We rely on your generosity to provide books, literacy classes, children’s story hours, and much more FREE for all New Yorkers. The payout ratio is easy to find by looking up the basic stats about a company on a site such as Yahoo Finance or Google Finance. If the payout ratio is above 100% it’s clear the company is paying out more money than its bringing in. They are doing this through leverage (debt), or by making more shares of their stock. I’m a big fan of high dividend stocks, and currently hold several FTSE 100 stocks that pay a decent dividend each year including Tesco, BP and Vodafone. Excel Worksheet-Formula Add-Ins allows worksheet formulas to change chart settings.
But based on valuation — stock prices relative to the fundamentals of the underlying companies — we unfortunately appear to still be in the middle of the latest bear” phase. Throughout history, stock prices have loosely gravitated around the fundamentals” of the underlying companies — namely, earnings. As can be seen, the stock market was very profitable, in real terms, in the 1950 to 1965 and 1983 to 2000 periods. For the first time ever, your formulas can create traffic-light charts, highlight chart elements, assign number formats, and much more.
As we go through the historical examples below, it is easy to see that it is quite common and rational for markets to be more difficult and indecisive when the Fed is opening up an almost limitless number of what if” scenarios as they begin to shift interest rate policy. The first thing that jumps off the chart below is the stock market was indecisive, going up and down, but making no progress between May 1983 and December 1984 (sound familiar?). In 2015, the stock market has gone up and down, but has made no progress between December 2014 and the present day.
Before we move to the what happened next” chart, take a moment to make a mental note of the look” of the 50-day and 200-day moving averages in the indecisive 1983-1984 chart above. Discipline and patience were rewarded in 1987 as the stock market rallied 33.7% over the next eight months. Those who stayed the course with their rules and discipline in 1994 were rewarded big time in 1995 and 1996.
The 1987 crash is not shown in the chart below for a reason; stocks rallied significantly for several months following the rate-induced indecisive period. Similar to the previous historical examples, the market showed some erratic behavior in 1988, making no progress between January and June, and again between mid-June and early-December. Nothing is more frustrating than breaking your rules or throwing in the this does not work” towel just prior to a big hey, discipline really does pay off!” move.