Category: Fundamental


How do Dividends Affect Your Rate of Return?

Filed Under: Fundamental by Bill — Comments Off
March 11, 2012

As a stock investor, you have two ways to profit from your investments: capital gains and dividends. Some investors invest primarily for capital gains or vise versa. If you want to start investing in stocks but you are unsure how dividends will play into your profit, you’ll need to know how it affects your rate of return.

What is a Rate of Return?

The rate of return, or ROR, is the gain or loss of an investment. It is expressed as a percentage determined by calculating the profit or loss against the initial price paid. The ROR is usually done in a one year period, but it can be calculated for any period of time. For any type of investment, the ROR should include all gains or losses it incurs.

Calculating a Rate of Return for Capital Gains

Let’s figure out the ROR for a stock that only earns capital gains. As an example, we will look at Apple (AAPL) for a one year ROR from March 11, 2011 to March 9, 2012. The price on March 11th, 2011 was $351.99. That is the approximate price you would have paid if you bought it on that date.

On March 9th, 2012, the price ends at $545.17. If you were able to sell it at that price, the difference would be $193.18, which is the capital gain. To calculate the ROR on this stock, divide the capital gain by the initial price paid:

  • 193.18/351.99 = 54.88%

The simple rate of return is approximately 54.88%. Understand that this is an extremely high rate of return for a stock. Usually, an average rate of return in a good economy is about 8 to 12%.

Factoring in Dividends

Factoring in the dividends is very simple. All you have to do is add the amount you were paid in dividends to the capital gains. Apple doesn’t issue dividends, but let’s say in the past year it issued $20 per share worth of dividends. In this case, you’d add $20 to the $193.18 for a total return of $213.18. Now, you divide that amount by the initial price to get the adjusted rate of return.

  • 213.18/351.99 = 60.56%

If you invested in a stock with this rate of return, good for you! You did well. Now that you know how dividends affect your rate of return, you can factor in the expected dividends of corporations while you analyze them to find good investments.

Ash is a writer for Ready to Buy Stocks. She specializes in buying stocks and other investment knowledge.

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Investing In Alternative Energy Funds

Filed Under: Fundamental by Bill — Comments Off
December 24, 2010

If you haven’t done a lot of research into the alternative energy sector, use this article as a resource on learning about this investment option.  Alternative energy is a sub-sector of the energy sector.  By definition, alternative energy includes energy sources that are alternatives to our main source of energy now – fossil fuels.  Some examples of alternative energy are:

  • solar power
  • wind power
  • hydroelectric power
  • nuclear power
  • biofuels

It is widely acknowledged that fossil fuels will eventually run out.  While best estimates give us decades before that happens, turmoil in the middle east and a growing world demand leave a lot of unease when it comes to oil.  Developing and implementing these alternative energy sources would bring independence from fossil fuels.

Because we will eventually have to implement one or all of these examples to satisfy the world’s energy consumption needs, investing in  alternative energy will most likely bring future gains.  Finding the right move will largely be reflected by finding the companies that are on the move, research-wise.

One way to invest in alternative energy is to look at mutual fund options.  Mutual funds hold a diverse portfolio of whatever the fund is focused on.  Alternative energy mutual funds would have holdings in different alternative energy companies, ranging throughout the entire sector (wind, solar, etc.).  However, investing in alternative energy mutual funds has its drawbacks.  Mutual funds have high fees, generally have low gains and dividends, and it is difficult to find a truly ‘alternative’ energy fund out there.  Most mutual funds associated with energy stocks have oil company holdings.

Another way  is by investing in alternative energy funds through ETFs.  ETFs are attractive because they can be completely customized and traded like regular stocks.  No fees are associated with them, and they can be as focused or diverse as your portfolio requires.

When investing in alternative energy funds, be sure to understand what fund will best fit your needs, as well as which funds can bring the best rewards in the future.

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Investing Tips and Solutions

Filed Under: Fundamental by Bill — Comments Off
August 27, 2010

Getting started with basic investing is something everyone should take part in. It is an excellent way to invest in the future of you, and your children. However, many people are overwhelmed with all the information from basic investing techniques. So to make things more understandable, we have put together some information, and tips for two investing techniques.

Investments: How to Invest In Dividend Stocks

Many publicly traded companies will pay their shareholders in cash, or dividends. In short, it is a great way to invest your money, so that you can earn from it. It’s almost like a second job, as it can fund your cash flow in the years to come. The money that you receive can either be reinvested, or spent on other areas.

The great thing about dividend investing is the simple fact that if the money is reinvested it will increase. Over time you will begin to see a snowball effect with your money. Frankly, it is a simple and ideal way to earn more money through the years. It is an excellent investment for you, and your family. So see what it will take for you invest in this kind of money.

Investments: How To Invest in

Another great investment option is to invest in gold. By investing in gold assets, you will invest in something that is a tangible investment. For example, it is an investment that you would have full control over. Also, keep in mind that gold is held in high regard by people around the world, making it a solid and sound investment of wealth building for you and your family.

Finding gold assets is  a fairly easy thing to do. You can often find gold coins at places like antique stores, flea markets, and pawn shops. Also, many jewelry stores have started carrying gold coins in their stores as well. Also, if you have access to the internet, you can always do your shopping online. There are many web sites that offer gold assets for a much lower price. So be sure to check web sites for the best prices.

Investments: Final Thoughts

Learn to take your time in choosing the righ routes for your investment journey. Before you know it, you will reap the many wonderful rewards.

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Investing Solutions

Filed Under: Fundamental by Bill — Comments Off
August 26, 2010

Many people are often interested in investing, but they don’t know where to start. Getting started in the right direction, and with the basic investment options, you can be well on your way. So to make it a bit easier for you, we have compiled helpful information on two of the most basic forms of investments. Continue reading to learn more.

Investing 101: Dividend Investing

Dividend Investing is a wonderful place to start when it comes to your investment options. Some publicly traded companies will pay their stock holders in cash or stocks over time. This in short can provide a steady income, or a great bonus to your current financial situation. You can look at it as a bonus for your cash flow.

Over time, you can reinvest the dividends so that your investment income will increase. It doesn’t happen over night, but before you know it you can have a snowball effect with your earnings. It takes a lot of time, and patience to get going with the dividend investing. However, the pay off is well worth it if you are willing to take the time to pursue it.

Investing 101: Building Wealth With Gold

Another wonderful way to pursue wealth management with your finances, is to invest in gold. And we are talking about gold assets such as gold coins, gold bars, and the like. By investing in these options for gold, you will be investing in tangible investments that you would have full control over. Gold is popular around the world, making is a sound investment for anyone.

As for where you can buy gold bars, and gold coins, you will be surprised to know they can be found at most pawn shops, and even antique stores. Now days even jewelry stores have started carrying gold coins in their stores for customers. There is also the option of shopping online. There are tons of stores out there these days that sell gold on the internet. The best part is that when you buy online you can often get a much lower price than in store.

Investing 101: Closing Thoughts

With these simple tips and solutions for investing, you can get started right away. This is one decision you will never regret making.

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