The Snowball Effect Quotes

“Remember: Companies that pay dividends will always provide you with a return. Always. You don’t need to examine your stocks’ price movement each day or panic when you hear on the news that the Dow fell by 500 points. Instead, concentrate your attention on the power of compounding dividends over time and their ability to provide income on”
― Timothy J. McIntosh, The Snowball Effect: Using Dividend & Interest Reinvestment To Help You Retire On Time

“Despite companies’ commitment to reinvesting their profits, earnings growth has not returned to the glory days of the 1990s (14 percent).”
― Timothy J. McIntosh, The Snowball Effect: Using Dividend & Interest Reinvestment To Help You Retire On Time

“A bond ladder is a portfolio of bonds in which each security has a significantly diverse maturity date.”
― Timothy J. McIntosh, The Snowball Effect: Using Dividend & Interest Reinvestment To Help You Retire On Time

“If you can tolerate the inherent volatility of corporate bonds—especially during recessions—you should strongly consider them as a long-term investment option. Investors who concentrate their corporate bond holdings in the BBB and BB ratings universe reap particularly good benefits. These bonds have the potential to reward investors with a 3 percent annualized premium over a government bond of a similar duration.”
― Timothy J. McIntosh, The Snowball Effect: Using Dividend & Interest Reinvestment To Help You Retire On Time

“While relatively safe during most economic periods, corporate bonds become a far riskier asset in recessionary periods, perhaps most notably demonstrated during the Great Recession of 2008 and 2009.”
― Timothy J. McIntosh, The Snowball Effect: Using Dividend & Interest Reinvestment To Help You Retire On Time

“As I mentioned, the primary difference between the two yields is known as the credit spread, but credit risk is not the only factor that leads corporate bonds to deliver better returns than government bonds. Other key factors include tax treatment, illiquidity, call features, and the unique provisions that are included in the contracts of corporate bonds—characteristics that government bonds simply don’t offer.”
― Timothy J. McIntosh, The Snowball Effect: Using Dividend & Interest Reinvestment To Help You Retire On Time

“Investment-grade corporate bonds carry a relatively low risk of default. As mentioned earlier, rating firms like S&P and Moody’s use different designations of upper- and lower-case As, Bs, and Cs to identify a bond’s credit quality rating.”
― Timothy J. McIntosh, The Snowball Effect: Using Dividend & Interest Reinvestment To Help You Retire On Time

“That is why the most important calculation to know in owning bonds is known as yield to maturity. Yield to maturity (YTM) takes this critical maturity value concept into account.”
― Timothy J. McIntosh, The Snowball Effect: Using Dividend & Interest Reinvestment To Help You Retire On Time

“However, the advantage of micro-cap stocks is their correlation to the larger-cap Dow—about .65, much lower than the entire small-cap universe. Furthermore, since 2008, the correlation has steadily been decreasing—the opposite of what is happening in the broader Russell 2000 Index.”
― Timothy J. McIntosh, The Snowball Effect: Using Dividend & Interest Reinvestment To Help You Retire On Time

“Small-cap stocks are also unpopular with institutional investors, such as pensions and mutual funds—which is clearly problematic, given the fact that the institutional market is growing rapidly.”
― Timothy J. McIntosh, The Snowball Effect: Using Dividend & Interest Reinvestment To Help You Retire On Time

“I use $1 billion as a benchmark and consider any company trading below this market cap a small cap.”
― Timothy J. McIntosh, The Snowball Effect: Using Dividend & Interest Reinvestment To Help You Retire On Time

“Market cap is the number of shares outstanding in a company multiplied by the share’s price.”
― Timothy J. McIntosh, The Snowball Effect: Using Dividend & Interest Reinvestment To Help You Retire On Time

“If you apply a price-to-dividend ratio analysis to stocks you are thinking of purchasing or already own, you can purchase, or reinvest, cash at optimal points in time. If Pepsi’s share price falls and the yield nears 4 percent, the investor could then time her purchases in the most efficient manner and gain the most shares of Pepsi stock possible. Following this type of market timing will allow an investor to collect more shares of a company’s stock at the times when it is most undervalued.”
― Timothy J. McIntosh, The Snowball Effect: Using Dividend & Interest Reinvestment To Help You Retire On Time

“The dividend puzzle is a concept in finance in which companies that pay dividends are rewarded by investors with higher valuations, despite the fact that, according to many economists, investors shouldn’t care whether a firm pays dividends.”
― Timothy J. McIntosh, The Snowball Effect: Using Dividend & Interest Reinvestment To Help You Retire On Time

“Remember, capital gains are taxed at a lower rate than dividends. Thus, some theorize, investors may prefer capital gains to dividends. This is known as the tax preference theory. Of course, capital gains are not paid until an investment is sold. Investors can control when capital gains are realized, but they can’t control dividend payments.”
― Timothy J. McIntosh, The Snowball Effect: Using Dividend & Interest Reinvestment To Help You Retire On Time

“According to dividend irrelevance theory, the only consideration that affects a company’s valuation is its earnings, which are a direct result of the company’s investment policy and the future prospects.”
― Timothy J. McIntosh, The Snowball Effect: Using Dividend & Interest Reinvestment To Help You Retire On Time

“The theory’s name comes from the maxim “A bird in the hand is worth two in the bush.” According to the theory, capital gains are considered to be quite risky, and thus investors expect to be compensated by higher returns. The bird-in-the-hand, thus, is the dividend, and the bush is the capital gains.”
― Timothy J. McIntosh, The Snowball Effect: Using Dividend & Interest Reinvestment To Help You Retire On Time

“Dividend-paying stocks can insulate an investor from secular bear market cycles by providing income while stock prices stagnate.”
― Timothy J. McIntosh, The Snowball Effect: Using Dividend & Interest Reinvestment To Help You Retire On Time

“In a secular bull market cycle, buying and holding stocks is the optimal strategy. As long as the secular bull market persists, stock appreciation accounts for the majority of stock gains. But when a secular bear market cycle begins, on the other hand, a simplistic buy-and-hold strategy could leave an individual’s portfolio with roughly the same amount of money decades later.”
― Timothy J. McIntosh, The Snowball Effect: Using Dividend & Interest Reinvestment To Help You Retire On Time

“Developing and maintaining strategies to survive secular bear markets is the most important consideration any prudent investor can have.”
― Timothy J. McIntosh, The Snowball Effect: Using Dividend & Interest Reinvestment To Help You Retire On Time

“A secular bull, or upward-trending, market occurs when each successive high point is higher than the previous one. But secular bull markets are actually more rare and almost always shorter than secular bear markets”
― Timothy J. McIntosh, The Snowball Effect: Using Dividend & Interest Reinvestment To Help You Retire On Time

“This leads me to address what is, in my opinion, the most misleading adage about the stock market: “the market always goes up.”
― Timothy J. McIntosh, The Snowball Effect: Using Dividend & Interest Reinvestment To Help You Retire On Time