Hadouken as Alternative Energy Source

Harnessing the power from within. Also, take that Brazil...I'm looking at you, EWZ.

This week, we took a look at utilities:

Investment	Pro	Con	Good/Bad
XLU (Utilities SPIDR)	·      Good dividend (2.9%) ·      Low expense ratio (0.18%)	·      The largest company is 10% of the fund. In other words, this fund could be a little more diverse.	The largest company in the fund, SO, is one we are interested in, so perhaps having more of it would be beneficial. Additionally, Exelon is the number two holding (around 8%), and it has not been doing well lately, but there is some potential. Some investors have recently downgraded it, and this might be a good time to catch it on before it swings up.
VPU (similar to above)	Lower expense ratio (0.14%) Higher dividend (3.8%)	(See above)	(See above)
IDU (similar to above)	Yield 3.26%	Higher expense ratio (0.46%)	This fund’s yield is higher than XLU, however it also has a higher expense ratio.
RYU	Much more diversified than the other funds we looked at, with the highest weighting being 2.75%	Highest expense ratio (0.5%)	We lose out on the potential growth or loss of Exelon.

We know that utilities are one of the weakest parts of our portfolios, so this is a balancing act to get our portfolio in line. Our friend's portfolio did not have a very attractive pick, at least not these days, so we wanted to consider some other options. Weighing the pros and cons between the various funds we looked at, we started to get a sense of what is important for us. However, next week we need to spend some time looking at EXC to see if it is worth the gamble. Another important thing to consider with anything dealing with energy is the source of this energy, coal, wind, solar, natural gas, etc. This could give us insight into how well an investment will perform. 

Profit!

So the economy didn't collapse...let's look at some investments.

More stock analysis.

Stock	Pro	Con	Other
TD (A Canadian bank)	During the financial collapse, Canadian banks largely eschewed highly risky sub-prime foolishness. This bodes well for stability.	We are already heavy in financials. It doesn’t help balance the portfolio.
VMC (Vulcan Materials Company--they make construction materials, or perhaps don’t tell many jokes)	In March 2007, Vulcan announced that it had been named to Fortune Magazine's list of Most Admired Companies for the sixth time. The company was ranked first in its industry sector, "Building Materials, Glass." Overall, Vulcan ranked among the top 10 companies in the Fortune 1000 for both long-term investment andsocial responsibility. (http://en.wikipedia.org/wiki/Vulcan_Materials_Company)	Doesn’t really help with portfolio balance.
AWF	Huge dividend.	Scary as hell (money from nothing).
MCLOX (formerly Blackrock)	See next column.	Morningstar’s take on MCLOX: Erring on the side of caution here is no mistake.
FIF (First Trust Energy Fund)		Not doing so hot right now.	They make a lot of funds.
HFQCX		No good for portfolio balancing.

As we were looking at TD vs. a financials ETF, we saw that Toronto Dominion was not up as much as the ETF. On first glance that didn’t look good for TD, but talking about it, we reasoned that TD didn’t fall as much as some of the US banks. Looking at Bank of America’s historical trends, for example, you see wild fluctuations without the stabilization that TD has had. The question becomes what sort of company do you want to invest in? Perhaps it is best to look for businesses that are more levelheaded and reasonable stewards of their profits. So it you’re going to go with a bank, make it Canadian.

In fact, going through all of these investments in our friend’s portfolio we started to wonder why these were chosen. While this has certainly given us experience with analyzing stocks a little more in depth, we still don’t have a new investment picked out. Our conversations seem to tend toward dividends as stable and attractive, so perhaps that is the way to go.

Some things to consider for next week:

For sector balancing, we need something in realty or utilities. As far as a divided purchase, we should look at something in information technology, healthcare, discretionary  (cyclical), and consumer staples. We are way thin on realty or utilities and less thin on the other categories.

Profit!

Got my business socks on...

It's business time...thanks, New Zealand!

Apparently most of our profits have come from ENZL, the New Zealand ETF we bought. Thanks, Kiwis! Then there's SPY, which has been doing excellent.

This article is an interesting take on putting together an investment strategy. It might be some good reading.

We are taking a look at TDC, Teradata Corp, a data mining, storage, consulting, etc. company.

• Pros: This company seems to be involved in a lot of different industries, which would make it possibly more resistant to changes in those particular industries. 

• Cons: No dividend. 

• Good/Bad: We are not heavy in technology. 

There is nothing really pulling us toward this particular stock, however it is an interesting thing to invest in. Perhaps we can find a more undervalued or attractive company to invest in that does the same sort of things. 

Next week, we take a look at TD, Toronto Dominion Bank and some of the other Avi stocks.

Profit!

I'm walking in the SPDRwebs, leave a message and I'll call you back.

Today, we're comparing SPIDRs to sector stocks. 

This week we are taking a look at some more of our friend's portfolio:

Stock	Pros	Cons	Good/Bad
GLD (a gold ETF)	It is shiny and people like it. This makes it a good hedge for our portfolio.	A $500 buy of gold is a large amount for a hedge, given our small size.	Ultimately, it would be around 15% of our portfolio right now. This may be something to consider in the future when it would be a much smaller portion of our portfolio. Additionally, there may be too many people using gold as a hedge. “I remember when gold used to be hip, now it’s like going to Starbucks.”
FTR (a telecommunications company)	Obscenely high dividend (>9%).	We already have a lot of telecom.	Since we already own ATT for its dividend, this might be redundant in our portfolio.
GSK (Big Pharma)	GSK is healthcare, which we don’t own a lot of. High dividend.	This is not doing as well as XLV, the healthcare SPDR ETF.	This would require more research to see what they’re up to.
GILD (Biotech)	They seem to be on the upswing. It is more healthcare, which we need.	Jim Kramer ranked it as a buy—screw that guy. Not doing as well as its corresponding SPIDR.  It may be too high up at this point.	Research is needed to see if the uptick in prices is justified or just hype.

We kept coming back to the idea that most of these stocks is underperforming compared to their respective sector ETF. GILD is the exception. That is the point of investing in specific stocks, however namely that you are hoping to pick something that will perform better than something else. Since ETFs hedge, you lose out on growth for the benefit of having a safer investment. The big gamble with stocks is believing you can actually predict the future better than everyone else.