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Showing posts from May, 2017

Consider These Issues Before Investing In Foreign Stocks

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Market pundits and investment experts have been telling us to start investing in foreign stocks. This is mainly because the US stock market is at its all-time highs and due a major correction whereas foreign markets have been lagging considerably for the past few years and now are primed to grow again in double digits.

If you look at the 5-year chart below which compares developed international stocks fund MSCI EAFE ETF (blue line) with US S&P 500 Index (green line), you will notice that international stocks have been grossly lagging US stock market since about mid 2014 and it is only recently that they have started to grow again.


A Stock Watchlist Makes A Better Investor

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What is a stock watchlist?

Stock watchlist is simply a list of stocks that one wants to buy when the conditions are right. Buy conditions can be triggered by a short-term company issue or industry specific downturn, but many times they can also be triggered by a broader market correction.

My watchlist contains stocks that I've already researched and interested in buying at sometime in the future when they are trading at the right valuation or price.

Which department store stock should I buy?

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A value investor is always looking for bargain stocks to buy. With the US stock market trading at a P/E of around 22, it's hard to find cheap good quality stocks.

However, if you have been paying attention to the retail business environment, you may have noticed that retail industry is not doing so well as more and more stores are closing their doors and have been reporting dwindling sales for the past several quarters.

How do you define a high quality stock investment?

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At least for me, a high quality stock investment is the one that exhibits the following three qualities:

1. High Quality Financials
2. High Dividend
3. High Dividend Growth

I'm a value and dividend growth investor which means I only invest in stocks of companies that are of high quality and pay a growing dividend.

You may ask why I only invest in dividend paying stocks?