Interesting Links

For your reading pleasure a few interesting articles from around the globe about dividends, stocks, the market and other just plain interesting finance or economic oriented articles- enjoy!

• Fear of Money
• How bubbles grow
• Bonds in Danger Zone?
• How Texas avoided the meltdown
• Mr. Distress is Ready to Buy
• A star fund manager gets cautious
• Citi to return TARP

Three Key Ratios For Investors

if you could only have four ratios to evaluate a company what would they be? This is a fun question that is popular in investing circles. For a laugh I’ll take my shot at it, what would you pick?

1) Current Ratio

Current Assets / Current Liabilities

Why?

This ratio keeps track of the company’s ability to pay its short term debt. If a company doesn’t have safety money to deal with debt then they might not be in business tomorrow and I don’t need any of that.

2) Dividend Yield

Annual Dividend Per Share / Price Per Share
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Healthy Debt

If you are fortunate enough to have a few extra dollars at the end of the month after paying your mortgage what should you do?

Sample Mortgage Details

• 5.25%
• 25 year amortization
• $400,000 loan
• loan payments of around $2400
• our user has an extra $600 every month in free cash.

Option 1: Put the money into a dividend paying stock

In this scenario the user decides to pay the mortgage for the full 25 years and invest the extra $600 directly into a dividend paying stock. Our user finds a stock with an dividend yield of 6%, once the appreciation in the stock’s value is included the return amounts to 7.25%.
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The truth about money

I watched this series a number of years ago and found it very enlightening. After you watch the first in the series be sure to seek out the other parts on you tube.