Many people wonder whether or not buying stocks is a good idea. Those who do not take part in investing may feel that buying stocks is not a good idea because there is risk to it. Well, this is right; there is risk to buying stocks. When you buy stocks, you are hoping that the price of the stock increases, that way you can sell the stocks for more money. For example, if you buy one share for $20 and that share doubles in price, you make $20 off your investment. Now, if you had 10,000 shares at $20 and it doubled in price, you would make $200,000. Is it any surprise that one of the richest men in the world, Warren Buffet, has been able to make so much money through investing?

However, buying stocks is something that can help you greatly in your life when you do it right. When you are buying stocks without a broker, or you are buying stocks with a discount broker, you can make good money by investing in the stock market.

If you go to the stock market and start investing without doing research, you will only end up losing all of your money. All of the steps to buying stocks include a step for research because it is so incredibly important. When you research stocks, you can determine what stocks will go up and what stocks will go down. You won’t know exactly what stocks will go up or down, but at least you will have a better idea of how stocks will do. When someone asks “Is buying stocks suggested in articles smart?” the only answer that we can give is yes. Various websites have been designed to help give you an indication of how stocks are going to do. These websites do the research and give you the scoop on what is going to happen so that you can begin to make a decision about how to invest.

Does this answer the question of whether or not buying stocks is a good idea. Well, yes buying stocks are a good idea and here are just some of the reasons why.

1.When you spend most of your working life investing, you can make a lot of money. When you have 40 years before retirement, you can invest heavily in your youth because you have more time to make up for falls in the stock market. In the long-run, buying stocks gives higher rewards than other types of investments.

2.When you invest in the stock market, you make money for doing nothing. You work at a job and you make money when you are at the job, but with stocks you make money even when you are sleeping. The stocks go up and down without you doing anything. It is all based on the work of others. When a company does well, you do well. It is possible, on a rapidly increasing stock, to make double or three times what you make a year at your job, without having to do anything but invest.

3.While there are risks to investing, buying stocks is not gambling. People will often ask what is the difference between buying and selling stocks and gambling, and to that we can say that with stocks you do research, while with gambling it is all about luck.

Buying stocks is something that can help you make a lot of money when you do it well. Buying stocks is a good idea when you do your research because you can make a lot of money. Of course, there is the chance you will lose a lot of money on the stock market, but there is just of much of a chance that you will make a lot of money. Fortunes are won and lost on the market on a daily basis.

So, is buying stocks a good idea? If you do your research and put a lot of thought into buying stocks, then yes it is a good idea. If you are picking stocks at random, then it is not a good idea. This is what you need to remember with investing in the stock market.

To illustrate this technique, let’s take a look at the prices for NYSE/Euronext (NYX),

as of March 4, 2009 market close:

STOCK COST/ SHARE: $16.36

ANNUAL DIVIDEND: $1.20/SHARE

DIVIDEND YIELD: 7.33%

CALL EXPIRATION DATE: JAN. 15, 2010

CALL STRIKE PRICE: $17.50

CALL PREMIUM: $3.25

STATIC CALL YIELD: 19.86%

TOTAL STATIC YIELD: 27.19%

TOTAL POTENTIAL ASSIGNED YIELD: 34.16%

As you can see from the yields in this example, this stock’s 19.86% call selling yield is 2.7 times its dividend yield of 7.33%. So, even if they were to cut their dividend, the investor in this example would still have nearly 20% downside protection. If the dividend remains intact, the downside protection in this trade is 27.19%, equivalent to the total static yield, (the combination of the dividend and call yields).In addition, by selling a call at the $17.50 strike price, approximately 7% above the $16.36 cost/share, this investor also has the potential to for a total assigned yield of 34.16%, making a very compelling case for this strategy.

Trade Summary for this Example:

Breakeven: $11.91

Maximum Share Reselling Price: $17.50

Static Yield: $435.00

Potential Assigned Yield: $559.00

Investment Term: 10+ months (The Annualized Yields would be even higher than the yields listed above).

Definitions:

Static Call Yield: The yield realized when the underlying shares are NOT assigned/(sold) at or before expiration. In a “static” scenario, the stock’s share price doesn’t rise above or close enough to the combination price of the strike price, plus the call premium, to make it worthwhile for the shares to be bought by the call buyer on the other side of the trade. In the above example, the share price would have to rise above or near $20.75, ($17.50 strike price plus the $3.25 call premium), to make it worthwhile for the call buyer to exercise his option to buy your shares.

Total Static Yield: The combined dividend and static call yields.

Assigned Call Yield: The yield realized when the underlying shares ARE assigned/(sold) at or before expiration. This normally occurs when the stock’s share price rises to or above the combination price of the strike price, plus the call premium, causing the shares to be assigned, (sold), at the strike price, which in the above example is $17.50.

Risks and Limits: As with any investment, there are risks. Obviously, this strategy can’t guarantee that these stocks won’t decline further in value once you’ve bought them. However, this value-based, “double dividend” covered call strategy will at the very least give you more downside protection than if you had only bought the stocks outright, and the call premium lowers your cost basis.

Upside Risk: Since this strategy quantifies the upper limit of your profit potential, you should be aware that, even if the stock appreciates far past your strike price and call premium, you’ll still be obligated to sell it at your covered call strike price, which places a limit on your profit potential. It’s usually wise to research the call’s theoretical value in an options pricing model, such as Black-Sholes, before placing the trade, to ascertain the chances of the call ending up in the money at expiration. You should always analyze your static and assigned gains, and breakeven point before placing any Covered call, (Buy/Write), strategy. Many of the online brokers have automated options pricing calculators that simplify this process.

Downside Risk: The biggest risk factor in selling covered calls is that you are putting much more money at risk here than by merely buying a call option. However, research has shown that the odds tend to favor option sellers over buyers. You should make sure you research any stock thoroughly before executing this or any other strategy. However, as noted before, if the stock declines past your breakeven, you should be able to offset some of the loss by “buying back in” your sold calls at a profit, and perhaps rolling into a lower strike price call, if you want to maintain your underlying position.

copyright 2009 DeMar Marketing. All Rights Reserved Worldwide. This article was written for informational purposes only. Readers should not make any investment decisions based solely on the information in this article.

Share Trading Techniques.

While perusing through one of my trading books, I came upon some fascinating facts that were very thought provoking, so I will pass them on to you.
The author is aDaryl Guppya a well established author and successful trader as well.

He stated, that over time he noticed that once a share magazine was published that the stocks that were recommended by the magazine went into an uptrend, because the readers took notice of the tips given and bought them. Here are the statistics.

1. One month after publication 90% of the stocks mentioned were still in an uptrend.

2. Two months after publication 80% were still in an uptrend.

3. Three months after publication only around 45% were still in an uptrend.

Obviously it pays to buy the magazines each month and buy the shares mentioned.

But I personally would be watching them very closely and would be hanging on to them only till my preset profit level had been reached and I definitely would be out after a 5-6 weeks.
They would still have to qualify to my buying strategy in the first place if not I would not touch them at all.

Now a hint for you here, How I trial mya New Ideasa out is by aPaper trading.a That way I am not risking any of my money in something that I am not 100% sure of.
If you want to paper trade the places I use are www.asx.com.au and www.sharecafe.com.au both are free sites and you can find free information there as well.

Becoming a aDividend Stripper.a

An interesting thing I found out was that apart from being share trader I have also become a aDividend Stripper.a I shall explain this further as to what I do occasionally.

A dividend stripper is a trader who buys shares to qualify for the oncoming dividend and then sells shortly afterwards.

You buy before the aEx Dividenda then you can sell the next day. Making sure of course you have the dates right in the first place.

But to qualify for the aFranking Creditsa you need to own them for 45 plus 2 days.
1day for buying, 1day for selling plus 45 days = 47 days. Anything less and you miss out on those franking credits.

An interesting thing to note is that a stock’s share price invariably falls usually by the amount of the dividend paid after the ex dividend date expires.

Another trick is to buy the stock 2-3 weeks earlier in the hope that the share price goes up prior to ex = dividend.

A Warning About IPO’s.

The market seems to be inundated with IPO’S (Initial public offering) these new companies all seem predominately to be in the mining sector.
All eager to get in on the current aminerals booma
A few opened up higher than the initial entry price. Most seem to be exploration of some sort or other. The flavors of the month are usually oil or uranium.

These are of course classified as aSpeculative Stocks.a

Which can mean that once the cash has dried up and they haven’t found anything, they then have to either raise more cash or shut shop? And your cash has gone with them.

The rags to riches stories are many, but the road is littered with the crushed hopes and dreams of the unwary investors.

All are searching for that elusive pot of gold at the end of the rainbow.
So be wary, do your research, and don’t jump in blind. Be an informed investor.

If it looks to be too good to be true then it usually is.

In the stock market, the basic definition of an active trader is someone who buys and sells stocks with the intention of making money in the short term. Active traders typically don’t hold individual stocks for many months or years, and generally do not focus upon long-term economic trends.

The Internal Revenue Service’s definition of a “tra der” is a person who aims to earn money from price fluctuations which occur throughout the day, and remains regularly active in the market. Other people who buy and sell stock are instead defined as “investors”.

An active trader who seeks to buy and sell the same stock shares during a single day often fits the definition of a “day trader”. Day traders have the potential to make (or lose) money quickly, but must devote much more time to trading than most long-term investors do.

Active traders aren’t involved in trading to earn money from corporate dividends. They also usually do not purchase preferred stock, which offers benefits that are oriented toward people who invest for the long-term.

Some traders of this type hold stocks for periods of time as short as a few minutes or a fraction of a minute. To get a better idea of what it is like to be an active trader, try playing one of the day trading computer simulations. Surely it is much more stressful when real money is involved.

Compared to other stock investors, somewhat different tax rules apply to active traders. Pages D-3/4 of the Schedule D instructions provide details on these differences, as well as additional information on how to determine your definition as an investor or trader.

Mutual funds are good options for American investors to meet their financial goals. These funds offer professional management and diversification of the funds invested. Mutual funds assets in 1990-2000 rose from 1.065 trillion to a whooping 6.965 trillion dollars. 10% Americans owned funds in 1980 and by 2000, the percentage increased to 49%.

What are Mutual funds?

A company dealing in mutual funds invests the money of several investors in bonds, stocks, securities, assets and several other short-term money-market instruments. The combined ‘holdings’ owned by the mutual fund are known as its portfolio. When you invest in a mutual fund you become a shareholder of the company. Each share in a mutual fund company is the representation of he investor’s proportionate ownership of the fund holdings and the income generated. You earn dividends when the mutual fund company earns a profit, however, your shares will decrease in value if it faces a loss. A professional investment manager does the buying and selling of securities for the growth of the fund.

Types of mutual funds:

Equity funds: These funds involve only common stock investments. They can earn a lot of profit, but are also very risky.

Fixed income funds: They include corporate and government securities. These funds offer fixed returns at a low risk.

Balanced funds: This is the combination of bonds and stocks with a low risk. However, the investment does not earn a lot through these funds.

How it works?

Mutual fund shares can be purchased from the company itself or a broker. There are secondary market investors also, like the New York Stock Exchange. Per share net asset value of the funds or NAV is the price that you pay for buying a mutual fund share. It also includes the shareholder fee that is imposed by the fund, at time of purchase. The best feature of mutual funds is that these shares are ‘redeemable’. You, as an investor, can sell your shares back to the broker. In order to accommodate new investors, mutual fund companies generally create new shares and sell them. They keep selling their shares continuously till they become large. Investment advisers act as separate entities and are responsible for managing the investment portfolio of the mutual funds. Investing in mutual funds tends to lower the risk factor because they are the result of diverse investments. Since someone else manages your investments, you need not worry about keeping constant tabs on the investment, though a periodical check enhances your personal book of accounts. Managing funds is the full time job of the fund manager and he is responsible for the performance and health of the investment.

The rate of returns in mutual funds is based on the increase or decrease of the value, during a specific period. Returns of a fund indicate the track record. It is important to remember that the past performance cannot guarantee future results.

As in the case of any investment or business, mutual funds also have risks associated with the returns. It is essential to set your financial goals and requirements, before investing in a mutual fund.

Benefits of Online Stock Trading

The new fad is online stock trading. Online stock trading refers to buying and/or sell securities by the stock investor himself on the Internet as compared to calling the broker and having him or her place the order. There are many benefits to online stock trading that I will discuss here.

Convenience/Quickness – Online stock trading allows you to place your orders from anywhere and at any time. The only piece of equipment needed is a computer. When an investor does online stock trading they save themselves time and money. Calling your broker takes longer and costs the investor more.
Control – With online stock trading the investor has full control of his or her investments. With online stock trading there is no having to explain to your stock broker on why and how long you plan to hold your position.

Efficiency – With online stock trading you can get account balance, positions, real time quote and other information instantly while when calling you broker would take much longer to receive this information.

Online stock trading allows all investors to take advantage of real time news and market movements. In the past when a stock investor had to call his broker it would take much longer to buy or sell and investors could not take advantage.

Article was written by David Hot Penny Stocks

Learn How To Read The Stock Market

Have you ever opened up to the Business Section of the newspaper with complete awe? Do you find the stock market daunting? If you have ever thought about investing, but felt intimidated, read on. Here are some definitions to basic stock market jargon.

AMEX: The American Stock Exchange is the third largest stock exchange by trading volume.

Baby Bond: Issued bonds holding par values less than $1,000.

Bull Market: A period during which the stock market prices are rising.

Common Stock: A security that stands for ownership in a company. Common stock holders elect a board of directors and vote on corporate policy.

Day Trading: Buying and selling a security within the period of one day.

Dividend: Payout of a portion of a company’s earnings. May be quoted in terms of dollars or percent of the current market price.

Dow Jones Industrial Average: Price-weighted average of 30 of the most significant stocks traded on NYSE and NASDAQ.
Hedge Funds: Private investment funds that are only made available to select investors.

January Effect: General stock price increases during the month of January.

Mutual Fund: Money pooled from investors is then invested collectively in stocks, bonds or other securities. Managed by a fund manager.

NYSE: The New York Stock Exchange, or the “Big Board” is a New York City-based stock exchange. The largest in the world in terms of dollar volume, the NYSE lists nearly 3,000 securities.

NASDAQ: The National Association of Securities Dealers Automated Quotations. The world’s first electronic stock market.

Outstanding Shares: Stock shares held by investors.

Par Value: A bond’s face value.

Preferred Stock: A security that stands for ownership in a company, however, holders have a higher claim than common stock holders on assets and earnings. Preferred stock dividends are paid out before dividends to common stock holders.

Reverse Stock Split: Reduction in the quantity of a corporation’s outstanding shares that increases the earnings per share.

Santa Claus Effect: Sudden increase in stock prices during the week between Christmas and New Year’s Day.

Stock Market: A system of trading company shares. A company that trades is also known as a public company. Selling shares allows a company to raise money.

Stock Market Index: Listing of stocks and statistics.

Stock Split: A company’s existing shares are divided into multiple shares.

Treasury Stock: Stock that has been repurchased by the company.

These basic stock market definitions will help you understand basic stock investment procedures.

Just What are Penny Stocks?

A penny stock is frequently described as a plain stock trading beyond the NYSE, NASDAQ, or AMEX stock exchanges and one that has a less than normal market capitalization and often trades beneath 5.00 a share. They are listed on over the counter or OTC quotation services like the OTC Bulletin Board or Pink Sheets.

Several first time investors are intrigued by the economical prices and earning potential that penny stocks present. Along with great profit opportunity comes a fair dose of risk. As new penny stock investors look at this kind of investing there are ways to minimize risk and maximize success.

What is the Amount of Cash that Can be Created With Penny Stocks?

There is a massive amount of money to be made with penny stock trading but you have to comprehend the hazards. If you happen to find an undervalued stock that is just about to move you can amplify your capital very quickly and sometimes attain return rates that are far ahead of conventional trading.

Many people have gotten extremely rich with this sort of investment and now is a great time to start investing in penny stocks because of the values that are presented when purchasing stocks. In general the stock market is moving up and it is a nice time to get in the game.

How to Rule Penny Stocks

As with everything that needs a monetary outlay you must do a adequate amount of research on the stock you are looking to get. Glimpse into the company and its past and look at financial statements. Don’t believe everything you see about a stock on internet forums and newsletters. Try and come to a common consensus from different sources before taking the dive. Contemplate ‘paper trading’ before truly using actual money.

You can make note of your stock picks and track them to see how well your trades do before actually investing.

The greatest way to get a lot of money with penny stocks is to discover a stock that is ready to ‘breakout’ and show a genuine gain. This gain may be short-term and quick and you have to be set to act. The value of penny stocks can be fickle with sizeable volumes and changes on a daily basis.

If you realize how to capitalize on these swings there is alot of money to be made.

The greatest way to succeed with penny stocks is to work with a proven method that offers a complete formula for researching and picking stocks that are about to move. You need to understand how to evaluate penny stocks quickly and decide when they are about to explode.

Instead of gold or silver bullion, many investors opt for precious metals mining stocks because they normally yield higher percentage increases than gold and silver when metals prices rise. However, investing in precious metals stocks carries risks beyond buying gold or silver bullion.

The risks are many and varied, and sometimes unforeseen problems can send stock prices plummeting, which, of course, is true of all stocks. Management mistakes cause most mishaps. With precious metals and other mining stocks, the sizes and grades of ore deposits can be overestimated or the cost of extracting the ore can be greater than expected, resulting in lower profits or even losses.

Additionally, businesses always struggle with economic downturns, interest rate increases, labor troubles, governmental interventions, and environmental requirements. Increases in energy costs–even energy shortages–could plague some mining companies, notably those operating in Nevada’s famed Carlin Trend.

For disastrous management decisions, Sunshine Mining and Refining Company comes to mind. Once a favorite of silver stock investors, Sunshine traded at $13 in early 1998 on the NYSE. However, by 2000 Sunshine was in Chapter 11, and its stock has traded at less than a nickel on the NASDAQ.

In 1996, Sunshine’s management borrowed $30 million and in 1997 an additional $15 million for development of its West Chance ore body at the Sunshine Mine, after which the company is named. Part of the borrowed funds were used to delineate what the company calls a “world-class” ore body in Argentina.

Although management claims the West Chance efforts were successful, management misjudged cash flow and was unable to meet interest and principal payments on the $45 million. Efforts to refinance were unsuccessful, and the lenders took control of the company and mothballed the famed Sunshine Mine. Shareholders wound up with about 3.6% of the company. Unfortunately, this was not Sunshine’s only brush with disaster.

In 1972, a fire in the Sunshine Mine nearly destroyed the company. While Sunshine’s stock price suffered, the company managed to survive. Now, Sunshine Mining essentially has been taken over by its creditors.

Ashanti Goldfields (Ghana) and Cambior (Canada), two gold producers, also exemplify what can happen to share prices when managements make bad decisions. In early 1996, Ashanti (ASL) traded at $25; in 2000, Ashanti’s stock traded below $1.50. In early 1996, Cambior, traded at $16; in late 2000, Cambior’s stock traded at twenty-five cents.

Both companies got caught up in forward sales, and their balance sheets were severely damaged by margin calls in 1999 when gold rallied from the $250s level to $338 on the announcement that 15 European central banks would limit gold sales and leasing for five years (The Washington Gold Agreement). Gold’s price move caused Ashanti and Cambior to liquidate assets and/or convert loans to equity shares at rates that severely damaged the value of their stocks.

Forward selling remains a threat to other gold mining companies because the amount sold short via forward sales is disproportionate to the size of the gold market. Some estimates have total forward sales equivalent to three to five years of production. One or two small short positions could be unwound with only minor price increases. But, the total position is enormous, and reversing it without the price of gold skyrocketing will be difficult, if not impossible.

Forward selling involves borrowing gold and selling it, and it is done mostly by mining companies because, logically, they should be able to replace the borrowed gold out of future production. Forward selling is profitable because the lenders, primarily central banks, lend with charges (lease rates) of about 1%, sometimes even less. The borrowers sell the gold with effective returns of somewhere between 6% and 10%, depending on the borrower’s credit rating.

If the funds from the sales of the gold are invested in high-grade bonds, the borrowers receive probably 6% to 8%, for a tidy margin of 5% to 7%. However, if the borrowers use the funds in operations, thereby permitting those to forego borrowing in the credit markets, then they effectively receive higher rates, depending on the companies’ credit ratings.

Hundreds of millions of dollars are made via forwarding selling. The central banks earn fees on an otherwise “sterile” asset. The mining companies earn 5% to 9%, and the bullion houses that arrange the central bank loans and handle the gold sales earn huge fees. Forward selling pays off like a broken slot machine–except for gold mining companies’ shareholders. Shareholders lose because forward selling distorts gold’s supply/demand fundamentals and puts downward pressure on the price of gold. However, forward selling is not without its risks.

If the price of gold rises, the lenders want additional margin deposits, which is what hammered Ashanti and Cambior. (Despite the borrowers having millions of ounces of gold in the ground, the central banks require “margin deposits,” usually US treasuries. This works much the same way as margin deposits do on futures and stock exchanges.) It is believed that some bullion houses have even given the central banks guarantees that the borrowed gold will be replaced. If so, then adverse developments in the forward sales arena could force government bailouts, such as was the case with the Fed-engineered rescue of Long-Term Credit Management.

Precious metals stocks are a way to participate in the gold and silver market; however, compared to gold and silver bullion, stocks are risky. No one ever went broke holding gold or silver. The same cannot be said of paper assets. Call the <a rel=”nofollow” onclick=”javascript:_gaq.push(['_trackPageview', '/outgoing/article_exit_link/1694742']);” href=”http://www.usgoldinvestors.com”>Superior Gold Group</a>today and start your account NOW!

14 Foreign Blue Chip Stocks With 5%+ Dividends

The Fed model compares the forward earnings yield of the stock market with 10-year government bond yields. The model assumes that investors view stocks and bonds as competing assets and will purchase whichever asset has a higher yield, according to an article in Quarterly Review of Economics and Finance May 2009 issue.

Income investors will always be in a dilemma over whether to purchase fixed income securities such as bonds, or to buy stocks with competitive yields. Companies that pay generous dividends tend to perform well in an era of mild inflation.

More than half of the total global stock market capitalization is outside of US borders. The reason to have foreign dividend-paying stocks is for income and growth from economies globally, especially in an environment that features a weakening US dollar.

14 ADRs With 5%+ Dividends

Prospective foreign companies often come to the US for financing, and that means a greater number of investment opportunities for income investors in ADRs. I went over all foreign companies listed on US exchanges (NASDAQ and NYSE). The following are ADRs with dividends higher than 5%, market caps greater than $1 billion, and forward P/E lower than 15:

Name (Symbol)

Forward P/E (1yr)

Yield

Market Cap

MAGYAR TELEKOM (MTA)

10

19%

4.17B

ENERSIS S A (ENI)

13

11%

637.41B

TELECOM CP N Z (NZT)

13

10%

2.05B

Partner Comm (PTNR)

3

8%

2.94B

DEUTSCHE TELE AG ADS (DT)

13

7%

68.09B

CPFL ENERGIA SA ADS (CPL)

13

7%

9.94B

FRANCE TELECOM ADS (FTE)

10

6%

70.66B

HELLENIC TELE ADS (OTE)

9

6%

7.74B

BP PLC (BP)

9

6%

180.71B

ECOPETROL SA (EC)

15

6%

52.17B

MOBILE TELSYS OJSC (MBT)

10

5%

18.84B

TOTAL S.A. (TOT)

9

5%

142.22B

PORTUGAL TELECM SGPS (PT)

14

5%

11.07B

TELEFONICA SA (TEF)

10

5%

132.75B

Not surprisingly, these companies are either in the telecom sector or energy related industries. They yield plenty, and many have some solid fundamentals to vouch for as well.

Telecom

The US telecom market is mature with very little growth out there. However, there are still more opportunities for foreign telecom companies, especially in emerging markets.

Magyar Telekom (MTA) provides telecommunication services in Hungary and internationally. Partner Communications (PTNR) operates a mobile telecommunications network in Israel. Hellenic Telecommunications (OTE) is a telecommunications services provider in Greece, Albania, Bulgaria, and Romania.

Mobile Telesystems (MBT), the Russian mobile telecom company, became a mobile/land-line provider this week with the purchase of COMSTAR-UTS. This gives it an entry into broadband – one of the country’s underdeveloped markets. Russia has vast stores of oil and gold, the world’s 3rd largest currency reserves, and a relatively low net debt-to-GDP ratio.

Telecom Corp. of New Zealand Ltd. (NZT), Deutsche Telekom (DT), FRANCE TELECOM (FTE) and Telefonica SA (TEF) are all in developed markets. Portugal Telecom (PT) is investing heavily in a fiber network and TV service in Portugal and in 3G & 3.5G technology in Brazil.

Utilities/Energy

Enersis S.A. (ENI) engages in electric power generation in Argentina, Brazil, Chile, Colombia, and Peru. CPFL Energia S.A (CPL) serves residential, industrial, and commercial customers in Brazil. Ecopetrol S.A. (EC) is a crude oil and gas giant in Columbia.

Main International ETFs With 5%+ Dividends

Name (Symbol)

Yield

WISDOMTREE EX-FINL (DOO)

12%

WISDOMTREE PACFC EQ (DNH)

10%

WISDOMTREE DEFA (DTH)

9%

WISDOMTREE PAC TTL (DND)

9%

WISDOMTREE EUR TDIV (DEB)

8%

WISDOMTREE INTL LC (DOL)

8%

WISDOMTREE DEFA (DWM)

7%

WISDOM TR EM MKT (DEM)

7%

VANGRD EUROPEAN ETF (VGK)

6%

Conclusion

An investor who missed the 10 best performance days out of 110,000 trading days would have had a portfolio that was 69% less valuable than a passive portfolio. Avoiding the 10 worst days would have resulted in a portfolio that was 337% more valuable than a passive investment, according to an article titled aBlack Swans in Emerging Marketsa in Journal of Investing Summer 2009 issue.

When a crisis strikes, the people who sell first get the best price, if they can move ahead of a wave of forced sales. If you are not a trader or can’t time the market, the best way is to find solid-yielding companies and stay invested.

Fundamental metrics such as P/E and dividend yields are too narrowly focused to stand alone as a single measure of a stock. Inconsistent dividends in the past mean that the dividend yields can’t be counted on. By combining different methods of valuation, you can get a better view of a company.

1. Disclosure: I have long position on CPL. Data is from Yahoo Finance as of December 4, 2009.

To learn more about dividend investing, be sure to check out our stock trading course!