Free Investing

Dobromir Stoyanov submits:As a dividend growth investor, two of the best dividend lists for further research that I have focused on have been the S&P Dividend Aristocrats and the Dividend Achievers Indexes. The first list focuses on stocks which have increased dividends for 25 consecutive years in row, while the second list focuses on stocks which have consistently raised distributions for over one decade. The Dividend Aristocrats index has supposedly outperformed the stock market over the past five years. In my research I have uncovered many dividend stocks however which have raised dividends for more than 25 years in a row, yet they are not included in the Dividend Aristocrats Index. I discussed this in dividend conspiracies.The limitations behind the dividend aristocrat’s index are that first a company has to be included in the S&P 500 before it qualifies. In addition to that, S&P requires minimum market capitalization of $3 billion and an average daily trading volume of $5 million. This means that even if a company has managed to raise annual dividends for 25 years in a row, it might not be included in the elite dividend index if it has a low market capitalization or that it is relatively illiquid. As a dividend investor, the last two criteria are irrelevant to me.Complete Story »

Dividends4Life submits: A stock with a high yield doesn’t mean much if the dividend is cut or eliminated, and the stock price declines significantly. Sometimes it is desirable to accept higher risk for a higher yield. Other times we may be accepting higher risk and are not being adequately compensated for the additional risk. What can we do to help gauge the risk of an individual stock?Complete Story »

David Merkel submits: Part I One of the things you learn as a fundamental investor is that the quality of accounting derived from accrual entries is always lower than that for cash entries. There is an implicit assumption behind every accrual entry that someone will make good in the future to pay cash, whether the amount is fixed or estimated.Accruals vary in quality. Accounts Receivable are more reliable than inventories. Who knows what fixed assets, property, plant and equipment are worth? Pension obligations are squishy, the assumptions can be manipulated within reason. Deferred tax assets rely on the ability to earn more money, but most companies with the deferred tax assets have lost significant money in the past. Will the company bounce back?Complete Story »

David I. Templeton submits: As I have noted in my previous two posts (Investor Sentiment Suggesting Caution and Markets And Their 200 Day Moving Average) the broader market indices are approaching extended levels on the upside. In this environment, investors might consider investing in equities that do not have valuations that are extended relative to the overall market.Below is a list of 26 companies in the S&P 500 Index that was generated using the following criteria:Complete Story »

Dobromir Stoyanov submits:Financial stocks, which used to be great dividend investments, have had their share of troubles over the past two years. The sector has rebounded sharply since hitting its lows in March. Since the major dividend growth stories of the past such as Bank of America (BAC) and US Bancorp (USB) have cut dividends, most dividend growth investors seem to have a very low allocation to the sector. As a result dividend investors could suffer inferior risk adjusted returns in the future since they won't own any financial stocks.There are several alternatives for investors who are underweight the financial sector right now. One of them involves purchasing shares in some of US insurance companies such as Aflac (AFL) or Chubb (CB), which offer decent yields and have a long history of dependable dividend growth.Complete Story »

Dobromir Stoyanov submits:Financial stocks, which used to be great dividend investments, have had their share of troubles over the past two years. The sector has rebounded sharply since hitting its lows in March. Since the major dividend growth stories of the past such as Bank of America (BAC) and US Bancorp (USB) have cut dividends, most dividend growth investors seem to have a very low allocation to the sector. As a result dividend investors could suffer inferior risk adjusted returns in the future since they won't own any financial stocks.There are several alternatives for investors who are underweight the financial sector right now. One of them involves purchasing shares in some of US insurance companies such as Aflac (AFL) or Chubb (CB), which offer decent yields and have a long history of dependable dividend growth.Complete Story »

Richard Shaw (QVM Group) submits: State budgets are a shambles. Sales taxes, corporate taxes, personal income taxes and other taxes are being raised all over the country. The budget problems and consequential taxes will impact municipal bond rates and default risk, and after-tax investment returns on many forms of investment. California Muni Money Funds:Complete Story »