How to create wealth in the stock marketWritten by Charles M. O'Melia
How to create wealth in stock marketFirst and foremost, an opportunistic strategy for creating wealth in stock market is needed. And opportunistic strategy for creating wealth in stock market must have two ingredients, a plan and a goal. The plan must be a definite, concrete plan of investing that would profit you and your family for rest of your lives. This opportunistic investment plan you begin should not profit anyone else – not a stockbroker, a mutual fund or a financial advisor. This means you have to have confidence in yourself and in your own judgment as to whether investment plan you begin has merit. And this means that investment plan would and should have already been proven to you! This definite, concrete plan you begin for creating wealth through opportunities in stock market must also have a goal. The goal should be clear and specific, and once your have made up your mind to achieve that goal, then go forward and make that goal a reality. What are opportunistic traits of a strategic investment plan built on concrete that would actually allow shareholder to profit through all turmoil of an up and down stock market? The secret for creating wealth in stock market; no matter what direction market is heading? As in what appears to be most difficult investment question of all to answer, answer lies in simplicity itself – investing in those companies that have a historical record of raising their dividend every year. Whether or not you can take this statement of fact to heart is your own judgment call. But it is this opportunistic trait that can and will create wealth for you and your family for rest of your lives. A company’s ability to raise its dividend every year, coupled with stock appreciation is a very powerful wealth creating formula! I’m going to provide you with two examples, though there are many more, some with even better results. The two examples are from my book, soon to be published by American Book Publishing – The Stockopoly Plan (where an investment plan and a goal are written in stone). The first example would be a stock purchased in 1990, Comerica (CMA). What led to purchase of CMA? – In 1990 CMA had a 21 year history of raising their dividend every year. Today’s CMA has a 35 year history of raising their dividend every year. This opportunistic trait in CMA stock has garnished a little better than a 15 percent return a year, compounded annually (just by having dividends reinvested back into stock each quarter through those years – I prove this to you in The Stockopoly Plan), for past 14 plus years. Today’s CMA stock just recently touched a new high at $60 dollars a share, with a dividend yield of around 3½ percent. In April of 2003 stock was selling around $37.50 a share, paying a dividend yield of around 5% a year. Am I tempted to sell my position in CMA? Do I care if stock drops from this lofty price back to $37 a share? Why should I? If stock drops back to $37 a share, my dividends being reinvested back into stock each quarter purchases more shares, and my dividend income from CMA simply and dramatically accelerates. I am also already prepared that if a buy-out offer is ever made for company to reap profits of owning stock (as well as possibility of another stock split).
| | Raising Money for Your CompanyWritten by William Cate
Raising Money for Your Company By William Cate September 2004 [http://home.earthlink.net/~beowulfinvestments/] [http://home.earthlink.net/~beowulfinvestments/globalvillageinvestmentclubwelcome/]It's never been easy to find risk capital for any business venture. Even during heyday of DotCom frenzy, only one business plan in two thousand five hundred was funded by venture capitalists. "Angel" investors funded about one business plan in three hundred. Wealthy private investors are called "Angel" investors. Some of these Angel investors are members of Venture Capital Clubs. Often, road to their money has been giving a presentation of your business plan at local Venture Capital Club's monthly meeting. When DotCom Bubble burst, a few venture capital firms disappeared. Many Angel Investors became extinct. At least fifteen percent of Venture Capital Clubs no longer exist. There are no longer any National Associations of Venture Capital Clubs. Your chances of finding risk capital from a venture capital firm are less than one in ten thousand. Your chances of raising money from Angels are less than one in one thousand. If you're spending time and money to raise money for your private business, you're betting on a long shot. The odds are overwhelmingly against you. To even those odds, you must offer potential investors a better risk/reward ratio. The emphasis should be on lower risk of financial loss and not greater reward. The simplest way to reduce risk and leverage reward is to take your company public. The investors can sell their shares and recover their risk capital. In most public companies share price outperforms company's balance sheet. Thus, your investors will earn more from sale of their shares in your public company than they would make from sale of their equity in your private company. And, there are far more stock buyers than buyers of equity in private companies. Costs are one prohibitive factor in taking any company public. If your plan is to do an Initial Public Offering (IPO), your SEC registration costs will average about $1.5 million. Your odds of getting a "No Action" letter from SEC are about even. It will take over a year to complete registration process. The underwriter must be paid and usually gets at least eighteen percent of money raised. You can buy a public shell trading on Over-the-Counter Bulletin Board (OTCBB). Assuming you get at least ninety percent control of issued shares, cost will be about $1.5 million. NEUP (Net 1 Ueps Technologies Inc.) was a trading OTCBB shell. It recently sold for $52 million and to my knowledge has been highest priced shell sale on record. Shells aren't cheap.
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