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Pot stock warning, GIC rate war and doughnut dividends: What you need to know in investing this week

Looking for investing ideas? Here’s your weekly digest of the Globe’s latest insights and analysis from the pros, stock tips, portfolio strategies plus what investors need to know for the week ahead.



Pot stocks flash warning signs as investors drive valuations back to January peak

Several days of frenzied trading have driven marijuana-stock valuations back to near the record highs set at the start of this year, setting the stage for what could be another brutal sell-off once the enthusiasm subsides, Matt Lundy writes. Even usually optimistic sell-side analysts are signalling that the biggest pot stock of them all – Canopy Growth – may be due for a pull back.

Read more: Analyst advises investors to buy pot stock Cronos after short-seller sparks steep sell-off

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Read more: This lagging pot stock is snapping back with 54% upside forecast

The long, dark night for GIC investors and savers finally comes to an end

A small but encouraging rate war is being fought over five-year GICs, Rob Carrick writes. EQ Bank is offering 3.52 per cent on a guaranteed investment certificate with a five-year term, just surpassing the 3.5 per cent offered by Oaken Financial. Several other small independent banks are offering rates in the 3.1-per-cent to 3.3-per-cent range, while the big online bank Tangerine offers 3 per cent. Expect more battling over the months ahead on rates for both GICs and savings accounts.

Read more: How your helpful bank will ace you out of a good GIC renewal rate

Why I’m switching from pizza to doughnuts in my dividend growth portfolio

Goodbye pizza. Hello coffee, doughnuts, burgers and fried chicken, John Heinzl writes. Back in May, I wrote that I was losing my appetite for Pizza Pizza Royalty shares. Since then things have only gotten worse. In light of the company’s deteriorating performance and poor dividend growth prospects, I’ve decided to take my lumps and sell. I’m using the proceeds – plus most of the cash in my model dividend growth portfolio – to purchase shares of Restaurant Brands International. The owner of Tim Hortons, Burger King and the Popeyes fried chicken chain not only offers superior diversification, but its dividend has been rising steadily and will almost certainly continue to increase.

Read more: Is it time to fire my adviser?

Whatever you do, avoid this type of investment

Binary options involve placing a bet on whether a specific stock, commodity, index, currency or whatever will go up or down within a specific period of time (usually very short). If you guess right, you win. If you don’t, you lose. Think of it as the financial equivalent of betting red or black on each turn of a roulette wheel, Gordon Pape writes. The attraction is that you don’t need to invest a lot of money, it’s easy to understand and it can be done online from your home. The disadvantage? Most people lose money (sometimes a lot) and some of the sites that promote this activity are scams

Mawer: Why investors should take a second look at Canadian lifecos

Among the reasons investors might want to consider llife insurance companies is return potential, writes Vijay Viswanathan, director of research at Mawer Investment Management. Core life insurance is now a much smaller aspect of the overall business than it once was. Global wealth management is fast becoming the main focus and presents some attractive growth potential in new markets.

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What investors need to know for the week ahead

Coming up this week: North American stock and bond markets will be closed Monday for the Labour Day holiday. Eyes will be on the Bank of Canada for its next interest rate announcement at 10 a.m. on Wednesday, the same day Canada and U.S. negotiators are set to resume NAFTA talks. Companies releasing their latest earnings include Hudson’s Bay, Laurentian Bank, Alimentation Couche-Tard, Broadcom, Dell Technologies Transcontinental. Economic data on tap: Canadian and U.S. auto sales for August on Tuesday; July trade balance figures for the two countries on Wednesday; Canadian building permits for July and U.S. factory orders for July on Thursday; and August employment for both on Friday.

Looking for more investing ideas and opinions?

How a $781-million outperforming fund manager is positioning for the next phase of the bull market

Short sales on the TSX: What bearish investors are betting against

A soaring stock that is close to setting a new record high

Three stocks on the move that investors should pay attention to

A value stock reporting solid operational results with 47% upside anticipated

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Downsize my home in retirement? Forget about it

Ensure you’re in the clear: Tax court decision serves as warning to home buyers

Bull markets don’t last forever: Ten things that could foreshadow the end

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