Investing in Stocks

3 October 2015 – 7:02 pm

Stocks can be a valuable part of your investment portfolio and it is crucial that you are going to use it properly.

Investment Terms | 30+ Financial Terms Every Investor Should Know

We believe stocks can be very cost effective and investing in stocks is often much better than investing in bonds. However, stocks can be risky and we encourage investors to follow their own risk tolerance.

The below discussion may be considered a summary and is not meant to be all inclusive.

Approach to Investing in Stocks

Since you want to invest in stocks, you need to first understand what stocks are.  Stocks are a preferred form of investment because they are much safer, are easy to track, and can generate higher returns than bonds. Get to know all about them at

What Makes Stocks Safe?

Bonds are subject to inflation, interest rate changes, and are sometimes subject to a market crash. In contrast, stocks do not generally experience any of these risk factors.

While stocks are subject to various risks, most of the financial value of a stock comes from the price. This means if you buy a stock in today’s market, you will get back an investment that has been partially funded by the earnings of the company during the past year.

At the same time, most stocks are taxed as income, and most stocks pay dividends. Therefore, if a stock is not yet paying you a dividend, it will eventually start paying you one.

What Are the Basic Types of Stocks?

The chart below shows five basic types of stocks:

Value Stocks: Stocks with a high price to earnings ratio and a high free cash flow

. These stocks earn their owners more than they cost.

Stocks with a high price to earnings ratio and a high free cash flow. These stocks earn their owners more than they cost. Growth Stocks: Stocks with a low price to earnings ratio and a high free cash flow

. These stocks earn their owners a higher return than they cost.

Stocks with a low price to earnings ratio and a high free cash flow. These stocks earn their owners a higher return than they cost. Growth stocks. These stocks may also be called growth stocks, tech stocks, high growth stocks, or commodity stocks. Many value stocks earn high growth, while the majority of growth stocks earn high growth and low dividend yields.

Over the last five years, the value and growth stocks have generally outperformed the growth stocks. As a result, many people have increased their allocations to growth stocks.

However, growth stocks also have a tendency to lose money. When that happens, the value investors can often capture the profit with a suitable trading strategy.

Tax Considerations of Stocks

The great benefit of investing in a stock portfolio is that the Internal Revenue Service (IRS) does not tax dividends and capital gains. Instead, you can pay no taxes on the gains because they are considered to be capital gains.

However, a downside of stocks is that the capital gains tax rate is currently only 20% instead of the normal 35%. That can make it expensive to realize any gains on stocks.

The same is true with dividends and payouts from corporations. If you were to sell a stock, your dividend or payouts could be taxed as capital gains.

My largest poster yet

12 May 2012 – 1:22 pm

Stoneleigh Fun Day banner

I have always enjoyed creating posters for events and elections. Last week I was lucky enough to create my largest poster yet – a whopping 4 metre long by 1 meter high banner advertising the forthcoming Fun Day in Stoneleigh. We printed three to display in various locations around Stoneleigh.

The banners were printed by Discount Banner Printing who did a very good job and turned it round in a week. The banners are very high quality PVC with decent metal rings built in to ensure secure attachment. I simply supplied them with a little PDF file and they blew it up beautifully with great vibrant colours.

Reveware flexible bluetooth keyboard works with Nokia N8

19 April 2011 – 9:23 pm

I have just purchased a Reveware flexible Bluetooth keyboard for use with my Nokia N8 and forthcoming iPad2. I had real trouble locating a driver to make it work with my Nokia N8 and then discovered that I don’t actually need one. I simply paired it through the Bluetooth menu on my Nokia N8, set a four digit key, which I then typed on the keyboard, and it worked perfectly.

The keyboard is great for touch typing (I have been known to reach 90 words per minute), but there are three niggles:

  1. It is very fiddly to turn the thing on and off.
  2. It is not entirely obvious whether the thing is on or off: when turning the keyboard on, the red ‘low battery’ light momentarily illumninates, but there is no feedback when turning it off. The battery is supposed to last a week before needing to be recharged, so perhaps this isn’t a big problem. It certainly hasn’t make me regret my purchase.
  3. It is not a proper UK keyboard, although it does have a pound (£) sign over the number 4 instead of the number 3. Unfortunately the only way to get the pound sign to work is to set the keyboard to UK in the Nokia N8, but this means that some of the keys don’t map correctly (e.g. you have to press shift-3 to get ‘£’ instead of shift-4 which is what the keyboard shows, and there is no way that I have discovered to enter hash ‘#’).

However, the keyboard is very light, waterproof and can be rolled up, making it highly portable. In my opinion, these factors outweigh the niggles.

Health, Safety and Dressing Gowns

29 December 2008 – 11:11 pm

521304_32802075smallMy wife Natalie returned from a shopping trip to Kingston today and reported that Marks & Spencer no longer sell full length dressing gowns.

This is for health and safety reasons following complaints from customers who have tripped on the ends of their dressing gowns and hurt themselves.

From the heart of the machine

24 December 2008 – 2:02 pm

Waiting on the tracks for a train

I travel by train to work and am daily regaled with automated announcments while waiting at the platform, particularly at Clapham Junction. These announcements are rather good, and cleverly seem to be on a separate system to the display boards, so that if one fails, the other will continue to function. Normally the announcements consist of something like

The train on Platform 13 is the Brighton service, calling at East Croydon, Gatwick Airport, some other place or other and Brighton.

in an extremely realistic voice, presumably by an actor who must have spent several weeks reading out the names of stations and numbers and pieces of sentences to be joined together later by computer prior to announcement.

What tickles me is when there is a delay and the voice says something like

The train on platform 13 is the delayed 7:23 service to Brighton. I apologise for the late running of this service.

How can a machine apologise? It feels no remorse at all that my journey has been delayed and so the apology is meaningless. Now, if the announcement passed on the apology from the train company, or the driver or something, that would be different.

So today I was doubly puzzled while waiting at Epsom station for a train to Ashtead and I heard the announcement say

I wish you a Merry Christmas.

Note, it didn’t say “The staff and management of South West Trains wish you a Merry Christmas”, or simply “We wish you a Merry Christmas”, but “I wish you a Merry Christmas”.

To me, this is just as meaningless as an apology for a late-running train. The machine isn’t passing on the expression of a human feeling (“sorry” or “Merry Christmas”), but is attempting to express it directly itself. Surely that just doesn’t make sense.

So, in the spirit of automated announcements, this blog wishes you a Merry Christmas and apologises for being the cause of any delay while you read this drivel instead of getting on with something interesting and fun.


22 October 2008 – 10:08 pm
20 Fenchurch Street nearing the end of demolition

I passed the site of my grandfather’s building in Fenchurch Street last week. It was built in 1969, and it broke his heart when he learned that they were going to demolish it.

He passed away in July, and now all that remains of his beloved building, one of the first skyscrapers in the City of London, is a rather sad stump that will soon disappear.

Carlsberg…probably the oddest direct marketing in the world

4 September 2008 – 11:26 am

In my capacity as Treasurer of my rugby club I have just received a letter from Jeremy Best of Carlsberg UK, who writes

We are passionate about the game; in fact I play it and would like nothing less than to help grow your business for the future.

He would like “nothing less”? That suggests there is a vast swathe of things he’d rather do more than help grow my business.

William H. Rogers 18 Feburary 1914 – 26 July 2008

26 July 2008 – 2:37 pm

My grandfather passed away this morning, aged 94. One of his proudest achievements was the construction of 20 Fenchurch Street in the City of London, of which he was the architect. The building was occupied by Kleinwort Benson from 1968 to 2006. It is somehow poignant that his life has come to an end at the same time as his building is in the final stages of being demolished.

I walked past the spot last week and stopped to gaze at the progress of demolition.  Because of the nature of its construction, they are having to dismantle the building floor by floor from the bottom up, with a gigantic steel structure in place to keep the whole thing supported.

20 Fenchurch Street is destined to become the site of the new landmark skyscraper known as the Walkie Talkie.

Boots want me to eat baby food

15 July 2008 – 8:47 pm

Apparently I can look and feel better for less by eating baby food.

I spotted this after Lorenzo’s even more hilarious look and feel better for less — with Coke.

Matthew’s 40th captured on Stuart’s new phone

13 July 2008 – 10:45 am

The Putney gang celebrated Matthew’s 40th birthday yesterday starting off with drinks in Red followed by a meal in Pizza Express. Read the rest of this entry »