Multiple INV

• Common stock


  • Can provide attractive capital appreciation opportunities
  • Dividends generally do not provide the greatest rate of return
  • Generally have a positive rate of return over a ten-year period
  • The DJIA is not the best indicator of the overall performance
• Benefits of stock ownership


  • Ease of trading
  • Attractive inflation-adjusted rates of return
  • Affordability
• Reasons some investors prefer bonds over common stocks

  • Stocks are too risky for their level of risk tolerance
  • They are concerned about preservation of wealth
  • Bond income is more predictable
• Characteristics of established growth companies

  • High operating margins
  • Steady earnings growth
  • Adequate cash flow to service their debt
• Characteristics of small cap stocks

  • Market cap less than $2 billion
  • Potential for high returns along with high risk
  • Potentially dramatic changes in their earnings
• Characteristics of blue-chip stocks

  • Solid balance sheets
  • Generous dividend yields
  • Some growth potential
• Characteristics of speculative investors


  • Invest in emerging markets
  • Buy and sell frequently
  • Invest in small-cap stocks
• Advantages of using American Depositary Receipts

  • Lower transaction costs than for direct foreign stock purchases
  • Dividends are paid in U.S. dollars
  • Quotations are readily available from U.S. sources such as Yahoo Finance or MSN Money
• Advantages of the buy and hold strategy

  • Low transaction costs
  • Capital gains taxed at the long-term rate
  • Portfolio requires less time and energy to manage than for most other strategies
• Strategies that appeal to investors who place primary emphasis on the storage of value aspects of an investment

  • Buy and hold
  • Quality long-term growth
  • Consistent dividend record