Dividend Coverage Ratios allow analysts to evaluate the safety of a company‘s dividend. Many investors concentrate on the dividend yield but don‘t give sufficient attention to the safety of that dividend. In the long run companies must create enough cash flow to pay expenses, invest in the future (capital expenditures), service their debt (if any), and return money to shareholders. The post Dividend Coverage Ratios: How Safe is Your D
Buy and Hold is considered by many to be the holy grail of investing. Its current popularity has become a cult-like strategy that draws criticism to its critics and disdain towards those who dare speak out against the beloved investing strategy. So buy and hold works.until it doesn‘t. People will quote all kinds of statistics ‘proving‘ that buy and hold works. Its the trend of our day. This is nothing new. Bull markets make buy
Over diversification is a serious and common mistake that decreases investment returns disproportionately to the benefits received. The post Over Diversification: Hurting Your Investment Returns? appeared first on Arbor Asset Allocation Model Portfolio (AAAMP) Value Blog.
Recognizing the differences between saving, investing, and gambling will help you compartmentalize each, and avoid common mistakes. It‘s an easy mistake because not enough people think it through, and the terms are used interchangeably in our culture. Keeping saving, investing, and gambling three separate activities in your mind and in your account structure will help you be more successful managing your money and growing your wealth. The p
Dividend yield is the annual dividend per share of a company compared to the price of the stock expressed as percentage. In other words it tells you the percentage dividend return the stock owner receives on the current price of a stock. The dividend yield has historically provided approximately one-half of long term total stock market returns to investors. It‘s a little less than one-half for those who take their dividend and little over o
The Gross Profitability Ratio is gaining credibility in value investing circles because it provides valuable and predictive qualitative analysis when combined with valuation metrics. Some analysts argue it is the single best qualitative metric with which to compare multiple stocks (particularly within the same industry) that have already been determined to be bargains. The post Gross Profitability Ratio - Qualitative Analysis appeared first on Ar
Free Cash Flow determines whether a company has sufficient cash resources to meet the goals of the entity and its‘ stakeholders (debt reduction, dividends, stock buybacks, acquisitions, etc.). Free Cash Flow Yield determines if the stock price provides good value for the amount of free cash flow being generated. The post Explain Free Cash Flow and Free Cash Flow Yield appeared first on Arbor Asset Allocation Model Portfolio (AAAMP) Value Bl
Dividend Payout Ratios provide us valuable information on how much money a company is returning to shareholders and their ability to pay and increase the dividend. One of these ratios is far superior to the other. The Dividend Payout Ratio and the Cash Dividend Payout Ratio are compared to find out which is better at providing pertinent information to differentiate between various dividend paying companies. The post Dividend Payout Ratio vs. Cash
There are 3 main types of investors today; each with their own characteristics and results: The buy high sell low investor, the index investor (passive management), and the value investor. The post 3 Types of Investors - Which Type Are You? appeared first on Arbor Asset Allocation Model Portfolio (AAAMP) Value Blog.
The quotes from the Book of Value by Anurag Sharma are investment gems that include deep ‘second-level thinking‘. Careful and rigorous analysis helps investors resist the temptation to do foolish things. Good investors are capitalists - they invest on the basis of sound data and analysis, with an eye for what could go wrong. The post Book of Value Quotes by Anurag Sharma appeared first on Arbor Asset Allocation Model Portfolio (AAAMP)