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

Let's get this year started off with a bang; change our thinking and doing habits.

Go from whining to winning

Go from lukewarm to "On Fire."

Go form security to opportunity.

Go from fear to faith.

Go from resisting to receiving.

Go from thinking of yourself to thinking of others.

Go from complaining to obtaining.

Go from drifting to steering.

Go from burnout to recharged.

Go from failure to learning.

Go from regrets of the past to dreams of the future.

Go from frustrated to focused.

Go from ordinary to extraordinary.

Go from defective to effective.

Go from despiteful to insightful.

Go from being a problem to being an answer.

Go from a copy to an original.

Go from envying others to serving others.

Go from ingratitude to thanksgiving.

Go from faultfinding to forgiveness.

Go from criticism to compliments.

Go from alibis to action.

Go from procrastination to progress.

Go from hesitation to obedience.

Go from blending in to standing out.

Go from fractured to focused.

Go from taking to giving.

Go from wishing to wisdom.

Go from quitting to starting.

Go from late to great!

Taken from "Expect to Win", John Mason.

Make this year the best, not in multiplying material things but in multiplying the knowledge you gain in becoming a better you and enhancing the life of those around you.

In the last few weeks it would appear as if our bull market is slowing down.  Don’t sweat it, it isn’t; it is going into a sideways market which is normal and no cause for alarm.  Especially when you are purchasing stocks that pay dividends, it gives you the opportunity to pick up on some good paying stocks that may have been moving out of your purchase price reach.  Also remember if you are a little scared don’t forget to place at least a 25% Trailing stop behind each position.

While most people either don’t know or just like to invest in the market upon pure speculation; investment Guru Bill Gross in a statement due to the market climate backs dividend stocks. 

PIMCO's legendary Managing Director, Bill Gross, a world-famous investment analyst, recently published an Investment Outlook column, called "Investment Potions."

"Stock P/Es will rest at lower historical norms, and higher stock prices will ultimately depend on tangible earnings growth in the form of increased dividends, not green shoots hope. An investor should remember that a journey to 3% nominal GDP means default/haircuts for assets on the upper end of the risk spectrum, as well as extremely low yielding returns for government and government-guaranteed assets at the bottom end. There is no investment potion for this new environment other than steady income-producing bond and equity investments in companies with strong balance sheets and high dividend yields, as well as selectively chosen emerging market commitments where nominal GDP growth prospects are tilted upward as opposed to gravitating to new lower norms."

Bill Gross, Managing Director of PIMCO

Here is another quick added thought: If you start investing through mutual funds, which is what most 401K’s have, you will most likely start your investing journey at -2%. This is because you will have to pay roughly 2% in fees to a portfolio manager that will be trading for you.  On the other side, if you buy a 3% dividend yield stock, you start your investing journey at +3%.

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

A Napoleon Hill Thought

 

 

"If you want a job done promptly and well, get a busy person to do it. The idle one knows too many substitutes and shortcuts."

Most of us will never know our true capacity for achievement because we never challenge ourselves to perform at our best every day. This truism becomes apparent when you are presented with an opportunity that really interests you. No matter how busy you may be, somehow you will find the time to pursue it. Conversely, duties that have little appeal for you are easily postponed and eventually forgotten. Busy people are not procrastinators. They know that life, as John David Wright once observed about business, "is like riding a bicycle. Either you keep moving, or you fall down." The most effective people have a sense of urgency. They set deadlines and force themselves to establish priorities. Even if your activities don't usually require strict deadlines, set them for yourself. You will be amazed at how much you can accomplish in a short time - if that's all the time you have.

I shared with you in an earlier writing that I bought Twitter when it opened on the market.  A neighborhood friend and I were sharing on Facebook about the purchase, I had purchased it at $47 a share and it went down and he purchased it at around $43 a share.  At the time of the market close on 12/17/13 Twitter was setting at $59 a share, not bad for a play.  This week I’m starting to do some Dividend Capture’s for a few of my subscribers, here is a little information on how that works.  A stock may pay a quarterly dividend and have 4 ex-dividend dates in a calendar year.  The ex-dividend date is mentioned when a dividend payout announcement occurs. Even if a company is known to pay regular dividends, they must make payout announcement each time they issue a dividend. The ex-dividend date is the date that’s exactly two business days prior to the date of record. What this means is that the firm that is giving out the dividend establishes and figures out exactly which individuals are entitled to receive a dividend from the company.  If you’re one of the investors that purchases the stock before this specific date then you are entitled to the dividend when it comes out.  If you purchase the stock on this specific date or the time after it, then the previous owners are entitled to the dividend payout when it arrives. He will receive the dividend payout in cash even if he doesn’t hold the position at the time of the dividend issue. What is important is to know if you are holding the shares prior to the ex-dividend date, not when the dividend is paid.

Investors often ask “why own the stock for the entire 365 days in the year when technically you can own it for 4 days in the year to capture the dividends?” So one of them has $10,000 to invest and the other one has $1,200.  Because on the ex-dividend date the stock will periodically lose the amount of the dividend per share the one investing the $10,000 for a particular stock will make after all is said and done around $700 and the one investing in the same stock with $1,200 will make around $90.  Not bad for a quick safe 4 day investment.  There are a few people that do this monthly with around $4,000 and average making around $10,000 or better a year with their consistent $4,000 investment two to three times a month.

Safe Investing

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