Coca Cola (KO), the colossus company that served the world before we were born, is one of the more relatively stable investments for our time. The company has been in business for over 120 years so it has a wealth of experience and assets. The company sells soft drinks, juices, coffees, teas, energy drinks, and… Continue Reading
Apple Inc. (AAPL) is the company whose mobile communication devices are changing the world. Now with apps, the users have much more power to accomplish things and to be much more efficient. As time goes by, more and more apps are being developed which give people the information and ability to focus on their interests… Continue Reading
So far we have discussed various types of risk and the concept of diversification. Here are some ideas about how to diversify your portfolio to avoid risk and make money. First, one can reduce risk by including cash and bonds in one’s portfolio. Cash can be invested in short-term money markets which can be sold… Continue Reading
Dillard’s Inc. has declared a $0.05 dividend per share on its common stock. The dividend is payable on January 30, 2012 for those who own the stock on December 30, 2011. Dillard’s owns 288 department stores and an additional 16 clearing centers in 29 American States. It sells apparel and home furnishings. Dillard’s had a… Continue Reading
Let’s start with a true story. Rambus Inc. has been suing companies in a law suit that has lasted 7 years. Rambus hoped to get $4 billion in damages. Yesterday morning, November 16, 2011, the stock was selling at $18 per share. During the day, the court ruled that Rambus had not been illegally damaged… Continue Reading
The Risk-Reward Tradeoff involves understanding the amount of risk that you are willing take in investing. The general rule is that an investor makes riskier investments in order to get higher rewards (i.e. earn more money). Low risk investments generally are expected to produce low level returns. High risk investments hopefully offer a high level… Continue Reading
Country Risk is the risk that a country will default of its debts. When a country fails to pay its debts, many of the businesses institutions in the country are damages as well as companies outside of the country. County risk affects bonds, stocks, futures, options, and mutual funds in the defaulting country. Foreign-Exchange Risk… Continue Reading
There are 2 basic risk categories: systematic risk and unsystematic risk. Systematic risk is usually a general event or phenomenon which can affect many of your portfolio’s investments. An important political happening can affect the whole market including several of your assets. The individual investor cannot do anything to protect himself against this kind of… Continue Reading
After determining how much risk you can take according to your time horizon and your available bank roll, you can employ the risk pyramid method of allocating your money between various investments. The risk pyramid works by dividing the pyramid into three horizontal levels. The bottom level of the pyramid is the foundation and the… Continue Reading
Each person has his own risk tolerance level and there is no magical risk tolerance formula that works for everyone. However, there are 2 important considerations to consider: one’s time horizon and one’s bankroll. Time Horizon Before investing, one should consider his time horizon, the amount of time that he can keep his money invested.… Continue Reading