Dividends are like the golden child's of the stock investment world. If you take a look back at stock history you'll see that dividend stocks are the safest stocks to invest in because not only does the price on them not change much but when they price does change for the worse the change in price is often off set by the dividend income you receive. This makes dividend stocks the ultimate investment tool for investors who want to safely own stocks and getting an income at the same time. If you own a collection of dividend stocks and you continue to build up your portfolio until you retire, during your retirement years you can get a nice large steady income from your stocks to support yourself. And the really good thing about dividend stocks is that you don't have to sell them to get the money you want.

With stocks that don't pay a dividend or don't pay a large enough dividend to be worth investing in for a dividend over the long wrong. These kind of stocks you have to sell in order to get your money from them. And when you sell the stocks the shares are gone and you can't get them back unless you buy more stocks. So your basically uprooting your money making tree without putting down a replacement. The beauty of dividend stocks is that not only does the dividend increase but the stock price also increases and to take your wealth out of the new money being put into the stock that you own you don't have to sell your stock to get profit.

This makes dividend stocks an ideal tool for people who want to live long and prosper and pass their wealth onto their family. Once the transfer of stocks is complete they will continue to pay dividends and grow. And since you don't have to sell them you never have to worry about running out of stocks like you would if you were only investing in stocks with capital gains potential and payments.

Antonio Seegars is the owner of the in-home computer repair company Hampton Roads Pc Repair

Article Source: http://EzineArticles.com/?expert=Antonio_Seegars

It has been written about to the point where investors are tired of hearing it, but it is worth repeating that dividend based investments are going to take on heightened importance and relevance in the future and particularly for 2011. Arguably the biggest reason why investors who need to derive income from their investment portfolios will start turning to dividend paying securities is that these types of income producing securities will not be impacted as much as bonds when rates start to increase.

Interest Rates and Preferred Shares

One of the safest ways to draw an income out of equities is through the purchase of preferred shares. While these types of securities will received a preferred dividend payout compared to common shares, there is also a lot less volatility in price. Still, these securities will deal with yield and whenever yield is involved, interest rate fluctuations will have a counter-corresponding impact on price... albeit much more muted here.

Interest Rates and Common Shares

Unlike preferred shares that will have muted price fluctuations with interest rate increases, common shares will have wider fluctuations. The biggest difference here is that once the immediate "shock" passes, common shares are apt to increase in value as rising rates tell investors that companies are doing well and the economy is seen as expanding. This spells profits and cash flow for companies, which bodes extremely well for their stock price.

The problem with common shares is that their dividends are normally lower than the dividends paid on preferred shares. This leaves the investor more inclined to hold such securities more for their growth attributes than for their income producing abilities.

Preferred or Common for Income

Most investors looking for a way to replace their bond income payments with a security that will not fluctuate as broadly as bonds will once rates start climbing will look to preferred shares. Yields are not only marginally better than they are on common shares (for the most part), but the security price will not move as much.

On the other hand, investors looking to cash in on the growth potential of an economic recovery and expansion can also earn dividend income through many of the common shares that trade on the markets. The trade off is greater volatility and lower income (again for the most part).

Either way, replacing bond income is not so much an issue for many investors, but deciding which way to invest (preferred shares or common shares) is the greater problem to solve. And while this may not seem like such a big problem to work through for 2011 when bonds may suffer market losses, a long-term investment plan needs to look beyond the next twelve months.

Chris has more than 17 years of financial services experience. He currently manages a website about Shipping Crate options at ShippingCrate.org as well as another about investing through Tax Lien List opportunities at TaxLienList.org.

Article Source: http://EzineArticles.com/?expert=Christopher_Fitch

Trading stocks involves buying and selling stocks. Unfortunately, all the hype surrounds the buying side of the stock market. Once you are committed all the sales people seem to disappear.

You see lower lows, you see trend lines breaking, you see volume increasing on the downside, you see negative news, you see insiders selling yet with all the information saying this stock is going down you hang on. Selling stocks is tough.

Perhaps you are a long-term investor and never sell. That is one way to play the game. However, when you are a trader and do not want to become an investor you must sell.

Why do people have such an emotional attachment to a losing stock?

Why can't they sell the loser and use the cash to buy a winner?

I think one of the main reasons traders find it difficult to sell is that from an early age people are trained not to make mistakes. This training happens without most people even realizing it and it begins at home and at school.

At the end of the school year the higher your marks are the happier you are. During the year you may have made some errors however, when it counted you came through and passed your test.

Now think of the reaction a child gets when they come home with a failed grade. Do they get heaps of praise, presents, rewards or do they get ridicule, told to buckle down, privileges taken away or worse. In most cases, my guess is the latter. This is unfortunate as in order to learn people generally fail first and succeed second.

What happens to many is that they get so frustrated about losing that as they grow older they will do anything not to lose and as such end up living a very average life.

You have to understand that trading is a probability game. In order to win you have to play and when you play you will eventually lose. The trick is to lose less than you win.

One of the first rules of trading is to cut your losses and let your winners run.

Let's look at a basic example:

School

90% pass, brilliant
10% fail, stupid

Stocks - 100 trades

90% of trades make $100 (+9,000)
10% of trades lose $1000 (-10,000)

Results in a loss of $1,000

Or

10% of trades make $1000 (+10,000)
90% of trades lose 100$ (-9,000)

Results in you making $1,000 even though you were right just 10% of the time.

This is why you repeatedly hear stock traders say: cut your losses and let your winners run.

This is not an easy job because while teachers and society in general are quick to tell you below 50% is a failure there is very little said about the subconscious mind.

The subconscious mind works on habits. You are programmed from an early age to win. Therefore, selling a losing stock for most people goes against their training whether they realize it or not. Essentially, selling a loser has not become a habit.

However, since most people do not start to play the stock market until they are 20+ years old they have 20+ years of subconscious programming to erase.

To trade well you need to develop the habit of selling your losers quickly and without emotion. Look at the evidence and sell. No remorse, no second guessing just get rid of the position.

Your job is to break this unconscious habit that has been developed over 20+ years. It will take time.

Prior to buying your next stock, identify when to sell your stock and get out of the position. Next, either place a stop loss with your broker or sell the stock when it breaks through your sell zone. In some cases, traders will place a stop loss order as soon as they have purchased a stock.

Move your stop up as the stock advances and never move it down. There will be times that your stop will be hit and the stock will rebound right after that. I have been taken out on the low of the day, it happens. Expect it and live with it. This is why trading is an art not a science.

You cannot control everyone that owns the stock that you own. When someone gets a margin call and chooses to sell a large volume of a stock you own, resulting in your stop being hit, don't take it personal, it is just part of the game.

Over time and a number of trades you will see that the weak stocks are being taken out while the strong stocks continue to advance.

Trading is a probability game. All you can do is put as much probability on your side as you can prior to entering a trade.

Mark trades stocks for fun and profit. To learn the basics of building a stock trading system please visit http://www.knispo-guide-to-stock-trading.com/stock-market-trading-system.html. Find more information on stock trading, stock market screeners and using technical analysis to buy and sell stocks at http://www.knispo-guide-to-stock-trading.com.

Article Source: http://EzineArticles.com/?expert=Mark_Kelly

This is a book on the history of the London Stock Market which goes from 1945 to 2007, it details how the markets stars were made and crushed, many of them turned into success stories while others just faded away.

It gives great examples, such as Jim Slater's, whose card house collapsed which left the Bank of England in a hole and they had to pick up the cards and repack them, then comes the washing machine that blew bubbles by John Bloom and Asil Nadir who made his millions out of oranges. Its gives examples from a range of industries from the recessions, booms and bubbles created throughout the years. Fruit packing, mining, dot com, textiles there all covered in there.

The dot com boom brought it all, how a bull market drives the population in buying shares without thinking, it was a classic. 9 names found their way into the London Stock Market and none survive, they took over the old brewers however it was the brewers who had the last laugh and had you sold your shares in time and got in with the brewers you would have been laughing all the way to the bank while the rest of the world was weeping with dot com loses.

Companies come fly all the way to the sky and suddenly drop, crashing straight on to the ground. Adils orange business was a prime example, Polly Peckers went from nothing to £1.5 million and back to nothing in just a short time of 9 years, the smart ones made money while the pigs got slaughtered.

Visit us to learn more on The London Stock Market

Article Source: http://EzineArticles.com/?expert=Suhaib_Alam