Value Added

Enough with Bernie Madoff and Michael Jackson. All this sensationalism and in depth news and no value added to your life. Yesterday, I got a lesson in technical analysis that was insightful and I plan to use along with my fundamental knowledge and experience. But while individuals look for 1000% return on some unnamed pharma stock or penny stock, there should be a focus on dividends. A steady return can help one be optimistic in a bear market. For example, I own GME (Gamestop), I like their business model, there in a niche market and have a fortress balance sheet. However, they pay no dividends, so even if the stock doubles within a year, my annualized return would be 50%. Also, the opportunity cost would be greater, because I did not purchase another security paying a 4% dividend so I do not get to compound my returns. I am aware growing and technology firms reinvest free cash but make sure you provide room in your portfolio for dividend paying securities.