If you do some searching for dividend stocks, you may find stocks that have dividend yields of 15% or more. To a beginner investor, stocks like this may seem like a bargain. However, it is often the case that the dividends for these high yielding companies are unsustainable and only high because the price of the stock has dropped due to poor fundamentals. There are a few ways to check if a dividend is safe, and this post will teach you just that.
Would you rather receive $100 one year from now? Or would you want to receive it today? The correct answer of course is today. That's because money loses value over time due to inflation and the opportunity cost of investing it. Well, the point of DCF analysis is to forecast future free cash flows of an investment/company and then discount them back into the present in order to find out what the future money is worth today (present value). If the present value of the future free cash flows are greater than the current cost of the investment, then it is considered a good/undervalued investment.
When it comes to the stock market, there are generally two types of participants: Investors and speculators.
"The Little Book That Still Beats the Market"
Literature often succeeds in amazing us and allowing us to find out new things. Whether you were or weren’t listening to your parents’ insistence to take a book and read, you have to admit that a piece of literature can offer great lessons. “The Little Book that Still Beats the Market” is no exception. In fact, it’s considered one of the gems of finance literature, being a useful tool for those new to investing and pros alike.