Issue #2135
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Six easy-to-follow rules are the only thing that stands between you and hitting the income jackpot. Follow these rules and it’s almost impossible not to get at least 12 percent in total annual returns. I know, because that’s the minimum return I get when I recommend companies for my INCOME, portfolio.
What makes 12 percent so satisfying is that these are just about the safest investments around… as long as you buy right. And there isn’t a better time than right now to learn how to buy right. Why? Because dividend yields are at historical lows and they’re ready to go up. And even though dividends are at such low levels, getting income plus stock appreciation is such a sweet deal that investors aren’t shying away from them. They love the checks these companies send in the mail.
But whether they know it or not, these checks used to be a lot bigger when compared to market cap and earnings. Even though dividends are getting bigger, companies are growing at an even faster pace.
As earnings slow (and I think they will for the market as a whole), dividend yields are bound to grow. That means companies will be giving out more of their earnings as dividends. But nowadays, they’re hoarding cash for these reasons:
There’s nothing wrong with that, except that your increased returns comes from capital appreciation. And to get the money, you have to sell the stock, as opposed to getting the increased returns through dividends that come every quarter in the form of bigger checks.
Most shareholders prefer getting the cash, and I don’t blame them. What’s more, stock appreciation can be reversed. But once the company sends you a check, nobody will knock on your door and take it back.
But keeping so much cash in the coffers and not reinvesting it back into the company suggests a fundamental lack of faith in the company’s ability to grow and to get an adequate return on capital expenditures.
Of course, the company would put it differently. They’d pin their reluctance to spend on externals, such as economic uncertainty.
Unfortunately, this ends up becoming a self-fulfilling prophecy. The company’s growth consequently slows down, and when enough companies hoard (as they’re doing now), it stunts the growth of the economy. Then companies can point to a slowing economy as a reason not to spend.
The last thing you want, however, is to get bigger yields through share prices going down. You need to approach these dividends as a bonus. Look for fundamentally strong, attractively priced companies that also happen to pay dividends. This is how you do it:
1. Do not exchange income for value. Even when the market is expensive and most companies are overpriced, there are always stocks to be found at discounted prices. Dividend-paying companies are no exception. These companies have proven to be much hardier than other companies. They grow when the market is going up, and usually do much better than other companies when the market declines. Dividend plus value offers double protection against a falling market.
2. Look at payout ratios. These ratios tell what proportion of earnings is going out as dividends. There’s no hard-and-fast number I could give you, however. The historical average is 55 percent. Last year, the average ratio was 21 percent. (Remember, companies are hoarding, so this is not surprising.)
We want companies that have the ability to give out dividends and grow. So we like companies that give out a generous portion of their earnings to shareholders, but not so much that they strangle growth.
The higher a company’s dividend yield is, the more likely it is for its payout ratio to also be on the high side. A high payout ratio and a low dividend yield tells you you’re looking at a loser. Avoid it at all costs.
It’s worth doing some comparison shopping by looking up the payout ratios of a company’s competitors. Your company’s payout ratio should be lower or in the same range.
3. Do not settle for a dividend yield of less than four percent. There’s no complicated mathematical formula at work here. From experience, I can tell you that there’s not enough choice at five percent and above, and that there are too many companies with dividend yields below four percent to settle for such yields.
4. Look for at least 10 quarters of uninterrupted dividend growth. You want your dividend checks to be getting bigger, not smaller. And you don’t want to take the company’s word for it. You want evidence that the company is capable of sustained dividend growth. Past payout growth is no guarantee that the company will continue along that path, but at least they’re not blowing smoke. A record of dividend growth plus a solid growth plan executed by experienced leadership lays the groundwork for continued dividend growth.
5. Confirm past price performance. Seeing is believing, and you want to see that the company is already climbing up the charts. As I said before, past performance is no guarantee, but it sure beats the alternative – investing in a company that has been falling. That’s one way to attain an impressive dividend yield, but it’s certainly not the right way.
6. Catch the stock on a dip. Though dividend companies tend to be less volatile, it’s still worth buying them on the dips. Doing so could improve your return by 5-7 percent. Multiply that by several stocks, and it can make a big difference.
Is it really this easy? Yes and no. There are always surprises, like when the Canadian government decided to propose withdrawing the tax advantages for Canadian trusts. Those stocks immediately went into a dive, and have since experienced several aborted rebounds. But instead of getting out along with everybody else when the Canadian REIT in our INCOME portfolio dived, we waited and issued "sell" instructions to our subscribers at the top of the first of the company’s several rebounds – with only a slight loss in our portfolio to show for it.
Payout ratios are the trickiest thing to figure out. So let me give you a simpler rule to follow: Anything under 55 percent is fine. If the payout ratio is more than 55 percent, do the following. If it’s gone up over the past six quarters, don’t invest. If it’s gone down, consider it a green light to buy.
There’s one more thing you need to keep in mind: Finding fundamentally strong companies – whether or not they pay dividends – requires serious digging. There are no shortcuts to doing the work. If you don’t have the time, get a trading service to help you out. The good ones should be able to find exceptional dividend-paying companies for you.
For example, one of the biggest gainers in my INCOME, portfolio is a pipeline company I recommended last July. It’s up almost 50 percent… and I consider it the safest stock in my portfolio.
It just goes to show that with dividend-paying companies, you don’t have to choose between great returns and safety. You can get both. Can you ask for anything more than that?
[Ed. Note: Andrew Gordon, ETR’s Investment Director, author of several books on energy markets, global countertrade practices, and the hot growth sectors of China and Russia, is the editor of INCOME, a monthly financial advisory service that uncovers income-generating stocks that promise safety (first and foremost), along with much-higher-than-average profit potential.]
Issue #2134
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Issue #2132
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For years, we’ve been telling ETR readers that aerobic training is not the best way to improve cardiovascular fitness. Instead, you want to use interval training, bodyweight training, and now, based on a new study, circuit weight training.
In a comparison of circuit weight training and cardiovascular exercise, Brazilian researchers assigned subjects to a 12-week training program. One group served as an inactive control group, a second group performed aerobic exercise three times per week (35 minutes at 70 percent of maximal heart rate), and a third group did circuit training three days per week (lifting at 60 percent of their one-repetition maximum for a series of exercises for 35 minutes).
The results showed a similar improvement in peak aerobic exercise performance for both training groups. Surprisingly, the aerobic training group did not outperform the lifting group. Both groups improved lower-body strength, but only the circuit training group got stronger in the upper body.
This study is a pleasant surprise for men and women who want to strengthen their entire body and improve their aerobic fitness in only three short workouts per week. You don’t have to do slow, boring cardio.
For maximum results in minimum time, perform multi-muscle resistance exercises (such as squats, push-ups, and rowing exercises) at a moderate intensity with minimal rest between exercises. You can see a video of circuit training in action here. ]
(Source: British Journal of Sports Medicine)
[Ed. Note: Craig Ballantyne, expert consultant for Men’s Health magazine and the creator of Turbulence Training for Fat Loss, is a contributing writer for ETR’s brand-new weekly natural health e-letter. Sign up today for practical strategies and real-world scientific discoveries that can help you melt off the pounds, pack on muscle, and eliminate the underlying causes of disease.]
Issue #2131
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Thousands of men and women are losing fat and building muscle thanks to the Web. What the Internet provides (aside from endless – yet pointless – amusement) is a source of social support, a crucial factor in the success of any body-transformation program.
In the Archives of Internal Medicine, 249 adults were split into two groups, with one group receiving motivational help on the Internet and another receiving the motivational help in print. The study ran for one year. Both types of motivational help resulted in the same increase in physical activity. But the researchers concluded that the low cost of delivering the information via the Internet made it the better choice.
The Internet is teeming with social support resources. Get online and find a network to help motivate you to become healthier today.
[Ed. Note: Fitness expert Craig Ballantyne is the creator of the Turbulence Training for Fat Loss system.
For a free online source of information, motivation, and social support to help you improve your health, lose weight, and get fit, sign up for ETR's brand-new natural health e-letter.]
Issue #2129
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If you’re a regular ETR reader, you already know how important the glycemic index is to make sure you’re eating well. But there’s a big problem with using the glycemic index as a guide to eating: It doesn’t take into account portion size. Glycemic load - a far more useful number – does.
The glycemic index measures your blood sugar response to a "standard" serving of 50 grams of digestible (non-fiber) carbohydrate. Great. But the real world of actual portions presents a much different picture. Some carbohydrate foods have way less than 50 grams in a serving, while many typically have a lot more.
Enter the glycemic load, a formula that multiplies the glycemic index by the number of grams of carbs in a typical portion (and then divides the result by 100, in case you’d like to do the actual math). Because the formula for glycemic load takes into account real-life portion sizes, it gives you a much better idea of what a food is doing to your blood sugar.
Take spaghetti and carrots, for example. The glycemic index of 50 grams of spaghetti is only "moderate," but you’d be hard-pressed to find someone who eats just 50 grams of spaghetti. The glycemic load of spaghetti is humongous. And while the glycemic index of 50 grams of carrots is "high," you probably wouldn’t eat 50 grams of carrots. (There are only three grams of carbohydrate in a single carrot.) Carrots have a high glycemic index- but a very low glycemic load.
Using the glycemic index is a great start in learning about the impact of food on your blood sugar. But glycemic load is even better, because it takes into account what you’re actually likely to eat.
It’s easier to find the glycemic index of a food than the glycemic load, but you can find both at mendosa.com/gilists.htm. Alternately, you could ignore the entire glycemic numbers game and just follow this simple rule: When it comes to sugar, less is more, zero is better.
[Ed. Note: Dr. Jonny Bowden is a nationally known expert on weight loss, nutrition, and health. He's a board certified nutritionist with a master's degree in psychology, and the author of the best-selling book, The 150 Healthiest Foods on Earth. For more information, go to www.jonnybowden.com. To read more of his articles on healthy living in ETR's brand-new natural health e-letter, click here.]
Issue #2128
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Issue #2127
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Cardio (a.k.a. aerobic exercise) is no longer the King of Exercise. Research now shows that you can lose fat, improve your heart health, increase your quality of life, and reduce your risk of disability with resistance training.
Sure, you can get some benefits by using machines at your local health club. But total-body "functional" exercises (like squats, push-ups, and bodyweight rows) are even better. And resistance training doesn’t mean barbell bench pressing with heavy weights. You can use dumbbell free weights or a variety of creative bodyweight exercises at home.
An extra benefit of bodyweight or free-weight exercises is that they give you the ability to complete a total-body workout in less time. For example, if you do a bodyweight or dumbbell squat, you will replace the need for the leg extension and leg curl machines in a health club. Push-ups or dumbbell chest presses replace the chest fly and triceps extension machines. And chin-ups replace the need for machine-aided pulldowns and biceps curls.
In three or four "functional" moves, you can complete a total-body workout. Do each exercise two to three times for 8 to 12 repetitions per set. Rest one minute between sets. You can do your exercises in a circuit (all exercises done back to back without rest) or in supersets (two exercises done back to back without rest) to cut even more time from your workout. Aim for three total-body strength-training workouts per week.
[Ed. Note: Craig Ballantyne is an expert consultant for Men's Health magazine and a contributing writer for ETR's brand-new natural health e-letter. Every week, he and our team of medical, fitness, and health experts will give you practical strategies and real-world scientific discoveries that can help you melt off the pounds, pack on muscle, and eliminate the underlying causes of disease.
And if you're looking to quickly step into the body you have always wanted with just three workouts each week, check out Craig's fat-loss system, Turbulence Training for Fat Loss.]
Issue #2126
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Are your lifestyle habits killing you? Or are they ensuring that you "live young"?
Have you ever noticed that obesity, heart disease, and cancer seem to afflict several people in the same family? Genetics are usually blamed. However, poor health passed down through generations is the result of lifestyle habits. Those who share similar habits also share the same health – bad or good. And those who make the same lifestyle changes experience equivalent changes in health – regardless of genetics.
To make a health transformation, you must capitalize on healthy habits. Two dangerous habits that are infecting Americans are habitual sugar consumption and a continual lack of moderate sunshine. Combined, these habits create an environment within your body that’s conducive to cancer growth. By minimizing sugar and exposing your body to direct sunlight for at least 20 minutes daily, you help prevent this pandemic killer from decreasing the time you can spend enjoying life.
[Ed. Note: Shane "The People’s Chemist" Ellison is an internationally recognized authority on therapeutic nutrition. Learn about his "Foundational Health Education" program to beat obesity, heart disease, and even Type II diabetes by clicking here.
You can also read Shane’s insights into what you can do to lead a healthier life by signing up for ETR’s FREE natural health e-letter here.]
Issue #2125
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Issue #2113
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I was so excited my hands were shaking.
It was 7:13 p.m. on August 25, 2004, and I had just completed a content-rich, 70-minute teleseminar interview with personal-development and goal-achievement guru Brian Tracy.
Three hundred forty-two participants paid the $29.95 tuition without raising an eyebrow, and 83 percent of them opted to pay $10 more (the "upsell") to get unlimited download (and replay) access to our online release of the audio files and enhanced transcripts of the interview.
If you do the math, you’ll discover that the 70-minute teleseminar generated $13,081.50 in revenue, or $186.89 a minute. But the story doesn’t end there. Fifty-eight of the tele-participants decided to pay $30 more to acquire our "offline" release of a three-ring binder with the enhanced transcripts and an audio CD of the interview – to chalk up another $1,740. All told, we racked up nearly $15K in income for just a few hours of work!
Since 2001, I’ve trained entrepreneurs, independent professionals, and small-business owners to utilize teleseminars in combination with the Internet to boost and accelerate their business profits. Teleseminars have changed my life. Their leveraging power made it possible to turn my 2001 annual income into an hourly income in 2006… 16 times.
If you’re an entrepreneurial CEO, public speaker, author, or information marketer, you owe it to yourself, your business, and your lifestyle to take a closer look at the revenue-generating potential of teleseminars – even if you’ve never listened to one.
In my experience, teleseminars are the fastest, easiest, most economical way to increase your sales and profits without spending a single penny more on marketing or advertising costs. Best of all, you can conduct them from the comfort of your home, your office, a hotel room, or virtually anywhere else in the world. All you need is a bridge line and a telephone, and you’re good to go. (For unlimited usage of a bridge line at just $47 per month, visit InstantTeleWebcast.com.)
I should know – because, as I write this, I have over 14,100 teleseminar students from every inhabited continent on Earth. I even teach entrepreneurial CEOs an eight-module tele-training program on the subject called Teleseminar Secrets (TeleseminarSecrets.com), which commands $2K and starts on the second Monday of every December.
But I’m getting ahead of myself. Let’s back-pedal a bit and analyze why the Brian Tracy teleseminar was so successful.
If you visit Brian’s website (BrianTracy.com), you’ll find that his typical audio program is available for $20. Why, then, can he and I command twice as much for a teleseminar? The answer is: greater "marketing intimacy" (in other words, live access), coupled with a 2,437-year-old technology championed by Socrates.
Secret of Socrates Rediscovered
If you follow this time-proven three-step "Socratic" method of inquiry, you too can capture more profits faster, better, and with less effort, even if you’re on a bootstrapped marketing budget.
Step 1: Ask Your Market. Most marketers create their message and then find their market to "monetize" the message. I do the opposite. I first "ask" members of my market what they want, and then ask them to pay for it.
For instance, the Brian Tracy teleseminar didn’t start on the evening of August 25, 2004. It started three weeks prior, with a worldwide survey posted online. After capturing over 860 questions that went into a special database I’ve developed, I chose the 12 most popular topics.
Step 2: Promote to Your Market. You’re not the "marketing genius" – nor am I. Your "market," collectively, is the marketing genius. Once you adopt this mindset, you’ll never engage in marketing guesswork again. That’s why, after two weeks of getting survey responses (and "opt-ins") for Brian’s teleseminar, I was ready to post an online sales letter – one that was ostensibly written not by me but by my "market."
If you visit JustAskBrian.com/teleseminar, you’ll see the actual sales letter that had a conversion rate of over 22 percent and generated over $13,000 in teleseminar tuition fees. How did I come up with a sales letter that was ostensibly written by my "market"? Simply by writing out the survey results.
I happen to know dozens of world-class copywriters who wrack their brains for days trying to come up with a winning "appeal" or "hook" to reel in more sales. I don’t do that, because it’s too stressful for me. And, frankly, I don’t like to work that hard.
Instead, I just ask the people in my market what they want most, and then I give it to them. Follow this process, and you’ll soon realize you no longer need to play pin-the-tail-on-the-donkey with your marketing dollars, because this system eliminates guesswork.
If you’re starting to smile because you’re beginning to realize how easy teleseminar marketing can be with my no-nonsense "Socratic" selling strategy, I want you to know that Step 3 gives you an even greater advantage to almost effortlessly crush your competitors.
Step 3. Repurpose Your Content. Because teleseminars produce audio content, it makes sense to "repurpose" that content and monetize it beyond the money you make from your live event. Put the recording on a CD and sell it. Transcribe the audio and sell the transcripts. Make MP3 downloads available online so your listeners can more "intimately" listen to you on their iPods or MP3 players.
For entrepreneurial CEOs like me, repurposing is the most powerful moneymaking force in the information-publishing world.
Although the repurposing possibilities are almost endless, the single most important thing you must do to monetize your repurposed teleseminar content is make it available for purchase before it’s even published. (Or, in this instance, recorded.) In info-marketing circles, we call this the "pre-publication" release, and it’s mind-boggling how many marketers leave thousands of dollars on the table by completely ignoring this strategy.
This is what I was doing when I first sold the $29.95 "admission" fee to the Brian Tracy teleseminar and then offered the $10 "upsell" for the unlimited download "recordings." (In my experience, this upsell strategy outperforms selling the teleseminar for $39.95 with no upsell.)
Repurposed Teleseminars Make More Profits
Simply ask your market what it wants, promote to your market based on those results, and repurpose your teleseminar content to scoop up more profits with almost no effort.
It’s that easy. And besides Brian Tracy, I’ve done this with other "thought leaders," such as Jack Canfield, Les Brown, Mark Victor Hansen, Vic Conant, Joe Polish, Michael Masterson, Joe Vitale, Janet Attwood, Jay Abraham, Stephen Covey, Michael Gerber, Zig Ziglar, Gay and Katie Hendricks, Harv Eker, Barbara DeAngelis, Jay Conrad Levinson, and Ken Blanchard … just to name a few.
Best of all, you don’t have to be famous to become a seven-figure teleseminar marketer. Like me, you can interview famous people in your business niche and share the profits – and create many ultra-fruitful strategic alliances along the way – all from the comfort of your home office.
[Ed. Note: Alex Mandossian, CEO of Heritage House Publishing Inc., has generated over $233 million in sales and profits for his clients and partners via "electronic marketing" media, such as TV infomercials, online catalogs, 24-hour recorded messages, voice/fax broadcasting, teleseminars, webinars, podcasts, and Internet marketing since 1991. You can get Alex’s insights into information marketing this fall at ETR’s Info Marketing Bootcamp. To get free instant access to Alex Mandossian’s blog on Electronic Marketing, please visit AlexMandossian.com.]