subject: Dividend Investing And Stock Market Trading News [print this page] The euro remains under violent attack and stock markets around the globe are unstable, so what potential reasons could there be for placing your money into shares now?
There are 5 arguments in favour of investing for the long run in stocks.
The FTSE 100 fell more than 2% to beneath the psychologically vital 5,000 level last Tuesday. However on Wednesday and Thursday, discount hunters have been buying up low cost shares and pushing the FTSE back up to get back all of Tuesday's slump.
Professional investors have additionally been benefiting from lower prices.
Anthony Bolton, the celebrated Fidelity fund supervisor staking his repute on a brand new China fund, is investing about 400m of British savers' cash there.
Last week he said market falls introduced 'important opportunities.'
With savings rates at record lows, corporations that pay dividends to shareholders are attractive.
The lower their stock prices, the more interesting their anticipated dividends become.
Numerous FTSE 100 giants, such as drug maker Glaxo and telecoms giant Vodafone, pay handsome dividends.
Buying shares in such firms can secure a yield - that's the value of the historic dividend relative to share price - of 5%.
There may be also the hope of capital growth although, importantly, values may fall further. How dependable are these companies' dividends?
Many of our largest companies earn most of their profits abroad.
Many also produce goods and services - like healthcare or tobacco - for which there's strong demand even throughout recessions.
Dividends have not often been more vital to investors. If you do not need to spend money on shares directly, you can decide an equity income fund where a knowledgeable money manager does the work on your behalf.
The euro crisis has pushed global capital towards the dollar, pushing it up against weaker currencies, together with sterling.
That is good news for British traders in shares or funds where company earnings, and dividends, are denominated in US dollars as they get an uplift purely on currency.
The decoupling argument posed the idea that emerging economies like China and India had ample momentum to develop, even when the established economies of the west faltered or shrank.
That principle proved mistaken in 2009 when the worldwide recession triggered by the West's financial disaster precipitated even China's powerful financial system to stop growing.
However now economists say decoupling actually is happening. While the West languishes in fragile recovery, China and India thrive and provide investors opportunities to profit.
James Dowey, economist at fund group Neptune, says: 'Till now, these markets have been suppliers of products needing to be exported. Post-crisis, they are demonstrating they've the size to grow internally.'
Traders can buy many funds that invest in China. Extremely regarded ones embrace First State Greater China Growth and Jupiter China.
Whether or not British investors opt for a China fund they are prone to profit from the nation's progress by way of their holdings in British companies, such as Burberry, which trade increasingly in Asia.
Understand that China's development has always been in jumps and stops and will likely continue this pattern in the future.
