Stock market investing
Top reasons to invest in high dividend yield stocks.
High dividend yield stocks can be an attractive investing choice in the stock market. They offer income and cash while if they are undervalued relative to their intrinsic or fundamental value, the return can be substantial compared to risk taken.
The basic advantages of investing in high dividend yield stocks
1.Sustainable income, cash to provide liquidity and help in financial planning in advance. Ability to cover expenses, holidays, gifts, or even larger financial choices such as a loan payment. Sustainable income is not an absolute term however, pending to economic and financial performance of the company and profitability.
2.Stocks with high fundamental analysis score and a high quality dividend are often safe and have lower volatility.
3.An average dividend annual yield of 10% is equal to doubling your initial capital investment in less than 8 years. Assuming there are no extreme stock market price action volatility with compounding, this seems an interesting idea for capital preservation and growth.
4.High dividend yield stocks are safer than IPOs or speculative stocks with losses, based on momentum and growth expectations which often are too optimistic by financial analysts.
5.High dividend yield stocks are often neglected by financial analysts and investors, considered boring. But is a stock that is providing a good risk-adjusted and inflation protected income, cash, money really boring?
These are some of the advantages that high dividend yield stocks offer. Even having a technical analysis indicating a range bound price action, a stock that offers an attractive dividend yield can be useful both in a portfolio for diversification and for producing cash and money at regular times. A stock and equities portfolio consisting only of high dividend yield stocks can play important role in financial planning, asset management and long term retiring goals. There are many stock market screeners that will help you make a thorough research and financial analysis to find these regular making money high dividend stocks.
Stock market financial analysis
5 interesting facts about financial analysis.
Yes stock market financial analysis is exiting and not easy.many analysts tend to favor buy ratings on stocks,some financial analysts guess,financial analysts could be parrots in some cases,target prices are somehow tough to focus on and a lot of times analysts do not just invest their own money to their recommendations unless they work for an asset management company.
These are all interesting facts about stock market and stock investing.
Investing with Exchange traded Funds
Exchange-Traded Funds Are an Interesting Way to Invest.
Reading this article about ETFs on FT.com and systemic risks it is interesting and worthwhile to refer to some of the advantages and disadvantages of Exchange traded funds.
As the article mentions, ETFs have gained a lot of popularity during last years as a new form of passive investing. There are many categories of ETFs offering both flexibility and the freedom for a passive investor to choose what type of investment to focus on. From popular commodities such as oil and gold to major indices such as S&P 500 or Nasdaq ETFs allow to any investor to follow the moves without worrying too much about individual stock picking.
Major advantages of ETFs:
1. Invest in a wide range of assets at any time on a daily basis, buy or sell
2. Passive investing, capturing the return of the whole index
4. Innovation investing in new asset classes and flexibility, new investing ideas
5. Offer liquidity
6. Tax advantages
7. Lower costs compared to Mutual funds
Major disadvantages of ETFs:
1. Systemic risks
2. Not control at the individual components of the ETF, passive investing
3. Not be able to outperform the general market, as their return should match the return of the asset class i.e. S@P 500
4. Problems for emerging markets due to illiquidity and fast turnover
There are also major differences between Europe and USA as ETFs are more popular in the USA, and are much more tax-efficient in the US market. Distribution and fragmentation have made ETFs less popular as investing choices in Europe.
So overall Exchange Traded Funds are a smart and effective way of investing. But there are a passive way of investing, so they are not suitable for stock-pickers. This does not mean that they are only long-term horizon related investing tools. The oil has made a nice rally during last week and an investor in an oil ETF going long would have a nice return in a very short period of time. ETFs are another great example of financial engineering, offering solutions, innovation, and flexibility to modern investing.
Stock market and Exchange Traded Funds
So invest in stock market and in ETFs.Why not?As this way of investing offers flexibility and more options to exploit stock market returns and opportunities,instead of focusing on individual stocks.
Stock trading and stock investing starts with the fundamentals.What drives up or down stocks and their prices?It is demand and supply based on fundamentals and expectations.Good fundamentals will usually drive stock prices up.But valuations is always a top factor to consider in the stock market.A great stock of a company could be overvalued.So while technical analysis of stocks is important the main focus should be on the fundamental analysis of a company and its stock.Because just buying a stock because it is in uptrend is very risky without an analysis of basic fundamentals such as profitability,cash flow etc.
US stock market after almost 2 weeks have passed from the Presidential Election
Almost 2 weeks after the US presidential election is officially over and there is a new US president, US stock market continues to show a persistent strength.
On Friday 18th November 2016 the major indices closed as follows :
S&P 500 2.181,90,-5,22,(-0,24%)
Dow 30 18.867,93,-35,89,(-0,19%)
Source : Yahoo Finance
With all 3 major indices having made higher prices it is interesting to watch for either a correction or a continuation of this current trend.All indices are in overbought levels using technical analysis indicators,so caution is necessary.As long as the uptrend continues buying dips on stocks seems safer than selling short stocks, but valuation is a concern as many stocks have risen in value so fast after the US election.
One of the most important things for the stock market to make money with is timing
The stock market is volatile,risky and unpredictable.there are no guarantees about making money or having profits.Someone can lose a lot of money at the stock market.But one very important aspect to remember is that timing is very important for stocks.This first week of US elections result the US stock market had a rally.yet not all stocks performed well.There are some sectors that did very well.
Financials sector did very well this week
Financial stocks performed very well with strong gains,even Wells Fargo had a nice rally.Also industrials,information technology,materials and energy performed well, while real estate and telecommunication services were among the weak sectors.
This date was taken from source investools.com
Being at the right sector the correct time is essential to ride the wave and pick stocks that will perform well and make money with.It is not easy though.
Stock market volatility
Now that we now the result and winner of US elections the stock market needs to find a direction.Asian stock markets tanked as the winner of US election was officially announced.Gold moved up,oil down,European stock markets opened lower but now rebound.
How will the US stock market react to the election result?A sell-off is very likely.But this could be a great opportunity to buy stocks at lower prices or sell stocks that deem to be overvalued.Overall volatility seems to be present,so a lot of caution is required when investing or trading the stock market not only today but the following days until the investors and traders and hedge funds, or big institutional investors make an opinion on the market not based on emotions such as fear or greed but on logic.Stock market always makes dips,and rallies.
Stock market today’s rally has something interesting
What is the stock market today’s feature that is worth mentioning?In such a strong rally even stocks that have been in a downtrend lets say with strong short selling interest may get positive reaction and trend higher.This however may not be a catalyst for a permanent trend change.If fundamentals have not changes caution is required as this strong rally may be short for stocks that have poor or bad fundamentals.
Stock market news
The US stock market is waiting this week the result of US elections to assess the outcome and form a new trend or not.Last days there was a selloff in the stock market as the polls show a tight battle to win.There could be a lot of volatility this week, which is both good and bad.Any possible selloff may create buying opportunities and selling also stocks that seem either overvalued or are at a downtrend.Caution is necessary.