Posts Tagged ‘dividends’

1. Investments. Closed End Funds

Wednesday, April 1st, 2009

investorAs mentioned earlier today, my last post before I went to Hong Kong covered The Federal Reserve. Prior to that article, we’ve been talking about the most fundamental investment strategies that every investor needs to know in order to have a complete and well rounded portfolio.

While you probably won’t make use of each and every one of these, it still pays to know about them, so that if the opportunity ever arises, you can apply your knowledge in a way that will earn you profit.

Closed End Funds

This time, we’re going to talk about closed end funds. Closed End Funds are essentially investments that are tied to a specific number of shares in a particular security, such as a company or a technology. The shares are traded in the same manner as stocks, but because there is a specific number of shares being dealt with at the same time, and this figure never varies, it also shares some features of the mutual fund.

The point of investing in a closed end fund actually varies from fund to fund, so it’s something you’ll need to pay close attention to. As a general example, some closed end funds are intended to serve as an easy way for one to have Diversification within their portfolio beyond a particular industry or region, while others are set up to profit from dividends rather than actual movements in the value of the underlying security.

Supply And Demand

brokerWhatever the case, if you do decide to engage in Investing in closed end funds, you can do so very easily. Most brokers deal with them, and you can buy and sell them exactly like stocks. In many cases, even the same fees apply.

The only real drawback is that because there are a fixed number of shares, your ability to profit is tied more to the supply and demand of the market as a whole rather than the movement of the security. Keep this in mind and realize that, for all its strengths and low risk, the closed end fund isn’t a get rich quick scheme.

See you next week for part 2 of Investments.

Sean Rasmussen
The Bullhunters Guide
Universal Wealth Creation © 2004 - 2009

Stock Picking Strategies, Part Nine: Dogs of the Dow

Wednesday, July 16th, 2008

Hey there. Welcome once again to our series of posts covering some of the most popular and effective methods for selecting stocks. These methods have been documented and compiled over the years, and while they differ dramatically in terms of execution and philosophy, they all share the common element that, depending on who you ask, they work!

While every stock selection is something of a gamble, it’s our hope that by looking at these time-tested strategies, you’ll begin to gleam some idea from them of how winning stocks are usually chosen, and begin to develop your own strategy that will be effective for you.

Beating The Dow

Dogs of the dowToday, we’re going to look at what is probably one of the simplest methods in all of investing. This method was first presented in a book by Michael Higgins called “Beating the Dow”, and is commonly known as the “Dogs of the Dow” method. Selecting stocks by this method couldn’t be easier. You simply take a look at the top 30 companies with the highest dividend yields, according to the Dow Jones Industrial Average, and then spread your portfolio among the top ten.

That’s really all there is to it. You just check back every so often, perhaps every quarter, and make changes based on what you see, so that your portfolio always accurately reflects the top ten dividend yield stocks at any given time.

Depending On The Dividends

DependingClearly, this strategy is depending highly on the dividends that you’ll receive from the stocks in question, but it always takes into consideration the future potential of those stocks. The idea is basically that, if a stock is in the Dow top 30, it will typically be a strong stock with enough of a foundation to weather passing storms and eventually return to a position of prominence, whereupon you can sell it for an amazing profit. In the meantime, you just enjoy those dividend yields.

Well, that’s it for now. Told you it was a simple method. Next time, we’re going to wrap this series up by taking a look at the last method on our list: technical analysis. Stay tuned!

See you next week for part 10 of Stock Picking Strategies.

Sean Rasmussen
The Bullhunters Guide
Universal Wealth Creation © 2004 - 2008