Tips and Tricks for Investing in the Stock Market
Investing in dividend paying stocks has become an important part of my my family’s financial goals over the past 2 years. My wife and I have a goal to earn over $500 in dividend income this calendar year. In order to reach this goal, we are busy building a solid portfolio of dividend paying stocks. [...]
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My wife and I have a goal to earn over $500 in dividend income this calendar year. In order to reach this goal, we are busy building a solid portfolio of dividend paying stocks. There is nothing glamorous about the stocks that we are buying up. The companies that we own shares in are not [...]
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A large cap stock generally has a market capitalization of $10 billion or greater. Market capitalization can be calculated by multiplying the current share price of a stock by the number of outstanding shares for a company. While there is no written rule a large cap stock has a market cap over $10 billion, most [...]
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Also referred to as “market cap”, the market capitalization of a company is the total dollar value of its outstanding shares. It is the value of the company as determined by the overall market. When the share price of a stock increases, so does the market cap of the company. Likewise when a company’s share [...]
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When it comes to dividend stocks, there are several financial ratios that can be useful to an investor. For example, the price to earnings ratio (P/E) compares a company’s current share price with its per-share earnings. The dividend payout ratio (DPR) is the percentage amount of earnings a company pays out in dividends to its [...]
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Have you ever worried about paying too much for a stock? As a dividend income investor, I have had this concern many times. Even though I like to take a long term approach to investing, I still don’t like to overpay to own a stock. There is no reason to overpay for a blue chip [...]
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The Price to Book Ratio (P/B Ratio) is commonly used by value investors to find undervalued stocks in the market. The formula compares a stock’s market value (current share price) to the company’s assets (book value per share). Generally speaking, the lower the P/B ratio of a stock, the more undervalued it may be. The [...]
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An automatic investment plan (AIP) is a way for investors to buy stocks on a recurring basis with small amounts of money. The funds to pay for these investments are automatically deducted from a checking or savings account of the investor. There are many different types of automated plans that investors can choose from. For [...]
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A Dividend Reinvestment Plan or DRIP is a tool investors can use to reinvest their dividend payments by purchasing additional shares of the stock. Most online stock brokers offer these plans to their clients as an opportunity to increase the value of an investment. Generally these investments are commission free and can be at a [...]
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The yield on cost is a simple but effective financial calculation that shows the dividend yield of a shareholder’s investment. Often times, investors rely on the current yield of a stock, which is not very helpful for shares you may already own. The current yield is specific to the current share price as opposed to [...]
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Factoring in the current yield of a stock can provide critical data for a dividend investor. The yield of a company offers a snapshot of the return on investment (in the form of dividend payments) shareholders could expect from owning the stock. The calculation is one of the most widely accessible financial ratios used by [...]
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Return on Investment Definition – Also referred to as the ROI, it is the calculated performance (or ratio) of the cost associated to purchasing an asset. An easy way to remember the ratio is the percentage gain or loss on any type of investment that is made. The return on investment can be calculated for [...]
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An Exchange Traded Fund is a security that trades like a stock but offers the diversification of a mutual fund. Exchange traded funds often track a collection of assets such as commodities, indexes, or a group of stocks. These types of securities allow investors to target specific areas of the market. Whether it is the [...]
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Dollar cost averaging is an important part of any long term trading strategy for investors who invest in stocks. Dividend investors will dollar cost average (DCA) into a stock they already own by setting up a dividend reinvestment plan (DRIP). Employees who contribute to a company sponsored 401k plan every month also dollar cost average [...]
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Want to learn how to calculate earnings per share? Most financial websites already calculate these numbers for investors, but it is still a good idea to learn where they actually come from. Every investor who buys stocks or sells them should at least have a general understanding of how to calculate earnings per share. As [...]
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Investors who buy dividend paying stocks need to understand the difference between preferred shares and common shares offered by corporations. Almost every investor has probably heard of common stock, which is what is usually referenced by analysts and media in the market. While preferred stock is not as common or well-known, it has plenty of [...]
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An unrealized gain occurs when a stock increases after the investor buys it but has not sold it. The term unrealized refers to the fact the investor still owns the stock and has yet to sell it for a profit. Once the investor sells the asset, it becomes a realized gain, assuming it is worth [...]
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