Dangers of Dividend Funds

On 05/13/2012, in Equities, Mutual Funds, by Jordan Wilson

Dividend funds are currently very popular with investors.

In many parts of the world, interest rate yields are quite low on a historical basis. To enhance returns, fixed income investors have turned to riskier investments that may offer higher yields. Such as dividends on preferred shares or dividend paying common shares.

As well, general equity investors are turning to perceived “safer” equity investments. Common shares in large, dividend paying companies. Shares that provide capital gains potential over time, but are back-stopped by a (hopefully) steady stream of dividend income.

Sounds like a good strategy to me. But there are always risks when investing.

Here are a few things to consider when assessing dividend funds (or dividend paying shares). 

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Characteristics of Common Shares

On 08/05/2010, in Equities, by Jordan Wilson

Many investors will go their entire lives without purchasing individual bonds, preferred shares, or even cash equivalents. Instead, they will utilize funds for these asset classes.

Most, if not all investors though, will buy and sell common shares of individual companies.

I am not sure that buying individual stocks is the best investment strategy, but almost all of you will trade specific stocks during your life.

So we will spend some time reviewing common stock.

Today we will look at a few key characteristics of common shares.

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Preferred Shares

On 07/28/2010, in Fixed Income, by Jordan Wilson

Today we will look at preferred shares.

Their characteristics and common variations that you will encounter in the investment world.

Although a type of equity, I shall write about preferred shares in the fixed income section. This is because the characteristics of preferreds make them more like debt than equity.

So what exactly is this hybrid asset that lies somewhere between debt and equity?

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