A correct backtest of a trading strategy requires accurate historical data. What is interesting about the aggregate data is that if the stock market began the year going into the mid-term elections after a positive year and then entered a pull-back, 50% of the time it ended the year down (6 out of the 12 occurrences since WWII). As shown in the above graph, the stock market in 1946 declined 19.69% peak to trough. The roaring late 90s with high internet company valuations and an accelerating stock market is a period that many readers should readily recall. I don’t like option #1 because maybe the stock that paid you the dividend is not cheap at this point in time.
Given the events that drove the results in the two most similar historical years, the actual outcome in 2014 may be more driven by political events than investors may be pricing into the market at the present time. The only fees for this investing strategy are the commission that you pay to buy the stock (from $3-$20) and the same fee when you sell the stock. Another reason for not doing this option is that perhaps you only get a $50 payout from a stock. Mattel also released American Girl Midge dolls with bendable legs (stock #1080).
Stick with oil (Chevron, Exxon Mobil), fast-food restaurants (Mcdonalds, Yum Foods), soda (Coca-Cola, Pepsico), consumer paper products (Kimberly Clark, Clorox, 3M, Proctor & Gamble), and big retailers (Wal-Mart). 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 focus a big part of my mutual funds on dividends – Franklin Rising Dividend fund, etc.
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. Definition of Options Delta – options delta is a measure of how sensitive an option price is to a change in the price of underlying security or stock. If it did split, the stock price would decrease and make it more accessible to everyday investors.
The option delta tells you how much the option price will change if the price of a stock increases or decreases by $1 in price. A. BSCall(s, x, r, sigma, t) computes the call price from the stock price (s), the exercise price (x), the risk free rate (r), the volatility (sigma) and the time to maturity (t). C. BSCallImplied(s, x, r, price, t) computes the implied volatility from the stock price (s), the exercise price (x), the risk free rate (r), the call price (price) and the time to maturity (t).