The technique of buying a fixed dollar amount of a particular investment on a regular schedule, regardless of the share price. More shares are purchased when prices are low, and fewer shares are bought when prices are high. Also referred to as a "constant dollar plan". Taobiz explains Dollar-Cost Averaging - DCA Eventually, the average cost per share of the security will become smaller and smaller. Dollar-cost averaging lessens the risk of investing a large amount in a single investment at the wrong time. For example, you decide to purchase $100 worth of XYZ each month for three months. In January, XYZ is worth $33, so you buy three shares. In February, XYZ is worth $25, so you buy four additional shares this time. Finally, in March, XYZ is worth $20, so you buy five shares. In total, you purchased 12 shares for an average price of approximately $25 each. In the U.K., it is known as "pound-cost averaging".
An investing strategy that consists of buying the 10 DJIA stocks with the highest dividend yield at the beginning of the year. The portfolio should be adjusted at the beginning of each year to include the 10 highest yielding stocks. Taobiz explains Dogs Of The Dow The strategy was formulated in 1972 and has proven to be successful. In fact, as Dog of the Dow investors readjust their portfolios each year, it places pressure on the stocks involved.
Instructions on a good-till-cancelled buy-limit or stop order that tell a broker not to increase the number of shares bought or sold in the event of a stock dividend or stock split. Taobiz explains Do Not Increase - DNI This is telling a broker not to increase the shares of your order when the number of shares you own increases.
1. A distribution of a portion of a company's earnings, decided by the board of directors, to a class of its shareholders. The dividend is most often quoted in terms of the dollar amount each share receives (dividends per share). It can also be quoted in terms of a percent of the current market price, referred to as dividend yield. Also referred to as "Dividend Per Share (DPS)." 2. Mandatory distributions of income and realized capital gains made to mutual fund investors. Watch: Dividend Taobiz explains Dividend 1. Dividends may be in the form of cash, stock or property. Most secure and stable companies offer dividends to their stockholders. Their share prices might not move much, but the dividend attempts to make up for this. High-growth companies rarely offer dividends because all of their profits are reinvested to help sustain higher-than-average growth. 2. Mutual funds pay out interest and dividend income received from their portfolio holdings as dividends to fund shareholders. In addition, realized capital gains from the portfolio's trading activities are generally paid out (capital gains distribution) as a year-end dividend.
A tax deduction received by a corporation on the dividends paid to it by companies in which it has an ownership stake. The purpose of this deduction is to soften the consequences of triple taxation. Triple taxation occurs because the company paying the dividend does so with after-tax money and the receiving company is subject to income tax on the dividends. Therefore, if the company that receives the dividends decides to pay out its shareholders, the money will have been taxed three times. Taobiz explains Dividends Received Deduction - DRD If a company owns less than 20% of another company, it is able to deduct 70% of the dividends it receives. If the company owns more than 20% but less than 80% of the company paying the dividend, it is able to deduct 80% of the dividend received. If it owns more than 80% of the dividend-paying company, it is allowed to deduct 100% of the dividends it receives.
The amount a Canadian resident applies against their tax owing on the grossed up portion of dividends received from Canadian corporations. Watch: Dividend Taobiz explains Dividend Tax Credit The dividends an individual receives from Canadian corporations are "grossed up" by 25%. This amount is then included on their income tax form as taxable income. Both Canadian federal and provincial governments then grants individuals a tax credit, equal to a percentage of the grossed up amount. This helps to reduce the actual tax payable. Let's run through an example. Susan Smith has a marginal income tax rate of 25% and is located in Alberta, where the provincial dividend tax credit is 6.4%. The federal dividend tax credit is 13.33%. Her total dividends for the year were $250. On the taxable income portion of her tax return she will include $312.50 (250*1.25). Her approximate taxes owing on this dividend would then be $78.13 (312.50*25%). She also receives dividend tax credits of $41.67 (312.50*13.33%) and $20 (312.50*6.4%). Therefore, in all her taxes payable on her dividend is $16.46 (78.13-41.67-20). This amounts to only 6.58% of her original dividend. Dividend tax credits are implemented in an attempt to offset double taxing, since dividends are paid to shareholders with a corporation's after-tax profit and the dividends received by shareholders are also taxed. There are both federal and provincial tax credits.
Commonly referred to as just the "Dow," the Dow 30 was created by Wall Street Journal editor Charles Dow and got its name from Dow and his business partner Edward Jones. The index was developed as a simple means of tracking U.S. market performance in an age when information flow was often limited. Also known as the "Dow Jones Industrial Average". Taobiz explains Dow 30 A spin-off of the Dow Jones Transportation Average, consisting primarily of railroad issues in the early years, the Dow expanded to 30 stocks in 1928, where it remains today. The composition of the index changes regularly, as stocks and the industries it represents fall in and out of favor.
An investing strategy in which a trader doubles his or her current position in an asset when an adverse price movement occurs. By doubling the risk, the trader hopes to earn a larger return when the security moves in a favorable direction. Taobiz explains Double Up When executing a double-up strategy, the investor believes that the latest adverse price fluctuation is only temporary and will shortly correct itself. To capitalize on the price reversal, the investor amplifies his or her current position. Doubling up is a risky strategy, but it can yield large returns.