The investment process is a many-aspect thing and many factors are to consider at one and the same time when it concerns your money. One of such factors is a dividend yield. Every investor must determine whether a prospective company can continue with its dividends in future the same as it does today. If a company increases its dividend, be sure to analyze that decision. A large increase, over a short period, a year or two, may turn out to be unsustainable into the future.
The key to successful management of money in investment theories is the ability to stick to an investment guidelines or plan. When a person knows what he does, why he does it and how he is going to react to every situation that can possibly occur - he is on his half way to a success.
Applying investment theories into the responsible investment process will help you in arranging the right strategy, which will wonderfully fit your own personal needs in your convenient way of investment. The three basics of successful investment lie in a fundamental analysis of the investing object, knowing about the management sides of corporation you invest in and the company's money flow. Valuing a company involves knowing numbers and predicting cash flows of the company, as well as looking at the general subjective qualities of a company. The strong management of a company is its backbone. When understanding well enough the company's principles of generating revenues, you can easily evaluate whether management tends to make the right decisions.
There are many good companies that pay great dividends and also continue their growth at a respectable rate. Investing in world-wide giants like Johnson and Johnson, IBM, Intel and others of the same kind will likely bring you great profits, certainly when you take your time, marking out the positive tendencies in every company from the leaders range. Dividends are, however, not everything that characterizes a good company. If you find out that the income of the company is likely to go for higher dividends instead of possible profitable re-investments, note that it is no sign of wealthy politics.
The most common way of investment theories goes through mutual funds, which have been around since the early 1900s and have grown considerably over the past twenty years. Today there are more mutual funds than there are individual stocks. Dealing with investing in the "stock market", you should mind that it concerns the equity markets around the whole world. The important point is that in most countries and states/provinces, dividend payments are taxed at the same rate as your wages. As such, these payments tend to be taxed higher than capital gains, which is a factor that reduces your overall return.
There are many investment theories like a modern portfolio theory, an efficient market theory, a value investment or a random walk model. A modern portfolio theory means mixing unrelated stocks in a portfolio with less volatility than the average volatility of the stocks. An efficient market theory assumes that the market price of a share accurately reflects the information, available about that particular investment. A value investment means buying a stock or indeed a business at less than its intrinsic value. This method of investment, founded by Benjamin Graham, a father of securities analysis, has been modified and enhanced by such legendary investors, as Warren Buffet and Peter Lynch. Graham always considered the value investment to be the only real form of investment; anything else was a speculation. A random walk model will diversify your portfolio with investments of different kinds. Always remember that the responsible investment process requires all of your wit and mind work. When your efforts make the world work for you, there will hardly be left anything that would manage to spoil the joy of your cloudless living.