Risk of Greater Fool Investing
By many measures the current stock market highs are crazy. We wrote months ago about how the stock market is ignoring the economy. Unemployment is still at historic lows, congress is not coming across with another stimulus, and people are running out of money. This will result in families tightening their belts, buying as little as possible, and driving the financials of many companies downward. Nevertheless, many investors seem to be ignoring the fundamentals and trying to eke out more profits before taking their profits.
Dividend Yield Strategy
Many investors choose dividend stocks based on their dividend yield. This dividend yield strategy can be risky as companies that are failing may choose to pay high dividends in order to keep shareholders from selling shares as the price falls. A dividend is a cash payment from company profit to shareholders who are eligible, usually on a quarterly basis. As a rule, dividends are a sign that a company is making money, has a strong margin of safety, and is a safe place to invest your money. The caveat is that when a company starts to falter, it may continue paying the same dividend.
Where to Invest During the Next Market Crash
The stock market has gotten ahead of any economic recovery and is at risk of a correction or crash. We noted some time back that the stock market seems to be ignoring the economy. This should concern investors. Where to invest during the next market crash is something to seriously consider. For that matter, investors should give some thought to where they should invest before a likely correction.
Define Investment Risk
Risk and reward go hand in hand when you are investing. You need to be able to define investment risk for every investment that you engage in. In any investment, the risk is the chance that your investment gains will be different from the outcome you expect.
Safe Investments if the Pandemic Gets Worse
The coronavirus pandemic continues and may even get worse when the fall flu season arrives. What are some safe investments if the pandemic gets worse? Investors have piled into tech stocks like the FAANG as these investments seem reasonably secure. But, these stocks are also high-priced and not immune to a correction if sales fall off. And, sales could fall off as more and more people continue being out of work and without any discretionary spending. There are some companies that have done well during the pandemic and which stand to prosper if things get worse.
Investment Options 2020
The stock market is back to record highs while the economy is in trouble. What are your investment options in 2020? Folks are investing in stocks because they don’t anything else to invest in. Is that really the case and, especially, are stocks really a safe bet right now? Nobody has a crystal ball to predict exactly where the future will take us but we would nevertheless like to offer our thoughts about profitable and safe investment options for 2020 and beyond.
Will the Market Crash Again in 2020?
The stock market started the year strong and then come the coronavirus pandemic and the market crashed. The stock market as a whole has largely recovered from the covid-19 crash. But, with a weak economy and no substantial stimulus, will the market crash again in 2020? If you look at how things played out in the wake of the 1929 market crash you see that the market crashed, partially recovered, fell again, and partially recovered and continued in a downward course until 1932.
Pros and Cons of Dollar Cost Averaging
Many investment advisors suggest that the average investor should use a technique called dollar cost averaging when investing. This approach lets you buy fewer stocks when the price is high and accumulate more when the price is low. It is a disciplined approach that avoids trying to time the market. By setting an amount that you want to invest every payday, month, or quarter, you set up an investing plan that is reliable and likely to succeed in accumulating wealth over the years. This having been said, what are the pros and cons of dollar cost averaging?