One thing you will learn in investing is that nothing is ever absolute and that rules are made to be broken. With that said, I’ve been giving a lot of thought as to what stocks to buy this year and my previous declaration to use the Dogs of the Dow strategy.
As I get closer to actually making a purchase, I’m starting to reconsider my initial plan and may have an alternative solution that would make more sense. Here’s is where my mind is at:
Category: Stocks & Investing
/ Tags: CNN Money
, Dividend Aristocrats
, dividend stocks
, Dividend Yield
, Dogs of the Dow
, Google Finance
, Hewlett Packard
, Joel Greenblatt
, Pitney Bowes
, Return on Assets
, The Big Secret for the Small Investor
, what stocks to buy
One of the biggest things that separates individual stock investors and mutual fund investors is how to read stocks and evaluate them on an individual basis. Unlike most mutual funds, individual stocks can carry a great deal more of risk. Pick the wrong ones and there goes your hard-earned money!
So how do we evaluate a company’s stock metrics to know if it will be a good investment? Fortunately, all this basic information you need to understand a potential prospect has been summarized by most major news outlets into single, bite-sized profiles that are convenient for you to access and are constantly updated.
The goal of this post will be to walk you through one of these pages of metrics and explain how to read stocks. For this exercise, I will use a stock that I own, Johnson & Johnson, and a news media that I often use, CNN Money. Keep in mind that you could find similar stock metrics and other variations just as easily on Yahoo Finance, Google Finance, MSN Money, your broker’s website etc. (CNN Money just happens to be the one I use the most)
Darn! The year was off to such a great start for us investors! But then worries about Greece and the Euro spoiled the party. If you were following conventional wisdom and investing in Index Funds, then you’ve basically lost about 6% in May (following the S&P 500).
Don’t worry – I’m not trying to bum you out. But it is times like this that you need to ask yourself “What am I doing to hedge myself? If buying stocks is offense, what am I doing to play defense?”
Admit it. You saw the title of this post and thought what the #@&! is this guy thinking! Is he insane? Who goes and sells one of the world’s most profitable and admired companies?
The truth is that this was not an easy post to write. Having watched the price of Apple stock (AAPL) rise above $600 (about $50 more than what I sold it for) left me wondering the same thing about my decision.
But isn’t that the problem when we invest? We let our imaginations run the show. If we sell, we’ll kick ourselves if stock goes up, but we’ll pat ourselves on the back when it goes down.