time to put money into the stock market

time to put money into the stock market

Investing in the stock market is more crucial than anything else. Furthermore, your stock market investment strategy should be based on your intended outcomes. Are you looking to earn income from dividend-paying companies or just want to see your investment grow in value? The alternative is to put money into the stock market with the hopes of earning dividends and capital appreciation. Do you want to invest in a variety of equities or use a mutual fund?

How do you like to put money into your stock or mutual fund positions? Do you like a flat sum or do you prefer to buy the same thing at different prices over the years? Is your return on investment (ROI) being maximized, or are you spreading your investment funds too thin? Is there a fee associated with buying stocks? Does your mutual fund(s) incur load fees? How much are the "hidden fees" (administration, operating, and marketing costs) that your mutual fund(s) impose on you? (For "hidden fees," one mutual fund was fined 450 million just recently.) Your return on investment (ROI) is determined by "how" you invest in the stock market, not by "when" you invest.

Once you have a strategy in place that considers the aforementioned variables, you may begin investing in the stock market. The truth is that you and your loved ones should be the only beneficiaries of any investment capital you put up.

Some of the highest paid executives on Wall Street get their hands on vast sums of money from investors. The compensation of Richard Grasso, the former chief executive officer of the New York Stock Exchange, was made public in the summer of 2003, forcing him to retire. His compensation has been $12 million per year for the last two years, $82 million in a pay-package that he hasn't returned as of this writing (mid-2004), and $48 million in a cheque that he was advised to return (which he dutifully did). Sure, it's good money if you can get it, but that's just one man's income on Wall Street! Where did all of the funds for his pay originate? Pension fund managers threatened to withdraw billions of dollars from the New York stock exchange over Grasso's income. If the money didn't originate from investor dollars, then why were they so outraged? I have no idea how they were able to pay his wage. The one spot where the mo! is something I am aware of.

the stockopoly investor, from whom ney did not receive his compensation. Completely free!

In my view, there ought to be no commission fees associated with buying stocks (which is certainly doable). Buying equities should be a long-term strategy, and you should look for companies that have consistently increased their dividend payout. In addition, until retirement, all dividends should be reinvested in the company's shares, without commission. Get the most out of every dollar you spend. When you buy shares in companies with a track record of consistent dividend increases (like Comerica, which has been going strong for 34 years, Procter & Gamble for 47, BB&T for 31, GE for 28, and Atmos Energy for 16 years; those companies also offer a 3% discount on all shares bought through dividend reinvestments), the "how" of investing becomes second nature: you just dollar-cost average into your holdings every quarter using the dividends paid out by the companies.

A corporation can't "fudge" the dividend. Paying the shareholder requires the availability of funds. A corporation must be doing something well if it can increase its dividend each year. One way to reduce risk is to invest in companies with a track record of increasing their dividend annually. This is because a lower stock price for such a firm simply implies a higher dividend yield. If, for instance, the price of a share of stock you bought for $50.00 suddenly lowers to $36.00, you can get more "bang for your buck" out of your dividends by reinvesting them, and the income they generate accelerates. The stock market has been through a lot of ups and downs in the last 47 years (I should know, I've been through nearly 40 of them), but Procter & Gamble has increased their dividend every single year.

Presented here are two hypothetical stock market investors, each with $10,000 to their name. A dollar-cost-averaging investor and a lump-sum investor are two types of investors. The dollar-cost averaging investor is concerned about dividends, while the other investor isn't. The 'HOW' of each investor's investment was distinct, but the 'WHEN' of their investments was same. Assume they both put money into the market at the same time, buying $50 worth of stock at the beginning of the year and seeing a $2.00 reduction in value each quarter until the stock price reaches $36.00 before surging back up to $50.00. Investor A bought shares in the hypothetical company ABC, which doesn't pay dividends, while Investor B used dollar-cost-averaging to buy shares in the hypothetical company XYZ, which does pay a quarterly dividend of 50 cents per share (a yield of 4.0% per annum) and has raised its dividend payment each March for the last 41 years running. January saw the purchasing of both items.

After purchasing 200 shares of ABC at $50.00 each, the investor saw the stock fall to $36.00 before regaining its previous level. In the end, his $10,000 investment was exactly the same.

A dollar-cost-averaging investor put $5,000 into XYZ in January (the stock pays a dividend of 50 cents per share, for a dividend yield of 4.0 percent annually) and added $1,000 to their holdings each quarter for the following five quarters. The company's dividend was reinvestment into more shares of stock every quarter. The dividend has been increasing for 45 years in a row, with each March seeing a 2 cent increase. There was no commission on any of the purchases.

In January, $5,000 would be the value of 100 XYZ shares at $50 each. A $1,000.00 fraction

Value of stocks Buying Dividends Investment in Stocks

March: $48.00 (equivalent to 52 cents per share) 20,83 shares out of 1,083

June: $46,000 (equivalent to 52 cents per share) 1.378,000 shares — 21.74 percent

September: $44.00 (equivalent to 52 cents per share) 2.272% of the population

Shares cost 42 cents on December. 23.81 shares out of 2,098

March — forty dollars, or fifty-four cents per share 25,00 shares, or 2,637 of them

Shares costing $38.00 in June (or 54 cents each) 3.169 — minus zero —

September: $36.00 (or 54 cents per share) (3.393) - (0%).

December-$38.00, or 54 cents per share 33.262, minus zero,

Cost: $40 in March, or 56 cents per share 3.260 - equals zero

The price in June was $42.00, or 56 cents per share. 3.149 - 0 equals

Fourth of September: $44.00 (56 cents per share) 3.045 — 0 analog

December: $48.00 (equivalent to 56 cents). 28,827 - zero

February $50,000 (58 cents per share) 2.843 minus zero



There are currently 247,953 shares of XYZ owned by the investor who is averaging costs. At $50 per share, the value is $12,397.65.

Thus, the initial investment of $10,000 in 200 shares of ABC remains with the lump-sum investor, while the 247.953 shares of XYZ, valued at $12,397.65 (plus dividend income), are owned by the investor who utilized dollar-cost averaging. The "when" of their investments was identical for the two.

The dividend yield is 4.64 percent per year, calculated as 58 cents every quarter ($50,000 divided by 4 multiplied by 100). In spite of fluctuations in the stock price from quarter to quarter, the company's dividends were consistently higher than those of the preceding quarter. In the upcoming quarter, regardless of the stock price, the dollar-cost averaging investor will receive a dividend of $143.81 from XYZ (.58 X 247.953 shares). If the company maintains their dividend, the dividend would be even higher in subsequent quarters. The way you invest in the stock market is crucial, even if XYZ and ABC maintained the same performance history ($50.00, $36.00, $50.00) for the following three years.

Every stock in the Stockopoly plan can be bought without paying a commission. No stockbroker is required (all the resources you need to do your own research are readily available, and the book provides the where-and-hows); no load fees, hidden costs, running, administration, or advertising expenses are involved. Investors have lost tens of millions of dollars due to unethical trading techniques. (And the holiday bonuses on Wall Street won't be dipping into your own coffers.) In the form of growing weekly, monthly, and annual cash dividends, every cent works for you. No matter how high a stock is at its 52-week high, you will never pay too much for it. If you want to be a successful stock market investor, knowing HOW to invest is more important than WHEN to invest.

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