your own, and your family's, safety should an undesirable ever choose to try and take them. Banks and other institutions will hold your valuables for a fee, and they are on the hook if anything goes missing.
• Lastly, if for whatever reason you choose to store valuables in your home, get the appropriate insurance coverage. The man in the above mentioned story neglected to get any coverage because he thought that it was too expensive to protect his investment. If something is so important to you that if you lost it your material welfare would greatly decline, it should be protected!

To read more about this story, or to look at how you can buy some gold and silver efficiently, intelligent investors please follow the links below : )

Story

http://www.theprovince.com/health/silver+stolen+from+home/4300052/story.html

Gold

https://www.spdrs.com/product/fund.seam?ticker=GLD

Silver

http://ca.ishares.com/product_info/fund/overview/SLV.htm

Are You Diversified? How Can You Tell?

One of the most common questions investors have is whether or not they are diversified. For most, the answer is no. But how can you tell if you are diversified so that you can avoid your portfolio imploding during the next stock market bust?

To truly be diversified an investor must own a broad range of securities and businesses that generate income in many different ways, and in many different places.

• Firstly, your businesses or investments must be located in a number of different places. This means that your portfolio should be generating income across the country, and around the world. As Canadians, most of our investments generate their income in Canada, but it is important for us to remember that this is a VERY small part of the world economy. We must also include businesses from the United States, Europe, and the developing world. Initially, the best way to do this might be to own a business like Coca-Cola (NYSE: KO) or Proctor and Gamble (NYSE: PG), which generate profits all around the world.

• Secondly, the intelligent investor should ensure that they own different asset classes of securities. This means that they should own bonds, real estate, and stocks... in addition to perhaps gold, silver, etc. in a larger portfolio. One should not own simply businesses listed on the stock exchange and not any bonds or something that will provide a more steady stream of income. But be careful, DO NOT own too much real estate, this is a very common mistake in the current investment climate. 

• Lastly, the intelligent investor must own a number of businesses that generate their income in different areas of the economy. For instance, Scotiabank (TSE: BNS) generates its income via banking, Suncor (TSE: SU) generates its income in the oil and gas industry, and Metro (TSE: MRU.A) generates its income in the grocery retail businesses. Together, these three businesses would provide the investor with a broader and more steady stream of income than if they owned just one. When one part of the economy is declining, another might very well be increasing.

Disclosure: The author of this article has an ownership interest in Metro and Suncor.

Be sure to e-mail me with any of your questions : )