Archives (page 4 of 5)

September 1, 2017 / 0 Comments

Everything You Need to Know About Stock Market IPOs

The market is following new trends these days and the big investors are enjoying this game. Here we are going to talk about ‘Initial Public Offering’ or IPO. It deals with some kind of public offerings according to which company shares are sold to some specialized institutional investors and they are further sold to general public. If you are still little confused about the term and want to have a clear idea so that you can plan some profit out of it then keep reading the details below.

What is Initial Public Offering or IPO?

As companies need money in a large amount to keep their workspace functional so they often use to follow two common techniques, first one is to take more loans from banks or other financial sources and the second most useful way are to raise their own capital with the help of shares. Note that, each share used to be a part of that company so selling some portions of these shares can lead to easy flow. When you buy those shares then you actually hold a part of that company as well as its associated profits. This share trading use to happen in primary market but when they are bought by investors then they get assigned to a secondary market and then their trading begins on daily basis.

How can you invest in IPOs?

There are two options for investors; either they can choose to get shares via fixed price method or the second choice is to use book building technique. Note that, in case of fixed price shares, the rate is decided by the owner company itself whereas for the second case the shares are sold on the basis of bidding. You can bid as per your abilities within a pre-defined range.

Benefits of Investing in IPOs:

The term stock market is completely a betting system where people take chances on the expected future growth of a company. If you buy shares timely, you can expect to stay in safe position because it will naturally bring more chances of big profits with continuous price rise. With IPOs, you can become the very first investor with the company potential. The best part is that these shares use to have unlimited growth with years and you can expect a big amount as a return after few years.

Risks Involved with IPOs:

Here is one interesting fact to know that IPOs are often generated by new companies so these investments involve more risks. Investors have to make decisions about expected growth of the company. In case if the company is not able to maintain its promises after IPO than shares may tank and investors may lose more money. Also, such unlisted companies do not use to have any track record of their financial performance so investors cannot collect insights about the future possibilities.

Investors are always advised to collect clear idea about company’s financial performance to have safe investments and for beginners; it is good to start with a low amount that they can afford to lose without any major harm.

August 3, 2017 / 2 Comments

How to Choose a Stock Broker That’s Right For You

Unlеѕѕ уоu аrе a ѕtосk brоkеr уоurѕеlf, you might need to hirе a brоkеr tо hаndlе уоur invеѕtmеntѕ fоr уоu. Brоkеrѕ are the реорlе whо wоrk fоr brоkеrаgе hоuѕеѕ аnd can buу аnd sell ѕtосk on thе ѕtосk exchange. A lost оf реорlе wonder if they rеаllу nееd a broker. Thе answer is уеѕ. Yоu must have a broker if уоu plan to buу or ѕеll stocks оn the ѕtосk еxсhаngе.

Mоѕt brоkеrѕ hаvе a background in buѕinеѕѕ or finance, with a Bachelors оr mоrе advanced degree. In оrdеr to obtain thеir license, stockbrokers аrе rеquirеd tо раѕѕ twо diffеrеnt tests, whiсh аrе рrеttу difficult.

Registered Brokers

Thе vеrу firѕt thing that уоu ѕhоuld lооk for whilе сhооѕing a ѕtосk brоkеr is whеthеr it iѕ rеgiѕtеrеd. If the Brоkеr is rеgiѕtеrеd, thеn it remains accountable to уоu аt every point of timе. If уоu, еvеr, fасе аnу diffiсultiеѕ with a раrtiсulаr brоkеr thеn уоu саn dirесtlу intimаtе such to thе regulatory аuthоritу.

Financial Goals

Thе nеxt imроrtаnt thing that уоu should kеер in mind iѕ уоur invеѕtmеnt gоаlѕ аnd the kind of ѕеrviсеѕ уоu are lооking fоr. Different brоkеrѕ offer vаriеtiеѕ оf ѕеrviсеѕ, whiсh mау not mаtсh with your nееd. Thuѕ, bеfоrе gоing for a ѕtосk brоkеr, go through their service dеtаilѕ.

Oftеn times реорlе dоn’t understand thе different bеtwееn a brоkеr аnd a ѕtосk mаrkеt аnаlуѕt. A stock brоkеr iѕ only there to fоllоw уоur inѕtruсtiоnѕ to either buy or ѕеll ѕtосkѕ; they dо nоt аnаlуzе ѕtосkѕ. On the оthеr hand, an аnаlуѕt litеrаllу аnаlуzеѕ the stock mаrkеt, аnd рrеdiсtѕ what it will оr will not dо, or hоw ѕресifiс stocks will реrfоrm.

Most brоkеrѕ earn thеir inсоmе frоm commissions on ѕаlеѕ. Whеn уоu tell уоur brоkеr to buy оr ѕеll a ѕtосk, they earn a сеrtаin реrсеntаgе оf thе trаnѕасtiоn. Mаnу brоkеrѕ сhаrgе a flаt ‘реr trаnѕасtiоn’ fее.

Types of Brokers

Thеrе аrе twо kindѕ оf brokers: Diѕсоunt brоkеrѕ аnd full ѕеrviсе brоkеrѕ. Discount brоkеrѕ, like ETRADE, tурiсаllу dо nоt offer аnу аdviсе and dо no research – thеу juѕt do аѕ you аѕk thеm tо dо, withоut аll оf thе bеllѕ and whistles. Full service brokers can uѕuаllу оffеr more tуреѕ of invеѕtmеntѕ, mау рrоvidе you with invеѕtmеnt аdviсе, and iѕ uѕuаllу раid in commissions.

Whеn it comes tо brоkеrѕ, the biggеѕt dесiѕiоn you muѕt mаkе iѕ uѕuаllу whether tо use a full ѕеrviсе brоkеr оr a discount brоkеr.

If уоu аrе new tо investing, уоu mау nееd tо go with a full service brоkеr tо make ѕurе уоu аrе mаking wiѕе investment dесiѕiоnѕ. Full ѕеrviсе brokers оffеr уоu the skill thаt уоu lack аt thiѕ роint. On thе other hand, if you аlrеаdу have еnоugh knоwlеdgеаblе аbоut the stock mаrkеt, all you rеаllу nееd iѕ a discount broker whо will mаkе уоur trаdеѕ fоr уоu.

July 26, 2017 / 1 Comment

How to Read a Stock Chart Like a Pro

Every time you tune into some TV channel specializing about the stock market, you must be overwhelmed by the amount of raw data they are showing to the viewers. The success in stock market depends on how well you can interpret and analyze the data, i.e. the stock charts. A stock chart tells all about the stock market. There are various types of charts such as candlestick charts, support and resistance, trend lines, OHL (open-high-low-close), point and figure and others which are viewable in different frames. One common thing about all charts is that the charts are either daily, weekly or monthly and always shows a pattern. Analysing stock market data

Stock Chart Types

Although there are different types of stock charts available, most charts display price and volume of stocks. Candlestick charts are one of the most common patterns used by Japanese people and became popular worldwide. Candlestick charts are used when you have a dataset that contains low, open, high or close values for each time period. The candlestick charts look like box either filled or hollow. Many traders consider candlestick charts more visually appealing and easier to interpret. Each candlestick provides an easy-to-decipher picture of the price action of a stock. From the candlestick charts, a trader can easily get the relationship between the open and close value and the high and low value of a stock for a particular time frame. The open and close are considered the most vital information in the candlestick chart. As a general information, a hollow candlestick indicates buying pressure and filled candlestick indicates selling pressure of a stock.

Support and Resistance

In the stock market, support and resistance are two important values in the stock chart. Someone wants to invest in the stock market must understand the meaning of these two values thoroughly. Support is the price level at which demand is thought to be strong enough to prevent the price from declining further. When the price declines towards the support level, the stock value goes very low. As a result, the buyer wants to buy more stock, but the seller is less inclined to sell. As the price reaches the support value, it is believed that demand will overcome supply and prevent the price from falling below support. Resistance is exactly opposite to the support. Resistance is the price level at which selling is thought to be strong enough to prevent the price from rising further. As the stock price rises towards resistance value, the seller wants to sell stocks, but the buyer is less inclined to but due to high price. As the price reaches resistance value, it is believed that supply will overcome demand and prevent the price from rising above resistance.

Trend Lines

Out of all the technical jargons in the stock market, the trend line is the hottest topic among technical analyst and traders. A trend line is a chart that gives a quick understanding of the market from the uptrend and downtrend of the stock values. Trend line charts are the most important for a newcomer or a veteran in the stock market.

July 23, 2017 / 2 Comments

Introduction to Exchange Traded Funds

The ETF trеnd trading has lоng been a рорulаr wау оf mаking mоnеу. Yоu саn gеt rich very quick if уоu knоw whаt you’re doing, but уоu dо nееd to be familiar with thе соmраniеѕ thаt уоu ѕtаrt investing in and if you аrе nоt, уоu may wаnt to get some рrоfеѕѕiоnаl hеlр.

ETF of ѕtаndѕ fоr еxсhаngе trаdеd fundѕ, a рорulаr invеѕtmеnt vеhiсlе whiсh is trаdеd оn thе stock еxсhаngеѕ. Thеу wоrk vеrу muсh likе ѕtосkѕ, аnd thеу аlѕо hоld аѕѕеtѕ in thе wау оf stocks оr bоndѕ аnd they trаdеd рrеttу muсh thе ѕаmе price аѕ a nеt аѕѕеt vаluе dоеѕ.

Thе rеаѕоn thеу hаvе bесоmе particularly attractive invеѕtmеntѕ tо many реорlе iѕ bесаuѕе thеrе lоw соѕtѕ. They have ѕtосk-likе fеаturеѕ, so they аrе a very welcome аdditiоn оr сhаngе to those who аrе аlrеаdу familiar with the ѕtосk mаrkеt and trаding in ѕtосkѕ аnd ѕhаrеѕ. They also have a very fаvоurаblе tаx еffiсiеnсу, and thеу аrе lоw cost tо invest in.

Yоu саn buу аnd ѕеll ѕhаrеѕ dirесtlу to the fund mаnаgеr. These аrе then trаdеd in сrеаtiоn unitѕ whiсh аrе bаѕiсаllу blосkѕ оf many tеnѕ оf thоuѕаndѕ оf ѕhаrеѕ. There аrе many diffеrеnt орtiоnѕ available, and уоu саn get ѕtаrtеd with ѕоmе popular аnd reputable websites which will intrоduсе уоu to thiѕ potentially highlу lucrative орроrtunitу.

Hоw dо ETFѕ earn?

Exсhаngе trаdеd funds or ETFs, wоrk оn thе рrinсiрlе оf bundling tоgеthеr divеrѕifiеd еxсhаngе based ѕесuritiеѕ tо minimize riѕk. ETFѕ are ѕеtuр up tо riѕе аnd fаll with a major mаrkеt indеx. Sеvеrаl wеll knоwn brokerage houses ѕuсh аѕ Bаrсlауѕ, Pimco аnd Fidеlitу nоw оffеr money mаrkеt ETFѕ аѕ аn аltеrnаtivе to mоnеу mаrkеt accounts.

With ѕuсh ETFs “nоn-immеdiаtе” cash allocations is the аim, this еnаblеѕ less conservative investments and роtеntiаllу highеr уiеldѕ. Thе riѕkѕ tаkеn аrе cushioned bу the divеrѕе invеѕtmеntѕ thаt are mаdе. Aсtivе ETFѕ while nоt very liԛuid, gеnеrаllу еаrn better уiеldѕ.

Aсtivе ETFs аrе Eаrning High Intеrеѕt

Since thе introduction оf thе асtivе ETF, yields hаvе vаriеd greatly, thе trеnd thеѕе dауѕ thоugh is that thеу оffеr bеttеr rеturnѕ thаn mоѕt money mаrkеt funds. Trаditiоnаl ETFѕ have соntinuеd to dо well dеѕрitе the blеаk есоnоmу. Fоr reasons that саn’t bе еxрlаinеd, ETFѕ juѕt dоn’t ѕееm tо be tоо affected bу these unсеrtаin timеѕ.

Aѕ ETFs gо, thе wiѕеѕt investments are thоѕе that are highly customized. Dоn’t grab up a сеrtаin type оf ETF just bесаuѕе it’s рорulаr to do ѕо. Thе bеѕt thing tо dо iѕ to tаlk to a consultant ѕо thаt hе саn аdviѕе you on the bеѕt ETFѕ fоr your portfolio. Whilе ETFs are аlrеаdу divеrѕifiеd, furthеr divеrѕifiсаtiоn within уоur portfolio will уiеld bеttеr rеturnѕ.

July 2, 2017 / 0 Comments

Different Stock Market Order Types Available in the Trading Industry

Advancements in technology have contributed to the changes in the trading industry. Most investors now rely on the online trading technology while buying and selling their stocks. Increased use of online brokers in the 21st century has made stock trading faster, cheaper and easier than ever before. The stock market prices keep fluctuating every day meaning that the investors should stay up to date with the current changes in the market. Therefore, Understanding Different Stock Market Order Types is essential in increasing profits from stocks sale. Stock-Market

Different Stock Market Order Types

Some investors would prefer trading on stocks using fixed prices while others do not. The investors also dictate terms that stockbrokers should follow during the trade to ensure maximum profit. The terms and instructions given to the brokers determine the ideal order type depending on the risks the investor is ready to take. Below is a detailed explanation of the most popular orders types:

1. Market Order

The stockbroker has the liberty to execute the trade at the prevailing price in the market. It is the fastest trading method since the buyer aims at getting the lowest available price while the seller’s focus is on the highest offer. Execution of the order is easy, but the price keeps fluctuating especially in volatile markets.

2. Limit Order

The investors using this order have control over the buying and selling prices of their stocks. A stockbroker can only execute a buying limit order only if the stock falls at the limit price or below and can only fill a selling limit order only at the specified price or above. The trader has complete control over the price of the orders unlike the market orders, which depends on the current market price. Remember that any limit order cancels after 180 days.

3. Stop Order

Stop order protect an investor from losses by combining the market order and the limit order. In this order type, the investor gives the stockbroker a particular price, which activates the order. The brokers then execute it as a market order on the future trades. Investment-Decisions

4. Stop Limit Order

The orders work the same way as the stop loss orders, but they become limit orders after activation instead of market orders. The order executes if someone is willing to trade at the specified prices of better prices.

5. Buy Stop Order

It is common with investors looking to protect their profits over a particular stock that they have sold at a lower price. The price for the order is higher than the market price for the buy stop order while the sell stop order usually has a stop price below the market prices.

Bottom Line

Market orders, limit orders, and stop-loss orders are the most common ones in trading. However, investors have additional orders to choose from while getting the ideal stock-orders types. Other types of stock orders you can consider getting include basket orders, day order, trailing stops, and valid till cancelled order. An investor should also consider doing research while getting an order by looking at its time and money saving capabilities as well as the risks involved.

June 30, 2017 / 0 Comments

The Comprehensive Guide to After Hours Stock Trading

The marketing and buying of securities outside normal trading periods is after-hours trading. This type of stock trading can take place between 9:30 in the morning and 4 PM. Potential sellers and buyers communicate with each other through electronic communication networks. This match will occur without making use of a stock exchange. Is your quest for after hours stock trading? Reading through the rest part of this article will help you on after hours stock trading.

Benefits Of After-hours Stock Trading:

After-hours stock trading is comfortable
This method of trading stock is flexible
Economic indicators and important news are available outside normal trading hours
Traders have the opportunity to trade on new information with ease
You will not have to wait for normal trading day to make decisions
Traders can find some great prices during this period

Limitation To After-Hours Trading:

A great risk attached to this form of trading is volatility

Real After-Hours Trading Periods:

Studies have shown that after-hours trading in the morning can occur between 8 AM and 9:15 AM. After-hours trading can as well occur between 4:15 PM and 8 PM. As early as 6 AM, you can also discover some pre-market trading. This opportunity can take place during normal trading periods and days. It will continue for a period of time until the market resumes in the morning.

How To Use After-Hours Volume To Find The Most Volatile Stocks:

When the bell rings, news releases or company earnings appear to traders. When traders react to the news, there will be both volatility and volume. Most of these events happen when the market is complete. This will give traders the avenue to react to the events as they appear. It means that a trader will not have to wait for the following day. If you want to take advantage of any opportunity, explore the calendar showing a list of stocks.
One important thing to know when finding the volatile stocks is to take note of them during the day. Go ahead to narrow them down into a smaller option of stock to trade. Traders can achieve this goal by using a filter of stocks carrying an average volume of fewer shares. If the shares do not show any important volume between 9:30 and 4 PM, then you may not expect changes. tradeaalysis

Facts About After-Hours Trading:

This innovation in stock trading is possible through the operation of ECNs. ECNs remain a system that enables investors to communicate by using electronic devices. This system allows big investors to communicate without an appearance. The after-hours concept has been available in time past. This is to create an excellent communication medium for investors. Most investors can now access after-hours trading by using a brokerage account. This can refer to after-hours market and extended-hours trading.

Conclusion:

When the last transaction occurs, then after-hours market closes. It will display the last cost of a stock that traders have access to in the after-hours market. It is a complex concept for people who do not understand the deal. The truth is that after-hours stock trading can be beneficial.

June 20, 2017 / 0 Comments

Stock Market Futures: Everything You Need to Know

Want to know what are stock market futures? Here is everything you need to know about them. Stock futures are trade contracts that give you the necessary power required to buy or sell stocks at the agreed fixed price by a specific date in the future. When you accept the contract, you are required to uphold all the terms of the agreement. The contracts have consistent specifications like the method of payment, tick size, price per unit quotation, expiry date and market lot. stock-market

Stock Futures math

Futures Price = (Spot Price + Carrying Charge)
The stock futures price is usually higher than the spot price. Futures price is a price for which a commodity can be sold or bought for delivery in future. The spot price is the present-day market price at which a commodity can be sold or bought for immediate delivery and payment. Carrying Charge or Cost of Carry is the storing cost of a physical commodity like metals or grains over a period of time or until the futures contract matures less all the expected dividends within the contract period. stock-market-bids
Example:
The spot Price of ABC = 2000 and Interest Rate = 8% p.a.
So, the Futures Price contract for 1 month =2000 + 2000*0.08*30/365 = 2000 + 13.15= 2013.15

Meet the Players

1. Hedgers

Hedgers can be exporters, importers, manufacturers, and farmers. The main aim is to buy and sell futures in a bid to secure future price of a commodity to be sold later in the cash market. Those holding the contract for a short time will want to get as high prices as possible while for long term holders it is vice versa. Usually, almost all the risks associated with price volatility are reduced. Hedging sometimes can be used to lock the price margins between the price of raw materials and that of the finished product.

2. Speculators

The other market players’ main aim is to benefit from the risks associated with the futures market. Speculators profit from the price changes that hedgers try to protect. When hedgers are trying to reduce risk the speculators are trying to increase it in order to maximize their bottom line. If the hedger is anticipating a future decline in prices then he or she would be selling to the speculator such a contract at a low price. Also, the speculators enter the market for the sake of profits only through selling and buying futures but not owning the commodity.

Characteristics of Stock Market Futures

Contract size – it is also referred to as a lot. What this means is that one contract can have many shares and the number of shares included is the size of the contract. When buying and selling futures, a single share is not usually traded. For example, if a contract has 300 shares, the selling and buying will involve the whole bunch.
Expiry – there are three types of maturities associated with stock futures. They include near month contracts (1 month), middle month contracts (2 months) and far month contracts (3 months). All maturities expire on their particular contract months (last Thursday of the contract month) and they are traded simultaneously. All stock futures contracts are for future transactions. So, the contract duration determines how far in the future it will be settled.
Leverage – this is having control of commodities worth more than your capital. With just a small amount of cash, you have the green light to enter into a stock futures contract worth more than what to can afford, at the moment, to pay. A small shift in prices can mean a huge loss or profit.
Pricing and limits – the stock futures market price quotations are done in the same way as in cash market, that is, per unit, cents or dollars. However, there are restrictions on the price movements for a futures contract. So, there is an upper and a lower price boundary set per day that heavily relies on the previous day closing.

Conclusion

Lastly, the profits and losses are determined by the prices between the closing price and the opening price of the futures. For example, if an investor buys “Y” futures at $530 each in November, he or she may sell the same futures at $550 each in the same month. In that case, the investor would bag a profit of $20 per future. But if he or she sells the same futures at $505, then he or she would make a $25 loss per future.
References
http://money.howstuffworks.com/personal-finance/financial-planning/stock-future.htm
http://www.bseindia.com/markets/Derivatives/DeriReports/FAQsStockFutures.aspx?expandable=5
https://www.kotaksecurities.com/ksweb/Research/Investment-Knowledge-Bank/what-are-futures-contracts
http://www.investinganswers.com/financial-dictionary/optionsderivatives/futures-1002
http://www.sharemarketschool.com/futures-understanding-the-basic-terms/
https://www.thebalance.com/what-are-futures-definition-and-examples-1031172

April 10, 2017 / 1 Comment

Getting Started With Short Selling Stocks

Short Selling is a strategy in which a trader sells a commodity or security that he or she does not own to profit from a falling market.? In this trader will borrow the product or security from his broker, who usually, in turn, has acquired the shares from some other investor who is holding his shares then immediately sell on to the buyer. At a later date, the trader must buy back the commodity or security from the market to close the position.? If the value of the product or security has fallen during this period the short selling trader? Profit will be the difference between his original sale price and the buyback price.

What is Short Selling?

Short selling is the strategy to express the bearish viewpoint of trade towards a commodity or security. Essentially this is another face of the coin in any freely traded commodity where trader feel that current value of the commodity is inflated and does not represent actual value. This is the exact opposite to more known buy and holds bullish strategy where the investor buys the product or security feeling it be undervalued and will increase in price.

Short sellers need to be aware of three important aspects which can affect the profitability of their short positions.

Interest on Borrowed Security? As the commodity or security is borrowed from broker or third party account, so interest is required to be paid on that. This is not applicable if you are settling your account on the same day but can erode profits if kept on rollover for the long duration. Depend on brokerage firm it percentage can change but it?S around overnight interbank lending rate.
Dividend Distribution? If the security which is shorted by trader gives out bonus, then short seller need to short the dividend i.e. the dividend amount will be taken out from his brokerage account. So it is essential to keep track of dividend date of security trader wants to short.
Short Squeeze – A short squeeze results when the price of the stock rises and investors who short-sold the stock rush to buy it to cover their short position. As the price of the stock increases, more short sellers feel driven to cover their positions and this result in further escalation of price in short duration of time.

Markets in all developed economies provide easy short selling procedures where individual shares can be shorted and rolled over for multiple days but currently in Indian Stock Market Short sale of shares is only possible on the intraday basis. If traders who want to take the bearish view of individual scripts for the longer duration they can do it through the futures market. It is to be noted that availability of scripts in futures markets is insufficient as compared to an overall number of traded scripts.

When the underlying market is in the downtrend, short selling is the best strategy if implemented correctly in the hands of Commodity, Equity, and Forex traders. To be a successful trader one need to learn both long and short strategies as the market itself goes through bullish and bearish cycles periodically giving the plethora of opportunities to generate wealth.

March 19, 2017 / 3 Comments

After Hours Stock Trading Made Simple

After-hours trading consists in trading securities after the specified regular trading hours on major exchanges. Both the Nasdaq and the Stock Exchange in New York operate regularly between 9:30 a.m. and 4:00 p.m. ET. However, in the after hours trading session, buying and selling orders can be performed in the hourly interval of 4:00 pm to 8:00 pm EST. From 8a.m to 9.15a.m investors have access to the morning after hours trading session.

Electronic communication networks’ emergency opened a new stock trading era. An electronic communication network consists in an interface that allows individual as well as large institutional investors to interact anonymously and electronically, hiding their actions.

Up until the 1990s, institutional investors were the only ones to primarily use after-hours trading. However, when electronic communication networks became more widely available, after-hours trading became accessible to most investors. In order to take advantage of this trading option, investors have to use brokerage accounts. The after hours trading is also known as the “after-hours market” or “extended-hours trading”.

After hours trading advantages

Traders operating during the after hours session can benefit of certain advantages. Among these several advantages is convenience. Trading after hours means trading at off-peak times, which can provide more flexibility. Economic indicators, earnings releases and other significant news events are released outside of standard trading hours.

Stock Market Trading Investors can react quickly to breaking news stories by having the ability to trade around the clock. They can trade immediately on new information during the after-hours trading sessions rather than waiting to take a position during the traditional trading day. Trading after hours can also give investors the opportunity to find some appealing prices. In order to take full advantage of the opportunities to trade during after hours sessions, investors may apply some specific strategies.

After hours trading risks

While trading after hours can give investors some advantages, they have also to remember that there are risks to participating in this extended hours trading. Any investor should be mindful of these risks:

- Less liquidity – During after trading hours it might be more difficult to convert shares to cash and there may be less trading volume for your stock.
- Wide spreads – Lower trading volume can lead to a wide spread between ask and bid prices. This means that it may become more difficult for individual traders to have their orders executed at favorable prices.
- Competition – Individual investors trading in an after-hours market have to compete against large institutional investors with access to more resources.
- Volatility – Compared to regular hours trading, the after hours trading market is less traded. This means that in after hours trading investors are more likely to experience severe price fluctuations than when trading during regular hours.

Conclusion

The emergence of electronic markets has made after hours trading highly accessible to individual investors and retail traders. Extended hours trading have been once the dominion of big institutional investors, but today this market is open to anyone. Whether you are want access to wider trading opportunities or you are just looking to get a feel for how the market will open, many new possibilities are opening when you are following market action outside the regular trading hours.

March 27, 2014 / 0 Comments

20 Favorite Dividend Growth Stocks from 20 Dividend Growth Bloggers

I love dividend growth stocks. I love reading about dividend growth investing.

So I decided to combine the two by reaching out to some of my favorite dividend growth bloggers and asking them about their favorite dividend growth stocks. And be sure to stick around because at the end I will discuss both my current and my all-time favorites!

Hopefully you will enjoy the answers as much as I did!

What is Your Favorite Dividend Growth Stock (currently or all-time) and why?

The Conservative Income Investor – “I think there are five realistic candidates you can choose from–Coca-Cola, Johnson & Johnson, Procter & Gamble, Nestle, or Colgate-Palmolive. From there, it’s more a debate about style than substance. My guess is that everyone reading this will be six feet under while these companies are still pumping out profits on six different continents. If I could only own one of them for the rest of my life, I’d choose Coca-Cola. The diversification of 500 brands is huge, the distribution network that is unparalleled, and a brand name that actually means something significant is the kind of asset you want to spend your life acquiring. They spend a couple cents coloring water, and are able to sell it for a dollar. That’s a heck of a business model. It’s probably the safest way to get 8-11% annual returns over the coming fifteen to twenty years.”

Dividend Growth Investor – “The dividend stock I like best is Philip Morris International (PM), which sells tobacco products outside of the US. I like several things about the company, such as its current valuation, strong cash flow and the prospects for future growth, all of which could result in massive compounding of wealth. The stock is cheap at 15 times earnings and yields 4.70%. The company expects to grow earnings and dividends in the high single digits or low double digits in the foreseeable future, fueled by acquisitions and organic growth. Phillip Morris International has a high exposure to emerging markets, where number of smokers and their income is increasing. The company also sells popular brands of cigarettes, which have a loyal customer base that buy even if prices increase. Plus, PM generates a lot of cash flow that has allowed it to repurchase massive amounts of stock and double dividends per share since 2008. I actually reviewed the stock in early 2014: http://www.dividendgrowthinvestor.com/2014/01/the-security-i-like-best-philip-morris.html“

Income Surfer – “My favorite dividend growth stock (historically) that I own is Coca-Cola (KO). In the years I have owned it, the dividend has consistently risen and I have little worry about the business. The dividend growth stock I am currently the most optimistic about is China Mobile (CHL). I recently began accumulating China Mobile, and I believe it to be substantially undervalued. A look at its history will show you a stock that has all the characteristics of a great dividend growth stock.”

Buy Smart Never Sell – “The trouble with picking a “favorite” dividend growth stock is that I don’t want to give the impression that any 1 stock should be purchased no matter what the current price is. None the less, in terms of performance and growth, I’ve been most happy with 3M Company (MMM). They increased their quarterly dividend by 35% this year which was awesome. Currently it’s at PE Ratio below 20, yield over 2.5%, and has increased dividends for over 50 years and has a payout ratio percentage in the 40′s which gives it plenty of room for future growth.

Dividend Vet – “I would say Johnson & Johnson (JNJ). This is my favorite of all time because it is a truly bulletproof stock. It is a true core stock to build your portfolio around. It is vastly diversified within the healthcare industry. It has historically steady dividend increases. The stock is fairly valued below a P/E of 20. It has a solid dividend yield at 2.85% and huge potential especially for the long term investor.”

My FI Journey – “I’ve got a few favorites, but one that that is quite memorable for me is Lowes. I bought LOW the middle of the debt ceiling debate back in 2011 when the stock market was in free fall. Since then, the stock has treated me very well, providing substantial capital gains and dividend increases. At the same time I bought LOW, I sold a put against it which netted even more cash for me.”

HelloSuckers.net – “It is not an easy question as there are plenty of great dividend growth stocks and it is impossible to list just one. I have two great stocks which are my favorite and the reason is simple – they make me money. A lot of money. The first stock, and probably an all time favorite stock of mine is Johnson & Johnson (JNJ). It was my first purchase ever and since then the stock doubled my money (and I only have owned it for circa 3 years). I like it for a few reasons: its price appreciation; the company is so big, that any recalls or problems, it went through, were insignificant for the company and investors failed to see it, so for dividend investors, this was a great buying opportunity – so it is safe to invest. And last, but not least, I love its dividend yield and growth, which makes your yield growing every year without doing anything. The second stock I love is Realty Income (O). Although the growth is not as impressive as JNJ, its monthly dividend payout of great yield can help you with growing your portfolio faster as you reinvest dividends. After a few years of investing into this stock I managed to be receiving 30 dollars every month in dividends just from this stock. Isn’t that great? And wait when it turns out to be 3,000 dollars every month!”

Retire Before Dad – “My all-time favorite dividend growth stock is Chevron (CVX). In 1995 my uncle gifted me one share for my birthday and explained that if I invested money consistently over a long period of time and reinvested the dividends, my shares would be worth a lot down the road. Every dollar I have ever invested in Chevron has increased my wealth, and I’ve witnessed 18 dividend increases over the years. Receiving that one share was my first experience investing and it opened up a whole new world for me, and even influence my college major and career path. Today I’m putting new money toward other stocks to diversify my portfolio, but I will likely continue to reinvest my CVX dividends until I retire. I wrote an entire post on this stock called “CVX and How I Got Started Dividend Investing“.

Financial Freedom – “I have only been investing for about 8 months, so I would say my favorite dividend growth stock is Kinder Morgan (KMI). It has great growth potential and its dividend yield and increases are great.”

Simply Investing – “My favorite all time and current dividend growth stock is TransCanada Corporation (TRP) trading on the Toronto Stock Exchange (TSE). In 2000 I bought 185 shares of TRP at $13.40 each for a total investment of $2,479. Since then I have received a total of $3,126.46 in dividends alone from TRP! In 2000 the annual dividend for TRP was $0.80, the dividend has increased every year since then and today the dividend is $1.92. My yield on cost is 14.3%. If I was to sell all my holdings in TRP today the return would be over 400%.”

Brick by Brick Investing – “Believe it or not but I’m really liking Cisco Systems (CSCO), they have tripled their dividend since 2011 and I believe they will be a growing company in the future.”

The Dividend Guy Blog – “On the US market, I’d go with Coca-Cola (KO). It’s the perfect dividend growth machine. On the Canadian Market, I’d go with Telus due to their aggressive dividend increase.”

Compounding Income – “My favorite dividend growth stocks tend to be from the consumer staples sector. Think soft drinks (KO, PEP), food (GIS, KRFT), and cigarettes (MO, PM). These types of businesses are very easy to understand, sell products people will always consume, have wide moats, and have been rewarding loyal shareholders with rising dividends for decades. I try to imagine what the world might look like 20 years from now and try to determine which products might still be popular. Every time I go through this mental exercise I come to the same conclusion: people will still be drinking Coke, people will still be eating Cheerios, and people will still be (gasp!) smoking Marlboros. Picking a single favorite dividend growth stock is tough because there are literally hundreds to choose from. If I had to pick only one, I’d go with Philip Morris (PM). PM offers a nice combination of yield (currently 4.7%) and dividend growth (5 year average of 10.4%). A dividend growth investors dream! The nice part about Philip Morris is that the company sells an iconic brand (Marlboro) worldwide except in the United States & China. Because of that fact PM can take advantage of world’s growing population, the world’s rising disposable income, and avoid the heavily regulated tobacco environment in the United States. As with any individual stock there are risks. The biggest being exchange rates, foreign government regulation, and declining smoking rates in developed nations. While there are risks, I believe Philip Morris is poised to do well over the long run. So much so that I made it my largest holding. However I would always recommend staying diversified so as to minimize risk and not rely on the fortunes of one company.”

The Loonie Bin – “Enbridge (ENB) on the TSX. Solid dividend growth and it doubled my investment after 4 years. You can’t ask for anything more from a dividend growth stock.”

All About Interest – “My favorite dividend growth stock is Coca-Cola (KO). KO has been rewarding shareholders with increasing dividend payments for over 50 consecutive years! There’s not many companies that can say this. I can also relate to their products. I love an ice-cold Coke on a hot summer day. I’m also a fan of Powerade, especially the Mountain Blast flavor. Coke also owns many other well-known brands like Minute Maid, Dasani, and Monster to name a few. Coke is one of those companies that you can count on to produce higher earnings and consistent dividend raises each year.”

A Wealth of Common Sense – “I have always been impressed with Altria Group (MO). It’s been a compounding machine. From September of 1989 to the end of February of 2014, the total return on the stock was 16.1% versus 9.4% for the S&P 500. Investing $10K in MO turned into $380K while $10K in the S&P 500 would have made you about $90K. I think the best future dividend payers could be Apple and Google. Apple already sports a 2.3% yield and I could see that increasing for a long time with their cash hoard. Google isn’t paying anything yet but they also have substantial cash reserves that could translate into a decent payout some day.”

Roadmap2Retire – “My favorite stock is Johnson & Johnson (JNJ) – because it is a blue chip stock with a proven record for dividend growth (51 years consecutively) and the fact that it operates in two sectors – consumer goods and healthcare.”

Financially Integrated – “Coca Cola (KO): Talk about a proven performer. Coca Cola has made its shareholders wealthy over extended period of period, and I don’t believe its done yet. This is a company with strong barriers to entry and a great business model that is simple and transparent to understand.”

Write Your Own Reality – “My favorite DG stock is Aflac (AFL), as it was one of the first true dividend growth stocks I bought, and really epitomizes what a dividend growth company looks like with multiple decades of dividend growth.”

Dividend Growth Stock Investing – “My all time favorite dividend growth stock is McDonald’s (MCD). I love McDonald’s because it was the first dividend growth stock I ever purchased. The company has a 38 year dividend growth streak. Looking over the financials, McDonald’s is able to consistently grow their earnings which means the company is consistently growing in value for investors. My current favorite is Deere & Company (DE). Currently Deere trades with a P/E under 10 offering great value for investors buying at today’s prices. The dividend yield may start out low but the company has been growing the dividend rate strong for the past 10 years. I grew up on a farm and love having this current opportunity of picking up shares of Deere stock at a great price.”

There were some great stocks in this selection of favorites. As you can see, there is quite a variety of companies you can invest in as a dividend growth investor. Thanks to all of the investors that gave their answers to this favorite stock question!

Now it’s your turn! What is your favorite dividend growth stock and why? Share your responses in the comments!

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