|
How To Create Wealth In
The Stock Market
By Charles M. O'Melia
First and foremost, an opportunistic strategy for creating wealth in the
stock market is needed. And the opportunistic strategy for creating wealth
in the 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 the 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 the
investment plan you begin has merit. And this means that the investment plan
would and should have already been proven to you!
This definite, concrete plan you begin for creating wealth through
opportunities in the 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 the opportunistic traits of a strategic investment plan built on
concrete that would actually allow the shareholder to profit through all the
turmoil of an up and down stock market? The secret for creating wealth in
the stock market; no matter what direction the market is heading?
As in what appears to be the most difficult investment question of all to
answer, the 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 the 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 the 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 a15 percent return a year, compounded
annually (just by having the dividends reinvested back into the stock each
quarter through those years ?I prove this to you in The Stockopoly Plan),
for the 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 3?percent. In
April of 2003 the 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 the stock drops from this lofty price back to $37 a share? Why
should I? If the stock drops back to $37 a share, my dividends being
reinvested back into the 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 the company to
reap the profits of owning the stock (as well as the possibility of another
stock split).
The second example is (unfortunately) in my book, also. I say unfortunately
because my book is in the final copy edit stage, so no one has had a chance
to read and benefit from it, and since a buy-out offer was made for the
stock last week or so, the stock will no longer exist (this means a rewrite
for me, before publication). The company in question is the Rouse Co. (RSE),
which was just purchased by General Growth Properties (GGP). Oddly enough,
you’ll find GGP in my book, also ?if you bother to pick it up. Anyway,
that’s neither here nor there - RSE, on the takeover bid jumped over $16.00
a share in one day! Whew! Why couldn’t they have waited a couple of months
until my book was released? RSE had the opportunistic trait of raising their
dividend every year since 1993 and I was quite content with its performance
through the years.
Well, that last paragraph blew my train of thought on this article. All I
can think about at the moment is my rewrite.
I would like to take this time to explain something to you. I have never
considered myself a writer nor am I a stock market professional. I am simply
a man with 39 years of experience and a passion for the stock market, trying
to share what wisdom those years have given me. When I sit down to write an
article, I seldom have an idea on what I’m going to say. It was the same way
when I sat down to write my book. I just meant to put down a few words on
paper for my 18-year old son so he would have a sound, concrete plan for
investing in those companies that make up the stock market (quite frankly ?
I didn’t want him to blow his inheritance). Whether you find merit in what I
say, I have no idea. What I do know is that life is just too short to learn
everything you need to learn by yourself, without the help of others.
There, now I’m satisfied with that ending!
For more excerpts from the book ‘The Stockopoly Plan?lt;br>
visit http://www.thestockopolyplan.com
Charles M. O'Melia is an individual investor with almost 40 years of
experience and passion for the stock market. Author of the book - The
Stockopoly Plan-soon to be published by American Book Publishing
Article Source: http://EzineArticles.com/
|
