Dividend Yield

Photo Credit mag3737 Check out the introductory post on dividends if you haven’t already done so. The term �dividend yield� or even just �yield� is commonly used when referring to the dividend of a stock or a stock index.� The dividend yield is the percentage which you get by dividing the annual dividend payments (total […]

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Online Discount Brokerages

Online brokerages are companies that allow you to set up an investment account with them and buy and sell investments.� The purpose of setting up one of these accounts is for someone who is a “do-it-yourself” investor and can buy investments without the help of an advisor.� An investor can have an advisor and still […]

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How Do Interest Rate Changes Affect Bond Prices?

Most investors own bonds via mutual funds or a target retirement fund.� Bonds are thought of as a very safe investment compared to stocks because their principal amount doesn’t change.� If you buy a $5,000, 10 year bond paying 6%, then in 10 years you will get your $5,000 back plus interest. �� Seems safe […]

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Traditional IRA Investment Account

The traditional IRA investment account is a retirement savings account which is fairly similar to the 401(k) plan in that all contributions are tax-deductible.� In other words, if you contribute money to a traditional IRA that you have already paid tax on, then the contribution will generate a tax rebate for you. Any earnings of […]

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Inflation

Inflation is a measure of average price changes of goods and services over a period of time expressed as a percentage.� The statement “inflation was 3% last year” means that cost of living for the average person increased by 3% for that year. How is it measured? Inflation is usually measured using the [consumer price […]

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Consumer Price Index (CPI)

The consumer price index is a measure of the average price of various goods and services consumed by households in America.� It is intended to represent the spending by the average city-dwelling American on a typical basket of goods and services. The CPI is similar to a stock market index in that the actual number […]

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Buying ETFs And Stocks – Limit Orders

In a previous post, the “market” order was discussed – if you haven’t done so, please read that post first. If you want to buy an ETF (exchange traded fund) or a stock online,� it is important to learn about market orders and limit orders.� One of the potential problems with a “market” order is […]

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Buying ETFs And Stocks – Market Orders

If you want to buy an ETF (exchange traded fund) or a stock online,� it is important to learn about market orders.� Unlike mutual funds, ETFs change their price throughout the day so you have to “trade” ETFs and place an order which will get the best price available at that time. Market order This […]

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Taxable vs Non-Taxable Investment Accounts

The taxable status of an investment account refers to the whether any income earned in the account is taxable at the time of earning.� For example if you have a 401k (non-taxable) and your investment earns an interest payment or dividend payment then there will be no taxes paid on that payment.� On the other […]

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CDs – Certificates of Deposit

Certificates of deposit (CDs) are a guaranteed investment where you pay a set amount for the CD and the bank will guarantee you will get your original money (principal) back when the CD matures plus a fixed interest rate which will never change.� Because you are agreeing to leave the money with the bank for […]

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Roth IRA Investment Account Basics

Roth IRA accounts are a very useful retirement savings plan.� All contributions to these accounts are made with money that you have already paid income tax on. No tax benefit is generated from the contribution, but the withdrawals can be tax-free. All earnings of any type are not taxed within the account.� This means that […]

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Dividend Increases and Cuts

Check out the introductory post on dividends if you haven’t already done so. If you own a stock that pays a dividend then you want the dividend to increase over time.� A $4 dividend now will not be worth much in 15 years because of inflation, so ideally the dividend increases should at least match […]

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Stock and ETF Symbols

Stock symbols or ticker symbols are the codes you need to buy and sell stocks or exchange traded funds (ETFs).� If you want to make a purchase of an ETF or stock you would need to follow these steps.� This is assuming you already have a trading account and know the approximate name of the […]

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Recession

A recession is when your neighbor loses his job. A depression is when you lose your job. The technical definition of a recession is when the GDP (gross domestic product) of a country contracts for 2 or more consecutive quarters (3 month periods).� What this means is that general economic activity is decreasing.� Less people […]

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Gross Domestic Product (GDP)

The gross domestic product or GDP of a country is a measure of the amount of economic activity in that country. Economists study the GDP numbers which are calculated quarterly to determine� the state of the country’s economy.� If the economy is doing well then the GDP should increase.� If the economy is not doing […]

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Chasing Investment Returns

Chasing investment returns refers to the activity of switching from a poorly performing (or average performing) investment into one that has an excellent recent return.� There are a few problems with this investment strategy: “Hot” investments don’t usually stay hot.� In fact they usually come crashing back to earth shortly after you buy them. Investments […]

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