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Dividend increases are typically met with a positive reaction from investors, while dividend cuts are typically met with a negative reaction. Whether these changes signal positive or negative information, however, depends on the quality of the company and its leverage. Companies...

Repurchases of common stock by corporations can be an attractive alternative to dividends. They may also affect share price. But what is their impact—to the corporation; to the shareholder? Many companies have been repurchasing their common stock in recent years and some can...

Earnings and dividend growth rate assumptions are a primary factor in almost all fundamental models of common stock valuation. The greater the anticipated future growth in firm earnings, the greater the stock valuation will be, assuming risk remains unchanged. But estimating earnings...

Important Note: Dear Subscriber, Starting with the September 2018 edition, Computerized Investing will be merging with the AAII Journal. Computerized Investing was originally created when computers, and using a computer to research investments, were a new option for individual investors....

The term “yield” is thrown about often by the financial press and others. The trouble is that yield has many different meanings and implications for investors. This workshop will try and sort out some of the major differences. It will not, however, attempt to present mathematically...

Judging a firm’s leaders is an important step in analyzing a stock for investment. But it’s a murky area that offers no solid statistics to review. And most investors don’t get the chance to actually meet a company’s CEO and other officers in order to get...

Naked put selling is equivalent to covered call writing in terms of where and how profits and losses are incurred. But it can be advantageous in terms of cost savings and potential reward. Talk to an investor who is involved in a covered call writing program about his doing some...

If you pay too much for a stock, your return on investment won’t be satisfactory. In the AAII world of Shadow Stocks—companies with some history of growth, little or no dividend yield and a small amount of the stock outstanding owned by institutions—you hope to profit mainly...

Experience is that marvelous thing that enables you to recognize a mistake … when you make it again. —Franklin P. Jones It is not that easy to talk about one’s mistakes. In the early days of Tocqueville Asset Management, I suggested that the senior partners jointly write...

The covered call provides extra income to a buy-and-hold strategy. In exchange for this income, there is a risk of lost opportunity. If the stock’s price rises well above the fixed strike price of the call, you have your 100 shares of stock called away below current market value....