Portfolio Diversification – Improving Your Portfolio With Every Purchase

Posted on by Ryan

Every time I make a new investment I am looking to improve my overall portfolio. There are 3 key measures that I look at in which a dividend growth stock purchase may improve my investment portfolio. A new buy may improve my portfolio by increasing overall diversification, increasing my current dividend yield or by increasing my dividend growth rate. Every single time I make an investment I look to improve the portfolio by at least one of these metrics. If a purchase helps me in more than one metric, then it is even better.

Increase Portfolio Diversification

Diversification involves reducing risk by investing in a variety of assets. For your overall financial picture this will involve investing in different assets such as stocks, bonds and real estate. For dividend growth stock investing, diversification involves investing in companies from different industries. You may want to invest in companies from the oil industry, retail industry or restaurant industry. There are many industries available to invest in which will aide us in our attempt to diversify our dividend growth stock portfolio.

When I look to make an investment I always look to see what industry the company operates in. Then I look over my portfolio to determine if I already have investments in that particular industry. If I do, how much of my portfolio does that industry make up. I don’t want to have all my stock investments be from one or two particular industries. For me the more industries I can invest in the more diverse my portfolio is. With higher diversification my portfolio will have less risk. This is because not all industries will be affected the same way by different market conditions. If the oil industry is really suffering, my oil stocks may be going down. However, my stocks from other industries may still be doing alright or even wonderful.

Increase Portfolio Dividend Yield

Another way I may look to improve my portfolio is by investing in stocks that will help increase my portfolio dividend yield. One of the goals in a dividend growth investing strategy involves bringing in dividend income. If I can increase my overall portfolio dividend yield, then I am increasing the income that I am being paid by my companies.

For example, if I have a portfolio of dividend growth stocks that is worth $10,000 and I expect to receive about $350 in dividend income this year then my portfolio dividend yield is 3.5% (350 divided by 10,000). Now when I am looking at new investments I know that if I invest in any stock currently yielding higher than 3.5% it will raise my overall portfolio yield. If I decide to invest in a company that is currently yielding 5% then I will increase my portfolio yield. Let’s say I invest $1,000 in a company yielding 5%. I will expect this company to pay me $50 in dividend income this year. My new portfolio dividend yield will increase to 3.64% (400 income dividend by 11,000 portfolio). This is good because on the whole my portfolio is earning me more income for each dollar invested.

Increase the Dividend Growth Rate

Another way to improve your overall portfolio with a new investment is by increasing the dividend growth rate of the portfolio. The dividend growth rate is the rate that a company increases their dividend payment from one year to the next. The higher the dividend growth rate, the faster my dividend income will increase. If my entire portfolio is invested in companies that don’t increase their dividend at a high rate each year, then I may improve the portfolio by investing in a company that has been growing their dividend quickly over the past few years. This will increase my total dividend growth rate and help me increase my income quicker.

For example, if the companies in my portfolio are averaging 8% dividend increases annually, I may look for a company that has been increasing their dividend faster recently. If I then invest in a company that has been averaging 15% dividend increases the past few years, I will expect my overall portfolio dividend income growth rate to increase slightly. A higher portfolio dividend growth rate means that my income will be growing faster. I always want to make sure my portfolio dividend growth rate is higher than the rate of inflation. Ideally I look for a portfolio dividend growth rate of at least 7-8%.

In Conclusion

With every purchase I look to improve my portfolio in one of these three ways. The more ways I can improve my portfolio the better. Dividend growth stock investing involves a balance between diversification, current dividend yield and dividend growth rate. We want to make sure we have a good mix of companies to help decrease overall risk of the portfolio, a good current yield so that we are getting an acceptable income and a good dividend growth rate so we know that income is increasing. Getting the perfect balance for your portfolio is more of an art then a science. By trying to improve at least one area with every purchase, you will be sure to keep your investment portfolio heading in the right direction.

Financial Goals of Dividend Investing

Posted on by Ryan

When you decide that you want to become an investor, one of the first things you must do is map out your goals. Figuring out what goals you want to achieve with your investments will help you determine what type of investing you should do and what strategy you may want to use.

Your Goals are your Investing Guide Map

Your goal in investing is going to be your mission statement. The goals you set will help be a guideline for your investment decisions that you make in the future. When setting your goals, make sure not to be vague. Most people that are investing are obviously out to make money. The question is why are you trying to make money through investing. Maybe you want to invest in order to gain a higher return on your money so that you may be able to afford something in the future. Possibly you are investing so that you can build up a passive income from rents, interest and dividends to spend now or/and in the future. Whatever you decide, be sure to write out a clear goal statement and focus on it frequently as you advance through your investing career. Modify your goal if and when things change. Remember that it is OK if what was once your goal has now changed and you find yourself trying to achieve something different. Just make sure to formulate your investing plan with your goals in mind.

Dividend Growth Stock Investing Goals

There are a few different goals you may be interested in pursuing where a dividend growth stock investing strategy is a suitable approach.

Building a passive income from dividends for current needs

Rather then spend all your money from your paycheck, you may be interested in investing some money each month in dividend paying stocks. This will allow you to build up an investment portfolio over time and provide some supplemental income if you decide to take the dividends in cash to spend as the companies pay out.

Building a passive income from dividends for future needs

You may decide that you don’t need more of a current income to meet your current needs and wants. However, you don’t plan on working forever and someday that paycheck will quit coming in if you quit working. Building a portfolio of dividend growth stocks is a good way to build an income for the future. You can grow your portfolio quicker by reinvesting your current dividends and eventually the annual dividend income may be enough to cover your living expenses. At this time you can afford to not have to work for a paycheck and just live off of your dividend income. This is a good strategy for retirement.

Preserve investment capital

When you are looking for a safe investment to keep your money safe most people will thing of bonds. While bonds will help keep your principal safe, they don’t offer much in the way of investment returns. Another option if you are willing to take on a little more risk is dividend paying stocks. Stocks are definitely a riskier asset class then bonds. However, dividend paying stocks have typically been less volatile compared to other stocks. Dividend paying stocks offer a decent income component and if you select your investments wisely will give you better preservation of your capital then non dividend paying stocks. Compared to bonds, dividend paying stocks may be a little more risky in that you can lose some or all of your investment. However they also typically offer greater returns then you would receive by investing in bonds.

Good returns

Financial Risk Tolerance vs. Emotional Risk Tolerance

There have been studies that have shown that dividend paying stocks tend to outperform over time non dividend paying stocks. Also companies that annually increase their dividend payments tend to outperform companies that do not increase their dividend payments. So over the long run, we can hope that we will be getting the best return in the market from our dividend paying stocks of solid well known companies. You will probably be less likely to lose your money and earn a decent return from a Coca Cola type company compared to a company that you have never heard of and don’t understand how they make money. Dividend growth investors pick solid stable companies that have a history of increasing earnings and paying out increasing dividends. These companies perform well over the long run.

My Dividend Growth Stock Investing Goals

Personally, I am investing in dividend growth stocks for all the reasons I’ve listed above. I believe that dividend growth stocks will over time give me a great return with less risk to my investing portfolio. I understand that dividend growth stocks will pay me out an income this year that I can use for expenses if needed. My main goal when investing in dividend growth stocks is to build up a portfolio that will provide me with a sizable income later in life. I am 30 years old and have at least another 30 years of working for a paycheck. However, I’d like to build up a portfolio of dividend stocks that eventually will pay me enough income that I can retire if I want. I will be able to use the income from my portfolio to pay my expenses without ever having to sell any of my stock assets and decrease my portfolio.

So for my goal I have a long journey ahead of me. Short term I measure my success by tracking my dividend income on a monthly and annual basis. I expect to see these income numbers rising as time passes and if this is happening I will know I am on the right track towards achieving my investing goals.

In Conclusion

Before you get started investing, make sure to take a moment and think about what you are really trying to achieve. Figure out your goals and use them as a guide map for your investing decisions in the future.

Investment Risk Explained

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What is Risk?

We are often told to take risks in life, but what does risk mean when it comes to investments? Risk is defined as a source of danger or possibility of incurring loss or misfortune. For example, you are taking a risk when you decide to go out the night before a big exam instead of study. You might end up failing your exam.

At first, risk sounds entirely unnecessary. Why would you do something that could possibly lead to misfortune? When you take a risk, you are not just setting yourself up for a possibility of failure, but you are also setting yourself up for the possibility of something extra.

You took the risk of failing your test so you could have a good time going out the night before. If you did not take that risk, you might have spent the time studying, but you wouldn’t have been happy staying home.

What does risk have to do with investing?

Risk plays a huge role in investing. An investment can be risky to varying degrees or risk-less. Risk-less investments are those investments backed by the governments such as government bonds or and FDIC insured savings account. Because the government backs them, you are guaranteed to get your money back. The only problem with risk-less investments is that you usually won’t get a very high return.

You have to take a risk to get a higher return which is why there are risky investments. The higher possible return on the investment, the riskier it is. The riskier the investment, the less likely you will get a return at all or even your principle investment back for that matter.

Why buy risky investments if you might not get it back?

Simple answer, a riskier investment gives a higher return. Sure, there’s a chance you might not get your money back, but that’s why you need to research your investments and weight the risks.

If you notice there are bonds for sale that offer 25% interest for a new start up company, you can’t just buy it and think “Well, I might get my $1,000 back and if I do I’ll get $1,250 back.”

Look into the company. Does it show promise? Do they seem like the’yre the kind of people that will pay you back? 25% interest is very high for a bond which would make it very risky.

On the other hand, there might be a bond that promises 8% interest from a company that has been around for a while and that you may have bought from before. Should you invest your $1,000 in this company for 8% or stay save and invest in a government bond for 4%?

This is where you need to way the risk. You decide if it’s right for you. Remember that if you don’t take any risks, you will continue to get a small return. The stock market is full of risk. You could invest in the stock market for the next 50 years and get a low historical average of a 10% return, or you could stay safe and invest in 4% interest government bonds.

Taking a little risk could mean thousands or even millions of dollars for you.

Should I always take the risk?

Generally, if you are young, take more risks, if you are older and nearing or in retirement, take very little risks. As a teenager or someone in their 20s, if you lost $25,000, you still have 20 to 30 years to get it back. If you lose that money when you are 65, you could be cutting into your living expenses in retirement.

Understand your risk and don’t always take the safe route. Take the risk and you could end up enjoying a much richer retirement sooner because of it.

Best Online Affiliate Programs To Make Money

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From companies such as Amazon.com to smaller niche market items, each online business has its own particular affiliate program, which allows advertisers to receive a commission (this can be as a percentage or fixed dollar amount) or income offer each time they acquire another lead or make a deal.

Affiliate marketing programs vary greatly in scale, reliability, and quality. In this article, we will discuss five of the best online affiliate programs for advertisers, bloggers or any other person keen on earning a full-time salary online.

Best Online Affiliate Programs

1) Amazon Associates

Amazon.com is the world’s biggest online retailer, and the affiliate program is also one of the world’s most well-known affiliate program. Amazon offers affiliates a commission ranges from 4% to 8.5 percent, for direct sales of specific items.

There are various points of interest to Amazon’s affiliate program. As a matter of first importance, it’s controlled by one of the world’s top trusted organizations, giving associates certainty that their payments will be sent out on time, each time.

Second, Amazon’s immense item range implies that its member system is suitable for a huge assortment of advertisers and bloggers to benefit from.

At last, Amazon’s program is anything but difficult to join and much less demanding to oversee once you become a dynamic member.

You can join the affiliate program from here.

2) ClickBank

ClickBank permits associates to promote items in four unique languages. This is a component that is not offered by the extensive part of other network marketing companies.

ClickBank acknowledges payments in thirteen unique monetary forms and permits affiliates to advance items in about each nation all through the world. ClickBank makes week after week or bi-weekly installments each Wednesday, once the account of the affiliate member has sales with more than five distinctive credit cards, yet excluding PayPal.

You can join the affiliate program from here.

3) Wealthy Affiliate Bootcamp

This affiliate training course is actually a “boot camp” for those who dream to become affiliate marketers and who are looking for an obvious way to achievement.

This course will show you all that you have to know for turning into a fruitful marketer, ranging from how to make an affiliate site to how to beneficially showcase PPC promotions.

It is comprised of six phases, all of which I will be further presenting to you

The purpose of the Wealthy Affiliate Bootcamp is to help all those persons who find themselves overburdened with excessive external information and do not know what is right and what is wrong and do not even know how to apply all that information. Moreover, it is intended to help people practice all the knowledge learned there.

Phase 1: The Foundation

This is the place you can hope to begin your preparation in turning into an expert affiliate marketer and where you will be demonstrated generally accepted methods to get your affiliate site up to promote Wealthy Affiliate.

Phase 2: Wealthy Affiliate Bootcamp

You will then figure out how you can avoid and do not commit a percentage of the basic errors that most affiliates can make.

Phase 3: Social Value

This phase is the place you will be figuring out how to set up your website so others will give you the quite coveted social shares.

Phase 4: Get Visual

In these ten lessons, you will be adapting such things as how to outline your site with the goal that Google will support it in the page ranking and search results.

Phase 5: Knowing Your Audience

And here is another phase of the preparation that will most unquestionably alter your opinion in light of the fact that this is the place where you realize about how to find out all there is to know about your audience.

Phase 6: The Power Of PPC

In this last stage of your path to becoming an expert affiliate marketer, you will learn exactly how much power PPC promotions can really hold to your prosperity as a best in the class advertiser.

You will find how to utilize these advertisements to expand your traffic, your income, and your overall standings as one Authority site in any industry that you will pick in your future profession in the business.

Phase 7: Scale Your PPC Campaign

Scaling PPC campaigns in a way that leads to profitability and long term success.

How much you can earn with Wealthy Affiliate Bootcamp?

You can join the affiliate program from here.

4) LinkShare

LinkShare is also an affiliate network, a kind of business that unites partners with cost-per-activity and cost-per-sale affiliate programs. LinkShare has a huge number of dealers in its system, including driving brands like Macy’s and Sephora.

Due to the fact that LinkShare is an affiliate network rather than a direct affiliate program, it could be a brilliant decision for advertisers that need to promote services and products from a wide assortment of distinctive merchants.

Owned by the Japanese e-business titan Rakuten, the LinkShare program has an awesome notoriety among advertisers and publishers.

5) Commission Junction (CJ)

Last but not least, CJ provides a larger number of components than other affiliate marketing companies do not have. One of its most exceptional components is an electronic email framework that permits affiliates and publicists to communicate with one another. Despite the fact that CJ does not group sponsors as “Premium Advertisers”, they do speak to substantial and well-known organizations that can make more traffic through the ads, raising commissions.

For affiliates who are executives for more than a few sites, CJ has made a straightforward route for them to deal with the commercials and track details for every site separately.

CJ gives payment alternatives through direct deposit or check. Payment recurrence is month to month and the limit is $100 for checks and $50 for direct deposits.

The Truth About Affiliate Marketing!

Posted on by Ryan

How To Make Money At Home With Affiliate Marketing?

Affiliate marketing has gotten to be one of the best business opportunities online on the grounds that the startup expenses are so low and the salary you produce can be amazing.

Affiliate marketing includes having your own particular site and sending your movement to another person’s site to purchase their items or services. For each deal started by a connection from your site, you gain a rate, called an affiliate deals commission.

Affiliate marketing should be possible on the part-time basis, and numerous are successful to the point that they have made it a full-time work. Similarly energizing, you can get in the diversion in only a couple of hours. In any case, how fruitful you depend on the measure of time and exertion you dedicate. Here is the way you can make money at home with these seven tips:

1) Choose Good Products

Everything you need with a specific end goal to be effective is a modest bunch of good items to advance. Attempt to comprehend the business sector needs and search for items that adjust accurately to the point of your site.

2) Choose the Right Merchant

When promoting an item, you likewise advance the individual or the organization behind the item so attempt to pick admirably. You don’t need your guests to go and purchase an item taking after your recommendation then return unhappy. Do you feel that this guest will return to your site and take your recommendation once more? In all probability, no and this can affect your credibility in the future.

3) Research

On the off chance that you attempt to offer an item that is in the low request then risks are that you are not going to get numerous deals regardless of how hard you attempt. So it is a smart thought to invest a touch of energy looking into and seeing whether an item that you are considering advancing is an item that your crowd needs. Also, on the off chance that your web page gets traffic then you could conduct online studies and effortlessly get info from your guests.

4) Use Traffic Sources

Like for example: Easyhits4u & TrafficMoonsoon

The majority of affiliate marketers set up the promotions just on their websites. There is nothing amiss with this methodology except for realizing that there are numerous other activity sources that you can take advantage of in order to promote the items all the while. The more focused on traffic you send to the business page the more your odds are of profiting.

5) Track Your Affiliate Marketing Campaign

It is a smart thought to utilize diverse item promotion methodologies in order to make sense of what is working and what is definitely not. Attempt to do part testing and measure the execution of every campaign and take actions in like manner. Changing a couple of things here and there can expand your income significantly.

Most affiliate programs will provide you with the essential details that you might require however there is nothing preventing you from utilizing your own conversion programming as well.

6) Learn New Techniques and Methods

Affiliate marketing is an exceptionally focused field and individuals are continually thinking of new strategies. Attempt to stay current with these new methods and business sector inclines else you will fall behind.

7) Use Helpful Tools

On the off chance that you are not kidding about affiliate marketing then attempt to discover instruments that will offer you some assistance with being more effective. There are numerous useful apparatuses out there. In the event that you are utilizing a WordPress controlled site then think about getting a plugin like the Affiliate Link Manager.

The Number One Resource for Beginners

Wealthy Affiliate is actually a step-by-step training program that shows its individuals how to wind up effective specialists in affiliate marketing. It is an immense instructive asset that will show you how to effectively turn into an Internet Marketer by giving all of you the apparatuses and preparing you would ever require.

It truly is best to consider it an online school. It is not an eBook you download or a bit of programming you introduce. It is an online course where you can gain from instructors and cooperate with students. You can login finish a few lessons, yet as opposed to getting grades, you can make money at home!

One of the most serious issues I’ve seen with different courses is that they rapidly ended up obsolete.

Wealthy Affiliate adjusts to changes in online marketing and is upgraded day by day both by the proprietors of the system and the individuals. New assets are composed all the time and you could dependably have full access to the majority of the preparation materials.

A perfect part about Wealthy Affiliate is that they will not attempt and offer you whatever else. Your enrollment incorporates all that you would need to begin an online business, to say the very least. They offer a week after week online courses, video preparing, site facilitating, support, individual one-on-one training, a forum, guidelines, thus a great deal more.

Just One More Thing…

In order to do well, read everything you can about the assessments, procedures, and tools of both specialists and beginners. In any case, before you even begin, pick a corner about which you are energetic. The more you genuinely appreciate what you are involved in, the more probable you are to change your affiliate marketing and make money at home business into a gigantic achievement.