Last weekend the author attended a dance rehearsal of a ballet company, there were some obvious benefits of watching young women and some men stretch their bodies in front of the audience. The class started the exact same for the juniors to the senior members of the dance company – everyone started with the same exercises. They do this 5 or 6 days a week, for the dancers likely 7 days, but everyday, they start with the same stretching of muscles and move on to where their bodies can turn out. They do not start with the exciting stuff, or go through the motions, they stretch until they are ready to do the big turns. The teacher made comments and one of the things he said was to complete the circle.

Linking to dividend paying stocks, similar to the dancers you start at the basics before you jump to the more exciting stuff. The basics to investing is make a profit – sell more goods than you buy at a healthy margin. It sounds simple, it is hard to execute. If you invest in profit making companies, the stock market will reward you in the short and long term with higher multiples and when the market goes up and down, the profit making companies retain their value longer and bounce back faster. Think of the circle or the economic cycle but start with basics – does the company make a profit to pay the dividend? then ask how much more?

There are more questions than answers, till the next time – to raising questions.