As the market is going a bit sideways after a mild earnings season, we are entering the famous “sell in May and go away” period, I thought of revisiting some investment biases we all experience at one point or another. When I did my financial classes, everything seemed so well calculated and rational. Financial theories are so simple, so easy to understand, it’s impossible to mess up the application in the real world, right? Investors are rational individuals making sound decisions based on …
Finding the Right Stock in The Current Market
Have you taken a look at the recent earnings? It is without any surprise that many US companies posted slow revenue growth due to either a “challenging” environment or (an even more common excuse: due to a strong US dollar. I follow primarily dividend stock results and many of them are international businesses. No need to explain that a strong US dollar is hurting many dividend stocks in particular. The market didn’t overreact as it was more a mild earnings season without many …
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Stock Valuation – The Mystery of the Discount Rate
After offering the Dividend Toolkit at a rebate for the whole month of April, I’ve had many questions about stock valuation, most precisely about the discount rate. The discount rate is used to determine a stock value through the Discounted Cash Flow (DCF) model and the Dividend Discount Model (DDM). The problem is that depending on which number you use as the discount rate, the stock you are analyzing could look like the perfect underdog just because you didn’t put a high enough discount …
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There are 3 Words in Dividend Growth
I decided I didn’t have enough from the article I wrote last week about dividend reports. Last week, I knew I was opening a can of worm when I wrote that I don’t understand the importance of tracking my dividend income on a monthly basis. While the discussion was very interesting on this blog, I got crucified for blasphemy on Seeking Alpha when they republished my article (at least they thought it was good enough to be read! Hahaha!). Don’t worry, I’m not going to go back to this post to defend …
What to Do with this Cash in your Investing Account?
The stock market is trading at its highest level ever; valuation multiples are increasing, it almost smells like food burning in the oven if you ask the “Swan Fans”. I get the following question from my readers almost daily of late: “I’ve an important sum of money sleeping in my cash account and I’m concerned about the current market. When is the right time to invest?” Here’s my straight to the point answer: The best time to invest was yesterday; If you didn’t do it yesterday, then …
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Dividend Income Report; The Good… and the Bad
I’m pretty sure you don’t solely read this blog if you are interested in dividend investing. Among your weekly reads, you probably include other great dividend blogs such as the ones I mention on my stock website resource page. Have you noticed something very common? Most bloggers report their monthly dividend income. I noticed throughout the years that many dividend investors focus on dividend income and not total return. For them, it doesn’t really matter if their capital grew or …
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