Soaring Highs for Wal-Mart Stores, Inc.

Something exciting happened this past week.

Incase you missed it, Walmart’s stock jumped approximately 10% to $ 99.6 US per share on November 16, 2017. According to online sources, this jump was most accurately connected to Walmart’s third-quarter press release which showed how the company has performed from August to November.

Wal-Mart Stores, Inc. employs approximately 2.3 million people across the globe through Walmart US, Walmart International and Sam’s Club. The company has certainly grown from its humble beginnings in Arkansas under the entrepreneurial direction of Sam Walton. Today, Wal-Mart Stores, Inc. earns well-over $400 billion USD in revenue annually through their stores and online platforms.

According to the company’s third-quarter annual report, the company earned over $100 billion USD over the course of three months. Compared to last year, this is a performance improvement of approximately 4.2%.

Should investors buy stocks in Wal-Mart Stores, Inc? Well, the traditional advice is to buy low and sell high. Is Wal-Mart at a ‘high price’? Probably, given that the recent 10% climb has brought Walmart to its highest stock price ever. However, the dollar-cost-averaging approach would encourage investors to buy the stock anyways, even though it is likely to correct. The company is probably a sound investment because it earns hundreds of billions of dollars each year and has increased its dividend payout each year since 2012.

Thanks for reading & happy investing,

Your team at CanadianDough.

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Choosing an ETF

I’ve been fortunate enough to have some extra spending money left over from a trip to New York City. I suppose I could cash the American dollars at the bank and receive Canadian dollars, or I could use the American dollars to buy American stocks. I like that option a lot because the greenback has been appreciating in value and American stocks continue to go strong.

I’m deciding on buying an ETF this time around. I think an ETF is great, especially one that tracks the S&P 500, because they would let me ride the wave that is the American stock market. Over at least the past 30 years, the S&P 500 has managed to grow at an average rate of 12% per year. Plus investing in an ETF that tracks this index is like investing in the whole stock market. I have faith in what major investors have said in the past, that the American stock market will continue to grow over time. I would expect some years to be better or worse than others, but if I can find a way to make extra money without having to touch my stock portfolio, it should pan out well.

I’ve narrowed my search of ETFs to three: OEF, SPY and IVV. I like OEF because it is the most affordable ETF out of the three, but it also has the highest expense ratio, which I think, means it actually costs the most to own. However, IVV and SPY are close in their price, but they’re expense ratios are slightly different even though they seem to have the same holdings. Also, they both pay dividends every three months (roughly $1 USD per share). The expense ratio of SPY is about 0.09% and the expense ratio of IVV is 0.04%. According to online sources, this means that 0.09% or 0.04% of the funds total assets will be used to cover expenses. So when you buy $100 worth of shares, a percentage of that will be used to cover expenses. If that’s accurate, I suppose that means an investor only pays the expense ratio when they buy their shares. Correct me if I am wrong.

Since the IVV and SPY seem very close but only differ in their expense ratios, I will likely move forward with IVV. Wish me luck!

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Dividends: Collect Your Canadian Dough!

If you’re thinking about investing in a particular stock, or just looking to get started and not too sure about what kind of stock to invest in, a stock that pays dividends may be the answer for you.

A dividend is a payment made to you, a shareholder, by the company that you bought shares from. Although you may not have bought your shares from the company itself, but instead from another shareholder, you may be eligible to collect a dividend. Collecting dividends are easy! You don’t need to sign up or register for them; they simply get transferred to you from that company you own!

Dividends can be paid monthly, quarterly (every 3 months), bi-annually (twice per year) or even annually. The amount you can collect depends on the number of shares that you own as a shareholder. For example, RBC pays a quarterly dividend. According to publicly available information on RBC’s website, their last dividend was $0.83 per share. This means for every share you own you would get paid $0.83. It doesn’t sound like much, but these small dividend payments may be enough to cover your transactions fees, plus more if you hold on to them long enough. Additionally, by continuing to contribute to your investment on a consistent basis, that dividend payment will grow, which will add to your overall cash flow. Ideally, it would be great to invest enough money to be able to survive off of dividend payments. On a smaller scale but still sizeable, if you own enough shares you may qualify for a DRIP, which is a direct reinvestment plan. The idea here is to buy shares with the dividends collected.

Using a hypothetical situation, if someone has invested approximately $3,300 in the stock market within dividend paying stocks and exchange traded funds, they would have collected approximately $46 in dividends after one year. This number is based on an investment portfolio invested in the following stocks and exchange traded funds: 7 shares of RBC, 17 shares of VRE, 17 shares of CDZ, 46 shares of XSP and 10 shares of ZDJ. Before buying a stock or exchange traded fund, it would be smart to look at how often a dividend is paid and in what amount when making your informed decision.