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Monthly Blog Roundup - Bringing You The Best of the Best

Kanwal Sarai — Fri, 25 May 2012 01:26:34 +0000

Here is the monthly blog roundup for May.

There are a some really good bloggers out there, and this is my opportunity to share with you the best of the best.

Enjoy!

Guru Focus, An Overview Of The Safest And Best Yielding Large Cap Dividend Stocks

Dividend Growth Investor, How to generate $1000/month in dividends

Dividend Monk, 5 Reliable Dividend Payers Boosting Payouts

Dividend Ninja, Should You Take a Bite into Apple?

My Own Advisor, May 2012 Stock Screening Results – Best Canadian Dividend Payers?

I have had the honor of recently participating in the following carnivals, have a look:

Carnival of Retirement – 17th Edition

Yakezie Carnival – Earth Day 2012 Edition

Financial Carnival for Young Adults – 10th Edition

Carnival of Money Pros

TotallyMoney Blog Carnival- Big Bang Theory Birthdays Edition

Carnival of Financial Camaraderie #31 – Lend A Helping Hand

Carnival of Financial Planning – Money Management Edition #234

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$40 Coca-Cola Share Turns Into $9.8 Million Using the Power of Dividends

Kanwal Sarai — Wed, 23 May 2012 02:02:10 +0000

Last month Coca-Cola’s board announced a two for one stock split, the first in 16 years. A stock split basically doubles the number of shares you own. If you own 100 shares in a company, and the stock splits two for one, you end up with 200 shares. Companies generally split stocks when they think their share price has gotten too expensive or if the stock is trading too high compared to similar companies’ stock. A stock split is a good thing for shareholders if the stock price continues to rise after the split.

In the last 92 years the stock has split 10 times. “If the latest proposed split is approved, the company noted that a single share purchased in 1919 for $40 would be worth more than 9,000 shares and $341,545. If dividends were reinvested annually, the share would be worth $9.8-million.”*

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* source: The Globe and Mail, April 25, 2012

Do You Think Investing is Too Difficult?

Kanwal Sarai — Tue, 08 May 2012 16:01:50 +0000

There is a common misconception that people have regarding investing, especially investing in stocks and that is, “investing is difficult”. Most people believe that investing by themselves is too complicated therefore most folks leave it to the so called professionals. I like to call these professionals, mutual fund sales people, sales people who work on commissions. A sales person’s interests may not be in-line with your interests. Keep in mind that mutual fund companies make money even when your investments don’t.

Therefore it is in your interest to invest for yourself by yourself. Investing is simple, buy shares in quality dividend paying companies when they are undervalued. This is my mission, to teach you in simple easy step-by-step instructions how to determine when a share is undervalued, and what is a quality company.

Basically look for companies that are:

Consistently profitable over the long-term
Continue to increase dividends year after year (like Johnson & Johnson, who have had 47 years of consecutive dividend increases)
Have a durable competitive advantage (like Coca Cola)

Investing is simple, but don’t take my word for it:

"Stocks are simple. All you do is buy shares in a great business for less than the business is intrinsically worth, with management of the highest integrity and ability. Then you own those shares forever." - Warren Buffet (self-made billionaire, and CEO of Berkshire Hathaway)

"Twenty years in this business convinces me that any normal person using the customary three percent of the brain can pick stocks just as well, if not better, than the average Wall Street expert." – Peter Lynch (one of the greatest stock investors of all time)

“Warren Buffets’s secret, and really that of every successful investor, is to hold on for a very long time. You could be out of favor for two or three years. The critical thing is, if you have good stocks, to really stay with your philosophy and you should do well. Buffett has obviously done superbly by using this fairly simple system.” – David Dreman (author and founder of Dreman Value Management)

Give investing a try; keep your mutual funds for now if it makes you feel safe. But start investing today, and start small, take your time, follow the simple steps, and you will prove to yourself that investing can really be easy and profitable.

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Top 5 Things You Need to Know About Dividend Paying Stocks

Kanwal Sarai — Sun, 29 Apr 2012 15:36:18 +0000

Dividends are cash payments made to shareholders. As a shareholder you are part owner of the company and therefore are entitled to share in the profits. Dividends can also help you determine when a share is undervalued, and priced right for purchase.

There are a number of other additional benefits to owning dividend paying shares, and I discuss my top five in this article.

1.       Dividends provide an immediate return
2.       Your safety buffer against the worst case scenario
3.       Dividends increase over time
4.       Dividends have a long history of being paid
5.       Dividend yield can help you determine when to buy

Click here to read the complete story at My Own Advisor where I posted this article as a guest blogger recently.

Thanks to My Own Advisor for allowing me to guest post on his awesome site!

Monthly Blog Roundup - Bringing You The Best of the Best

Kanwal Sarai — Sun, 22 Apr 2012 16:28:07 +0000

Here is the monthly blog roundup for April.

There are a some really good bloggers out there, and this is my opportunity to share with you the best of the best.

Enjoy!

Dividend Growth Investor, Three Companies Expecting High Dividend Growth and Returns

Dividend Monk, 4 Dividend Growers with Almost Zero Credit Risk

Dividend Ninja, Why Dividend Cuts Are a Good Thing

My Own Advisor, When to sell a dividend paying stock

The Dividend Guy, $39K in Dividend The Power of Dividend Growth

I have had the honor of recently participating in the following carnival, have a look:

Carnival of Financial Planning – Edition #232 – April 13, 2012

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For every $10,000 you have invested in Mutual Funds more than a third is lost to fees!

Kanwal Sarai — Sat, 21 Apr 2012 16:00:00 +0000

For every $10,000 you have invested in Mutual Funds more than one third is lost to fees. For every $10,000 invested you will lose $3,367.80 in 15 years*. After 25 years the amount lost will be $5,613, more than 50% of your initial investment! Mutual fund fees take out a big portion of your earnings. The good news is that you can avoid these fees all together.

Can you imagine losing more than 50% of your investment to fees? It’s no wonder why so many people will have to work for the rest of their lives. I truly believe that regularly investing in mutual funds till you retire will not make you financially free, this explains why most retirees continue to work past the age of 65.

The solution is simple. Avoid mutual fund fees by avoiding mutual funds. Invest in quality dividend-paying stocks when they are undervalued.

*The mutual fund fees are calculated using the Mutual Fund Fee Calculator. Assuming an MER of 2.22% and no loads, after 25 years $10,000 invested in Mutual Funds will cost you $5,613 in fees.

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Is it Good When Companies Buy Back Their Own Shares?

Kanwal Sarai — Sat, 14 Apr 2012 16:31:00 +0000

Companies will sometimes buy back their own shares, but is this good or bad for you the shareholder? Generally it’s a good thing because in the long run it will result in an increase in the share price.

Here are the four key reasons for a stock buyback:

the company believes their shares are undervalued and the market offers a good buying opportunity
good use of excess cash when the stock represents the best investment (stock is undervalued) for a company, over and above using cash for reinvesting in the existing business, such as research and development or debt reduction
a show of confidence by the company that their shares represent great value to both investors and the company
an increase in earnings per share -- reducing the number of shares on the market creates an increase in earnings from an accounting point of view

Here are some recent share buyback announcements:

April 12, 2012: Adobe Systems Inc. (ADBE) said it will buy back up to $2 billion in common stock through the end of fiscal 2015, as the software company looks to increase shareholder value.

March 27, 2012: AutoNation Inc. (AN) announced that it has authorized the repurchase of up to an additional $250 million of common stock. The company revealed that it has exhausted its previous stock buyback program. Last year, the automotive retailer has repurchased 18.6 million shares for $635.2 million. This compared with repurchases of 26.6 million shares for $523.7 million in 2010.

March 22, 2012: American Express (AXP) authorized $4 billion 2012 buyback, up to $1 billion in 2013.

March 19, 2012: Apple announces share repurchase program for 2012, expects to spend $45 billion over three years.

May 19, 2011: GE announces $12 billion share buy-back plan.

October 18, 2011: Coca-Cola annonced on a year-to-date basis, their net share repurchases stand at $2.2 billion. They are now planning to increase their share repurchase program with a plan to purchase at least $2.5 billion to $3.0 billion in net shares by year end.

As a general rule, share buybacks are good for shareholders. The laws of supply and demand suggests that with fewer shares on the market, the share price will likely rise. Although the company will see a fall in profits because it will no longer receive interest on the cash they were sitting on, this is more than made up for by the reduction in the number of shares. In effect you get more pie, as although the total size of the pie is reduced this is more than offset by the fact that you get a bigger slice.

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Photo credit: I Love Pie

Are you thinking about investing, but never get around it?

Kanwal Sarai — Tue, 27 Mar 2012 01:41:08 +0000

Here are 2 reasons why you need to start investing on your own today:

1. Each day you spend invested in mutual funds (take a look at your company RRSP or 401K statement) you are wasting money. Over time this could add up to over $300,000 lost to fees. Click here, and here to read more about this.

2. Start investing early to make the most money, each day you wait is lost opportunity. Do you really want to have to work another 15 years because you waited 2 years to start investing? Click here to read more.

Did you enjoy reading this article? If so, I encourage you to sign up for my newsletter and have these articles delivered via e-mail once a month...and it's free!

Monthly Blog Roundup - Bringing You The Best of the Best

Kanwal Sarai — Sun, 25 Mar 2012 15:47:08 +0000

Here is the monthly blog roundup for March.

There are a some really good bloggers out there, and this is my opportunity to share with you the best of the best.

Enjoy!

Dividend Growth Investor, 17 Cheap Dividend Aristocrats on Sale

Dividend Mantra, The Poor Rich Need Dividends?

Dividend Monk, 3 Dividend Payers Benefiting from the Network Effect

Dividend Ninja, Building My Portfolio for Retirement, with Dividends and Bonds

My Own Advisor, I disagree with an expert, buying what you know makes sense

Financial Highway, 8 Things to Do as You Spring Clean Your Finances

Buy Like Buffett, I Was Wrong About Apple

I have had the honor of recently participating in a number of financial carnivals. Have a look:

Carnival of Retirement #9: Like planting a garden

TotallyMoney Blog Carnival # 57 – Words of Wisdom Edition

Carnival of Money Pros - 2^nd Edition

Yakezie Carnival Dr Seuss The Lorax Edition

The Carnival of Financial Camaraderie #23

TotallyMoney Blog Carnival # 57 – Words of Wisdom Edition

Carnival of Financial Planning – Money Management Edition #226

Carnival of Retirement #9: Like planting a garden

Financial Carnival for Young Adults – 2nd Edition

Carnival of Retirement #11 – Saving for Retirement

Yakezie Carnival March 18, 2012 - Have Fun Edition

Financial Carnival for Young Adults – 4th Edition

Did you enjoy reading this article? If so, I encourage you to sign up for my newsletter and have these articles delivered via e-mail once a month...and it's free!

The Biggest Investment Mistakes Canadians Are Making

Kanwal Sarai — Tue, 13 Mar 2012 19:19:00 +0000

I was recently interviewed for this article by Cindy Waxer (she writes for publications including Technology Review, The Economist, TIME, Fortune Small Business, and CNNMoney.com). Have a look....

Many Canadians are falling short of their investing goals. According to a February 2012 Bank of Montreal survey, only 38 percent of Canadians contributed or planned to contribute to their Registered Retirement Savings Plans (RRSPs) before the Feb. 29 deadline.

Whether you're investing in an RRSP, stocks or mutual funds, bad planning and missteps can stunt the growth of your nest egg..... Click here to read the complete article.