Why stocks are BETTER than bonds and CDs

Here is a good reason on why you should concentrate on Stocks rather than Bonds and CDs.....because of the dividends. This video will reveal the best 3 companies that you should invest in to take advantage of their wonderful stock increase.



Dividend Stocks Pay You to Own Them

Consider that $10,000 invested into the S&P500 between 1926 and 2004 would have grown to a little over $1,000,000 without dividends. This is not bad, but with dividends reinvested, that same amount would have grown to a little over $24,000,000! The power of dividend reinvesting and stock splits over time is amazing!

Think about owning a diversified portfolio of stocks that pays you to invest, in the form of dividends. Do you own a credit card? Well then you probably understand how fast interest expense can add up, becoming a financial nightmare. The opposite is true with dividend investing and how fast your dividend income can add up. Even better, when dividend paying companies you own increase their dividend payouts, your income increases! There are many questions to ask when investing in dividend paying stocks some of which are:

*How long has the company paid dividends ? (Check the dividend yield and history)

There are amazing dividend paying companies such as Colgate Palmolive (NY:CL) (yield 2.0%) that have paid dividends every year since 1895 or Proctor & Gamble (NY:PG) (yield 1.9%) since 1891. These tremendous dividend histories confirm the companies’ commitment to paying dividends. Normally dividend histories of 5 to 10 years plus are considered good.

*Are the dividends sustainable ? (Check the dividend payout ratio)

There are companies which have good dividend payout ratios like 3M (NY:MMM) which pays out 40% or Johnson & Johnson (NY:JNJ) which currently pays out 38%. The payout ratio is a tool that helps investors determine if the company has sufficient funds for maintaining dividend payouts. Normally a payout ratio below 70% is acceptable.

*Are the dividends growing ? (Check the dividend growth rate)

There are companies, such as Sysco (NY:SYY) that have raised its dividends by over 400% during the 10 year period from 1995 to 2005. Sterling Bancorp (NY:STL) raised its dividends over 500% during the same 10 year period! Normally dividend increases that exceed inflation are considered good.

A potential investing strategy is to buy a diversified basket of high quality dividend payers which consistently raise their dividends. Reinvest the dividend income you receive to buy more shares and repeat the cycle to create your own dividend compounding money machine.

5 Companies With Low Valuations And High Dividends

It's not common to find companies that trade below their breakup value (i.e., less than book value) after a 60%-plus rise in the broad market, yet still pay out hefty dividends. But when the package is also delivered up with low P/E readings and some momentum to boot, you'd have to be crazy not to take a look.

Here are several such issues: companies with price-to-book ratios of less than one, dividend yields of better than 7% and multiples of less than six-times last year's earnings..

Real Estate Play
Northstar Realty Finance (NYSE:NRF) is an investment company that invests in commercial real estate debt and equity. The company is structured as a REIT for income tax purposes and currently boasts some very strong fundamentals.

NRF's dividend yield is a very healthy 11.44% and the P/E ratio is a measly 0.73. The stock currently trades well below book value with a P/B of just 0.22.

Jets and Energy
Babcock & Brown Air, Ltd. (NYSE:FLY) also sports a very low P/E ratio, at just 3.37-times last year's earnings. The Ireland-based lessor of jet airlines also pays a handsome 8.92% annual dividend and trades with a P/B of 0.58.

Babcock & Brown shares are up over 250% since bottoming in February.

EV Energy Partners, L.P. (NASDAQ:EVEP) is a Master Limited Partnership (MLP) that develops and operates oil and natural gas properties across the United States. The stock trades with a 1.38 trailing P/E and is no slouch in the yield department, either, offering an annual payout of 11.84%. P/B on the stock is 0.91.

Chinese Oil Drills
WSP Holdings (NYSE:WH) is an American company that conducts all of its operations through China-based subsidiaries. The company produces parts for use in the oil-drilling business and pays an annual 7.44% dividend yield. The P/E is 4.66 and P/B of 0.95.

Enerplus Resources Fund (NYSE:ERF) has a P/B of 0.97 and trades with a multiple of 5.75-times last year's earnings. The stock also fetches 8.89% annually for those who seek income. Enerplus is a closed-end investment fund that invests in the crude oil and natural gas assets of its subsidiaries.

The Wrap
Several metrics help investors determine whether stocks are selling at good value. Above, we've highlighted five such value issues, with great P/E and P/B ratios and rocking dividend yields

3 Simple Rules If You Want to Make Money in Online Stock Trading

Stock trading is not a risk-free activity. Although all stock traders know that losses are inevitable, they want to minimize those losses and still be around to trade another day. Having the right tools, techniques and skills can help you enter the world of stock trading and enable you to continue to trade for a long time to come

Make use of Technical and Fundamental Analyses

Technical analysis is important in finding the best entry and exit points in stock trading, fundamental analysis is important in finding the right stock choices, according to current market and economic situations.

You can make lots of money in stock trading if you use both the fundamental and technical analyses and the best time to trade stocks are at the beginning of these phases of change

Make sure you know your costs

In stock trading, you have to worry about commissions or transactions fees, you also must watch for any slippage in your trades. You might not execute trades at your desired entry or exit prices even though you may be using stop or limit orders. Slippage, which is the difference between the quoted price and the actual price for the security, is bound to happen, so you need monitor your commission costs, transaction fees, and slippage costs carefully. If the stocks that you trade are held for less than a year, the profits that you make are taxed as current income rather than at lower capital gains tax rates. For a full-time day traders, they enjoy special tax-treatment and in order for you to become that, you must be a "superb" day trader to qualify

When to stay and when to exit

Learn when to take your profits and exit and when to cut your losses and close a position before it becomes worse. If the stock market is going your way, you will be tempted by it and want to hold on to it to the absolute peak. Be wise and plan your exit points at the top and bottom of each position long before they even enter that position and, and they stuck by it no matter what. Stock trading is like operating a business, don't get so emotional and get hooked by the winning stock trade. When you have reached your target, quickly exit the market and enjoy your profits. Remember, your winning position might just turn into a loss.

What Are the 2 Top Secrets of Stock Trading Success?

Let's take a look at one of the secrets of find stocks that will make you huge profits. The truth about the stock market is that the stock price of a publicly-traded company will soar up high whenever there is a good news about that particular company

For example, let's say company XYZ has found an amazing new cure for baldness and FDA has given approval to them to market this product. The product in question is just a simple pill. All you have to do is take that pill and a full head of hair will grow on your head in less than 30 seconds and the good news is there are no harmful side effects.

People all over the globe will be raving and ranting about this pill and ultimately, XYZ's stock price will skyrocket like crazy!! The bad news is, you don't have the chance to buy that stock because the stock price will only skyrocket before the market opens the next morning.

So what's next? You buy XYZ's stocks, approximately 9:38 East Coast Time and hoping that the stock price will go back up.

The stock price rises and the price will stutter and fluctuates anytime around 10:20 a.m. and 10:30 a.m. East Coast Time. This is the signal for you to SELL that stock

This trend will occur every single day in the stock market. So try getting a live intraday graph and observe this trend for a few days. Observe it for about 15 or 25 times and you will start making huge profits based on this trend every single the stock market opens!

Well my friend, what you've read above is only the second best secret of making lots of money in stocks And here comes the best top secret... become a subscriber to the Day Trading Robot Members List.

The Day Trading Robot will use its Artificial Intelligence technology and react immediately to the phenomenon that you have read above. It will use it's highly sophisticated database of chart patterns and recommends the best stocks to buy to its subscribers. For the past few months, subscribers have received 15 different stock picks from the Day Trading Robot. Almost every single recommended stock price increases just within days so it is not that hard for its subscribers to make lots of money in stocks. The stocks recommended guarantees the subscribers to make an average 85% profits within an average of 4 days. When it comes to choosing the most profitable stocks to buy, lets see if anyone can do a better job than the Day Trading Robot.

What Do You Need to Make Money in Stock Trading?

All traders want to make money but stock trading not a risk-free activity. Although all traders know that losses are inevitable, they still want to be around to trade another day and continue to trade for a long time to come. Having the right stock trading tools, techniques and skills can help you make money in stocks, maximize your profits and minimize those losses. With the right tools, a trader can enter the market safely and enable them to make money in stock trading.

Before you buy that first share of stock, you need to be certain that you have the right tools so that you can make money, rather than losing them. By analyzing the current stock price and quotes, the right tools can help a trader identify candidates; display the interpret charts; research trading opportunities; screen stocks for fundamental constraints; monitor and analyze your portfolio, open or close positions, analyze market indexes and trading statistics. In summary, the proper stock trading tools are critical in finding the right trades and then monitoring those positions after you've found and entered them.

Even after you've found the right trades, if you don't have the right tools, you may not be able to enter and exit positions efficiently, control or track your orders, track your profits and losses, analyze your stock trading history and monitor economic reports, earnings and other business news.

The proper stock trading tools will help you evaluate your system and your ideas. They enable you to keep logs to review your performance. A good tool is the core of any good trader's business. Without the right ones, your chances of success drop dramatically. Definitely you can make money in stock trading if choose your tools wisely

You'll probably find out that there are hundreds of tools out there in the market. You don't need to learn and use them all. Pick the trading tool that makes sense to you and fit your trading style. Choose the one that is user friendly and with proper after sales product support. Take your time getting to know how they work and how best to interpret the information they generate. Use them to build the types of charts that match your trading style. If your tools are working and you are making money from stock trading, don't rush to add the newest tool innovation.

Finally, keep your eyes open for new tools that can really help you make money in stock trading. Hope you are successful someday.

Stock Trading Basics - 10 Golden Rules For Stock Trading Success

In order to be successful in stock trading, you have to set yourself some rules. And if you follow these rules religiously, you will make money. The opposite will likely to happen if you break your own rules so it is advisable to stick to it no matter what. Sticking to your stock trading rules will definitely be rewarding in the long run, it is a discipline that can help you reap huge profits. So read these rules before you enter the stock market and read the rules even when you leave with lots of money in your pocket

Rule 1: Don't break the rules.

It is natural if you to want to break or change your own rules and it takes a lot of discipline to follow your own set of rules.

Rule 2: Don't risk more than 3% of your total portfolio on any one stock trade.

There are many old traders and there are also many bold traders but there are never any old bold traders. Protect your initial capital is important if you want to trade stocks successfully.

Rule 3: If you are wrong, cut your losses at 5% to 15%

The most important rule here is to set stop loss points and minimize your losses if your predictions went wrong. Stick to your stop loss point and keep in touch about the performance of you stock

Rule 4: Always set price targets.

Don't be too greedy and try to get the most out of rising stock price. When you have reached your target profit margin for that day, pack your backs and leave. A stock price can rise too high too quickly and also can drop too drastically.

Rule 5: Master one style.

Keep learning and practicing at the one method of stock trading style that will relate to you the most. Never jump from one trading style to another. Master one style rather than become average at implementing several styles.

Rule 6: Let price and volume be speak for itself.

All the important information about that particular stock is reflected in the volume and price. Many people will give you lots of opinions about the stock that you are planning to trade or currently trading, stick to your instincts and the skills that you have learned and don't listen to them

Rule 7: Take that valid signal

If you see a valid signal of a stock, take it!

Rule 8: Do not use the intra-day data to trade.

During any trading day, you will be able to see a stock price variation. If you rely to much on this data, you will end up making all the wrong decisions.

Rule 9: Relax

Successful stock traders are fit and you also have to be strong emotionally. Taking time off the computer and relax will help you reduce the stress of trading. An unsuccessful trader is a stressful trader.

Rule 10: Be an exceptional trader.

Don't try to do anything exceptional if you want to be successful in the stock market, instead, be an exceptional trader. Exceptional stock traders are consistent and disciplined. After you are done with the stock market for the day, ask yourself "Did I follow the rules?" If your answer is yes then you are on the path to stock trading success for a long long time to come.

5 Companies With Low Valuations And High Dividends

It's not common to find companies that trade below their breakup value (i.e., less than book value) after a 60%-plus rise in the broad market, yet still pay out hefty dividends. But when the package is also delivered up with low P/E readings and some momentum to boot, you'd have to be crazy not to take a look.

Here are several such issues: companies with price-to-book ratios of less than one, dividend yields of better than 7% and multiples of less than six-times last year's earnings..

Real Estate Play
Northstar Realty Finance (NYSE:NRF) is an investment company that invests in commercial real estate debt and equity. The company is structured as a REIT for income tax purposes and currently boasts some very strong fundamentals.

NRF's dividend yield is a very healthy 11.44% and the P/E ratio is a measly 0.73. The stock currently trades well below book value with a P/B of just 0.22.

Jets and Energy
Babcock & Brown Air, Ltd. (NYSE:FLY) also sports a very low P/E ratio, at just 3.37-times last year's earnings. The Ireland-based lessor of jet airlines also pays a handsome 8.92% annual dividend and trades with a P/B of 0.58.

Babcock & Brown shares are up over 250% since bottoming in February.

EV Energy Partners, L.P. (NASDAQ:EVEP) is a Master Limited Partnership (MLP) that develops and operates oil and natural gas properties across the United States. The stock trades with a 1.38 trailing P/E and is no slouch in the yield department, either, offering an annual payout of 11.84%. P/B on the stock is 0.91.

Chinese Oil Drills
WSP Holdings (NYSE:WH) is an American company that conducts all of its operations through China-based subsidiaries. The company produces parts for use in the oil-drilling business and pays an annual 7.44% dividend yield. The P/E is 4.66 and P/B of 0.95.

Enerplus Resources Fund (NYSE:ERF) has a P/B of 0.97 and trades with a multiple of 5.75-times last year's earnings. The stock also fetches 8.89% annually for those who seek income. Enerplus is a closed-end investment fund that invests in the crude oil and natural gas assets of its subsidiaries.

The Wrap
Several metrics help investors determine whether stocks are selling at good value. Above, we've highlighted five such value issues, with great P/E and P/B ratios and rocking dividend yields

10 Dividend Stocks for Enterprising Investors

This month, the screen produced the following companies:

* EV Energy Partners (EVEP) (11.64% dividend yield) – EV Energy Partners is a limited partnership engaged in the exploration, development and production of oil and natural gas properties. The company passes four of the five tests for the enterprising investor (failing only the debt to net current assets requirement). I estimate earnings in 2009 will be only $1.04, considerably lower than last year’s $11.14. However, normalized earnings per share (based on a five year weighted average of the earnings per share) will remain at $4.28. This is the first time EVEP has appeared in this screen (in response to some reader comments I decided to include limited partnerships in the screen).
* Psychemedics Corp (PMD) (9.6%) – Psychemedics Corp provides testing services for substance abuse. The company passes all of the tests of the enterprising investor. I estimate earnings in 2009 will be $0.24 and normalized earnings per share will be $0.58. This is the third consecutive month PMD has appeared in this screen.
* Natural Resource Partners LP (NRP) (9.05%) – Natural Resource Partners is a limited partnership involved in coal properties in the United States. The company passes four of the five tests for the enterprising investor (failing only the debt to net current assets requirement). I estimate earnings in 2009 will be $0.92, the lowest level since 2003. However, normalized earnings should be $1.43. This is the first time NRP has appeared in this screen.
* B&G Foods Inc (BGS) (7.94%) – B&G Foods produces and sells food products. The company passes four out of the five tests for the enterprising investor (failing only the debt to net current assets requirement). I estimate earnings in 2009 will be $0.59, and normalized earnings per share should be $0.45. This is the third consecutive month BGS has appeared in this screen.
* Suburban Propane Partners LP (SPH) (7.47%) – Suburban Propane Partners is a limited partnership focused on energy distribution products. The company passes four of the five tests for the enterprising investor (failing only the debt to net current assets requirement). I estimate earnings in 2009 will be $4.98 and normalized earnings per share will be $3.82, both increases over last year. This is the first time SPH has appeared in this screen.
* International Shipholding Corp (ISH) (6.02%) – International Shipholding Corp provides marine trasportation through charters. The company passes four of the five tests for the enterprising investor (failing only the debt to net current assets requirement). I estimate earnings in 2009 will be $4.97 and normalized earnings per share will be $3.50, both increases over last year. This is the third consecutive month ISH has appeared in this screen.
* NPK – National Presto Industries (NPK) (5.96%) – National Presto is primarily a producer of small appliances. The company is a favorite of mine (and was a favorite of Graham himself – see chapter 15 of The Intelligent Investor) and passes all of the tests of the enterprising investor. I estimate earnings in 2009 will be $7.67 and normalized earnings per share will be $6.11, both significant increases over last year. This is the third consecutive month NPK has appeared in this screen.
* Bristol-Myers Squibb Company (BMY) (4.90%) – Bristol-Myers Squibb is a pharmaceuticals company. The company passes all of the tests of the enterprising investor. I estimate earnings in 2009 will be $1.70 and normalized earnings per share will be $1.34. This is the third consecutive month BMY has appeared in this screen.
* Olin Corp (OLN) (4.77%) – Olin is a chemical and ammunitions producer. The company passes all of the tests of the enterprising investor. I estimate earnings in 2009 will be $0.64 and normalized earnings per share will be $1.37, both decreases from last year. This is the third consecutive month OLN has appeared in this screen.
* E.I. du Pont de Nemours and Company (DD) (4.74%) DuPont is a diversified company. The company passes four of the five tests for the enterprising investor (failing only the debt to net current assets requirement). I estimate earnings in 2009 will be $1.78 and normalized earnings per share will be $2.41. This is the third consecutive month DD has appeared in this screen.