Attitude

Attitude

 

 A little girl walked to and from school daily.  /though the weather that morning was questionable and clouds were forming, she made her daily trek to school.  As the afternoon progressed, the winds whipped up, along with lightning.  The mother of the little girl felt concerned that her daughter would be frightened as she walked home from school. She also feared the electrical storm might harm her child.

 

  Full of concern, the mother got into her car and quickly drove along the route to her child's school.  As she did, she saw her little girl walking along.  At each flash of lightning, the child would stop, look up, and smile.  More lightning followed quickly and with each, the little girl would stop and look at the streak of light and smile.  When the mother drew up beside the child, she lowered the window and called, "What are you doing?"  The child answered, "I am trying to look pretty because God keeps taking my picture."  

 

Thought: Face the trials that come your way with a smile of hope!  Churchill says, "Attitude is a little thing that makes a big difference." 

To Your Blessings and Successes!

Five Investment Risks

This week is a short one; I just want to quickly share with you Five Investment Risks to avoid and an allocation of stocks structure.

Here are Five Major Investment Risks to avoid:

1. Being too conservative. This means your net worth doesn't grow fast enough to exceed inflation or meet your investment objectives.

2. Being too aggressive. Extreme optimism is a benefit in the business world but can be your undoing in volatile financial markets.

3. Trying and failing to time the market. Remember that there are only two types of market timers: those who don't know what they're doing and those who don't know they don't know what they're doing.

4. Using expensive fund managers who underperform their benchmarks. As more than 95% of them do over a decade or more. ETFs and Vanguard index funds are effective, low-cost and tax-efficient.

5. Unwise delegation. Bernie Madoff and his ilk can't run off with money they don't manage.

If it is one thing that we have learned over the years at Suburban Trader is not to try to analyze and follow the right predictions, but make sure that we are following the right principles.  As one of the great investors in this present time Alex Green, we always attempt to asset allocate properly, diversify broadly, minimize our taxes and expenses and rebalance annually.  The following is a good asset allocation to look at when purchasing stocks that pay dividends or any stock for that matter.

 The first asset allocation exercise you should do with your dividend portfolio is to look at all the economic sectors which is the foundation of Suburban Trader’s  portfolio:

Basic Materials

Communications

Consumer, Cyclical

Consumer, non-Cyclical

Energy

Financial

Industrial

Technology

Utilities

Ideally, a good dividend asset allocation would include dividend stocks from each sector, which is how we do. Therefore, you are not only picking solid dividend payers but you also invest in different sectors that will react differently to economic cycles. This will allow you to have a smoother investment return over the long run.  Now after looking at the different sectors you might also want to look at different countries.  It easy to trade Canadian stocks here in the US and they are known to pay higher dividends than the US in their Energy sector.  And no matter what sector or country do not forget to always set at least a minimum of a 25% trailing stop.

To your Investing Success

Disclaimer:  Suburban Trader is a publisher of financial news and opinions and NOT a securities broker/dealer or an investment adviser.  You are responsible for your own investment decisions.  All information contained in our newsletters or on our web site(s) should be independently verified with the companies mentioned, and readers should always conduct their own research and due diligence.

Suburban Trader

INFRASTRUCTURE

One of the things that the President mentioned last night during his address was the fact of building up our infrastructure; while that is good news as investors we need to be careful in the way that we may invest in order to capitalize on it. Infrastructure alone is no precursor to economic growth. The late British economist Peter Bauer pointed out in his extensive research that infrastructure alone is insufficient to assure growth. According to Bauer, infrastructure develops in the course of economic development, not ahead of it. In other words, economic development and infrastructure develop in tandem, with growth powering infrastructure spending. To build, and then to expect “they” will come, is folly. Build a magnificent urban infrastructure in Antarctica and that's all that will exist. Infrastructure arises as needed; infrastructure follows, it doesn't lead. This is no matter of small importance: To be a successful investor you must understand the economic consequences of your investments. If you don't, you invest at the whim of speculators.

The problem with many infrastructural investments is that they adhere to a one-and-done paradigm. Sustained value is difficult to gauge. Once a bridge is built or a road paved, that's it. Contractors must scramble to ensure another bridge to build or road to pave is in the waiting. Concurrently, they must maintain the expensive fixed capital to ensure they can build or pave if a bridge or road is in the waiting.

The safer course is to invest in infrastructure that creates value, and then does it repetitively on the initial investment. After all, it's riskier to continually find new projects than to continually tap established projects for revenue, earnings, and cash flow. In other words, the infrastructure company itself must have a stable infrastructure. In looking at that we believe that we have found such a company this week for our members that meet those criteria. The company itself has a stable infrastructure, it has a 27% upside potential over the next 12 to 18 months and at present it boasting a 6.61% dividend yield with the potential of increase, and its paying .87 a share.

Remember you can’t make income if you don’t get in the game and play.

Disclaimer:  Suburban Trader is a publisher of financial news and opinions and NOT a securities broker/dealer or an investment adviser.  You are responsible for your own investment decisions.  All information contained in our newsletters or on our web site(s) should be independently verified with the companies mentioned, and readers should always conduct their own research and due diligence.

Suburban Trader