Your coterie DINKS (Double Income,...

Your coterie DINKS (Double Income, No KidS), is merely two years old, and you are obviously having frolic at investing. With monthly contributions and income reinvested, you are already seeing the benefits of compounding, and in many reverences your Club is like an RRSP account. Moreover, your dispose sounds like an interesting single with the various backgrounds, and you are already probably having more ideas at handed at your meetings than you can handle.

OVERVIEW

My reaction to your investment portfolio as it stood in June 1994 is that you are against to a very good start and upon safe ground. You have clearly deliberately made substantial investments in U companies, and calm your Canadian selections (Bombardier, Nortel and Imasco) have extremely significant non-Canadian exposure.

Your selections have probably serv you quite well during the first half of 1994 level though there have been setbacks in the one and the other the U.S. and Canadian stock markets. At the same time, there is a noticeable absence of younger and les seasoned companies in your portfolio.

ANALYSIS

With the form a club up and going now for brace years, the members have contributed about $12000 and with dividends reinvested and near appreciation, the value of the Portfolio is about $14000 With contributions of $600 a month that works public to $7,200 a year which with further reinvested income means that the portfolio common year hence should be around $21000 - or better with any appreciation.

Therefore, I would confine the portfolio to no more than ten stock positions. Doing with equal reason will be an exercise in discipline, in that each month or pair you will have to decide which of your holdings you will add to, and if there is a of the present day and exciting investment that you be due [i]or[/i] owing up with, you will have to replace the same of your existing "stars" in order to contain the list. Be careful to avoid the question of so many clubs, that is, adding the "stock of the month" and ending up with a large list of names with the set members not really on top of their investments. It unhurts as though DINKS has solv that question by making the "presenter" responsible for following a stock one time the club buys it. With fifteen members and as you make progress you might over time expand the list to a total of fifteen stocks in such a manner that each member will have a distinct assignment.

CAUTIONS

DINKS is now invested in a number of senior, well-established companies--Aflac, McDonalds and Upjohn--and as of that kind the upside may be more limited than with a certain younger, less well-established stocks. In denominations of diversification, the DINKS investments are spread through the whole extent of several areas--insurance (Aflac), food and tobacco (McDonalds, Canada Malting, Hannaford, Imasco) technology (Nortel, Softkey) and transportation (Bombardier) The portfolio is missing a certain very large areas such as banking and finance, oil and gas, and other resources. Admittedly, in a $14000 portfolio, single in kind can have only so a great deal exposure.

SOME NEW IDEAS

Basically, I would stick with the portfolio which you have makeed so well, especially Aflac, McDonalds, Bombardier and Canada Malting. The no other than holding that I would really question is Upjohn which among pharmaceutical companies would appear to be relatively unattractive, reject for the possibility of a takeover; these shares have essentially been in a down incline now for about four years. Upjohn Hannaford and Imasco are all relatively small holdings which leads to me to allude to that on occasion you possess back on investing until you can make a least a $1000 commitment in a company. There is after all something to be said for having a small cash store up at all times so that DINKS can act if a compelling opportunity instants itself.

As to your question about the U exchange rate and whether to withhold investing in U.S. stocks, I would give an inkling of that you should continue to do for a like reason and generally to emphasize those Canadian companies which benefit from foreign prospect Here are some additional names which you might wish to studious mood many of which I have mentioned in earlier columns:

Established Growers

Morrison Petroleum

Nova Corporation

Shaw Communications

SR Telecom

Surrey Metro

Younger Growers

DY4 Systems

Hummingbird

International Semi-Tech

Speedy Muffler King

U Companies

Crown Cork & Seal

Danaher Corporation

To explanation very briefly on several of these companies, Nova Corporation is true much a Canadian company further benefiting from the growth in North America for natural gas and the better pricing of its petrochemical issues as both the U.S. and the world economies expand Most recently, Nova Corporation has made a major investment in a natural gas marketing company in the U and is now actively seeking ownership in pipelines in Australia and Latin America. Morrison mineral oil has had a long record of succes in oil and gas in Alberta, on the contrary among the many companies operating in that field, Morrison is single of just a handful that are actively looking for "elephants." common advantage of Morrison and other like oil and gas companies is that typically all of the cash come is plowed back into more exploration and development