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American Capital Agency Corp Dynamic Dividend Stock Investing

Companies / Dividends Dec 27, 2009 - 07:07 PM GMT

By: Jay_DeVincentis

Companies

Best Financial Markets Analysis ArticleOur indicators are calling for a top to come as early as tomorrow. However, we’ll still recommend a stock a week as good stocks will perform better than the market.


Here's our weekly pick, from our Dividend list:



Dividend paying stocks are usually found in the various utility industries, real estate operations, financial services, and other sectors or industry groups. They offer the unique potential for income while holding for capital appreciation. What is better than being paid to hold on to a stock for the long term?

Regretfully, most investors are sucked into the high risk game of trading high beta stocks looking for the Holy Grail. There are times when high beta stocks are great to own, but there are also times when they will lose a significant portion of their value. I believe that slow and steady wins the race - and dividend stocks give you the best of both worlds.

As a technician, most stock charts normally don't show a dividend. But it shows the effect of dividends. There are periodically stocks that pay huge one-time dividends. The problem with this is that the stock will usually drop by the amount of the dividend payout. So what you make on the dividend, you lose on the stock value.

Trading dividend stocks just for the dividend makes little sense. The key with dividend stocks is to own the stock while it is going higher and get paid a dividend all the while. A stock can go down much lower than its dividend payout. So there is no sense in holding a stock for a 12% payout, when its price has dropped 50%. No sense.

As a market technician, there are good times in the market cycle to be buying dividends and bad times. However, in long term investing, you can reduce the impact of market timing by making frequent, equally timed investments or trades. What matters most is getting in good positions with good potential for long term growth as well as a solid dividend.

I'm not as big of a fan of just searching for companies that are growing their dividends. Their dividends tend to be lower than you can find with a little work on your own.

We like smaller dividend paying stocks whose stocks are in up trends and applying an intermediate term trading approach. The reason being is that we also want to make a big chunk of our money from stock appreciation. Not just from the dividend while holding the stock.

You want to go where the relative strength is - so you can grab onto a stock that is likely in an uptrend and also more likely to remain in that uptrend. I won't bore you by regurgitating a bunch of financial information that you could readily find for free on Yahoo.

What follows is a list of Dividend Paying Stocks for consideration by you, the investor/trader too include in your portfolio, whether as a long term investment or a short term swing, trend or break out trade. No matter how you play it, I recommend the use of stops set at 1/3 of your profit objective below your entry. And by no means should you risk losing more than 8-10% on a trade.


As an alternative investment strategy, I would suggest my Triangle of Wealth investment methodology. Please advise if you're interested in learning more.

If you have any questions or comments, email me at Jay@stockbarometer.com.

Regards,

By Jay DeVincentis


Stock Barometer Premier Membership Receive 5 Newsletters, including the Daily Stock Barometer, Stock Options Speculator, QQQQ/Rydex Trader, Market Chat & Explosive Stock Alert FOR ONE LOW PRICE.


Important Disclosure
Futures, Options, Mutual Fund, ETF and Equity trading have large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in these markets. Don't trade with money you can't afford to lose. This is neither a solicitation nor an offer to buy/sell Futures, Options, Mutual Funds or Equities. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this Web site. The past performance of any trading system or methodology is not necessarily indicative of future results.
Performance results are hypothetical. Hypothetical or simulated performance results have certain inherent limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not actually been executed, the results may have under- or over-compensated for the impact, if any, of certain market factors, such as a lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown.
Investment Research Group and all individuals affiliated with Investment Research Group assume no responsibilities for your trading and investment results.
Investment Research Group (IRG), as a publisher of a financial newsletter of general and regular circulation, cannot tender individual investment advice. Only a registered broker or investment adviser may advise you individually on the suitability and performance of your portfolio or specific investments.
In making any investment decision, you will rely solely on your own review and examination of the fact and records relating to such investments. Past performance of our recommendations is not an indication of future performance. The publisher shall have no liability of whatever nature in respect of any claims, damages, loss, or expense arising out of or in connection with the reliance by you on the contents of our Web site, any promotion, published material, alert, or update.
For a complete understanding of the risks associated with trading, see our Risk Disclosure.

© 2009 Copyright Jay DeVincentis - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


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