Tag Archives: stocks

Should You Buy Stock In the Company You Work For?

 
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financials

One of the most popular “perks” of working for a publicly traded company is that your employer will offer you the chance to buy their stock. Most, if not all companies have a company stock fund in their 401k plans that invests in nothing but your employer’s stock. I’ve even seen some companies who give their 401k match as a contribution into the company stock fund. Stock options are another popular way employers offer employees chances to buy company stock. Stock options are a chance for the employee to buy shares of stock in the company for a significant discount to the current market price of the stock. The catch with stock options is that there are usually a bunch of terms and conditions attached. You may have to work for the company for several years before your stock options will fully vest. There may be other restrictions on when, and how … Continue reading →

Investing Experts and the Herd Mentality

 
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sheep

Buy low, sell high.  Any idiot off the street could repeat this phrase to you as if they had the secret recipe for investing success. Honestly, it’s good advice. One of my favorite investing quotes, and one I try to base my investing strategy around comes from the great Warren Buffet. He famously said “Be greedy when others are fearful, and fearful when others are greedy.” On the surface it seems like Buffett is saying the same thing a different way. But what I love about his quote is that it’s actually much deeper than simply buying low and selling high. His quote also illustrates why “buy low, sell high” is much easier said than done. In the investing world, almost like no place else there is an amazing herd mentality. When things are going good, such as over the past month, all the talking heads will tell you how great of … Continue reading →

Recent Stock Purchase – American Express

 
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It’s been a while since I’ve made any purchases 1 in the dividend stock portfolio I’m building in my Roth IRA. The last new position I took in a stock was in First Niagara Financial Group. So far I’m losing on that purchase, but I still feel strongly about the company’s long-term prospects and have used some of the larger dips in price to add more shares. However this post is about my most recent addition to the portfolio: American Express (NYSE: AXP). Overall I’m pretty bullish on the credit card industry as a whole. Regardless of what I, or any other bloggers my write, Americans are still extremely dependent on credit cards. While the recession did get more people using credit wisely, as the economy recovers credit card use is sure to increase even more. What drew me to American Express over its competitors in the credit card industry was … Continue reading →

My Best Investment Ever

 
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It was early December of 2000 and I was just an eager high school student with an interest in finance. After a bit of prodding I convinced my parents to let me take $5000 (basically my life savings to that point) and open an online investment account with it. Being the middle of what we now know as the dot-com bubble, the stock market was on fire, it seemed impossible to lose money. So off I went to Datek.com (anyone remember them?!) to make my millions. So there I was, a high school kid, with $5000 to his name ready to conquer Wall Street. The only problem was, I had no idea where to start! So I did what any trusting kid would do, I went to my dad and asked: “What stocks should I buy?!” The Tip Lucky for me, it was around this same time that my dad had a friend … Continue reading →

Investing Basics: Market Cap

 
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Market Cap (short for “market capitalization”) is one of the most widely used terms you’ll hear when stocks are being discussed. Open your favorite finance website or turn on the financial news and you wont be able to escape it. Yet many beginning investors don’t exactly know what market cap is, or why it’s important to their portfolios.   Definition Market cap is simply the value of all of a company’s outstanding shares of stock. To put it another way, market cap is the price you would have to pay to buy every share of outstanding stock in a company. You can calculate a company’s market cap by multiplying its share price by the total number of shares.  Using the example of Exxon Mobil from above you’d multiply $86.31 x 4.71 billion to get its market cap of 406 billion.   Importance of Market Cap Market capitalization is such an … Continue reading →

Dividend Investing – A Primer

 
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dividend-investing

   In my recent post about my investing strategy I mentioned that reinvesting dividends was a big part of my strategy. Many people think of dividend paying stocks as boring, safe stocks that don’t yield much of a return. When in reality this couldn’t be further from the truth. Sure, compared to a lot of the volatile small-cap companies out there that may double or triple in value in a matter of months dividend stocks will appear slow and boring. Dividend stocks are usually larger, more mature companies that have slower growth and more predictable earnings trends. However, the growth they do provide coupled with steady, growing dividend payouts is a recipe for market crushing returns. Dividends have accounted for over 40% of the S&P500′s total returns over the past 20 years. To really harness the power of dividends I look for high quality companies that have a long history of increasing their dividend, and … Continue reading →