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Schwab Has Released Its Own Dividend ETF

December 3rd, 2011 6 comments

Charles Schwab has gotten into the Dividend ETF market with the release of its ETF, Schwab U.S. Dividend Equity ETF (Symbol: SCHD). If you are an investor in this type of ETF, you will want to know about this one it’s worthy of your consideration.

Dividend ETFs are a great way to passively participate in the market to invest in dividend paying companies. If you don’t have the time or inclination to select individual stocks, this is a good way to go. It’s a better strategy that simply buying a total market index fund.

They don’t call it an index fund, but it is an index fund, it’s based upon the Dow Jones U.S. Dividend 100 Index. Indexes are worthy investment choices because they have many benefits over actively managed funds.
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Earn $100 Bonus From Zecco Online (Dec 2011)

December 1st, 2011 No comments

Zecco has announced an end of year promotion to attract new investors. It’s a referral program that will provide friends of current customers to earn a $100 bonus when they open an account. It’s a great deal that will only last a couple of months.

As a customer of Zecco for a few years, Zecco has been a good broker with low cost trades ($4.95/trade) and good customer service.

Here is a summary of the offer:

Friend must click though the invitation & fund account with $10,000 within 60 days of receiving the invitation. A minimum $10,000 balance must stay in the account for subsequent 90 days. Email used must be the email from the invitation. See Terms & Conditions.

Do you have a friend who is a Zecco customer? Let them refer you for the bonus. Don’t have a friend? Let me know either by commenting here or reaching me on my contact page, I will refer you for the bonus!

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Why Slow Growth Beats Fast Growth

November 29th, 2011 2 comments

I have to first say that I was surprised by this exercise. I have come to a conclusion that was not expected: slower growth can get you better returns than faster growth.

In this exercise, I initially thought that going 100% in the fastest growing stocks is the way to go. I’ve changed my view. As you will see below, growth doesn’t necessarily get you the best returns. It’s possible to beat everyone if you make bets on some very high growth speculative companies AND put all your money in them. This is really not the strategy I was looking for because the risk is too high.
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How To Calculate Investment Return

November 25th, 2011 No comments

You’ve identified a great investment which you think is valued attractively (e.g., that great company is selling at a P/E which is near its earnings growth rate).

How much money will you make? Before you buy, you should have a good idea and an equal amount of confidence of how you will make money and how much you will make. If you don’t do this, the market will surely test your confidence in that investment through volatility, bear markets and reactions to company news.

Any kind of return model will necessarily have to model your capital gains (increase in the price of your investment). If you are a value investor, whereby you are buying investments that pay you dividends, your job is much easier. The return model I will talk about ignores capital gains as an input.
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You Shouldn’t Invest In This Stock

November 21st, 2011 No comments

Finding great investment ideas involves using screens, valuation criteria, and fundamental analysis. Value investors are better off using hard criteria like this because it’s easy and it works. I wouldn’t suggest otherwise.

But, there are times when you can and should turn off the screens and invest in companies that might not at first look like attractive investments. Here’s an example of a company that doesn’t look that attractive:
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