Categories Dividend

Vanguard's High Dividend Yield Etf: Great Investment

The Vanguard High Dividend Yield ETF (Exchange Traded Fund) is on the rise and as the economy continues to resettle this ETF should continue as well. Why look into this fund as an option for investing? Just take a good look at what it has portfolio wise and where that portfolio can take you.

The first thing to know about Vanguard High Dividend Yield (VYM on the ticker) is that it is a large-cap ETF that promises high dividend sharing quarterly. Now, know that unless you are able to invest a serious amount of money, the dividends will not pay your bills, however, buying into a stock that pays dividends is always smart because whether the stock goes up or down, you the investor still get those quarterly droppings which can be later used for re-investing.

Second thing to know is what it holds. An ETF is basically a mutual fund that plays like a stock. That means that there is no minimum investment to be made here. When buying a fund like this it is important to look at what stocks the fund is holding. With VYM the top ten holdings account for 32.5% of the fund. These companies are:

1 Exxon Mobil Corp. 2 Microsoft Corp. 3 Procter & Gamble Co. 4 Johnson & Johnson 5 General Electric Co. 6 Wal-Mart Stores Inc. 7 JPMorgan Chase & Co. 8 AT&T; Inc. 9 Pfizer Inc. 10 Chevron Corp.

Notice that all of these companies are survivors of the economic crisis and not only that but they are going to come out probably stronger since many of their competitors are either bankrupt or are simply hurting financially and are all considered to be staples for their respective industries and all pay dividends.

Third thing to know is that Vanguard is like the Mercedes of stock funds. Buying into an ETF that is run by Vanguard is far more stable than that of Charles Schwab or many other popular investing companies. They have the talent and the prestige and experience to back their funds.

when does VYM pay dividends?

VYM pays dividends on a quarterly basis, usually in March, June, September, and December. The last Ex-dividend date was 09/21/20 and paid a $0.705 dividend a small decrease from the year before($0.786) but with all things considered not bad at all, especially in a year where the majority of large-caps have been slashing dividends.

Dividend History

High Dividend Yield ETF (VYM) 2020 Total: 2.097

High Dividend Yield ETF (VYM) 2019 Total: 2.842

High Dividend Yield ETF (VYM) 2018 Total: 2.649

High Dividend Yield ETF (VYM) 2017 Total: 2.401

High Dividend Yield ETF (VYM) 2016 Total: 2.206

High Dividend Yield ETF (VYM) 2015 Total: 2.149

For more information on VYM or other Vanguard ETF’s visit www.vanguard.com

Categories Stock Market

What You Should Know as a Stock Investor

Before one begins investing in stocks, it is absolutely essential that he or she begin by learning the basics. Investing in stocks may appear relatively basic at first glance. However, in order to truly capitalize on investing, you must be properly educated on the topic. We will discuss the various types of ownership in a company (primarily focusing on stocks), the rights you gain by owning stocks, and more.

Have you ever wondered how investors were able to exchange and transfer public companies stock between each other? Well, stock is now primarily electronically traded at stock exchanges around the world. Among these exchanges are New York Stock Exchange (NYSE), National Association of Securities Dealers Automated Quotations (NASDAQ), American Stock Exchange (AMEX), Euronext, London Stock Exchange, and numerous more. These exchanges are generally linked to a physical location, but with the advent of technology the physical locations are no longer a necessity. These stock exchanges allow for relatively smooth and flawless stock trading to occur between individuals and institutions. Stocks are also given symbols (usually consisting of letters) to differentiate between companies. Some symbols include GOOG (Google), BA (Boeing), F (Ford), and WFC (Wells Fargo), to name a few.

There are also various levels of ownership of a company. The stock most people refer to is common stock. Common stock gives the investor the right to vote on certain company issues. Each share generally equates to one vote, however that may vary based on the companies policies. The downside to common stock is that in the case of a company bankruptcy, these shareholders may lose their complete initial investment. Creditors, bond holders, and preferred stock holders receive the left over cash and assets before common stockholders respectively. Yet, common stock usually offers higher return or yield on the initial investment and is highly liquid (the relatively timely and easy process of converting an investment into cash).

Preferred stockholders, on the other hand, do not have voting rights. The company pays a fixed or floating (changing) dividend to the stock holders ordinarily. They also have the right receive their dividends before common stockholders, along with cash and assets in the case of a bankruptcy. This allows for a more secure investment, but may not lead to as significant of a return on your investment.

Bonds allow investors to capitalize from corporate debt. Investors purchase bonds for face value, or the initial investment cost for each bond (usually $100 per bond). The company is bound by law to repay at least the face value or initial investment in most cases. Furthermore, investors receive interest which is determined by the coupon. The coupon may be fixed or floating similar to preferred stock. Bond holders receive their initial investment before any of the afore mentioned investment methods. This results in a high level of security, but decreases its liquidity. Therefore, bond holders are required to maintain the bonds until the maturity date (a set date when the company has agreed to repay the debt) when the initial investment is returned along with any owed interest. However, investors may opt out before the maturity date, which usually results in a monetary penalty.

The obvious question you ask, “Why should I invest in common stock if it is so vulnerable to bankruptcy?” Well, a major concern of investors is to hedge against inflation. Inflation is the reduction of value a currency posses in buying power. This may be caused by various reasons, but we won’t go into detail here. If investors do not stay ahead of inflation, the value of their wealth and buying power will dwindle over time. Stocks allow not only a hedge against inflation, but also the possibility of more aggressive growth above the other investment choices discussed above. In some cases, investors such as Warren Buffet have become extraordinarily wealthy through long-term investing. However, investors must also be highly vigilant so as not to lose their wealth. Yet, I believe through steadfast and persistent learning, you may also become a brilliant investor.

Categories Stock Market

Cash Paying Securities: Stocks Versus Bonds

In addition to seeking healthy returns on money, investors also judge where the want to put their funds by what sort of cash flows they can get out of the investment. Sure, commodities such as gold and platinum, and many stocks and bonds offer excellent return potential, but if they offer no cash from month to month, the investor’s cash flow is tied up entirely in the security itself. To get around this, there are several investments that an investor may make use of to maintain some current income and cash flows. These investments include dividend paying stocks/ETFs, and Bonds. I will discuss each separately, and the pluses and minuses of both.

Stocks

Stocks are great in terms of growth potential, and have historically outperformed bonds in terms of growth. Stocks that pay a dividend in the simple sense are a lot like bonds; you put your money into the shares, and you get a payment every month or quarter. Sounds simple? However, there are pitfalls you need to be aware of. The first is to see if the dividend has been stable or steadily increasing over the LONG term, preferably 10 years minimum. You don’t want to buy the security expecting $1 per share and have it slashed to $.50, $.25 or even nothing. There is nothing that forces companies to keep paying their dividends. In addition, your principal (original amount you put in) could drop as well). A good alternative is to look at shares of preferred stock; they tend to have a larger dividend, and the dividends on preferred shares must be paid first before other dividends are paid out. Another good way to diversify your risk is to invest in an ETF (exchange traded fund), which pools together shares from hundreds or thousands of companies, helping to minimize your risk if one stock alone cuts or delays its dividend. Some funds which I invest in personally are AGC, AVK, and AOD (Advent Claymore and Alpine), but there are many other out there as well. Another good option is a REIT or Royalty trust which pays dividends that are typically larger and avoids the double taxation of dividends. The only downside to this is that their dividends are taxed at ordinary income rates, so beware of this for tax purposes.

Bonds

Bonds are best for those who are more risk adverse or getting closer to retirement age. Your principal is safe, unless you choose to sell your bond in the open market. Remember that bond returns and prices are inverse; bond rates are currently low, making their prices high. If you buy a bond now, be prepared to hold it until maturity or you may lose some on your initial investment. The best thing about a bond is that your payments are guaranteed; if the company doesn’t make their payments, they can be held in default and forced into bankruptcy. In addition, if the company does go bankrupt, you have a good chance at getting some of your principal bank, versus none for shareholders (bondholders have priority over stockholders). Bond risk is easy to determine; if they are in the A-AAA, and not in a currently depressed market (i.e. A-AAA bonds involving real estate), it is probably safe to buy them, with a low risk of default. Bonds may not offer mega returns, but if your aim is cash stability and security, bonds may be the best route to go.

Categories Stock Market

Strong Buy Stock: PPHM

Strong Buy Stock: PPHM – In today’s questionable financial times, it’s difficult to put money into the stock market and feel confident that your risk is going to pay off. But there are stocks out there that can earn much more money than a simple interest-earning savings account. For easy trading, no service fees, and no minimum dollar amount required to open an account, look at individual investor websites like www.TDAmeritrade.com.

PPHM Funded by the US Department of Defense’s Defense Threat Reduction Agency

Peregrine Pharmaceuticals, Inc. (PPHM) has apparently caught the interest of the Transformational Medical Technologies Initiative (TMTI) of the US Department of Defense’s Defense Threat Reduction Agency (DTRA). The US government agency DTRA has agreed via contract to pay up to $44.4 million for PPHM’s furtherance of testing and developing what is termed “bavituximab” as well as “broad spectrum treatments for viral hemorrhagic fever infections.” In short, PPHM has been funded to develop counter-terrorism drugs for the US.

According to PPHM’s management, “The DTRA biodefense contract award has the potential to create long-term value for Peregrine, including generating future potential revenues from government stockpiling to combat bioterrorism threats.”

Furthermore, PPHM is well on its way with researching, developing, and testing treatments for cancer and hepatitis C.

Time to Buy Indicators

While the stock price has a volatile history, on January 13, 2009, it moved above its 50-day moving average, on the 14th it moved above its 200-day moving average, and it has recently experienced unusually high volume.

Because of its current low stock price, only .40 per share, there is not a lot of information going on about PPHM, but one can easily chalk that up to its low price and a low amount of publication relations information. While most institutional investors stay away from stocks priced under $1, PPHM does have 4.16 percent institutional investors, a percentage that is likely to increase once PPHM meets the NASDAQ’s “minimum bid price rule” requiring a stock price of at least $1. Look for that by July 27.

Also, look for news about PPHM’s new chairman and the changes that will bring to PPHM.

As with buying any stock, there is risk involved, but several indicators point toward higher stock prices for PPHM: the assignment a new chairman and possibly bringing onboard an additional board member; the stock price crossing above its moving averages; NASDAQ’s $1 stock price requirement deadline coming up on July 27; funding from the US government; and of course, continual successful clinical trials as PPHM strives toward treating various forms of cancer and hepatitis C.

Categories Stock Market

Trading in Stocks

For an investor to survive the rough tides of the stock exchange market the investor should first establish an investment policy. Investment policy is a plan of action or a statement of ideals. This plan should have specific objectives regarding the return requirements and the risk tolerance. This means that the investor should determine or forecast the level of returns he expects on his principle once invested before choosing the stock. An investor should generally seek an investment strategy that provides the highest possible returns within the constraints of time, capital, and risk level among other important variables.

Stock selection is more important than timing the price swings. Wisely selected stocks have been found to be appreciating assets that most often offset the hurdles of inflation whereas cash has been a depreciating asset since its introduction. Private investors should focus upon one main approach. Basically there are three approaches to investment and an investor should settle on an approach according to guidelines on his or her investment policy. Majority of investors are appealed to technical analysis approach where buying and selling of shares is based entirely on price movements irrespective of the financial fundamentals of the companies in the question. Investment gurus shun this method because substantial proportion of gains is lost in form of commissions.

Great investors like warren Buffet combine both the growth share approach and the asset situation approach. Both approaches are the best avenues for those investors who take investment as profession and take their time to study and identify these companies. In the asset situations approach the investor buys shares of the company whose share prices have fallen below the underlying value of the business. In this approach one is guaranteed a cushion in case of company closure because there is a security margin provided by the company trading its shares below its intrinsic value. Growth share approach involves trading on shares of companies which have the ability to increase earnings per share at above average returns year after year. The article “choosing the stock to invest in” explains why the growth share is the best approach for the private investor.

Categories Whisky

On the Whisky Trail in Campbeltown, Scotland

Formerly the home of nearly three dozen whisky-producing brands, Campbeltown, Scotland today only has three operating distilleries: Glen Scotia, Glengyle, and Springbank. The trio extend into today a tradition dating back to the seventeenth century, when single-malt whisky distillation first began in the area. Now only a shadow of its former self, the region once was home to at least 34 distilleries, whose total output in quantity (1.9 million gallons in 1886) crowned the region as Scotland’s whisky producing capital before the end of the nineteenth century. Within fifty years, however, a post-Great War economic downturn would close most distilleries on the Kintyre Peninsula, leaving only four operating whisky houses and a sparse few employed of the former 255 distillery workers. The area was also once home to Taketsuru, considered the founding father of Japanese whisky; he studied at the University of Glasgow and then worked at Hazelburn Distillery before returning to his native land.

Fortunately, things have began to change for Campbeltown with the beginning of the new millennium. Although only two brands, Glen Scotia and Springbank would survive the Second World War, a third distillery reopened in 2004 with the formation of Mitchell’s Glengyle, Ltd. At the helm of operations is Hedley Wright, a descendant of 1872 founder William Mitchell, and also directing production at Springbank Distillery. The reopening of the distillery inspired the Scotch Whisky Association to reinstate Campbeltown as a whisky-producing region; formerly, the other two brands were considered to be Highland whiskies. Glengyle will bottle its first casks of recent whisky in 2014, after an aging period of nearly a decade; however, the label will read “Kilkerran,” to avoid confusion with another Scotch. The name refers to ancient King Ciar of Ulster.

Of the other two labels, Springbank is the oldest, founded in 1828 by the Mitchell brothers, whose descendants would begin Glengyle Distillery’s initial production forty years later. Springbank Distillery today is the oldest family-owned independent distillery in Scotland, with traditional whisky production methods preferred. Located at the site of an ancient still, the entire production process for Springbank Distillery occurs at their single location in Argyll; also produced there are two othe whiskies, Longrow and Hazelburn, the name of two operating distilleries in the area at the height of its culinary fame. Also known as an experimenter, three single-malt lines produced at the facility are aged in either sherry, port, or bourbon casks, lending unique flavors unknown to other whiskeys. Another intrinsic trait of Springbank’s products is their brine-like taste, imparted by salty sea air surrounding the region. Tours of the distillery are available, but be sure to arrange for such in advance; visitations are allowed year-round for the price of £3.00.

Founded four years after Springbank, Glen Scotia Distillery first opened in 1832, and by 1886 the facility’s output totaled 85,000 gallons annually. Today the single-malt is bottled by its distiller, as well as the reknown Gordon & MacPhail bottling company, and Signatory Vintage, another blender and bottler. Also rumored to be haunted by a former worker whom drowned in Campbeltown Loch, the distillery closed for a short period in the 1980’s before being reopened by the Gibson Canadian Whiskey Company, who also operated Littlemill Distillery in Scotland’s Lowlands. Housed in a cottage-like building between Argyll and Bute, the primary product to leave the production grounds is an eight-year-old single-malt Scotch whisky considered to be inferior to Springbank, but still of quality.

Although no longer considered the king of Scotland’s whisky-producing regions, Campbeltown today is experiencing a revival that may pique the interest of more and more individuals in years to come. For whisky tasters and distillery visitors, Campbeltown’s Scotch whiskies are a part of living history not to be missed.

http://website.lineone.net/~john.mcsporran/campbeltowndistilleries.html

Categories Dividend

Investing Early Pays Big Dividends

When I was in my twenties, I cared very little about my financial future… I was interested in the money I was making now! I wanted to buy a new car, get a better apartment, maybe get married, have kids – all the things we are raised in the United States to want for ourselves. Saving money for when I was older was not on my list of things to accomplish before I turned 30!

But, my father – who is a Southern Baptist pastor – taught me two things about money for which I shall be eternally grateful. The first is to make sure that I tithe. It’s a biblical principal of giving back. The Bible teaches that we are to give a tenth of our earnings back to the original source (God) with a grateful heart. Those monies allow His work to continue, and allow the church or other charitable organization to help others who might not have as much as I do be able to provide food, shelter or health care for their families.

My heart has been lifted so many times, as I have learned how I have helped families through giving to some fund to help send a child to an expensive hospital thousands of miles away for specialized medical care, or providing food for a needy family, or nice clothes for a single mother who needs to go apply for a job to help her children. Tithing – giving back – is not just good for those in need, but, it fulfills a need within each of us to be a part of something bigger than ourselves. The return on investment is immense – not just in monetary value to our society and culture, but in emotional and social benefits as well.

The second financial advice my father gave me was to invest. At the time, I didn’t have a lot of money to invest. My work in radio as a disk jockey was not an extremely profitable one in rural Mississippi. But, still, I placed another 10 percent of my income into a safe annuity at the time. $25 a week isn’t a lot of money, but, with sheltered investments in high, moderate and low risk opportunities, what started out as a $1,300 a year contribution in 1988 continues to grow – even in this down economy.

Thirteen hundred dollars a year has grown, and my investments have both increased in amount and types of investments. But, I keep that annuity in place. It’s a reminder of why I invest… and of the truth my father taught me. “Put the money in, leave it in, don’t ever touch it, and let it grow,” he told me. “If you’ll do that,” he said, “when you have to take it out, you’ll be very happy you did.”

He was so very correct!

Next year, I turn 50. I’m nowhere near retirement. But, if I wanted to, I could! My measly $25 a week contribution increased to about $75 a week before I started investing into other vehicles. When I began to diversify, I continued to keep that annuity investment going… but, back at the $25 a week level.

There have been times, I was tempted to just pull that annuity out and spend it, re-invest it, or just get it out of that account. Resistance to temptation is very difficult at times… especially after the government’s housing finance debacle that led to the 2008 collapse. I was tempted to pull all of my investments out and just bury them in jars in the backyard. The interest rate might have been even better, especially if I had planted trees nearby those jars!

But, I kept investing. In that annuity, and money markets, and other retirement funds. Still, that annuity fund I began at age 23 provides for me the security my wife and I need to know that we’ll be ok today, and in the future. It will provide for us the funds we need to survive – and to thrive! Today, my investments are above seven digits in value – because I followed my dad’s advice. Put it in. Keep putting it in. And never take it out, until the day you retire.

Categories Dividend

10 Dividend Paying Consumer Staples Stocks to Consider

Companies involved in consumer staples are some of the strongest and most stable companies that one could invest in. They sell products such as beverages, cleaning products, personal care products, food, prescription drugs, and other products that are used on a daily basis by people all over the world. Not only are the products that the companies sell stable sources of business, but the stocks themselves are generally stable. The stocks are usually less volatile than other industries such as technology and financial services, meaning that you have fewer violent swings up and down. Additionally they usually pay safe dividends that grow their payouts over time, especially when the dividends are reinvested.

While consumer staples usually have lower dividend yields, they are typically less risky investments than other forms of equity. Additionally, consumer staples usually make up your core holdings, stocks that you are less likely to sell, meaning that over time the dividends will be able to compound and provide a nice source of income to reinvest, or ultimately live off of during retirement.

Below are 10 consumer staples stocks (that also pay dividends) to consider. Remember that you should always consult with a financial advisor concerning investments.

Procter and Gamble (PG)

Proctor and Gamble is the quintessential consumer staples company. It has massive exposure domestically and abroad. 23 of P&G;’s brands have more than $1 billion in sales annually including Crest toothpaste, Tide detergent, Duracell, and Pampers. The company has manufacturing sites across the US and the world, and is always developing new products for domestic, developed, and emerging markets. The stock currently yields around 3.4% and has increased its dividend 55 years in a row.

Kellogg’s (K)

When you think of Kellogg’s, you usually think of breakfast food. The company’s portfolio includes cereals such as Frosted Flakes and Raisin Bran, snack bars such as Nutri-Grain and FiberPlus, and other foods including Cheez-It and Eggo Waffles. While the company’s performance is strongly affected by the prices of different grains, the popularity of its brands could allow the company to raise prices if necessary. The company currently has a dividend yield of 3.2%.

Coca Cola (KO)

You likely do not need a description of what this company does. Chances are this global beverage giant has sold you a product sometime in the last week. In the last year the company has had more than $42 billion in sales and the stock currently has a dividend yield of 2.8%.

PepsiCo (PEP)

You may be asking yourself why I have both Coca Cola and Pepsi on the same list. First of all, they are both very strong companies that pay stable dividends. But additionally, Pepsi’s business is different in ways other than the taste of their products. Besides their iconic soft drinks, the company also sells Lay’s potato chips and Gatorade, creating a diverse portfolio of products. The stock currently has a dividend yield of 3.3%.

Johnson and Johnson (JNJ)

While the company has taken a hit to its reputation lately with a string of product recalls, the core products of Johnson and Johnson are still profitable and growing. The company has a diverse mix of prescription drugs, medical devices, and over-the-counter products such as Listerine, Band-Aid, Tylenol and Benadryl. JNJ stock currently has a dividend yield of 3.6%.

Novartis (NVS)

Novartis is the second healthcare company on the list of dividend payers. It has a strong business in pharmaceuticals, vaccines, and other products such as Benefiber and Theraflu. This Swiss company currently has a dividend yield of approximately 4%, however it only pays out one dividend per year (albeit much larger than most).

Kimberley-Clark (KMB)

Kimberley-Clark is primarily a paper-based consumer products company. Its brands include Kleenex, Huggies (diapers), Cottonelle, and Viva paper towels. It has a very stable business and currently has a dividend yield of around 4.3%.

B&G; Foods (BGS)

B and G Foods is by far the smallest company on the list, with a market cap of less than $1 billion. But it still has a large portfolio of strong food products including Cream of Wheat and Ortega. The company currently has a yield of 4.9%.

Philip Morris International (PM)

Philip Morris is definitely a controversial pick. It is an international tobacco company (no exposure to the US) with brands such as Marlboro and Virginia Slims. Globally, regulations are generally behind US tobacco regulations, but it is still something to consider. Personally you may also have a problem with the ethics of profiting off of something that harms people (I certainly do and choose not to own the company). If you can see passed the ethics issues though, the stock has a yield of 3.8% and is a serious play on international growth.

Colgate-Palmolive (CL)

Colgate-Palmolive is the final consumer staples stock on the list. Its brands include Colgate, Palmolive, and Softsoap. Like its competitor Procter and Gamble, it has a noteworthy exposure to emerging markets. The company has a dividend yield of around 2.7% and has raised its dividend payout for 47 years in a row.

Consumer staples companies offer a safer and more stable way to invest in the stock market. They have diverse products that are used worldwide by billions of people, most with exposure to emerging markets. They also have strong dividends to reinvest and ultimately serve as a source of income.

Full disclosure: I am currently long Procter and Gamble. I have no intent to initiate new positions in the companies listed above in the next 72 hours. Always consult a financial advisor when it comes to investing.

Categories Stock Market

Why Invest in a Foreign Stock Fund

The attraction of owning a foreign stock fund lies with the two key components that investors seek.

  1. Great returns: For example in 1999 the average foreign stock fund gave happy investors a return of around 44% compared to the S&P; 500 which gave returns around 22%.
  2. Diversification: Diversifying your investment allotments into foreign funds means you increase the chances of having a good performer even if the domestic markets are in a sulk. (Morningstar)

The wise investor looks at foreign stock funds as another stream of income. There are possibilities of soaring returns but also risks of precipitous drops in the return percentages. John J. Ray, writing for Forbes.com notes that mutual funds are a good way to add what he calls “a little foreign spice” to your investment portfolio.

Foreign funds can be volatile due to any number of factors not affected by, and not controlled by U.S. investment laws. It pays to have a complete knowledge of your foreign fund manager’s strategy and style. Two key issues to investigate are:

  1. How often does the manager of your targeted fund invest in the emerging market sectors?

    2. What region or what countries does your fund manager focus on? (Morningstar)

Foreign Funds often spike while U.S. funds are dragging so a portfolio that balances the risks can offer good return potential and diversification. Check with your fund manager and the Morningstar fund rating to examine a target fund’s past returns. Check the funds exposure to emerging markets and volatile local influences. You must understand the degree of insulation from American markets in order to accurately assess the risk in opposition to the perceived potential returns of small cap foreign companies. (Morningstar)

Understanding style is as critical in foreign fund investments as it is in domestic U.S. fund investments. Style balances value and growth, and looks at the capitalization of the stocks in which your target fund invests. I particularly like the Morningstar style box for the quick visual on investment style. The large-blend foreign fund will be the easiest way to take advantage of both the large-value and the large-growth foreign stocks.

A wise investor always keeps the performance of the stock’s parent country in mind. When you look at those foreign funds remember that your return is the combination of how well your stock is performing and the value of the country’s currency against the U.S. dollar. If you buy a stock from Company (A) which is based in the “National Republic” of (B) and the stocks value increases 15% but the Currency falls 20% against the U.S. dollar you lose. If your fund manager is working to eliminate the exposure to the volatility of foreign currencies they will be hedging their currencies by trading in the “National Republic” currencies for U.S. dollars. Buying and selling the stock is totally separate from the buying and selling of the currencies involved. The stock is traded in the equities market. The foreign currency can be contracted for sale at a set future date so the fund is in effect guaranteed a specific exchange rate. Currencies are exchanged in the global currencies market. This separation of activities means the hedging of the currencies has nothing to do with the valuing of the actual stock itself and nothing to do with the fund manager’s decision to buy or sell those companies stocks. Some funds hedge currencies and some do not. It is important to know what your fund’s policies are. (Morningstar)

Explore your options for investing in foreign funds by contacting trusted fund managers. Forbes lists international and global fund families. Here are four funds from their best buy list:

1. Oakmark International Fund-1

  1.  Lazard International Small Cap-Open
  2.  Vanguard International Value
  3.  Alpine International Real Estate Equity-Y

International fund managers may be a bit more daring than domestic fund managers so it pays to re-evaluate your own risk tolerance before you look at investing in foreign funds. Try to match your risk tolerance with the risk behavior of a fund’s management style in order to avoid unsustainable risks that influence your overall investment strategy.

Categories Dividend

Dividend Investing for Long Term Income

Most investor’s greatest fear is taking a financial loss. Dividend investing can be one of the easiest and most reliable ways to achieve long term growth. In fact, any dividend paying stock holding actually grows in two different ways. First, the fluctuations of the stock market, and second, the periodic payouts offered by the company.
Nearly all dividend paying companies are large organizations with a long-standing history of increased value. In fact, nearly all major banks offer dividend payouts, as well as many natural resource organizations. This protects you from any major losses in the long-term.

The real power of dividend investing comes with the compound growth when re-investing your payouts. Eventually you actually own shares that were paid for by simply owning your original shares.

For example, if you buy 100 shares of Company A for $10, and they pay a quarterly dividend of 1 percent, you would be able to use the earnings to purchase one additional share of that stock. Without any further investments, your next dividend payout would result in an additional one share, plus a fraction. Over the long term, this eventually means you will have many more shares, resulting in much larger payouts.

As you can see this is not a get rich quick investing strategy since this will take many years to create a substantial amount of money. This kind of investing is meant to be used over a long time, usually twenty years or more. The reason that this type of investing is important is because of it low risk and ability to always make money. As with all investing though this should not be your only investment, as the saying goes “never put all of your eggs in one basket”. This is true even to this investment, this should only be one part of your portfolio.