In 2008 the S&P 500 did a nose dive. In 2009 it reversed itself. Since January, 2010 the S&P 500 has traded in a very small range and as of March, 2010 is at the same position it was in at the beginning of January, 2010. There are many different viewpoints of what the stock market is going to do during the remainder of 2010 and going forward. In order to make money in your investments during this and other volatile times it is important to establish a defensive position in your trading strategy. One of these strategies is to find dividend paying stocks that you can buy that will help you to make money while possibly experiencing a potential roller coaster ride. In this way, you will continue to make money with your investments.

In developing an investment strategy, you want to be able to beat the return you would have gotten if you have put your money in the Treasury Fund. This is because you are taking on more risk with an investment in the stock market so you should be rewarded for it. However, with any stock market investment you should always be thinking of long term rewards. If you will need the money in a very short term, you should not be investing in the stock market. Because you will want to make more money than the Treasury Fund, you should look for dividend paying stocks that have a higher dividend yield than what you can get in that fund.

You should look at more than the dividend yield. If you were only going to look at the dividend yield, then it would be a simple matter of using a filtering screen to find the highest paying dividend stocks and put your money in those stocks. However, just because a company has recently paid out high dividends does not mean they will continue to pay these high dividends. They may choose to discontinue the paying of dividends or to reduce them.

In evaluating dividend paying companies, you should look at a few other items. The first one to look at is their balance sheet. This is a statement as of a period of time that shows what their assets and liabilities are. If the company has high liabilities and is losing cash for whatever reason, it is a good idea to stay away from them. They will probably need to reduce their dividends at some time due to a problem with cash flow. The stock price will drop in anticipation of this action. In relation to this, you should review their cash flow statement and determine where their cash is coming from. The second thing you should look at is the income statement. This will show how profitable they are. If their trend is a downward trend in their revenue and profits, this will probably translate into a reduction of cash at some time. Look for stable companies with sustaining profits and a good cash flow.

You should also look for a long term history of these dividends. A company who has developed a reputation for being a high dividend paying company will often do all they can to continue paying these dividends. They do not want to hurt their reputation. So look for companies with a history and not just some company that has begun recently to pay out dividends.

A good diversification policy is also a good idea. Be willing to invest in several different companies or even in a fund that specializes in dividend paying companies. In this way, you will be able to obtain the best of two worlds. You will have your money spread over several different funds and have the rewards of obtaining dividends.

Of course what you will need to realize that investing in dividend paying stocks is not a get rich quick method. It will take some time to grow your investment. However, what you will do with this method is to continue to beat the return you would have gotten with a low risk investment in the treasury bonds or with a money market investment. You will also be able to beat the unseen risk known as inflation. Too often, people do not consider this risk. However, it is a real risk that each of us should be trying to beat.

All of the content published on this website is to be used for informational purposes only and without warranty of any kind. The materials and information in this website are not, and should not be construed as an offer to buy or sell any of the securities named in these materials. Trading of securities may not be suitable for all users of this information.

Investing in the stock market at any time can be a daunting task. It is really tough to know when to go for it and buy shares in the companies stocks that you have researched. None of us has a crystal ball and it is easier to kick ourselves when a stock goes up 5% that we had on our watch list. It is also hard to avoid the tendency to check back on stocks we once owned and then beat ourselves up over lost opportunities.

Mistakes that we all have a tendency to make when finding stocks to buy now will hurt us in our abilities to make the most profit out of our investment trading system. It is important to have these mistakes identified so we can avoid them.

Not paying enough attention to the fundamentals of a company is a large mistake. An investor can choose to look at the technical analysis of a company and become a trader instead of an investor. Not having a strong feeling for the fundamentals of the company makes it more frightening to make the call. If you know the company has a strong balance sheet and is growing, then the long term investment opportunity is truly there especially if the stock is currently undervalued.

The second mistake then would be in not educating yourself enough. Just taking a look at how the stock has performed over the past year and making your decision from that historical data is not sufficient. Also not knowing how to research the different stocks available and what the different financial terms mean. All of these items are part of obtaining the correct amount of investing knowledge.

When we do not look for the right opportunities we hurt our chances to succeed. An investor may choose to look at only one or two asset classes or sectors. They do not broaden their horizon enough to really make the right decisions.

Diversification is a major item in stock market investing. Not creating enough of a diversified portfolio when determining the right shares to buy now will certainly create a recipe for disaster. If you put all your investments in the financial sector and the bottom falls out of it, then you have nothing to do but wait. Spread your investment over many diversified asset classes and sectors. Then you have a greater chance of success.

The last mistake I am going to list is the desire to go for the home run. We constantly hear and read about those who have had their investments go up 400% over night. Trying to actually find that company that is coming out with a revolutionary invention tomorrow is difficult to do. More likely, any booming tip is nothing but a disaster waiting to happen. Better to steadily work your investment upward than on a roller coaster.

All of the content published on this website is to be used for informational purposes only and without warranty of any kind. The materials and information in this website are not,and should not be construed as an offer to buy or sell any of the securities named in these materials. Trading of securities may not be suitable for all users of this information.

The stock market tends to move in cycles. The hard thing to determine is when one cycle ends and another one begins. If you as an investor make the wrong determination as to whether to hold or to jump, you might end up being on the sidelines watching a rally or invested, watching your stocks move downward. Trying to read the fundamental and technical signs to determine which stocks to buy now is what it is all about. A farmer knows when to expect rain or sun, but the market is less predictable than nature.

A former hedge fund manager, Andy Kessler, wrote in the Wall Street Journal that “In the long run the market is always right. On any given day, your guess is as good as mine.” Another saying on Wall Street is that “being early is the same as being wrong.” The late economist Charles Kindleberger once said “there is nothing so corrosive to good judgment as watching your neighbor become rich, and, unless you have an iron will, the odds are good that you would have finally capitulated at precisely the wrong moment.”

It is my opinion that an investor can never go wrong with good solid company stocks. During the downturn of 2008 I had investments in stocks that paid dividends. Even though the principle of my stock was going down, I was still making money from the dividends. Investing in dividend paying stocks at any time can never be a bad idea. This is especially true if the dividend is significantly better than what you would get from investing in the money market. One piece of advice then would be to buy shares in solid dividend paying companies.

In the end, you can try and identify the waves that are forming on the horizon and try and ride them to the promised land or you can accept the notion that doing so profitably over the long term is a difficult choice at best, and instead focus on a trading system couched in solid asset allocation and making current choices that will maximize your returns over the long run

I was recently talking to a broker and indicated a stock I had recently identified was having a good run. He indicated that therein lies the danger of picking one good stock. You tend to think you are infallible and can always pick the winners. It just does not work that way. . In other words, quit trying to be a trader and trying to time the market. You should instead determine good strong investments for the long run and stick with them.

All of the content published on this website is to be used for informational purposes only and without warranty of any kind. The materials and information in this website are not, and should not be construed as an offer to buy or sell any of the securities named in these materials. Trading of securities may not be suitable for all users of this information.