The start of the year brings new companies into focus for investors, particularly those that had a poor showing in the prior year. There are a few different ways to classify these opportunities, but most are based on being a “dog” of some sort.
Originally, the strategy was to buy the five highest-yielding companies in the Dow Index—hence the name Dogs of the Dow. But there are variations, like using 10 names, or using the S&P 50...
With the end of the year, there are all sorts of predictions about the next. But more important than predictions are specific investment ideas.
There are a few ways to take advantage of the changing calendar and find profitable investments. By focusing on a few key areas and concepts, traders can find specific investments that play to these opportunities.
First, investors can look to buy stocks that have been out of favor with the m...
One of the best-performing stocks of the 2010’s was Netflix. And, with 2019’s
big push for new streaming services, the competition is heating up.
The most interesting competitor to emerge this year was The Walt Disney
Company (DIS), with its Disney+ streaming service launch.
Taking advantage of its massive library of content spanning nearly a century,
the company could have gotten away with pricing its service at a premium.
Decades of investment data can reveal a lot of interesting patterns. A fun seasonal one right now is that of the Santa Claus Rally. Simply put, it’s the propensity for stocks to rally into the end of the year.
Originally, this trend was noticed in the last week of December and into the first few trading days of the next year. However, looking at the data, the last six weeks or so of the year tends to be good for the market on averag...
Tesla Motors Continues to Innovate, But Will Shareholders Benefit?
There’s no room in life for complacency. Capitalism has been described as a form of “creative destruction,” whereby new products and services lower costs and shift demand to new products.
In the past few years, Tesla Motors has shaken up the automotive industry. With a push for an all-electric car at a time when many of the major manufacturers were simply considering ...
Markets often top out for a while—or go through a multi-month correction—when greed gets rampant. There are a lot of ways to look at this phenomenon. It can happen when everyday folks are suddenly interested in the stock market.
But a more important one comes from corporations themselves. Specifically, one warning of a market top occurs when there’s a record-setting buyout offer from one company to buy another.
When big companies mer...
Typically, celebrities and investing seem like two entirely different subjects. That hasn’t always been true. There’s actually been a rich history of celebrities getting involved with publicly-traded companies as investors, active partners, and even board members.
To use one historic example, actress Grace Kelly once served on the board of 20th Century Fox.
Today, a myriad of celebrities can be seen as getting involved with a compan...
There are many ways to invest—and many potential ways to beat the market.
But one way, more than any other, will result in different returns than the market. Done right, it means beating the pants off of the index. Done wrong, it means underperforming.
This secret has to do with portfolio allocation.
While most investment professionals discuss the importance of diversification, they tend to do so to stress an investment that could go ...
We all come into some extra money from time to time. Whether it’s from a birthday card from a relative, some cash found in the pocket of an old jacket, or even just literally found on the street, that extra money can be put to good use.
In today’s age, it’s easy to even take that money and invest it. While most say you need thousands to start investing, even with as little as $50 you can start to get yourself on a financial track to...
What Warren Buffett’s Investment Strategy Tells Us About Today’s Values
Only a few investors have come close to Warren Buffett’s track record. Over the decades, he’s beaten the market handily. That success all comes down to one factor: Value.
Whenever you buy shares of a company, if you don’t have an idea of what the company is worth, and will be worth in the future, it’s impossible to know if you’re buying at a great price or not.
As tempting as it is to just dive into trading, it’s important to know a few things first. Knowing these “rules of the game” ensure you’re going in with sufficient knowledge to profit more often than you lose on a trade.
With just three simple numbers, however, you can get most of the knowledge you need to know if a trade is worth making or not.
If you’re trading on a fundamental basis, for instance, you should look at a company’s PE...
While most investors think of the potential returns possible, they do so at the danger of overlooking the flip side to the equation: Risk. All investments have risks. It may be the risk of a bond losing value over time due to inflation. It may be the risk of owning a company that goes bankrupt.
Risks can vary, and knowing how to manage those risks is critical.
While financial analysts think they can plug some numbers into Excel and ...
The stock market can do a lot of things efficiently. It can digest news about a company’s performance in seconds, for instance.
But it also picks up on the fear or greed of traders. If traders think a company is going bankrupt, they won’t wait to sell, and shares may end up going bankrupt as a result of a self-fulfilling prophecy.
Likewise, a lot of high-tech companies that went public in 2019 fizzled after their IPO as more invest...
How Stocks Are the Best Game in Town For Income
When most people think of the stock market, they think of big price swings
that can make—or lose—a fortune quickly.
While that’s certainly a component to it, smart investors know that price
moves higher, or capital gains, are just part of the investment equation.
In fact, capital gains are only about half the market’s performance in your
portfolio over time.
The other half? Income.
What Investment Beginners
Need to Know About Investing
There’s a lot of excitement around investing—and rightly so. It’s possible to
build a fortune. But it’s also possible to lose your shirt.
If you’re just getting started—or if you’ve tried to start in the past and can’t
seem to get any momentum going—investing can seem intimidating at first.
There’s a lot that goes into it besides your money, after all. Investing also
Trading isn’t for everyone. Most active investors fail to beat the market’s
average return. That’s because they make a lot of mistakes. While that’s an
inevitable part of investing, failing to learn from those mistakes and build on
successes can end up costing traders even more.
One of the most important things a trader can do is think about risk. After all,
every investment has a tradeoff between a risk and a reward, and most folks
Study after study on the market indicates that investors in smaller companies often get a return premium over time.
There’s some common-sense explanation behind that superior return. Bigger, more established companies may get all the attention in the market, and investors may have already paid up to own a big, established, blue-chip name. But smaller companies that could become the next great blue-chip firm still remain off-the-rad...
If you just follow the stock market, you may have missed the biggest financial news in years. That news is the rise of negative interest rates—or bonds that pay investors less in total than what it costs them to invest.
In the past, you may have bought a bond with a par value of $100 for, well, $100. And after receiving interest, you’d get back your $100 value, ensuring a total positive return. Negative yields occur when bond price...
Hurricane season is in full swing this time of year, and once again the east coast is in the crosshairs.
It’s something that’s happened before, and will happen again. While the unpredictable weather can sometimes cause billions of dollars in damages in a few short days, astute traders can take advantage of these developments to make an extra profit from it as well—as long as they’ve planned ahead carefully and are prepared.
Hindsight is 2020. While it’s easy to look back on a great trade that you passed up, investors make a much more common mistake.
They tend to use recent trends and extrapolate them out forever.
The problem with that strategy is that investment looks like the best opportunity after it’s already had a great run. Early investors already made their money. And no company can always be on the growth path. There will be times to change cour...