Strategies

Understanding Dividend Reinvestment Plans (DRIPs)

A Dividend Reinvestment Plan or “DRIP” is a plan offered by a company that enables investors to purchase additional shares (or fractional shares) by reinvesting their cash dividends on the date of payment. DRIPs offer investors a cost-effective way to make good use of their stock dividends as most DRIPs allow for these dividend [...]

Growth at a Reasonable Price (GARP) Stock Investing

The GARP strategy of investing seeks to combine and balance both value and growth investing. GARP investors look for stocks that are undervalued and show potential for significant, sustainable growth. A GARP investor can often find those companies that fall that have been passed over by pure value or pure growth investors. The [...]

Choosing an Investment Strategy Based on Time Horizon

Investment time horizons (the length of time before you plan to cash-in on your investment) can be generally divided into three groups: short, medium and long-term timeframes. It is important for an investor, in the course of their planning to understand when they will need their money as their time horizon will impact their [...]

Large-Cap Stock Investing

Large-cap (large market capitalization) is a term used to describe the stocks of the largest companies, those companies whose market capitalization exceeds $10 billion. Because of their size, large-cap stocks tend not to be viewed as speculative. Instead, large-caps are considered by many to be perfect for defensive investing because of their size, [...]

The Basics of Money Market Investing

A money market fund is a mutual fund that invests in the “money markets” with the purpose of providing a low-risk way of investing while making the funds easily accessible to investors. Typically, shares of money market funds can be bought or sold at any time and the account often provides check-writing privileges. For [...]

The Bottom Fisher’s Stock Market Strategy

A stock market “bottom fisher” is an investor who looks to find bargains in stocks whose prices have recently declined. Most bottom fishers subscribe to the theory that, while investors may typically under-react to the bad news or poor performance surrounding a company, over time they tend to over-react, leading to significant opportunities to [...]

Hedge Strategies for the Individual Investor

For investors, hedging is the practice of purchasing securities in a combination that reduces portfolio risk. Under most hedging strategies, the investor will take two positions with negative correlations. The two most common financial instruments used for hedging are options and futures. While there is no way to completely eliminate market risk, proper execution [...]

Growth Investing and Small-Cap Stocks

Small-Cap stocks (stocks with small market capitalization) are generally defined as companies with a market capitalization of between $300 million and $2 billion (although the small-cap classification can vary among brokerage houses). While these securities trade with higher risk profiles than larger-caps, they can offer greater upside potential and may be appealing to investors [...]

Investing in Gold in an Uncertain Economy

People invest in gold for many reasons, including as a method of diversification against stock market fluctuations. In fact, for centuries gold has attracted investors as a means of protecting their wealth in troubled or uncertain times. While this appeal is as compelling for many of today’s investors, there are a number of additional [...]

Utility Stocks Investing in a Bear Market

Utility stocks are the stocks of companies that generate, transmit or distribute electricity, water or gas from their facilities. As such, these stocks are issued by companies whose services are an indispensable part of peoples’ lives and are a traditional safe haven in a down economy. Utilities have a history of paying solid [...]