Similar to many people, the writer spent some of the time cleaning during the holidays. If you have fewer errands or work, there is always cleaning to do. On cloudy days, cleaning is easier, but when the sun shines – the light exposes all the areas that were not done as well as you might think it was cleaned. This results tends to be cleaning takes longer. In a similar vein, there is a old joke stating a man was looking for his wallet and someone offered to help. After searching for a while, the person who offered assistance suggested the man retrace his steps, so they could narrow down the area. The man said oh, I lost my wallet over there. The other person said, why are you looking here, when you should be looking over there? the man says the light is better in this area.

Linking to dividend paying stocks – in the short term, lots of stocks offer great promise and some with live up to the promise. The problem is no one knows which stocks will do the best. If you buy dividend paying stocks that have a consistency of raising their dividend, those stocks will tend to outperform the stock market average. The stocks tend to outperform the average because profitability is reflected in a higher stock price and with a dividend, the companies will have a minimum price so the lows or potential losses will be minimized. If not losing money is half the battle, you are a good position to do well over the long term.

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

During the Christmas break, the writer was reading a obituary from a small town newspaper. The story was the person over the course of their life was born in the small town (one of those towns with 10 houses at the crossroads), moved to a bigger town and then a city and back to the small town. From the story you would have thought the small town was their centre of the universe, and likely was.

Linking to dividend paying stocks, wherever we are from we are biased. We are bias towards local, regional and national companies. As long as we understand that, it can be good. If the companies you are considering or having invested in are more local, you can keep at eye on them in different methods. It also means, your area although special to you, wherever there are people, there is an opportunity. In the new year, preserving your capital and having an income flow such as a dividend is a continuing good thing to have as the centre of your financial universe.

We are all from somewhere, and most of the places have tended to be smaller towns from which we ended in larger cities. In is always great to look through the travel magazines and find a story about your area of the world. One of the great secrets of …. for you know it is true. The physical features such as the hills, lakes because they do not move means to truely appreciate the area you have to embrace their characteristics both good and not so good. For example the lake is magnificent 340 days a year, but every once in a while it can batter the shoreline, send the northern winds through your bones, the ride into the lake can be rough, the fish do not bite, if the lake freezes, sometimes the lake does not freeze enough. The lake and other features has help to define you while you lived there.

Linking to dividend stocks – most of the time they are regularly performing companies, they do good things, sell products that people want and pay a dividend. Nothing extraordinary until you compare them to what else is there. Then you appreciate the consistency of the dividend and the company’s consistency in staying ahead in the marketplace.

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

In London, England because of its lack of regulation, the financial services companies grew and London is one of the centres of the world finances. In London, the major banks submit bids on the cost of borrowing money from each other – this average is called the Libor. Most of the time the rate fits into a very narrow trading range because the banks are not desperate for the funds. All banks need capital or money to exist and grow their businesses, the cost of capital is interest rates and over the years, the Libor rate has seen as the lowest rate and other interest rates are tied to it. You may have asked for a loan and the bank said it was x points above prime. For the international banking community, Libor is the base rate or prime rate.  When banks were doing well, the system worked beautifully. Occasionally, the banks, because in the end they are run by people and most people do not want to show their declines to the public, tried to manipulate the rates. By not allowing the rates to fluctuate, the banks would  not have to show they were not doing as well. The other aspect was to make bets on the direction of interest rates, after the Libor rate was first rigged.

Linking to dividend paying stocks – all the banks that have been fined until the financial crisis were some of the best stocks to own. They were very profitable, were involved in the biggest deals across the world, were able to influence governments and corporations and were on the top of the hill. In turns out, they cheater to stay there and in a manner which materially affects their business. Naturally people have left the company and the company continues in a seemingly lesser light. The question is what to do? if you owned the shares would you keep them? for they still pay dividends. Owning shares in a profitable business that pays dividends is a good thing, but even better is when the company at least tries to stay within the law.

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

We all collect something, and at this time of the year, you may receive more of what you collect. If you are a sports fan and have a favourite team, among the gifts under your tree will likely be something with your favourite team logo. At this type of year, liquor gifts are common and so are stories about the value of some scotches, cognacs, wines and other spirits. As they get older and rarer the value goes up. However whatever you collect, hopefully the enoyment of the collectible should be the first reason for collecting. For if the value sometimes goes up. sometimes the value goes down.

Linking to dividend paying stocks – one of the good things about dividend paying stocks is every year a dividend is paid. The stocks will go up and down, but the overall return is often better than the indexes. The dividend gives you a constant cash flow to allow you to buy more stock or other things you collect.

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

In the paper, there was a wonderful advertisement by the music store hmv. In the music business, it seems to make perfect sense to cross sell items. Music is one of those areas where the music and words often says something to us and we want something more than the song. Each of us has our favourite songs and artists and many come with the potential adds on. Sometimes the adds on are about the music, but it does not have to be. An example is the Beatles had an album called Sgt Pepper’s Lonely Hearts Club Band and hmv is  selling a Sgt Peppermill pepper grinder. What has the grinder have to  do with the album? outside of the name, nothing, but it is still a cute item.

Linking to dividend producing stocks, the add on is the dividend. The stocks are out of the  thousands which are traded, you have decided is a good investment. If you ensure the add on of a dividend has been paid for a number of years, the likelihood of your stock doing better than the index makes dividend paying stocks worth having

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

One of the methods advertisers use to sell their product is by postcards. In various locations and sometimes depending on your postal code, they are dropped off in the mail. The other day one arrived in the mailbox and glancing at the picture it looked like a face. In fact the picture was of a building and its outside staircase viewed through the trees. The procedure has been a long tired and true method reaching back to Ichabod Crane and the Legend of Sleepy Hollow featuring the headless horseman. It was a wonderful story and the trees at night accent the plot. If you were to wonder through the trees in the evening, it is not hard to come up with great stories. In the daytime, the trees just not have the same negative effect.

Linking to dividend paying stocks, different methods to look at the same thing is something we should strive for. We may do the same thing, but every once in a while we should look through a different perspective. For most of us, we should focus on: ensuring our capital is protected (not losing money) and making money through the use of dividends with the bonus of increasing stock price. The number one rule of investing is do not lose your capital. The second rule is make compound interest work for you – if you prefer stocks ensure a dividend is paid. In the long run you will have a greater amount of assets than any other way.

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

As someone who lives in an urban area, one of the areas the writer likes to read about is how can public spaces be made better? When we come to an urban area whether to work or to study, we eventually settle in one part of the city or another. The writer’s preference has been closer to the centre than the outskirts. However, in every part of the city there is an area which could use a do over. Many times the money does not have to be large, but if the area is scheduled to be fixed up, there is an opportunity to do something. To do more, one idea is to examine what cities around the world are doing and a reference book is the good life – new public spaces for recreation edited by Zoe Ryan, Val Alen Institute, New York, 2006. There are interesting ideas which have been done, could be done as well as ideas that are a little far fetched.

Linking to dividend paying stocks –  the do more for stocks is receiving a dividend, the ideas that are far fetched are the stocks that try to promise gains rising to the moon which you should avoid. The ones in between are the stocks you read about and think maybe, but studies continue to prove sticking to stocks that pay dividends and have consistently done so gives you an average better than the stock market index which means your money grows over time with less risk.

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

David Einhorn of Greenlight Capital wrote a book called Fooling Some of the People All the Time, John Wiley & Sons , 2008. Mr. Einhorn runs a hedge fund called Greenlight Capital

An issue in the book is what should the regulators be doing? Mr. Einhorn went to the regulators on a regular basis to show his evidence. Financial fraud is relatively easy to do, but it takes a lot of work to bring action against the abusers. Allied Capital was dealing in small business loans which the government policy makers wanted done.The program was to give out money, not how well the money was received back, as long as Allied Capital paid a dividend or gave its distribution, it was generally assumed the company was doing what the normal standard is. Greenlight and others proved Allied Capital was fixing the books to look like they were doing what is normal, for Allied’s normal turned out to cost the government millions of dollars.

The Securities and Exchange Committee which should be interested because Allied would go into the capital markets to issue stocks and bonds, were not really interested until millions was at issue, not thousands. The questions for financial fraud is would a bureaucrat risk his/her job for thousands in fraud? Sometimes the answer is yes, most of the time the answer is no. By the time fraud throughout the organization is proved and acknowledged larger sums will have been lost. The bureaucrats look to their political masters and senior people who deal with the great side of doing small business loans including ribbon cutting, new jobs and donations.

Lessons for dividend stock owners – the system is imperfect. Regulators try but often the mechanisms to search, prove and track fraud are not high priority when programs are introduced and running. This is especially true if the programs involve a higher goal of the government and consistent fees. Most program systems are designed believing the users are honest, ethical and only a little fraud with go on. Honest people do not like to do much paperwork and those involved in fraud are happy to do even less. In countless programs, it seems fraud creeps in and affects many programs. Thank goodness for short sellers and whistle blowers. If the first reaction of management is to go against the short sellers, it is a sign to move on to other investments.

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