Everyone has access to information and seemingly it is hard to determine what will happen in the future. As an investor you want knowledge, understanding and clarity. But if you read the financial press you will generally come across conflicting stories. In an article titled Tips for staying afloat on a sea of financial new, John Reese the CEO of Validea Capital wrote he saw information suggesting oil was going down to the 20’s and oil could go up to the 80’s, one of the prices will be correct and one will be wrong. The problem is of course, each side has very valid reasons for predicting one way or another and you never know for sure until the event has passed. What do you do? Among Mr. Reese suggestions are:

1. Be a fox, not a hedgehog.

Gather as much information as you can before making a decision, particularly information representing opposing viewpoints. When you made a decision, ask yourself How might I be wrong? Then you will know how to make corrective actions, if you are wrong. If you are correct carry on.

2. Consider the track record

In your research you will encounter many people making an opinion. Some people make opinions to drive people to their funds; some opinions you will like and others you will not. One thing you can do is determine their performance in the past. Most will have done some things very well and others will be average.

3. Stick to the numbers

You can always read more information, but at some time you will need to look at quantitative systems that focuses on fundamentals and financials of stocks rather than the subjective ones. There are a variety of people who have and had a long history of making money – Ben Graham, Warren Buffett, Peter Lynch and others. You can learn from them.

Linking to dividend paying stocks, the reason why this blog suggests you start with these companies, and there are lots of them , is profitable companies will tend to lose less stock prices fluctuates) but if you hold them for a few years, the dividends plus the market price to earnings ratio will make money for you. When the market tend to go down or is bearish there is a flight to quality stocks and their price to earnings ratio goes up because they make a profit. Along the way the dividend payments add to your total return.