If you're an avid reader of MoneyMorning, you've probably heard about “value-traps” - companies that seem cheap because they're trading at a massive discount to its sector, peers or net asset value for a period of time.
But do you know what an “income-trap” is?
Well, they're companies that seem attractive because of their high dividend yields.
You may not believe me, but many i... ››› more
There's an old saying on Wall Street that says, "Profits are a matter of opinion, but dividends are a matter of fact."
And simply put - I believe too few investors are giving sufficient attention to many of the incredible dividend paying stocks on the JSE…
If you're like me, into fast moving high return shares, you know its even more difficult finding small cap companies that pay a divid... ››› more
When you invest in shares there are two things that can make you money - capital appreciation as the share price rises. And dividends putting hard cash in your pocket.
Most investors focus mostly on capital appreciation.
But the fact is dividends can make you massive returns.
If for instance you bought Adapt IT in 2009, you'd have paid 44c per share. Since then the company has paid out... ››› more
Where is, the Rand going?
The biggest surprise last week came from the Rand which strengthened another 2,3% against the US Dollar and 3% to the Pound. This put Rand hedge stocks under pressure and the Resources Index fell 2,7%. The JSE Top 40 index was down 1,5%.
The Dow Jones Industrial Average rose 1,8% and the S&P500 1,5%, touching new highs. European markets were firmer but m... ››› more
Investing for income is a wonderful thing.
Income is what gives you the freedom to enjoy your life.
Income supercharges your retirement savings.
More importantly, income is what you need to ensure you and your family live a comfortable life.
So what's really the best form of income?
Dividends are “rewards” you get for investing in stocks. And they're vital to... ››› more
It's Monday morning. The sun is peeping over the horizon, you're sipping on a cup of coffee waiting for seven ‘o clock to arrive. You need to hit the road.
You pull out of your driveway and watch the stream of cars head into the city. A smile drifts over your face because you're driving in the opposite direction. You're leaving town, hitting the open road. The ocean is ca... ››› more
Wouldn't it be a nice for a change, to see consistent income flowing in your account instead of out?
I'm talking about the kind of income that could help you:
• Pay off debts
• Supercharge your retirement
• Build the wealth you need to live the lifestyle you want
Basically do whatever you want, when you want - with no money worries. The kind of income that comes streaming in no m... ››› more
The other day, while making my morning coffee, a work colleague asked me about an opportunity to earn an 11.5% return on a fixed-term bond investment.
And she wasn't talking about RSA Government Retail Bonds. She was talking about investing in a Participation Bond Fund, specifically the FedGroup Participation Bond Fund.
When you invest in a Participation Bond Fund, money is pooled with oth... ››› more
Nothing could prepare investors for the volatility that we've seen in the markets in recent months. It's been interesting to watch the economy dodge junk status, the JSE tank under Brexit and investors scramble around trying their best to find investment opportunities.
The good news is, just because the financial markets are going crazy, doesn't meant there are no opportunities for your to pro... ››› more
Companies that pay huge dividends give your portfolio a certain level of protection and a steady flow of passive income.
This extra income stream is perfect for investors nearing retirement because it relieves some of the financial pressure and grows your retirement savings with very little effort. With a powerful dividend packed portfolio, you don't have to tap into your capital or savings... ››› more
If you've been acting on the share recommendations the FSPInvest team delivers every month in publications like The South African Investor, Real Wealth and Red Hot Penny Shares, then you're probably making handsome investment returns right now.
Soon, these investment returns will spark interest from SARS, and soon they'll come knocking asking for their share of your profits.
Your broker is... ››› more
I know that most investors love dividend paying shares. After all, great dividend paying companies give you a steady flow of passive income that you can either spend or reinvest.
This makes dividends an attractive choice for those nearing retirement because it helps you to score additional income from your investments.
But that doesn't mean you should rush out and buy any dividend paying s... ››› more
If you've been holding Redefine Properties (RDF) shares, you have an important decision to make. You see, the company is paying a dividend of 41.70 cents for the six months ended 29 February 2016.
You need to choose if you want to receive the cash dividend or use the dividend to reinvest to buy more shares.
The biggest advantage of reinvesting your dividends is compounding
You accumulate... ››› more
I love receiving dividends but reinvesting dividends is not always the most cost effective way to invest it.
Let me explain...
When you only get paid out a couple of hundred or thousand rand in dividends, the brokerage costs of reinvesting that cash can eat away a large chunk of the money.
That's why some investors draw the cash and spend it. This isn't a wise move either.
So, today ... ››› more
Dividend paying investments are the perfect income stream. And income is what gives you the freedom to enjoy your life.
Daily Wealth expert, Dr. David Eifrig has this to say on the subject: “Ignoring dividends is a blind spot many investors have, and it's a mistake. You shouldn't measure your wealth by the balance of your bank account, but by the income it generates.”
But first you need ... ››› more
I often get this question from investors: “What makes a great company to invest in?”
And while I can give you many technical answers about discounted cash flow (DCF) valuations, future growth forecasts and the like, the best answer is really simple.
The very best companies are the ones that “pay back” their investors.
That's the big rule of investing.
Invest in companies that w... ››› more
When you invest in penny shares you need to be alert.
Companies can pay you “stealth dividends”, or literally steal a chunk of your investment, without you even knowing it.
So it's important you know exactly how companies can do this and what to look out for…
“Stealth Dividends”: The only way a company can pay you tax free dividends!
You get “stealth dividends” f... ››› more
Right now, you're facing an incredible opportunity.
You've got the chance to buy a handful of top quality, penny shares on the JSE right now, all at a steal.
These companies are so cheap, they're selling at multiple times the average dividend yield of the average JSE share.
But it won't be that way for long. So listen up. This is what you need to do…
The JSEs smallest companies are of... ››› more
Your retirement isn't going to be cheap. Chances are you're going to have a couple of decades to enjoy it.
So if you're looking towards planning for retirement and want to invest on the stock market, what sort of stocks should you invest in?
Read on to find out…
The challenges of retirement
Funding your retirement will come down to your pension and financial assets you’v... ››› more
When you're an income investor, you want to know that your dividends are safe. But it can be difficult to work this out.
Some of the more common approaches to check dividends include calculating dividend cover. But is there another way to check?
Read on to find out…
Using distance-to-default to check dividends
The distance-to-default metric (which is also known as the ... ››› more
Disclaimer Note that FSP Invest, a division of Fleet Street Publications (Pty) Ltd, is a research house and not a registered broker, financial advisor or financial service provider. Our editors and customer services teams also do not give personal investment advice. The advice in this website is general advice only and may not be appropriate to your particular investment objectives, financial situation or particular needs, so before investing or if in any doubt about your personal situation, you should seek professional advice from a stockbroker or independent financial adviser authorised by the Financial Services Board.
We research our recommendations and articles thoroughly, but disclaim all liability for any inaccuracies or omissions found in this publication.
Remember: Never invest more than you can afford to spare and that the value of any investment, and the income derived from it, can go down as well as up. The past is not necessarily a guide to future performance.
Editors or contributors may have an interest in investments commented on in this newsletter. However they have signed restraints to prevent the abuse of their position as contributors to this publication.