- When Should You Reinvest Your Dividends?
Investing in dividend-paying stocks or ETFs offers the opportunity to generate passive income. If you don’t need this income immediately, reinvesting dividends — using them to purchase additional shares of the same stock or ETF — can be a powerful strategy for compounding growth. Over time, this approach leverages the effects of compounding by increasing… read more…
- How and When Dividends Are Paid
Dividends can provide extra income or help grow your investment if you reinvest them in more shares. Many investors wonder how often dividends are paid, and it’s important to understand the process. Typically, companies pay dividends every quarter, but some may distribute them monthly or annually. To know when you’ll receive dividends and whether you’re… read more…
- How to Buy Carnival Stock (CCL)
Carnival Corporation (ticker symbol: CCL) is a large British and American cruise operator with its headquarters located in Doral, Florida. Carnival went public on the New York Stock Exchange (NYSE) in 1987 at a price of about $4 per share. Since then, the stock reached a historic high of about $70 in early 2018. However, at… read more…
- Understanding the Dividend Discount Model
Stock pricing may play a part in determining which companies to add to your investment portfolio. And the dividend discount model (DDM) is a commonly used method for measuring valuations. This model bases value calculations on present and future dividend payouts rather than current market conditions. If you’re a value investor, you can use the… read more…
- How to Calculate Your Dividend Payout Ratio
The dividend payout ratio can be a helpful metric for comparing dividend stocks. This ratio represents the amount of net income that a company pays out to shareholders in the form of dividends. The dividend payout ratio, or DPR, doesn’t necessarily tell you how financially healthy a company is, but it can tell you how… read more…
- What Is an Option Premium?
An option premium is the fee that the buyer of an option contract pays for the right to buy or sell stocks or other securities at a pre-set price when the contract’s time limit expires. From the perspective of the option seller, the premium is the fee received in exchange for the obligation to buy… read more…
- How and When Do ETFs Pay Dividends?
Exchange-traded funds (ETFs) generally offer two strategies for investing. One approach emphasizes traditional capital gains growth. So as products listed on an exchange, ETFs are highly liquid assets, meaning you can buy and sell them like ordinary stocks and collect the difference when their value grows. The other strategy emphasizes income investing, as an ETF would… read more…
- Understanding Dividend Record Dates
The dividend record date establishes when shareholders are eligible to receive dividend payments. Anyone who owns shares before the record date will collect the dividend, while anyone who owns shares afterward will not. In order to qualify for a dividend payment you must have completed your purchase of the company’s shares at least two business… read more…
- Beginner’s Guide to Dividend Growth Stocks
When it works, dividend growth investing is a best-case scenario for income investing. In this strategy you buy a stock that not only grows in value year after year, but it also pays you a steady yield in the process. On top of that, the payments themselves grow each year as the company earns value. With… read more…
- Investment Income: Everything You Need to Know
Investment income is an umbrella term that includes just about any money you make from buying, holding and selling assets. However, there are three main forms of investment income, which we discuss below. Together these types of investment income are… read more…
- Tax-Deductible Investments for Your Portfolio
Incorporating tax-deductible investments into your portfolio can be a powerful strategy to enhance your overall returns. By reducing the taxable portion of your portfolio’s earnings, you can effectively keep more of your investment income working for you. These investment vehicles not only provide tax benefits, but can also align with your long-term objectives, offering a… read more…
- Why Risk Premium Matters
Risk premium is the added return that investors expect to earn from an asset such as a share of stock that carries more risk than another asset such as a high-grade corporate bond. The risk premium is what encourages investors to purchase riskier assets. Without a risk premium, investors would have no reason to put… read more…
- What Are Qualified Dividends?
Earning dividends is a valuable source of income for investors, particularly those saving for retirement. The IRS allows so-called qualified dividends to be taxed at a lower capital gains rate than the higher income tax rate. Here’s a breakdown of… read more…
- How to Buy Snowflake Stock (SNOW)
Snowflake is a cloud data platform company that lets business customers consolidate data from multiple clouds and other sources. After the company’s 2020 initial public offering the price of its shares rose sharply, attracting the attention of hedge funds and other investors. Although it has yet to produce profits since going public, Snowflake is still… read more…
- How to Buy Planet 13 Stock (PLNHF)
As marijuana laws have relaxed, the pot trade has become a legitimate industry and some cannabis-related companies, including Nevada pot superstore operator Planet 13, have gone public, allowing investors to purchase their shares. Investing in cannabis companies has been complicated, however, by the fact that U.S. federal laws still prohibit marijuana. That has kept their… read more…
- Ex-Dividend Date: What Investors Need to Know
The ex-dividend date explained simply refers to the cutoff point for investors to be eligible for an upcoming dividend payment. When a company announces a dividend, it sets a record date, and the ex-dividend date typically falls one business day before that. Anyone buying the stock on or after the ex-dividend date is not entitled… read more…
- What Is a Wells Notice and How to Respond
When the staff at the Securities and Exchange Commission (SEC) has made the decision to recommend taking an enforcement action against a person or firm, the commission will often issue a Wells Notice. This notice informs the potential target of a proposed enforcement action of the commission’s plans and provides for a response. Not every… read more…
- A Guide to Fixed-Income Investing
Fixed-income investments can provide a steady stream of income through dividends or interest payments. In the investing landscape, fixed-income is generally considered a less risky asset class since there’s some predictability about what you can earn. You may use fixed-income… read more…
- Understanding Tax-Advantaged Investments
When investing for the short- or long-term, where you choose to put your money matters from a tax perspective. Including tax-advantaged investments in your investment portfolio can help to minimize what you owe on the returns you earn. Tax-advantaged investments can include individual securities but it can also refer to accounts that receive favorable tax… read more…
- How to Buy Netflix Stock
The FAANG stocks are a set of five high-value technology stocks. Together they make up nearly a fifth of the S&P 500’s total value. The “N” in FAANG stands for Netflix. One of the first major tech companies, Netflix arguably invented and defined the streaming era. This has made it a highly successful company and, in the… read more…
- What Is a Tax-Deferred Investment Account?
In a tax-deferred investment account the dividends, interest and capital gains are not taxed until money is withdrawn. These kinds of investments are attractive to people whose earnings or net worth put them in a high tax bracket. They often expect they will be in a lower tax bracket when they retire. But people in… read more…
- In the Money vs. Out of the Money: What Is the Difference?
When trading options, it’s important to understand the difference between in the money vs. out of the money. In simple terms, this is a way to measure an option’s intrinsic value, relative to the underlying asset’s current price. Knowing the difference between the two and when an option is in the money or out of… read more…
- What Hedge Fund Analysts Do for Investments
Every investment class needs someone to manage it. From the market makers and clearing houses that ensure stock trading to the bankers who move currencies around the world, markets are not natural phenomena. They require management. Perhaps nowhere is that more true than in funds. A hedge fund, like similarly structured mutual funds and exchanged-traded funds… read more…
- Why Market Sell-Offs Happen and How to Respond
A market sell-off happens when traders make a lot of sales very quickly. Sometimes a sell-off, which is a particularly aggressive form of a bear market, can encompass an entire market. Other times it may focus on specific industries or even individual assets. It isn’t always a bad thing when market sell-offs occur. They act as a… read more…
- How to Buy Coinbase Stock
Coinbase has taken cryptocurrency legitimate. At least, that’s the position of many in the cryptocurrency community who see the company’s IPO as proof that digital assets have arrived as mainstream investment products. Investors are excited about crypto, even if many don’t quite know what it is. Regulators haven’t made up their minds about how to treat… read more…