Value stocks typically return a dividend between 2.5% to 10% depending on the industry they’re in and the prevailing market conditions. Growth stocks typically do not provide a dividend, and if they do its usually less then 2.5%. They usually retain their earnings for future growth. Many stock analysts and investors believe that returning money to shareholders means that the management is running out of ideas on how to grow the business and avoid dividend paying stocks like the plague! Personally I’m partial towards dividend-paying stocks. I especially like the Canadian Income Funds that invest in Oil and Gas.
The last time I wrote a post about investing in Canadian Royalty Trusts was a few months ago. Since then the price of Canroys has increased and the yields have dropped. If you missed that opportunity to invest, you might have been put off by the lower yields.
However, today’s 200 point drop in the Dow Jones Industrial average has provided another a good opportunity to buy them. Its also a good opportunity to invest new money into them.
One of my wife’s childhood friends asked me a very profound question. “You know a bit about investing, don’t you? So what’s asset allocation?”. The friend is pretty smart. She went to school for several years and became a pharmacist and can rattle off various diseases, symptoms, drugs and side-effects which I find quite entertaining (somehow my wife doesn’t share my enthusiasm for “Stump the Pharmacist”). But she doesn’t know anything about investing (or much about anything money-related for that matter).
If you’re like me, you enjoy reading facts and figures about various countries. While sitting down to do this may sound rather monotonous, the Economist.com has a rather novel way of feeding you this information in small doses. Its offering a free screen saver that provides all this data with a graphical rotating globe.
The Economist Screensaver is a treasure trove of fascinating data on 66 of the world’s major economies. Drawing on the 2007 edition of the bestselling “Pocket World in Figures”, it presents facts and figures on population, demographics, the economy, society, health and education around the world. The screensaver also features a ticker displaying the headlines of new articles published on Economist.com, as well as some of the witty one-liners used in The Economist ’s renowned advertising campaigns.
BlackStone’s much hyped IPO brought private-equity companies into the limelight. Along with that came the usual ‘Do you think its a good investment or not‘ questions from friends. While thats difficult to answer, the fact that a private-equity company is going public is ironic in itself. And if some other private-equity company decided to take them private, then that would be down right hysterical!
One of the three pillars to Financial Independance is having your own business. The other two are having hard assets like Real Estate, and paper-based assets like stocks and mutual funds. The business provides the cash-flow, the real estate provides leveraged returns and tax shelters and the paper assets provide liquidity.
But starting a business takes both perseverance and guts. You are venturing into uncharted territory and the road ahead will be bumpy and filled with challenges. Having said this, it can also be extremely rewarding and put you on the path to living the “American dream”.
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