EX DATE is coming..

Since I decided to dedicate a portion of my stock investment into high yield dividend stock, I started to pay attention to EX DATE. In order to get the dividend payout for the quarter, I learn that I must buy the stock before EX date to be eligible to received dividend. Anyone buy on EX date or after will not get the dividend income. Right after EX date, I can sell the stock and I can still eligible to receive dividend. The interesting pattern I found is that the stock price will "automatically" reduced by the dividend payout amount on the opening of EX DATE, then the price will go back to normal after few days trading session. This could be an opportunity to buy the stock if your stategy is to ignore the dividend but betting purely the rise of the stock. One of my favoirte dividend payer stock FRO , which have a yield >15%, will have EX DATE tomorrow (10/10/07). The payout amount is impressive $3.25, or 6.25% assuming stock price $50 dollar. I bought this stock few days ago anticipating receiving this handsome amount of dividend. It'd be interesting to see how FRO trade tomorrow morning. My plan is to sell one or few days after ex date at the price I bought so I can receive the full amount dividend (6.25%) owning this stock just a week or two.

3 winning way to pick stocks like a PRO

Tonight, I want to share with you the three ways I pick stock which earn me over 10% return in last few years of stock investing
1) Pick stocks that has lower P/E ratio. Price/Earning is a measure of the stock’s current price relative to its earning. The higher the P/E ratio mean the stock ‘s current price is traded on the high side. Vice verse, the lower the P/E ratio, it means the stock ‘s current price is traded on the lower side. I suggest you pick the stock that has lower P/E, as it has a higher chance to go up in price once the market correct itself. The historic average of P/E is about 15.
2) Pick stocks that has higher return on Asset. Assume you spend 100 dollar in capital expenditure building up your business, each year the business bring your 10 dollar profit. Then your return on equity is 10%. The higher, the healthier the company. I’d suggest to pick stock that can give 10% return on asset or more for your portfolio
3) Pick stocks that earn high dividend return. Just like putting money in the bank where they give you 2-4% interest. Buying stock giving dividend could be a safe and consistent way to earn your interest. Some stock give out dividend every quarter,others give out dividend every month! I normally buy stocks that can give at least 7% annual return with a very consistent history of paying out dividend. The longer the history, the better chance you will earn the dividend in future. Combining the above three winning ways to pick your stock, it could be a very powerful, safe and rewarding investment you could get.

Top 5 reasons why I LOVE dividend paying stock

The reasons are following:
1) Earn income while I'm holding the stock for a potential gain
2) The dividend is taxed at a lower tax rate than capital gain in most case
3) Higher chance to increase my overall return of investment (dividend income + stocks appreciation)
4) More liquidate than individual cooperate bonds or municipal bonds
5) No minimum investment required for greater diversification.

Most importantly, my strategy in stock investing is: Buy and Hold. As I believe the longer you hold the stock, the less risk of losing money. Plus, frequent buy and sell will increase the chance of error. So, buying a stock with dividend income just match my strategy well.