Category

Global Investing

Buy, Sell or Hold: BCE Inc. (NYSE: BCE) Has Canada Covered

The market right now is torn between data that suggests the U.S. is waning and reports that many companies are increasing guidance and beating earnings estimates.

This has created a lot of volatility, and if you already have enough strong growth plays in your portfolio, adding some large, established companies with stable cashflows and hefty dividend yields could ease some of the anxiety you may be feeling.

Such an approach in my opinion is superior to bonds, since bond yields are just too low at these levels. That means you actually risk capital losses if they go up. In addition, safe dividends paid by leading companies are higher than bond yields. And unlike bonds, big companies usually can adjust prices in accordance with inflation.

There are a lot of companies for an investor to choose from, but BCE Inc. (NYSE: BCE) jumps out at me immediately. It is a dominant, well-managed company, and it has strong upside potential.

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South Korea Moves on U.K. Energy Assets as Competition with China Increases

Korea National Oil Corp. (KNOC) on Friday made a hostile bid for the United Kingdom's Dana Petroleum PLC, marking the first time a state-owned Asian company has gone directly to shareholders.

The move underscores South Korea's determination to double its oil output by 2012 and increase its energy security. It also shows that South Korea will not be denied energy assets, despite being outbid by Chinese companies in several instances.

KNOC took the $2.9 billion (1.87 billion pound) bid to Dana's shareholders after the oil explorer rejected KNOC's previous offer of 1,800 pence a share offer. In a filing with the London Stock Exchange, KNOC said it had support from 48.62% of shareholders, putting the needed 50% approval target within close reach.

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Germany's Export Reliance Edges Out European Neighbors

By relying on exports and not promoting domestic demand, Germany is creating a lopsided recovery that is hurting retailers and foreign exporters.

While Germany's exports continue to surge, its consumers are refusing to spend. The government has failed to raise wages or encourage consumption and says it has few plans to do so.

"By cutting its budget deficit and resisting a rise in wages to compensate for a decline in the purchasing power of the euro, Germany is actually making it more difficult for other countries to regain competitiveness," billionaire investor and cofounder of the Quantum Fund George Soros said in a speech on June 23 in Berlin. Germany is "the main protagonist" for Europe's debt crisis, he added.

Germany's economy – four times more reliant on exports than is the United States – posted the highest second-quarter growth in the Eurozone, growing by 2.2% in the second quarter from the first. The country is headed for about 9% growth this year.

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This China Province Will Become a Global Oil-and-Gas Market Powerhouse

Like everything else, the balance of power in the global energy market is shifting toward China, where a little-known province is perfectly situated to become a global oil-and-gas market powerhouse.

Nestled in the far northwest of China, Xinjiang is the country's largest province and the primary domestic source for oil and gas. It is sparsely populated and as big as Western Europe. The name, Xinjiang, literally means "New Frontier." And recent decisions in Beijing are going to give that translation even more meaning – transforming this province into a "new frontier" for the global energy sector.

To understand how to profit from this development, please read on...

The Headline You Never Expected: Foreign Growth Could Bail Out the U.S. Economy

During a period of increasingly worrisome headlines about the U.S. economy, there is one bright spot.

The rest of the world appears to be doing much better than we are.

In the long run, that's good news for the United States. Rapid world growth will eventually rekindle the economic fires here, producing a growth that is more balanced than the bubbles of 1995-2008.

Still, getting to that point will be a challenge, since – economically speaking – the home fires don't appear to be burning all that brightly.

To see how foreign growth could bail out the U.S. economy, please read on…

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Defensive Investing: Use Dollar-Cost Averaging to Reduce Volatility Risks

Dollar-cost averaging has long been a strategic staple among mutual fund buyers. Longer-term investors use it to smooth out the effects of short-term price fluctuations, but the tactic seldom has been practical for purchasers of individual stocks – that is until now.

For those unfamiliar with the strategy, dollar-cost averaging – also known as constant-dollar investing – involves the regular purchase of a smaller fixed-dollar amount worth of shares over time, as opposed to the lump-sum purchase of a large number of shares at once. For example, rather than buy $1,200 worth of shares of fictitious company XYZ in January, you might buy $100 worth of XYZ shares each month for the full year.

The technique offers several advantages for fund investors:

  • Because you are investing a fixed-dollar amount at regular intervals, you don't have to be concerned with trying to time the markets.
  • Since the fixed-dollar amount you invest buys more shares when prices are low and fewer when they are high, your average cost basis levels out over time. This reduces the risk that you might pay too high a price by making a lump-sum purchase at the wrong time.
  • The lower average cost basis mutes the impact of short-term volatility on your existing holdings.
  • You can build a sizable position in a single fund, even if you never have a large sum of money to invest at any one time.

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An Anemic Economic Recovery Keeps the Fed From Focusing on Inflation

With interest rates near zero and a balance sheet that's in excess of $2 trillion, U.S. Federal Reserve Chairman Ben Bernanke would be very glad to offload some of the Fed's obligations. But so far he's has been unable to do so, as an anemic economic recovery continues to monopolize his attention.

The central bank yesterday (Tuesday) announced that it would reinvest the proceeds from expiring mortgage-backed securities into longer-term U.S. Treasuries. The move should help a weakening economy by keeping mortgage rates low. And while it also may boost inflationary pressures, the central bank feels it had little choice.

"Information received since the Federal Open Market Committee met in June indicates that the pace of recovery in output and employment has slowed in recent months," the Federal Open Market Committee said.

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Investing Strategies: How to Build a Global-Investing Portfolio Using ETFs

It wasn't all that long ago that global investing was an activity that was restricted to only the wealthiest U.S. investors. If you weren't one of America's ultra-rich, you weren't able to access foreign markets.

That began to change in the 1950s, with the advent of international and global mutual funds, and access further expanded over the next three decades with the introduction of single-country closed-end funds. Today, thanks to the recent explosion in exchange-traded funds (ETFs), investing in overseas stocks is now almost as easy as targeting a given market sector here at home.

In fact, although it has been a mere 17 years since the first ETF began trading in the United States (in 1993), the most recent count finds more than 290 international, regional and foreign-country-focused funds listed on the various U.S. exchanges – enough to entice any investor with even a modest yen for overseas portfolio exposure.

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Drought Forces Russia to Ban Grain Exports

Russia yesterday (Thursday) banned grain exports after unrelenting heat left the country with its worst drought in at least a half-century.

Wheat rose to a 23-month high after Russia, the world's third-largest grower, announced a ban beginning Aug.15 that will last through the end of the year. Corn and rice prices also surged yesterday after Russian Prime Minister Vladimir Putin said a ban on those grains would be "appropriate" in light of skyrocketing prices. 

Domestic grain prices gained 19% last week, faster than at the peak of the global food crisis in 2008.  The ban includes wheat, barley, rye, corn and flour exports, according to the government decree that also set aside nearly $1.2 billion for stricken farmers.

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