robin1234

That's an important one, but I think they need to revisit the dress code too.

Yorkieabroad

Thats very true, but what percentage of shareholders ever attend a single AGM of any of their investments? Or even bother to return the proxy voting cards. I tend to return the proxy cards if theres anything interesting going on, and I used to go to BP AGM's back in the 80's/90's and there were maybe 300 individuals there....I've never been to an AGM of any of my other investments, and I suspect I'm more the norm than the exception. Given the numbers involved, as an indvidual, you need a hell of a lot of cash invested to make your vote count against the corporate investors....not that that should ever deter you from voting as you see fit.

Michael

Although I hold mostly stocks, I do hold some ETFs (no mutual funds).

The ETFs that I hold are primary for diversification. The following are some that have reasonable dividends and can be used for diversification.

• DIA - ETF that tracks the DOW - Current dividend yield 2.50%
• SPY - ETF that tracks the S&P500 - Current dividend yield 2.20%
• FEZ - ETF that tracks the STOXX 50 (European Large Cap Stocks) Current dividend yield 3.20%
• DWX - ETF that tracks international large cap stocks - Current dividend yield 4.40%

The following are some of the advantages and disadvantages of ETFs as compared to mutual funds.

• Typically ETFs have lower management fees than mutual funds. Most mutual funds are actively traded by the fund managers so the management fee is about 1% higher than ETFs.
• ETFs are traded like stocks and can be traded instantly where mutual funds can only be traded at the end of the day. Usually you must place the order to trade mutual funds well before the end of the trading day (some as early as 4 hours before the close) to execute the trade that day.
• ETFs do not have a minimum amount of shares that you must purchase but many mutual funds require you to purchase $2,500-$5,000 worth to make a trade.
• Brokers charge a fee to trade ETFs (typically less than $10 for discount brokers) where most brokers do not charge a fee to trade mutual funds (unless it is a load fund and then the fee is ridiculous). However, most brokers will charge about a $50 fee to trade a mutual fund if you trade mutual funds to often.
• Caution should to be used when choosing a mutual fund to make sure that the fund manager tries to minimize tax consequences. If the mutual fund is too actively traded, you could possibly get a tax bill for long and/or short term capital gains even though you haven't sold the fund. In effect, you may be paying taxes on someone elses gains. ETFs usually don't have this problem since they just track indexes.
• During a bear market, you can get hit with long and/or short term capital gains from mutual funds due to the fact that the fund manager may be forced to sell shares to pay redemptions that had capital gains. In effect, you may be paying for someone elses capital gains. ETFs don't usually have this problem since they are traded between investors and if you don't sell your holding, capital gains normally can't occur.

The following are some of the disadvantages of international ETFs, mutual funds, and stocks.

• About 1/3rd of all foreign stocks have taxes withheld on dividends. It is difficult and near impossible to determine which foreign stock has taxes withheld. If taxes are withheld on foreign stocks in an IRA or 401k, you are just wasting money. As an example, Royal Dutch Shell common stock (RDS.A) withholds 25% of the dividends in taxes but RDS.B does not. The difference is that RDS.A is issued out of the Netherlands which withholds taxes and RDS.B is issued out of London which doesn't withhold taxes.
• About 1/3rd of all foreign stocks do not qualify for the lower tax rate for dividends. However all US common stocks qualify for the lower tax rate if the stock is held for 61 days or more and you don't hedge the stock (buy calls and puts against the stock).

anotherlimey

I have; but I wouldn't buy AT&T, only because as a provider to my employer they have absolutely sucked, and just yesterday I was talking to a phone tech who said he's moved 3 buildings in downtown away from AT&T.

But that's my opinion.

Remember it's not just dividends you want to look at. Total return = dividends + capital gains (minus applicable taxes and transaction fees of course), so if the stock price falls while you wait for the dividends, you lose.

Redwing

Agreed, plus we have and prefer stocks with DRIPs. They can really grow over the years.

Michael

True but I feel that investors should be somewhat defensive in the market at the current time because of everything that is going on (especially of they are just entering the market). If the DOW pulls back to the 9,000 range again, AT&T may lose 20% but Netflix, Apple, or any of the high growth stocks could lose 50% or more of their value.

So unless you are a trader that is currently trying to time the market and/or stock prices, high growth stocks may not be the best investment.

Although normally Apple wouldn't be that high of a risk stock, currently it is the 2nd largest company in the world (only Exxon/Mobile is larger) by market capitalization. With its current p/e of about 19, it will be the worlds largest company if it stock price increases another 30% at that p/e. When companies have gotten that large in the past, they couldn't maintain their growth causing major pullbacks in their stock price (eg. Microsoft, Cisco, Intel).

Netflix with its current p/e of about 76 is very risky. If it can't continuously beat its profit expectations of 50% increase annually, the stock will crash. With all the competitors (eg. Apple and Amazon for streaming and Redbox, Coinstar, and Blockbuster with their $1 kiosks), it may start becoming difficult to grow that quickly. If comcast offers streaming at a similar price as Netflix, it will likely knock Netflix off its pedestal.

Even though about 95% of the analysts are currently bullish on the market, those same analysts have been wrong during almost all previous market downs.

lisa67

Thanks for the advice guys. I'm finding this all fascinating

Poppy girl

Yes me too reading and Googling and learning

Michael

Since there seems to be some interest, I'll give you a basic tutorial on stocks.

Normally you can find just about everything that has been made public about a stock at sites such as msn money. In the following link, I have brought up information concerning AT&T (symbol T).

http://investing.money.msn.com/inves...ymbol=T&s=qbeb

You can find any stock by typing the symbol or by starting to type the name of the company and a menu will pop down allowing you to select the symbol from the list.

Under details you will see dividend ($1.72 per share) and yield (dividend yield of 6.21%). Dividend is the annual dividend that is paid per share (usually paid quarterly and in this case is $0.43 per quarter). Yield changes daily and is based on the current value of the stock so if the stock price goes down, the yield will rise and visa/versa.

To get more information about the dividend, use the following link. In this link you will see a button labeled "Dividend Paid Since" and if you click on that button, you will see how the dividend has rise or fallen over the years.

http://www.dividendinvestor.com/?chk...26414&symbol=t

In this case, you will see that AT&T has increased dividends every year since 2005 from $0.3325 to the current $0.43 per share per quarter. Growth stocks normally don't pay dividends or very small dividends.

OK, back to msn money. If you look down below the details, you will see Forward p/e and P/E. P/E stands for "Price to Earnings Ratio" or the price per share as compared to the earnings for the year per share. Therefore a stock with a p/e of 10 earned $0.10 for every $1 that is invested in the shares of the company. If the p/e is 100, it earned only $0.01 for every $1 invested in the shares of the company. P/E is the current p/e over the past 4 quarters and Forward p/e is the expected p/e during the next year. Stocks with a low p/e are generally low growth stocks (eg. 5% per year) and stocks with high p/e are generally high growth stocks (10%-70% per year). When a company grows at a very high rate and is expected to grow at a very high rate in the future, investors tend to bid up the price of a stock raising the p/e. However, purchasing a stock with a high p/e can be very risky since if it doesn't meet expectations, the stock can tumble very badly since no one wants to own a stock that only return 1%-2% on their investment.

High p/e stocks may not be high growth stocks but may be stocks that lost a vast amount of their earnings and the p/e is high because the earnings are so low.

Market Cap is the value of a company based on the amount of shares outstanding times the current price per share. In the case of AT&T there are 5.91 billion shares outstanding and the price is currently $28.14 so the market cap is $166.11 billion.

Now you can go to the top of the page and click on "Earnings" and information will be displayed about projected earnings. You can see that AT&T is projected to grow 3.08% in 2011 and another 7.89% in 2012.

You can now click on the "Analysis" tab and you will see that analysis are about equally divided between a "strong buy" and a "hold".

For more in depth information about the company, you can click on the "Financials" tab. There you can analyze the income statement, balance sheet, and cash flow.

If you click on the "Quote" tab, you will notice a chart to the right. You can select any chart up to a 10 year period. Once you select a chart, you will also be able to select Max at the top of the chart to show a chart from as far back as data is available.

To create a portfolio, move the mouse over "Investing" near the top of the screen and click on "portfolio manager". You will be able to track your stocks and dividends and/or create a watch list with the portfolio manager.

Back to the DividendInvestor link.

http://www.dividendinvestor.com/?chk...29815&symbol=t

Further down the screen, you will see "Dividend Ex Date" which is known as the ex-dividend date. If you own the stock for the day prior to the ex-dividend date, you will receive the dividend. Therefore all you need to do to get the dividend is to own the stock for 1 day. "Dividend Pay Date" is the date that the dividend will be paid and show up in your brokerage account. AT&T has not yet declared any of those dates for this quarter but the ex-dividend date will likely be about April 6th.

lisa67

Thanks for that Michael

anotherlimey

I'm not really interested enough in AT&T to be concerned but they recently announced they would take over T-Mobile, but unless they're paying less than T-Mobile is worth (highly unlikely) the odds are against them making money on this transaction.

Michael

AT&T is paying $39 billion for T-Mobile USA to Deutsche Telecom. That is a premium of about 75% over AT&Ts current p/e or about a p/e of 17. Although that may seem to be a stiff price to pay for T-Mobile, a large part of AT&Ts p/e is held down by the low profit/low growth land line business. With this purchase, AT&T is investing in their higher growth business.

The purchase will be financed through JP Morgan. Both AT&T and T-Mobile use 3G and 4G networks and therefore it is estimated that there will be about $40 billion worth of synergies (facilities, equipment, tower leases, bandwidth leases, etc.) that AT&T will acquire in the purchase. Besides that, they will get about 36 million new customers.

AT&T needs T-Mobile due to their current limited coverage as compared to Verizon. AT&T could build out their own network fighting for bandwidth and towers leases but that would likely take several years and cost as much or more as they are paying for T-Mobile and not get any customers. Prior to the deal with AT&T, Sprint and T-Mobil were in talks to merge the two companies to try to compete with Verizon and AT&T.

We won't know whether the purchase will be successful until well after the buyout occurs but without it, AT&T would likely lose ground against Verizon.

anotherlimey

$40b in synergies? Who pulled that out of a hat - an investment banker no doubt!!

39b / 36m = ~$1080/customer, I'd imagine that's in the ballpark for the cell industry.

But the odds are against them, most buyouts don't return what's expected (over-estimated is more accurate).

fatbrit

Brain not required. But hard work is!

Study a market (the stock market is one I mostly avoid) on your own -- don't take specific advice off others. If you want to run short-term gains (i.e. the news wire announces a buy out of one company by another), you should know (through previous study) whether you are betting on a rise or fall in the price as soon as the news hits. If you don't know, you aren't ready to invest yet! By the time the advisors tell you what to buy, you're too late because the people who make the money have already called it.

Michael

Their networks are compatible so that helps a lot. As far a the synergies, that does surprise many analysts since generally synergies account for far less than the purchase price but then most companies that purchase another company have to close offices, close production facilities due to duplicate product lines, and many other reasons. In this case, AT&T estimates that nearly 100% of T-Mobil network, bandwidth, towers, and facilities will be able to be used.

T-Mobile needed to merge due to the vast size of the country with a large amount of equipment required for a reliable network while only owning about 10% of the market. I suspect Sprint will also have to either sell out to Verizon or purchase all the bit players in the market. It would be nice if three reliable carriers could survive in the US.

The US is not like the UK with a land area of about 1/30th size of the US that serves about 60 million people. In the UK, you can possibly have many mobile providers since building out and maintaining a reliable network is a lot cheaper.