The Best Lottery Ticket You Will Ever Buy!

As I got home today I remembered that I had bought a lottery ticket for the mega millions last week, of course immediately all those thoughts of the things I could do with all that money came flooding in. Hmm a new car, new house, retire... I went to the computer and looked up the numbers... guess what? I didn't have a single number on a five dollar ticket. No real surprise, as the lottery is nearly impossible to win, but the real question was why did I just throw away that five dollars?

Let's say though you take that same five dollars and all the other money that you have waisted into the stock market. Think of it as a lottery ticket that never expires, can go up an infinite amount, sometimes pays you money (dividends), and can never go under the amount that you put in. Sounds too good to be true, but that is exactly what the stock market is all about.... one big lottery.

Just think of all that money that you just throw away every day whether it be from lottery tickets or some other vice. I don't know about you, but I am ready to retire already aren't you? Think of the stock market as educated gambling. There are numerous tools that you can use to help you beat the odds. First of all, try to find yourself a hot industry that you feel will continue to grow in the future. Then find the company that has the biggest potential... this is not always the obvious choice.

Make sure the company has good fundamentals, which simply means that they have cash on hand (it's nice when it is increasing), their assets should be growing at a faster pace then their liabilities. All of this you can find at the companies website under "The Balance Sheet" (they all are designed the same so don't worry once you have seen one you have seen them all).

Next, look at a companies Income Statement which shows you how much money the company is really making. Of course this should be increasing (the quicker the better), you can also find out if the companies pays you a dividend (a cash or stock payment made normally every three months).

Sure, there are a lot of other factors that go into buying a stock, like it's float, p/e ratio, the health of it's industry, and general market conditions, but the fact remains that stocks can be your ticket to early retirement, not that lottery ticket you just waisted five bucks on...

The Importance Of A Good Dividend

While a lot of people are in the market just for growth stocks, there is a safer, less exciting way to build your fortune. Just look for stocks that pay a hefty dividend and that have consistently raised their dividend over the years.

A dividend is simply a payment that is issued to stockholders normally every three months. Most brokerages allow you to either take the dividend in cash or you can re-invest your dividends directly back into the stock. My favorite personally, is to re-invest those dividend payments. Think of it this way, you put $1000 into a stock that pays a 4% dividend. Three months or less later you get your first dividend of $40. As I stated above, you can take this in cash or simply re-invest it automatically.

This way you are technically buying stock every three months automatically without even raising your finger! As you can imagine this will really end up paying off in the long run. Plus, if a company is raising it's dividend it is always a sign that business is good so stocks like this tend to go up naturally as well! It is a win-win situation!

For me though, the idea is to eventually have so much stock that you can simply live off of the dividends as well. This way no matter if a stock goes up or down you still receive that dividend.

Yet another advantage of dividends is that in a market like we had on Friday, which was terrible in case you missed it, stocks that have high dividends tend to not be hit as bad as ones that do not. So while it is great to have growth stocks that shoot straight up there is nothing wrong with a good steady stock that pays a nice dividend. A couple that I would suggest looking at include Royal Bank of Canada (ry), Yum Brands (yum) or any other stock that has been increasing it's dividend consistently.

Find out more about why I like Yum brands here, or you can learn even more valuable information about the stock market here!

Welcome To Stock Picky!

This blog will be dedicated to finding stocks that are actually worth investing in and have the potential to make you large amounts of money. We will try our best to find the best value stocks and growth stocks in the entire stock market!

Some of our favorite picks right now include Google (goog), Vasco Data Securities (vdsi), Royal Bank of Canada (ry), Yum Brands (yum), Boeing (ba), and Ormat Technologies (ora)! All of these stocks will be featured in detail in the coming posts, so stay tuned to this sites for more info on these great companies...

Remember though it is very important that you do your own research or contact your stock broker before making any investments. It is also important that you consider were you are in your life. Generally, the younger you are the more you can take risks in your stock picks. If you are nearing retirement you should be much more conservative with the stocks that you choose.

Be sure to bookmark us and feel free to give us your feedback on the stocks that we feature here at Stock Picky!