Recently the writer read the book Outperform – Inside the Investment Strategy of Billion Dollar Endowments by John Baschab and Jon Piot, John Wiley & Sons Inc, 2010. The book examines what lessons can be learnt from the people who manage the funds at the larger educational institutions. If you are a college football fan, you would have heard or maybe even went to one of the larger schools profiled. The investment track record for the past number of years has been very good for endowments, why and what can individual investors learn?

Two themes which come into play are time and what is the money needed for? Time is a factor because the expectation is the institution will last for a very long time. This means the horizon for some of its investments to pay off will be longer. Balancing the time horizon is what is the money needed for? In the case of school endowments, some the money is used for the payment of operating costs of the university and scholarships. In this case, a specific amount is needed for each university as a minimum. Once it is met, then the endowment has options for investments.

Likely your portfolio is not the same size as the school’s but answering the above key questions is the first step. The reality is many of us individuals, want more sooner and we like rising markets. The method to counteract the reality is when and for what purpose?    Tomorrow will be part two.

On the weekend, to stay out of the rain, I stopped at the local library. Similar to most libraries there is a collection of magazines which on an average day I would not buy but may read once in a while. In one of the magazines there was an article about the Bonneville Salt Flats. For those who read car magazines, the salt flats have for many years been a place to try to gain a new car speed record. As the name implies the ground is flat and prior to people landing on the moon, new land speed records were regularly set at the location. Every couple of weeks or so, people gather to try to see how fast their vehicles will travel, leading up to Speed Week in August. Do they make lots of money, no. But it is legal and there is a a dual need to go faster and to try.

Linking to dividend producing stocks, some of the people who go to Bonneville do it because it is their passion. Dividend producing stocks can help pay for your passions. The regular income which often increases over time, can enhance your passions, which bring dividends in a non financial matter. Both are important, being passionate about something enhances your life while dividends enhances your financial situation. Go for both – income and growth in finances and in life.

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

In the US, two professional baseball teams  (Detroit Tigers and San Francisco Giants) are playing for a championship called the World Series. The reason it is called the World Series is the first championship was sponsored by a newspaper called the New York World. Anytime the other newspapers talked about the championship they would have to advertise the New York World newspaper. It is one of the reasons why in sports, just about every sport has sponsorship and marketing related to it, The New York World newspaper eventually went out of business but the trophy was never changed for the name gave the illusion the world was playing for the cup. For many years it was not so, now with players from all over the world playing professional baseball, there is validity in the name of World Series, even though the teams are based in North America..

Linking to dividend paying stocks, when companies start out they tend to be focused on a small part of the economic cycle because they do not have the resources to do everything. Over time some companies will grow and evolve and become “world class” companies for they have diversified operations around the world. Most will not, for the desire and management skills are different as the companies grow in size and scope. All along the continuum of medium sized to large sized companies are companies that are public and pay dividends. Look beyond the name to the business model and if you like the model and it has paid dividends for a number of years, you will end up with championship dividends.

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

If you are alive, you have a bias.You can pretend that you do not, but you do. We make choices everyday, We pick colours to dress ourselves, we are creatures of habit. There is nothing wrong with having biases. The trick is to ensure that because you have a bias, you do not automatically dismiss those that disagree with you. It is the same in the investing world, we have a bias towards what is a good industry segment to be in or not. We have a bias towards companies, it is easier if you like the company and invest in it. The point of the above is in every market segment, there are opportunities.

Linking to dividend producing stocks, if you start with the bias the company has to pay a dividend which has been paid for a number of years. You will find the usual companies such as utilities, pipelines, but within this select group will be companies you may not be familiar with. Some will be in industry segments you have a bias against, as long as you reject for the correct reasons, than dismiss them outright, it is okay, You likely will dismiss some because most of us do not have unlimited funds to buy every dividend producing company.

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

At this time of year, people begin to go into the card stores to look at calendars for next year. Now days you can have almost anything you wish on the calendar or you can make it yourself. Inside many calendars are the reminder stickers – appointments, birthdays, medical appointments, and others. In most homes there is a least one common calendar that people tend to look at, which makes the calendars useful and in a good position to share information.

Linking to dividend producing stocks – for each of your stocks that you own you should mark the date the dividends come into your account. If you can do that process, it means the company has paid dividends for many years and expects to continue. For some companies which have continually increased their dividends, you should see more money than planned which is a good thing. Companies such as Coca-Cola and Wal-mart are two of many examples.

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

Every industry has their own season for new products, at this time of the year it is the fall and winter clothing and the assorted events which go with fall and winter. If you are in the fashion industry, the new lines are in the stores and to stay in business the people have to be excited and engaged with the offerings. Every year something changes to stay fresh, however the themes of style and flexibility remain the same. The challenge is to ensure those who spend money on fashion be very regulars and for those that need adjustments to come in and spend.

Linking to dividend producing stocks, for those stocks which pay a dividend the challenge is to ensure the business model remains correct. Every year brings challenges both internal and external threats, but if the model is working and the dividend is safe, it is a time to see the glass more than half full.

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

Although grocery stores are open longer, some even 24 hours, the grocery stores seem busiest on Saturday and Sunday. The writer went to a grocery store on the weekend and  while browsing the products, new items showed up with a lower cost. It seems almost everything at some point goes on special at the grocery store. New items compete with more established items, and we consumers get to pick winners and losers. Eventually the losers will be deep discounted and replaced by new items to start the process all over again.

Linking to dividend producing stocks, the grocery store is a tough market place, although there are products in the store which have proven and continue to be successful for their owners. That is the key to dividend producing stocks, there are many stocks in the marketplace, most do not produce dividends. The ones that do offer you two rewards dividends and potential growth in stock price. Tilt the advantage to yourself receive two rewards rather than one possible.

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

In the world of the stock market, companies are in a state of change – some do well, some do not. Some stake their future on a big discovery or merger, some are adding to their offerings, someone else is subtracting. One of the companies the writer follows wanted to do a large merger, larger than its past, but not larger enough to affect their profitability or dividend payout. In the past all went smooth, the investment community understood their rational, the government approved it and they beat the competition from doing exactly the same thing. This time the expectations were high, but the government was swayed by the competitors and turned down the merger.

Linking to dividend producing stocks due to the fact the companies pay a dividend, most of the time management gets it right. When a dividend producing company does a merger, it has options or choices. If it goes ahead, that is great, the company is highly likely to be even more profitable. If the merger goes ahead and the results are sideways, the company still makes money and can pay a dividend. if the company eventually sells much of the acquisition, then it has learnt an expensive lesson but still paid a dividend.The key is continuing to be profitable and paying a dividend.

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

This morning the writer went for a bike ride in the urban area in which I live in. If you drive in the city at this time of the year, construction crews are trying to finish or do as much as possible. If you drive a car there are delays, if you ride a bike, some of them can be ridden around using the sidewalk. Normally it is not recommended to ride on the sidewalk but it some areas there are less walkers than others. This type of behaviour can be also called looking for opportunities. There maybe opportunity to save time, but it is something we all do. We look for opportunities.

Linking to dividend producing stocks, with these securely in your portfolio, you have to look less and enjoy the sites and sounds of construction. Whether it is new buildings or services to see how your city constantly changes and adapts. It is nice once in a while to ride through the city catching every opportunity, but do you want to do it everyday?. If you said yes, stay with growth stocks; if you prefer the more leisurely route try dividend producing stocks and enjoy the advantages.

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