Many income-focused investors solely focus on the dividends when considering what to invest in. After all, bigger dividends equals more income. Right? Actually, this may not be the case all of the time. Take Matthew Page and Ian Mortimer, for example. These two mutual-fund managers take a different approach to deciding how to invest and where to place their faith. Instead of solely focusing on dividend yield, these two focus on the characteristics of the company, and how the company has fared in the past and is projected to fare in the future. They start their search by identifying a pool of companies with characteristics that exemplify long-term success. These companies are dividend growers who have a history of smart investment strategy and high returns on capital. Both of these traits indicate companies with the ability to continue hiking their dividends. However, these companies do not necessarily have to have the highest dividend yields in the market. A company with moderate dividend yields may actually be a better option because it has more room to grow, whereas companies with high dividend yields may have hit their ceiling. Ultimately, Page and Mortimer’s strategy may not be for you, but their ability to think innovatively is undeniable. For any investor, following the norm may not always be the best way. In Page and Mortimer’s case, they aren’t following the norm, and they are doing quite well for themselves. Investors everywhere can learn an important lesson from these two mutual-fund managers: always think outside of the box, and if you cannot, get an advisor who will for you.
President Trump recently introduced a minor increase to the United States military budget. Though the bill proposes only a 0.3% increase in the military budget, it places high emphasis on high-tech defense equipment such as cyberwarfare innovations, specialized drones, and artificial intelligence. With the increase in the military budget and the military’s new-age emphasis on high-tech defense equipment, stocks for several military sector corporations have the potential to grow exponentially. These stocks could become coveted pieces for investor portfolios if Trump and Congress can see eye to eye. However, the risk is still there for investors. For investors willing to gamble that a republican led Senate can force another military spending bill through, the military sector could be a goldmine in the near future.
Do you remember the Bitcoin surge in 2017? From January 2017 to November 2017. Bitcoin stock surged from around $885 to nearly $20,000. The 2,100% growth increase was unprecedented in such a short time period, and it left lucky investors with loaded portfolios. A similar growth pattern has occurred in TSLA over the past few days (23.61% growth over last 5 days, 45.92% growth over last month). The growth increase has been borderline parabolic over the last few months, sparking the comparison on Wall Street between Tesla and Bitcoin. However, some experts are skeptical on the comparison, mainly due to the fact that Bitcoin cratered shortly after peaking in November of 2017. They question the longevity of Tesla’s growth, and they use Bitcoin’s cratering in 2017 as their basis. These critics are misinterpreting the situation though. Bitcoin provided a service (e-currency) that had no intrinsic value; the service was merely a figment of the internet. On the other hand, Tesla manufactures a product that has real economic value. Even aside from its market value, a car has value because it is made of tangible resources that cost money.
Americans may be an incredibly unique assortment of people, but the capitalist system surrounding us has created one common desire: wealth. From the celebrities to the impoverished, every American dreams of striking it big. It is the American dream, and no one, besides Jay Gatsby, can deny that. However, the premier way to obtain wealth is debatable. Catey Hill, an editor for Market Watch, believes her way to be the best. She claims that the number 1 way to get a fat savings account is through cutting essential expenses (housing and transportation) instead of cutting discretionary spending. The reason for her claim has merit; it is easier to cut spending on housing and transportation because you only have to make one decision. Once you buy a house or a car, the decision is over, and you have already saved a large chunk of change by buying an older car or a modest house. On the other hand, if you want to save by cutting discretionary spending, you have to make daily decisions that cause decision fatigue. For example, if you eat out three times a week, and you want to save money by only eating out once a week, you have to make two decisions a week, eight decisions a month, one hundred four decisions a year, etc. Making these decisions is tough, and Catey believes that after a while, the person will fatigue and sway from their savings plan. Catey’s claim is intelligent, and it does have data to back it up. However, not every person wants to own a moderate house or an older car. Some people like to splurge their money on big houses and fast cars, so this strategy would not work for them. That is the beauty of America though. If you don’t want to strike it rich by saving, you can do it through investment, high-paying employment, entrepreneurship, hard work, etc. There is no best way to strike it rich; America has limitless ways. For Americans, the message is simple; find out how you want to live your life, and cater your wealth around the way you want to live. If you don’t want to cut expenses, then work harder, work more hours, develop a new product, invest in the stock market, etc. Every success story has a different beginning in America. What’s yours?