by Dr. Bart DiLiddo
Friday, 01/20/2006
If you haven't been trading in Canadian stocks, you have been missing out on some great money making opportunities. The Canadian market has performed very well and is likely to do so for several years to come. Why not? With a resurgent boom in demand for natural resources such as oil, gas, timber, diamonds and metals, many Canadian companies have prospered and are positioned to do so in the years to come. For investors, it gets even better than that.
On February 4, 2005, I wrote about Canadian Income Trusts. These entities are similar to U.S. Limited Partnerships, and they have delivered outstanding capital gains and dividend yields over the last several years. Some analysts were saying it was too late to buy these stocks last year when I wrote about them. So let's see how they have performed since then: The Industry Group, now called Investment Trust (TrstUnits), gained 2.59% compared to the Price of the VVC/CA which gained 8.62%. Well, that's not so hot, but it's not the end of the story either.
The top 20 stocks in the Investment Trust (TrstUnits) Industry Group ranked by VST-Vector gained 13.83% in less than a year. The top 10 stocks gained 31.40% and the top five stocks gained 59.01%. You might say these excellent results are just dumb luck, but they are not. While I can't say that the top five stocks will always outperform the top 10 and the top 10 will always outperform the top 20 stocks, I have done hundreds, if not thousands, of Quick Tests on the Canadian database, and I assure you that the top stocks ranked by VST-Vector will consistently make money and outperform the market in the Canadian database as the American stocks do in our American database. Moreover, anyone, including me, would have a hard time outsmarting the VectorVest system of ranking stocks by VST-Vector.
If you read my essay of 02/04/05, you would see that I cherry-picked five stocks I thought I would buy. I am pleased to say that four of them have gone up in price and the portfolio gained 14.59%. That's pretty good, but it's not nearly as good as the top five ranked by VST-Vector. Oh well, at least the portfolio gave a dividend yield of 9.90%.
Before closing, I must say a few words about mining stocks. For a number of years, I've been receiving a magazine called the Bull & Bear Financial Report. This magazine is chock full of articles about mining companies. While many of the articles were quite intriguing to me, I never felt that I had enough information to buy any of the stocks. With VectorVest Canada, however, I now have the confidence I need to make trades with these stocks. As with the stocks in the Investment Trust Industry Group, the top stocks in the Mining Industry Groups also have done quite well. For example, the top 20 stocks in the Mining (Gold\Silver) group are up an average of 301.04% since 02/04/05.
As a final note, we are now including a new WatchList in VectorVest Canada of the stocks the Standard & Poor's Income Trust Index.
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