First tier diversification is the division of all funds
available for retirement planning among the major types of investment
vehicles, for most people - Stocks, Bonds, and Cash. Secondary
diversification involves dividing the funds allocated to one type of
investment, among a variety vehicles. For instance, the funds allocated to
Cash may be divided between cash and money market funds. The funds allocated
to Stocks should be divided among different companies with different
products and/or services. As the maxim goes - 'Don't put all your eggs in to
one basket'. [Go Back]
The primary financial statistics that a publicly owned Company
is required to report to the Securities and Exchange Commission. The kind of statistics vary
depending on the type of business the Company is in. For most
companies, the primary fundamental statistics are - the Stock's price,
Earnings, Sales, and Cash Flow. Financial service companies fundamentals
vary and may include Premium Income and Investment income.
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A program administered by most Direct Purchase accounts
and most Companies, where rather than receiving a cash dividend, the
dividends are used to buy additional shares and partial shares. A near
painless way to increase Stock holdings. [Go Back]
The practice of buying Shares either directly through
the Company, or through the transfer agent that normally handles the Stock
of a given Company. Generally speaking, the Direct Purchase accounts that
are company run tend to have fewer and lower fees than accounts administered
by the transfer agent. [Go Back]
The idea of buying a Stock with the intent of holding
it forever. Warren Buffet, one of the most successful investor's of our time
counts this as his primary strategies. The 'idea' is to hold forever, in
reality, if the reasons for buying the shares are no longer valid, it's time
to sell. [Go Back]
The strategy of buying the same dollar amount of shares
on a regular schedule over an extended period of time. When the stock is
high, fewer shares are purchased than when the stock is low, resulting in an
average purchase price lower than the average of the price at purchase.
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A company that keeps track of all the outstanding
Shares of a publicly owned company. Their responsibilities include issuing
and replacement of stock certificates. [Go
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In this case, a standardized description of the direct purchase program,
how to enroll, any cost or fees, participant options and plan provisions.
Along with mailing address, telephone numbers, and
website. [Go
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Authorization given to a direct purchase program to withdraw a specific
amount of money on a schedule determined by the holder of the checking
account, in order to purchase plan shares. [Go
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