Investing

Investor Sentiment

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Over the last few weeks I have become quite interested in both global inflation and investor sentiment. I find these are two indicators that give some direction of the markets. Unfortunately in the past it’s been an indicator of topped-out stock markets, with rising interest rates. I don’t base my investment decisions on a crystal ball, and neither should you. However the indicators are interesting to look at nonetheless. In this post I will look at the concept of investor sentiment as a signal of market direction – which if correct is currently indicating a topped-out stock market. Coincidentally, the …

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The Power of Preferred Shares

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Preferred shares are often overlooked by dividend investors because of their lower growth rate as compared to common shares.  Since they have a higher dividend yield, and preferred shareholders have rights to dividends over common shareholders, they certainly are worth looking into. The key point is preferred shareholders give up their voting rights in favour of a higher yield. In addition preferred shares are more complex than common stock, and have similar characteristics to corporate bonds that make purchasing them also more complex.  However if you like high dividend yield with less market volatility, then preferred shares can make an …

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Asset Allocation – Part 1: Risk Assessment

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The premise of this article is that “Risk Assessment” is designed by the financial industry, and does not provide any useful indicator for the individual investor. I’ll argue that “Risk Assessment” has no bearing on proper Asset Allocation. Rather, your age is what should determine your investment risk. What is Risk Assessment? Mutual fund and insurance companies understand “risk assessment” very well.  In fact they have it down to a calculated science, highly correlated with human behaviour and piles of statistics. For mutual fund dealers and investment advisors meeting with new clients, it all begins with the “Risk Assessment Profile” …

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Creating Monthly Dividend Income

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Dividend Investors all share the same goal – to obtain a passive revenue stream from dividend income.  The combination of both consistent dividend payments (say 3% to 4% average), and the potential capital appreciation of those investments is a winning strategy. Every dividend investor has his or her own strategy. My strategy is more of a value play. I like to obtain stocks that are near their 52 week lows, have been punished for bad earnings or unforeseen events (Bad News Investing), and have low PE and LE ratios. But the end result is the same for most dividend investors …

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