Investing your money in mutual funds is a wise move especially for your long term goals. There are different types available in the market. One of these is the income mutual funds whereby the investor gets an income on a monthly or quarterly basis. Other types focus mostly on capital growth instead of this type or they opt for a combination of both. When you want to invest for a long period of time and get a regular income, then this is the option you need to consider. When you invest in this type of fund you get a percentage of its total earnings.
You make an initial investment of a couple of dollars or even less and still enjoy the benefits of owning a part of a large portfolio. Income mutual funds are mostly categorized as either balanced or equity income funds. The balanced type normally tries to balance the investments in stocks and bonds. The income equity funds often concentrate more on dividend paying stocks. Despite the fact that they may both have varying holdings, their main focus is generating and maintaining a high income level and preserving capital.
In comparison to money market or bonds funds, they are considered to be a better investment choice. This is because they produce higher returns than those that you would find in the money market and bond funds.
This type of investment is also considered quite safe as they mostly invest in companies that are creditworthy and established. These companies can be counted onto provide dividends and interest payments.
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The 2008 financial crisis uncannily echoes what happened in Japan more than a decade ago. In the 1990s, the Japanese banking systems had become overloaded with bad loans after a property bubble collapse, according to Gillian Tett, author of Fool’s Gold. The investor psychology seemed dangerously similar too. If this is the case, investors who high yield stocks now could collect big dividends while the economy fights to get back on its feet.
The Associated Press (AP) reported on Friday that the U.S. federal budget deficit has surged to an all-time high of $1.42 trillion. The Obama administration projects deficits will total $9.1 trillion over the next decade. For weeks the US dollar’s decline sent gold to all-time highs and helped oil to over $78. Canada happens to have plenty of these commodities.
The following are 18 Canadian companies listed on U.S. exchanges with market caps greater than $1 billion, reasonable P/E ratios, and dividend yields greater than 3.5% (sorted by yield):
Name
Symbol
P/E
Yield
Market Cap
PROVIDENT ENERGY TR
(PVX)
9.0
11.1%
1.66B
PENGROWTH EGY UTS
(PGH)
5.0
10.6%
2.61B
PENN WEST ENERGY TRU
(PWE)
5.1
10.1%
6.90B
ENERPLUS RES FD
(ERF)
5.8
8.4%
3.97B
HARVEST ENERGY TRUST
(HTE)
4.2
8.1%
1.14B
B C E INC
(BCE)
21.7
6.1%
18.82B
TELUS CORP
(TU)
8.6
5.8%
9.41B
PRECISION DRILL TRST
(PDS)
4.3
5.7%
1.91B
BANK OF MONTREAL
(BMO)
17.3
5.1%
27.68B
TRANSALTA CORP
(TAC)
21.9
5.1%
4.07B
BAYTEX ENERGY TR UTS
(BTE)
12.8
5.0%
2.77B
CANADIAN IMP BK COMM
(CM)
3.7
5.0%
2.98B
BROOKFIELD PTYS CP
(BPO)
6.2
4.6%
4.47B
TRANSCANADA CORP
(TRP)
15.1
4.3%
21.71B
SHAW COMM CL B NV
(SJR)
15.6
4.2%
8.24B
ROGERS COMMUN CL B
(RCI)
16.8
4.0%
16.57B
BANK OF NOVA SCOTIA
(BNS)
16.7
3.9%
45.86B
TORONTO DOMINION
(TD)
17.4
3.5%
53.70B
These 18 high-dividend companies are in 4 sectors: Energy, Financial, Telecom and Utilities.
Energy Income Trust
High demand from China and a weak US dollar make the energy sector attractive. 7 companies belong to energy income trust category:
Symbol
Operating Margin
Debt/Operating CF
52-wk Range
(BTE)
36%
1.0
7.84 – 26.44
(ERF)
51%
0.7
12.85 – 28.58
(HTE)
10%
3.2
3.00 – 11.55
(PDS)
28%
2.0
2.00 – 12.21
(PGH)
22%
2.5
4.51 – 11.90
(PVX)
23%
1.5
2.23 – 6.84
(PWE)
58%
2.3
6.77 – 19.01
For sophisticated traders, trading commodities directly might provide a higher reward. For income investors, commodity companies might be a better choice because they provide some buffer, in addition to regular dividends.
There is a small ETF called Claymore Canadian Energy Income (ENY) which includes most of these companies. Its yield is 5.45%.
Financials
The Following are comparisons between Canadian banks, U.S. major banks averages, as well as JPMorgan Chase (JPM), one of the most conservative banks in the US. Clearly Canadian banks are much more profitable.
Description
P/E
ROE %
Div. Yield %
Net Profit Margin %
U.S. Money Center Banks
n/a
1.1%
1.1%
1.3%
JPMorgan Chase & Co. (JPM)
52.6
2.9%
0.4%
15.5%
Toronto-Dominion Bank (TD)
17.6
9.4%
3.5%
22.2%
The Bank Of Nova Scotia (BNS)
16.8
13.2%
3.9%
28.9%
CIBC (CM)
3.8
7.0%
5.0%
18.8%
Bank of Montreal (BMO)
17.4
9.2%
5.1%
21.8%
Telecom
Competition in the telecom sector is heating up in Canada. When BCE (BCE) and Telus (TU) announced they will start carrying the iPhone next month which puts an end to the exclusivity that Rogers (RCI) has enjoyed, it sent RCI’s short ratio to a stunning high of 33. Unlike those 3, Shaw Communications (SJR) primarily focuses on cable services.
Utilities
TransAlta (TAC) is an electric utility company while TransCanada (TRP) operates through two segments: pipelines and energy. TAC’s short ratio of 5.8 makes me nervous.
Conclusion
After boldly buying when others were selling, Warren Buffet is pulling back, buying fewer stocks while investing in debt. He is warning that the economy, though on the mend, remains deeply troubled.
In addition, the Canadian dollar is a strong threat to the Canadian economy. CurrencyShares Canadian Dollar Trust (FXC) appreciated over 13% this year. Mark Carney, the governor of the Bank of Canada, has warned that the Canadian dollar appears to be moving away from the fundamentals.
The iShares MSCI Canada Index (EWC) year-to-date’s return is an astonishing 46%. A great stock can be easily turned into a bad investment, if you it at a higher than reasonable price. It all depends on the starting price.
Nonetheless, high-dividend, fundamentally-strong companies are more likely to survive in this stormy market. One of the greatest ways to protect your portfolio is through asset allocation: to make sure not a single sector accounts for more than 20% of your portfolio. Be sure to re-balance as it will automatically enroll you into the “ low, sell high” camp.
Disclosure: I have long positions on BMO, BNS, CM, PWE, TD, and TRE. All data is from Yahoo Finance (http://finance.yahoo.com/) as of Oct 16, 2009.
Mutual funds pool money from investors, who are constantly saving into the fund and at the same time, others are withdrawing from the fund, forcing the investment managers to keep large sums of money as liquid cash. This is one disadvantage of a mutual fund because, keeping liquid cash is detrimental to the growth of a portfolio since, it ties the money. The money is not invested in productive endeavors, thereby reducing the benefits that could have been accrued.
The various fees charged include shareholders fees, which come in the form of loads and redemption fees. Loads are divided into front load fund, back load fund, constant load fund as well as no load fund, calculated as a percentage of the amount of stock you wish to or sell. Annual fund operating fees include the cost of keeping shareholders records and financial statements, marketing and advertisement fees. As an investor who is only starting out on investment, it would be wise if you could start up with funds that have low investment requirements.
A front load fund entails paying the commission that would accrue up front and in a back load fund, you pay the commission upon selling all or part of your holding. A constant load fund deducts commissions on a regular basis, while a no load Fund does not charge any commission. There are many no load funds out there and in most instances, they out perform the loaded funds since all your money goes into buying shares. There are also many examples of load funds out there, but the most prominent ones are the index mutual funds.
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Is there a cigar aficionado on your gift list? Wondering how to choose a decent cigar for a friend or loved one? Even if you know nothing about cigars or choosing a good cigar, just learning a few basics can help you sniff out (sometimes literally) a good cigar to give to a friend.
Fortunately, cigars have now entered the mainstream. Once the symbol of the rich and powerful, it’s easier than ever for just about anyone to purchase a good cigar. Of course, you probably won’t be able to your friend a box of top-tier Cuban cigars, but you can definitely them a good quality cigar that will put a smile on their face.
First, visit your local tobacconist or specialty smoke shop for the best quality and widest selection. Avoid ‘drugstore’ cigars. Although they may be inexpensive and convenient to purchase, drugstore cigars are usually filled with preservatives and generally of poorer quality. They may contain, at minimum, saltpeter, paper, glycerin, and other preservatives and irritants. You should make sure that the cigars you purchase are made of 100% tobacco. If you have any questions regarding the cigars ingredients, ask the salesperson. An experienced and knowledgeable clerk will be able to tell you extensive information about the ingredients.
Your local tobacco shop is a good place to shop because you will generally be allowed to smell and touch the cigars. Squeeze the cigar gently. A good quality cigar will give a little when squeezed. The cigar should be firm, with no excessively soft or hard spots. Never a lumpy cigar. Look at the wrapper. If you notice any drying or discoloration, best not to it. Ideally, the wrapper should be tight and smooth. Inspect the color of the tobacco to make sure it is even. Do this by inspecting the end of the cigar. Some color variation is normal, but if the color changes abruptly, chances are the cigar was not rolled properly. A cigar that is not rolled properly may result in an uneven burning and unpleasant odors.
If you’re not sure how much your friend smokes, choose a longer cigar. Longer cigars tend to have a ‘cooler’ taste-an excellent choice for beginners. If you know your friend is an experienced and regular smoker, choose a cigar that is greater in diameter. These cigars tend to have a richer flavor that experienced smokers will appreciate.
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are categorized by size and shape. Together, these are known as the vitola of a cigar.
Cigar size is measured two ways: ring gauge (its diameter) and its length. For example, most non-Cuban robustos have a ring gauge of approximately 50 and a length of approximately 5 inches. Robustos of Cuban origin always have a ring gauge of 50 and a length of 4 ? inches
The most common shape is the parejo. It has a cylindrical body, straight sides, one open end, and a round tobacco-leaf “cap” on the other end that must be sliced off in to be smoked.
Parejos are designated by the following terms: Coronas Rothschilds (4 ½” x 50), after the Rothschild family Robusto (4 ?” x 50) Hermosos No. 4 (5″ x 48) Mareva/Petit Corona (5 ?” x 42) Corona (5 ½” x 42) Corona Gorda (5 ?” x 46) Toro (6″ x 50) Corona Grande (6 ?” x 42) Cervantes/Lonsdale (6 ½” x 42), named for Hugh Cecil Lowther, 5th Earl of Lonsdale Dalia (6 ¾” x 43) Julieta, also known as Churchill (7″ x 47), named for Sir Winston Churchill Prominente/Double Corona (7 ?” x 49) Presidente (8″ x 50) Gran Corona (“A”) (9 ¼” x 47) Panatelas – longer and generally thinner than Coronas Small Panatela (5″ x 33) Carlota (5 ?” x 35) Short Panatela (5″ x 38) Slim Panatela (6″ x 34.9) Panatela (6″ x 38) Deliciados/Laguito No. 1 (7 ¼” x 38)
These dimensions, of course, are estimated at best.
Irregularly shaped cigars are known as figurados and are more difficult to make, leading many to consider them higher quality cigars. During the 19th century, figurados were the most popular shapes; however, they have since fallen out of fashion and all but disappeared.
Figurados include the following: Torpedo – Like a parejo except that the cap is pointed. Pyramid – Broad foot and evenly narrows to a pointed cap. Perfecto – A caricature of a cigar, narrow at both ends and bulged in the middle. Presidente/Diadema – Shaped like a parejo but considered a figurado because of its enormous size and occasional closed foot akin to a perfecto. Culebras – An exotic of three long, pointed cigars braided together. Tuscanian – Typical Italian cigar. This shape, known as a cheroot, is the largest selling cigar shape in the United States.
Little cigars differ greatly from regular cigars. They weigh less than cigars and cigarillos, and resemble cigarettes in size, shape, packaging and filters.
Whatever shape or size you prefer, a variety of cigars can be found online at fine purveyors’ websites.
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Cigars are available in a wide range of prices with a great variety in terms of qualities. While the most discerning cigar fanatic can purchase cigar brands that cost upwards of several hundred dollars for just a small pack, he may also choose from a range of discount cigars that promise a really pleasing smoking experience. In fact, many people do not know that some of the high quality brands of cigars can be purchased at steeply reduced prices; only if one is ready to do a little search around. Discount cigars constitute a substantial portion of the multi-billion dollar cigar industry in North America, making the cigars accessible to smokers belonging to all income levels.
One of the widely accepted methods of purchasing discounted cigars is via the Internet. Even a simple search for ‘discount cigars’ is bound to produce hundreds of results with lots of low-priced cigar brands to choose from. There are many prominent discount cigar merchants also that offer low-priced cigars, lighters and humidors. Some popular sites are perfect for any cigar lover looking for quality tobacco and cigar products at reduced prices. Some of the most liked brands of premium cigars are made available at highly discounted prices. These brands feature several different types of cigars having varying tastes. Even though, they are available at discounted prices, they do not compromise on quality, and those types of cigars are widely purchased and smoked by smoking enthusiasts all over the world.
The key way to avail of real savings in discount cigars is by buying them in bulk. Often, when an individual opt to a large assortment of tobacco cigars at one go, major discounts are provided. Cigar bundles are a popular choice among smokers who yearn for a variety of cigar choices or sheer quantity for purposes of gifting them to friends and relatives. Although a few of the well known brands of cigars are always expensive, discount cigar sellers can make cigars and cigar products affordable for people belonging to all income groups.
On the other hand, everyone knows that it is risky to smoke cigars and cigarettes, but only a very few know about the dangerous effects of smoking a cigar. Smoking tobacco cigars on a daily basis is proved to be dangerous for your health. Studies have revealed that cigar smoking cause cancers of the lungs, oral cavity and oesophagus in human beings. More recent studies state that pancreas cancer is also caused, in rare instances, by cigar use. The chances of contracting heart and lung diseases will get increased as you enjoy cigars by inhaling the tobacco smoke. The smoker is at an increased risk of contracting oral cancer compared to a nonsmoker. The deleterious effects of regular cigar smoking are well documented and are well known. Another thing is that it is more addictive when compared to cigarettes. It does not matter at all the way in which tobacco cigars are smoked. As long as there is nicotine in these cigars, it is sure to produce addictive effects.
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Every one has heard of the risks associated with passive smoking. A lot of people ask whether the dangers of inhaling send hand cigar smoke are as great, or even greater.
Unfortunately it seems that being around the second hand smoke from a lit cigar is just carries as much danger or even more danger then that from regular cigarette smoke.
Second hand smoke given out by lit tobacco products is classes as environmental smoke from tobacco. Environmental smoke relates to all the second-hand smoke given out from lit tobacco products, including cigarettes and cigars. Research tells is that this environmental smoke contains many of the same type of chemicals and irritants that smokers inhale on a daily basis.
All types of environmental smoke from tobacco contain, ammonia, nicotine, carbon monoxide and hydrogen cyanide, they may also contain varying amounts of benzene hydrocarbons, nitrosamines and vinyl chlorine which are all recognized as carcinogens. Due to the fact that as a rule cigars are usually considerably larger than standard cigarettes they actually release greater amounts of second hand smoke than cigarettes. Due to these facts being around second hand smoke from cigars can be a greater risk to health then inhaling second hand cigarette smoke.
Even considering that cigarettes and cigars both release similar types of environment tobacco smoke, there are in fact some key differences between both types. These key differences are due to the vastly different methods used during the manufacture of Cigarettes and Cigars.
The process of manufacturing cigars includes a long process of aging and fermentation of the tobacco leaves. During this manufacturing process, large quantities of carcinogens are made. When a cigar has been aged and fermented it is packed into a nonporous wrapper which is designed to slow the burning process of the cigar. The Fermentation and manufacturing process both add to the levels of carcinogens released into the smoke of a lit cigar.
Once a cigar is lit, to combination of carcinogens produced during the manufacturing process are released. The non-porous wrapper around the cigar also adds to an unclean burn that contains an elevated level of carcinogens.
Yet another reason for cigars producing larger amounts of carcinogens is their length and girth. To put it simply cigars are larger than cigarettes and their greater size means they emit a greater volume of smoking contain toxins, irritants and carcinogens. On top of this, and to make matters worse, cigars are designed to be smoked more slowly than cigarettes and people who smoke cigars are encouraged to “enjoy the relaxing experience” and take their time. This leads to a longer smoking time, and of course much more smoke is produced. For health reasons therefore it is advisable to avoid places where cigars are being smoked and if you personally do smoke cigars try to do so in an area which is well ventilated.
Key West FL is the southernmost city in the Continental United States. Key West is a city and an island by the same name near the southernmost tip of the Florida Keys and encompasses the namesake island, the part of Stock Island north of US 1, Sigsbee Park and Sunset Key.
Many passenger cruise ships utilize Key West as a seaport. Key West International Airport also serves the area. Naval Air Station Key West offers a training site for Naval Aviation.
Key West is officially known for having the nation’s first and oldest continuous gay and lesbian chamber of commerce. Thus the city’s motto “One Human Family”
Kay West was inhabited by ancient peoples known as the Calusa People in Pre-Columbian times. Juan Ponce De Leon was the first European to visit the area and the island was known as Cayo Hueso. It was established as a fishing and salvage village with a small fort to protect the Spanish colony.
Cayo Hueso literally means “bone key” as it is said that the island is littered with the bones from an Indian battlefield or burial ground. It is thought that the name changed to Key West is an Anglicization of the word “Hueso” that could mean west in English. Many businesses on the island use the name.
Great Britain took control of Florida in the late 1700′s and relocated the Spaniards and Indians to Havana. Florida passed back to the Spanish 20 years later but they did not formally resettle. The island was used by fishermen from Cuba and joined by fishermen from the United States.
The island was deeded to Juan Pablo Salis in 1815 but when Florida was transferred to the United States Salas was eager to sell the island. First he sold it for a sloop valued at $575 and then to a US businessman named Simonton for about $2,000. The sloop trader sold it to a man named Geddes who could not secure rights to the property because Simonton had help from influential friends in Washington and gained clear title. Simonton bought the island because he had learned of the opportunities presented by the strategic location. Simonton’s friend John Whitehead, once stranded on the islands by a shipwreck had seen the deep harbor.
Lying 90 in a strategic location on the deep shipping lane Straits of Florida the harbor was considered the “Gibraltar of the West”. Matthew Perry said into the harbor in 1822 and physically planted the US flag to claim it as US property. He reported on the piracy problems and renamed it “Thompson’s Island” and named the harbor “Port Rodgers”. Neither name stuck. In 1823 Commodore David Porter took charge and tried to rule the island as a military dictator under martial law.
Simonton soon subdivided the island into plots and sold 3 undivided quarters of each plot to private individuals. Simonton spent the winter in Key West and then the summer in Washington to lobby for development of the island and for the establishment of a naval base. Among other first founders are Pardon Green who moved there permanently and became a prominent businessman. John Whitehead lived there for 8 years and partnered with Greene in the firm of “P.C. Greene and Company”. He left the island for good in 1832 returning only once during the Civil War. John Fleeming, active in the mercantile business in Alabama was a friend of Simonton. He spent only a few months in Key West before leaving to marry in Massachusetts. He returned to Key West intending to develop the slat manufacturing of the island but died soon after. The names of these founding fathers of modern Key West used as names for the main arteries of the island.
Many residents of Key West emigrated from the Bahamas. They were known as Counch. They arrived in ever increasing numbers after 1830. Sons and daughters of Loyalists fled to the nearest British soil during the American Revelation. Many of residents of Key West refer to themselves as Conchs and the term is now generally applied to all residents of Key West. The term “Fresh Water Counch” refers to a resident not “native born” but who has lived there for more than seven years. The name is derived from the tradition of placing a conch shell on a pole at the home of a new born baby.
“Bahama Village” is an area of Old town next to the Truman Annex largely inhabited by Bahaman immigrants.
Fishing, salt production and ocean salvage were major industries in the early 19th century. The salvage operations made Key West the largest and richest city in Florida and residents had a high concentration of fine furniture and fancy chandeliers which the locals used in their homes after taking them from shipwrecks on the Florida reefs.
During the Civil War Fort Zachary Taylor was established in Key West after Florida seceded and joined the confederate States of America. It was an important outpost and now contains the largest collection of Civil War cannons ever discovered in a single location.
In 1912 Key West was connected to the Florida mainland via the Overseas Railway extension. The railway created a landfill at Trumbon Point for rail yards. In 1935 the Labor Day Hurricane destroyed much of the railroad and hilled hundreds. About 400 World War I veterans living in camps there working on federal road projects and mosquito control projects in the Middle Keys were also killed. It was too expensive to restore the railroad. In 1938 The Federal Government rebuilt the rail lines as an automobile highway. Completed in 1938 it became an extension of the US Highway 1. The portion of US 1 running though the Keys is called the Overseas Highway.
Numerous artists and writers have come to the Keys but the two most associated with the island are Ernest Hemmingway and Tennessee Williams. Hemmingway reportedly wrote 2 novels “A Farewell to Arms” and “To Have and Have Not” while living in the Keys. The Ernest Hemingway House and Sloppy Joes Bar have become important tourist’s attractions. The Hemingway House is currently inhabited by six or seven toed polydactyl cats descended form Hemingway’s original pert named “Snowball”. The cats live on the grounds and are cared for by the Hemingway House even though the USDA complains about the number of them housed there. The Key West City Commission exempted the house from a law prohibiting more than four domestic animals per household.
Tennessee Williams is said to have written the first draft of “A Streetcar Named Desire” while staying at the La Concha Hotel. He bought a permanent house and listed Key West as his permanent residence. Williams’ home in the “unfashionable” New Town neighborhood is quite the contrast to the elegant Hemingway house. It is a very modest bungalow. The house is privately owned and is not open to the public. The Tenn4essee Williams Theatre is located on the campus of Florida Keys Community College on Stock Island.
Key West is much closer to Havana than to Miami. In 1890 it had a population of nearly 18,800 which made it the richest and biggest city in Florida. The population was nearly half Cuban descent and the city had a succession of Cuban mayors. Cubans were reportedly active in nearly 200 factories in town producing cigars.
The Battleship Maine was blown up after sailing from Key West to Havana which ignited the Spanish American War.
Pan American Airlines was founded in Key West to fly visitors to Havana.
John Kennedy used the phrase “90 miles to Cuba” in his speeches against Fidel Castro.
There were regular ferry and airplane services between Key West and Havana until the revelation in 1959. Refugees flooded into Key West during the Mariel Boatlift and continue to come across the dangerous stretch of waters.
In 1982 Key West and the rest of the Keys tried to declare independence and become the “Conch Republic” in a protest over US Border Patrol blockades. The blockade was set up in response to the Mariel Boatlift. This blockade created a 17 mile traffic jam when the Border Patrol stopped every car to search for illegal immigrants. The Florida Keys were virtually paralyzed as tourism nearly ground to a halt. Couch Republic flags and T shirts are still popular souvenirs for visitors. The Counch Republic Independence Celebration is celebrated each April 23.
Key West was always an important military post. At the beginning of World War II the Navy built the first water line extending the length of the Keys to serve the Naval Air Station. The main facility on Boca Chica is where the navy trains pilots. There are 3400 civilians and 16oo active duty military personnel along with family members. The area next to the old For Taylor became a submarine pen and was used for the Fleet Sonar School.