Newsletter April 9, 2005

InvestorsFriend Inc. Newsletter April 9, 2005


With the first quarter of the year now over, the performance of InvestorsFriend Inc.’s stock analysis continues to be strong. Currently 6 stocks are rated Strong Buy. Sectors included are two property insurance stocks, a mutual fund company, a retailer, a paint manufacturer and a forestry company. These picks are available on a paid subscription basis for $10 per month on a month-to-month basis.

How to Get Started Investing in Stocks

Most subscribers to this free newsletter are well aware of how to invest in stocks. However, I occasionally get questions from people just trying to get started. I have added a new article to the Site that gives some guidance on on how to get a trading account set up.

Stock Market Direction

My strategy in investing is to look for individual stocks that re bargains. It is always very difficult to predict where the overall market will go in the short term.

However, I am hopeful that the market will do well in the next month or so. I base this on the fact that long-term interest rates have started to fall again, hopefully the first quarter earnings reports will be good and oil prices have retreated from their highs, which will help most stocks.

However, whether the overall market rises or falls, I believe I will do well in the long run if I stick with profitable companies that are available at reasonable prices.

I recently updated my analysis of the overall level of the Dow Jones Industrial Average and the S&P 500 Index. As earnings have climbed over the last few years, the markets are looking like a better value than they were  several years ago when the P/E ratios peaked.

Investing in Bonds

It is a surprising fact that overall, bond trading is a much larger market than is stock trading. But bond investing and certainly bond trading seems to be the domain mostly of institutional investors and not retail investors. Bonds do not trade on a central exchange like the Toronto Stock Exchange, instead they trade in a less organized fashion, with individual bond dealers quoting their own prices.

I’ve tried to shed a bit of light on this in a new short article on investing in bonds and one on bond trading.

Opportunities in Thinly Traded Stocks

I recently became a bit more conscious of the fact that thinly traded stocks can be an opportunity area for the do-it-yourself investor. The reason is that analysts usually cannot cover them because they are so thinly traded that the analysis could result in a (probably temporary) spike in the price when the clients of that analyst tried to buy. I have added an article on this subject.

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Shawn Allen
InvestorsFriend Inc.