Hot answers tagged

11

From everything I have read I still cannot be convinced of Whole Life Insurance Good! You have a brain! but it seems to be the first thing any financial advisor is trained to sell. The commissions on whole life are sick. The selling agent gets upward of 90% of your first year's premium. I imagine that the regional and district managers split the ...


10

Buy the minimum of one fund now. (Eg total bond market) Buy the minimum of the next fund next time you have $2500. (Eg large-cap stocks.) Continue with those until you have enough to buy the next fund (eg small-cap stocks). Adjust as you go to balance these funds according to your planned ratios, or as close as you can reasonably get without having to ...


8

I like Keshlam's answer and would like to add a few notes: Don't invest any more money now. Concentrate on finishing the degree, landing a job and setting up a household. Get a feel of your expenses for at least a few weeks after landing the job. Do you have student loans or other debt? You can make a nice guaranteed return by taking care of those ASAP. ...


4

What you are looking for is an indicator called the "Rate of Change (Price)". It provides a rolling % change in the price over the period you have chosen. Below is an example showing a price chart over the last 6 months with a 100 day Rate of Change indicator below the price chart.


4

The value premium would state the opposite in fact if one looks at the work of Fama and French. The Investment Entertainment Pricing Theory (INEPT) shows a graph with the rates on small-cap/large-cap and growth/value combinations that may be of interest as well for another article noting the same research. Index fund advisors in Figure 9-1 shows various ...


4

The short answer is that it is impossible to KNOW when the best time is to sell a stock. There are a number of reasons to sell a stock: You need the money Company fundamentals have changed Share price has advanced very rapidly, perhaps unsustainably The stock is overvalued The stock is overvalued compared to its peers The dividend has been cut Portfolio ...


3

(Congrats on earning/saving $3K and not wanting to blow it all on immediate gratification!) I currently have it invested in sector mutual funds but with the rise and fall of the stock market, is this really the best way to prepare long-term? Long-term? Yes! However... four years is not long term. It is, in fact, borderline short term. (When I was ...


3

In financial theory, there is no reason for a difference in investor return to exist between dividend paying and non-dividend paying stocks, except for tax consequences. This is because in theory, a company can either pay dividends to investors [who can reinvest the funds themselves], or reinvest its capital and earn the same return on that reinvestment [...


3

The key is to look at total return, that is dividend yields plus capital growth. Some stocks have yields of 5%-7%, and no growth. In that case, you get the dividends, and not a whole lot more. These are called dividend stocks. Other stocks pay no dividends. But if they can grow at 15%-20% a year or more, you're fine.These are called growth stocks. The ...


3

Does the company see itself expanding into new product lines or new territories? What is the current predicted growth for the company's earnings for the next 5 years? These would generally be where I'd look for growth in companies. In the case of Costco, there may be a perception of the company as being a "safe" company as the market capitalization for the ...


3

They don't, actually. Though in some time frames S&P 500 growth out performs S&P 500, it often lags. This is because "growth" doesn't refer to what happens to your account, but rather the type of stock in the index -- roughly speaking, it's the half of the S&P with the best earnings growth. That would be great, except it's not looking for is to ...


3

It's a good question, but it turns into a general 'how to invest' question. You see, the cliche of "invest the difference" simply point to the ripoff the other two answers discuss. And it doesn't specify how to invest, only that this money should be put to work as long term investments. The best answer is to find the asset allocation appropriate for your ...


3

You make money from growth ETF funds in exactly the same way you make money from any other investments: You buy 'em. You hold 'em. You sell 'em.


2

As you haven't specified country, will try and answer more in general ... Whole Life Insurance but it seems to be the first thing any financial adviser is trained to sell ... The commission structure is such that it makes more attractive for a financial adviser to sell Whole Life. Plus for most buyers its easier to sell Whole Life compared to Term. The way ...


2

MoneyChimp is great for this. It only offers full year returns, but it compounds the results correctly, including dividends. For mid year results, just adjust a bit based on the data you can find from Google or Yahoo to add some return (or loss) for the months.


2

It wouldn't surprise me to see a country's return to show Inflation + 2-4%, on average. The members of this board are from all over the world, but those in a low inflation country, as the US,Canada, and Australia are right now, would be used to a long term return of 8-10%, with sub 2% inflation. In your case, the 20% return is looking backwards, hindsight, ...


2

That includes the dividend yield. From Morningstar directly: Annual Returns Annual total returns are calculated on a calendar-year and year-to-date basis. Total return includes both capital appreciation and dividends. The year-to-date return is updated daily. For mutual funds, return includes both income (in the form of dividends or ...


2

I always hear people pronounce it to rhyme with "bagger".


2

Avoiding the complexities of tax [dividends likely taxed the year they are received, barring special tax accounts which many countries implement in for example, locked-in retirement type accounts; share growth is likely only taxed when sold / on death / on expatriation / similar], and assuming you reinvest the dividends every year in new shares, then yes, ...


2

In my mind its not the same. If growth is stock value then this is incorrect because of compound interest in stock price. $100 stock price after one year would be $105 and a dividend would be $2 Next year the stock would be $110.20 (Compound Interest) and would the Dividend really go up in lock step with the stock price? Well probably not, but if it did ...


2

In the method below all the portfolio values at each time interval are calculated. Then they are aggregated in each time period and the period return is calculated. Finally the period returns are compounded and annualised. For example, the portfolio return between periods x5 and x6 is (a11 + a23 + a34)/(a1 + a22 + a33) - 1 = 0.903 % where a1 is the ...


2

Recapping your method with a simple example initialvalue = 1000 m1start = 100 m2start = 100 m3start = 100 v3end = 1500 =RATE(3,-100,-1000,1500,1) 0.0528704 The calculated rate is 5.29% per period. This is equivalent to solving the equation below. ∴ v3end = (100 (1 + r) ((1 + r)^3 - 1))/r + initialvalue (1 + r)^3 ∴ r = 0.0528704 The most accurate ...


2

If the company sometimes doesn't pay a dividend in a year, then you can't really calculate dividend growth rate using this method, because you would be dividing by zero. The formula assumes that each year a dividend is paid. To calculate the dividend growth rate for a data set where the company skips a payment, you need to use a different time period. For ...


2

I would like to add my accolades in saving $3000, it is an accomplishment that the majority of US households are unable to achieve. source While it is something, in some ways it is hardly anything. Working part time at a entry level job will earn you almost three times this amount per year, and with the same job you can earn about as much in two weeks as ...


2

If you're 25 years from retirement, you don't want income from your investments**, you want the value of your investments to grow. When you're getting ready to retire, you'll want to convert some or all of those growth investments into investments that do generate income, because you won't have income from your job any more. ** It's OK if they do pay ...


1

It is a bit hard to understand your question, as I am not sure what you are trying to accomplish. Typically asset allocation models (AAMs) look something like: 80% Stocks : 20% Bonds with 15% International. So your stock ETFs, or funds, would include about 15% exposure to international. Even that becomes tricky. Is Tesla an international or domestic ...


1

What is your career choice? Because seriously, the best way to grow wealth is to start in a high income profession. And / or go into anything where you handle a lot of money (making deals etc.). It also depends on how much you are willing to sacrifice - you are aware that high earners often have 60 or 80 hour weeks. And do not select their friends about how ...


1

A lot of people use dividend stocks as a regular income, which is why dividend stocks are often associated with retirement. If your goal is growth and you're reinvesting capital gains and dividends then investing growth stocks or dividend stocks should have the same effect. The only difference would be if you are manually reinvesting dividends, which could ...


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