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Frequently Asked Questions

While you are new to Investing Daily’s Complete Investor please read through these FAQs before posting questions in the Stock Talk forum. If you have a question about getting started, you can be sure that many others have had the same question before you.

How do I log into the Complete Investor website?

For general account questions and login instructions, and to control the messages you receive from Investing Daily, see Managing Your TCI Account.

How do I contact Investing Daily to manage my Complete Investor account?

For general account questions and login instructions, and to control the messages you receive from Investing Daily, see Managing Your TCI Account.

Why is my Leeb subscription now being managed by Investing Daily?

Leeb Group has teamed up with Investing Daily. The merger gives Dr. Stephen Leeb and other TCI analysts access to more resources and more brain power so that we can deliver better stock market advice and higher-quality service than ever before.

How will my experience be different now?

You will continue to receive the same excellent editorial content and astute stock market advice from TCI and other Leeb publications, but the service will be better than ever. The printed issues of TCI will be delivered faster and you will now have the opportunity to interact with Dr. Leeb and other experts on the Investing Daily Stock Talk discussion forum. You will also have a chance to sign up for discount memberships to Investing Daily’s other excellent publications.

What is Stephen Leeb’s strategy for beating the market? Could you please explain The Complete Investor’s Master Keys?

Dr. Leeb is known for thinking ahead. Among other predictions, he correctly predicted $100 oil and the tech bubble crash. He employs both a top-down and bottom-up analysis to find the best of the best stocks. He identifies key long-term macroeconomic trends and sectors that should benefit most from said trends. Then he selects the best companies in those particular sectors.

The Master Key measures the year-over-year change in the price of a barrel of oil. Here we’re looking to see whether we’re getting close to the kind of spike in oil prices that historically has been associated with the start of bear markets. A reading of minus 80 means that oil prices are 80 percent higher than 12 months earlier and constitutes the threshold for a negative signal. At the same time, positive readings indicate that oil prices are lower than 12 months earlier. Positive readings on our Long-Term Key have been correlated with rising equity markets.

What exactly is PEG, and why is it important?

PEG stands for price/earnings-to-growth ratio and refers to a stock’s P/E ratio divided by the company’s projected earnings growth rate. The reason we find it so useful is that it’s a way of seeing how the market is valuing a company’s growth; it is a measure by which you can judge if a stock’s P/E and price are reasonable for its growth rate. For this reason, PEG is more significant than the P/E ratio alone, even though investors tend to focus more on P/Es.

Typically we seek stocks with PEG ratios below that of the S&P 500, an indication that the market has undervalued the stock’s growth prospects. The key with PEGs, of course, is to make sure that your estimates of growth are on target.

The other way to look at PEG ratio is how much the market is paying for the unit of growth. Generally, investors are willing to pay more for a stock that is expected to grow rapidly.

Why do you assign China and India (Chindia) so much importance from the investment point of view? What are BRACC countries?

In our opinion, China and India represent the biggest growth opportunity of today as never before has such a large portion of the world developed at such a fast pace. Chindia is getting much bigger both in terms of GDP and in terms of demand on resources and finished goods. China and India will likely remain global growth leaders for the foreseeable future and key growth drivers for the global economy.

BRACC stands for Brazil, Russia, Australia, Canada, and China. These are resource rich nations (plus China) that we believe will be in prime position to benefit from the ever growing demand for natural resources and that offer excellent growth potential going forward.

What weighting should my portfolio have in gold and other precious metals investments?

How much weighting you want to allocate to precious metal investments is ultimately up to you, but we generally recommend a range of about 10 percent to 15 percent or more, depending on market conditions. We recommend a mix of investment in the metals themselves from ETFs like SPDR Gold Shares (GLD) to gold miners stocks to gold-oriented mutual funds. Holding mining stocks gives you leverage and usually higher returns when underlying metal prices go up, but during bad times they can also fall more than the metals themselves.

You have a number of portfolios. What is the difference among them?

The Growth Portfolio is our core portfolio. The companies in the portfolio are largely blue chippers that we think can grow at an average annual rate of 10% or better. We also believe that companies with strong international exposure have better growth potential than strictly domestic companies.

The Income/Value Portfolio is our most conservative portfolio. It’s geared toward investors who desire a steady stream of income from investment. We select companies with strong histories of distributions and dividend growth. We also have fixed income investment recommendations plus recommendations in special classes of high yielding stocks such as Master Limited Partnerships and Real Estate Investment Trusts.

Fund Folio, as its name suggests, is a collection of funds, including mutual funds and exchange-traded-funds. It is divided into a large number of categories. We recommend that you begin with the relatively diversified funds before expanding to the funds more concentrated in particular sectors.

The Core ETF Portfolio is a collection of ETFs categorized into three investment strategies: Income, Capital Appreciation, and Hard Assets/Hedge. This section is tailored for our readers who prefer instant diversification by purchasing ETFs rather than individual stocks. We’ve amassed a core group of ETFs that in our opinion will position an investor well for the future.

The Small-Cap Portfolio seeks to identify small cap stocks that have been relatively undervalued by the market. Such stocks typically have low price-to-book value ratios.

How do you suggest we make the best use of all the different portfolios and recommendations in TCI?

This obviously will vary depending on your individual investment goals. Some investors find it easiest to stick with mutual funds; for them, we recommend starting with a “core” fund, generally a relatively diversified large- or mid-cap core, growth or value pick, and then selectively supplementing it with a single-purpose funds, such as a gold, tech, or energy funds. Our Growth Portfolio is designed for long-term investors who want closer control over their own investments. Its categories and risk-level designations are intended to guide you in constructing a diversified portfolio that balances growth with safety. Given our cautious outlook, we recommend that you begin with the securities in the low risk level and expand to the medium risk level. Importantly, you should always diversify with stocks from different sectors.

How can I tell if you’re still recommending a particular position?

This obviously will vary depending on your individual investment goals.

Some investors find it easiest to stick with mutual funds; for them, we recommend starting with a “core” fund, generally a relatively diversified large- or mid-cap core, growth or value pick, and then selectively supplementing it with a single-purpose funds, such as a gold, tech, or energy funds.

Our Growth Portfolio is designed for long-term investors who want closer control over their own investments. Its categories and risk-level designations are intended to guide you in constructing a diversified portfolio that balances growth with safety.

Given our cautious outlook, we recommend that you begin with the securities in the low risk level and expand to the medium risk level. Importantly, you should always diversify with stocks from different sectors.

How can I determine from the tables in your newsletter whether you still recommend a certain position – so many of them are listed at prices higher than the Recommended Price?

If we think that any recommended position in our portfolios has not realized its full total return potential, we keep it in the portfolio. Thus, if you see a position in one of our portfolios, we still recommend it.

How long should I expect to hold stocks recommended in your portfolios?

We are long-haul investors, and when we pick stocks we do so with the idea that you will be holding onto them for at least several years. Even in our aggressive Fast Track Portfolio, you should expect to hold a position for two years or more, though because of that portfolio’s higher-risk nature we’re more prone to jettison a stock after a shorter time. For our other portfolios, the ideal holding period, a la Warren Buffett, would be forever, though obviously it’s important to be adaptable if the fundamentals of a stock or of the market as a whole change. For instance, we can take a profit or loss on a newsletter position if we think other companies are better positioned to capitalize on the particular trend.

What are zero coupon bonds and how do I buy them?

Zero coupon bonds are bonds that don’t pay interest during their lifetime. Rather, investors buy them at a deep discount to their face value. When the bond matures, its owner gets one lump sum equal to the initial investment plus the interest that has accrued.

We would recommend investing in zero coupon bonds only as a hedge against deflation. When interest rates go down, as occurs during deflationary periods, zero bond prices go up. Because zeros pay no interest until maturity, their prices fluctuate more than other types of bonds in the secondary market. The longer the maturity, the greater the discount and leverage to safety. For this reason, we recommend buying zeros as far out as possible.

The U.S. Treasury has a program called STRIPS (Separate Trading of Registered Interest and Principal of Securities), first introduced in 1985. While Treasury securities are never issued as zero coupon bonds, each interest payment as well as the principal can become a zero coupon bond, with differing maturities. These are then traded as independent negotiable zero coupon securities and are guaranteed by the full faith of the U.S. government. However, the Treasury does not issue or sell STRIPS directly to investors. They can be purchased and held only through financial institutions and government securities brokers and dealers. An easy way to invest in them is through an exchange-traded-fund such as the Vanguard Extended Duration Treasury ETF (EDV).

What is a short sale and how does it work?

Short selling is a technique that allows you to make money by selling the security you do not own with the expectation that the stock will dip in price later on. In a short sale, you borrow the security from your broker and sell it on the open market with the intention of buying it back later at a lower price. If your prediction holds true and the price has indeed gone down, you can reap a profit by buying back the shares at a lower price and returning them to the broker. Buying back the shares or “covering” your short effectively closes your position. Just like in a standard “long” stock trade, you keep the difference between the price at which you sold the stock and at which you bought it back, only in this case you sell first and buy second. There is no potential for dividend or interest income in short selling; your only profit is the price differential. Moreover, when you short a stock that does pay a dividend, you owe that dividend to the lender.

A word of caution is necessary: there is a great risk involved in short selling. The return is limited by price falling to zero but the potential loss is unlimited since the stock price theoretically can rise indefinitely. There is always the possibility of the trade going against you if stock price rises. While there is no time limit on a short position, should the price rise sufficiently, the lender may even require the return of the borrowed shares thus forcing you to buy back the shares at a loss. One possible way to protect from such a loss is by placing a stop-loss order, which is a standing order to buy the stock back (and close the position) if the price rises to a certain level. In this case you would only sustain a loss of the amount by which the price has risen and would not incur more losses if the price continues to rise.

How will I be notified about Complete Investor trades?

As soon as Stephen posts a recommendation or an update Investing Daily will let you know by email (see Managing Your TCI Account), so that you can take action as soon as possible. We’ll then continue to follow up on all open trades with detailed information on a regular basis.

Can I use my current brokerage account to trade with The Complete Investor?

To trade Complete Investor stock recommendations, you’ll need only a standard brokerage account with margin authorization. If you haven’t already opened a brokerage account, review the Financial Industry Regulatory Authority’s advice, and then start researching potential brokers using websites such as Investopedia and Barron’s. (At Investing Daily, we’re not affiliated with any brokers.)

How do I communicate with Stephen Leeb and other Complete Investor members?

As much as we would like to talk to each one of you individually, federal regulations prohibit subscription companies like Investing Daily from giving personalized investing advice – that’s something a licensed financial planner or stockbroker would do.

At The Complete Investor, the best way to communicate with Stephen and your fellow TCI members is through the Stock Talk forum. This is where experienced and novice members come together to learn from each other and help each other out. You’ll see recent forum posts in the right column of this website.

A Stock Talk posting form appears at the bottom of all website alerts and articles. If you have a question or comment pertaining to one particular alert or article, please post your question at the bottom of that alert or article.

If you have a question about trading in general, the answer can probably be found by searching using the white Search bar in the website’s upper right. If you don’t find your answer, the Forum lets you begin a discussion about a particular topic or join ongoing discussions.

Please be sure to read all of these “Frequently Asked Questions” before posting any questions. Many of the questions that novice traders have are already answered in the FAQs.