|
"I am glad
that I discovered your system...I'm already up 2.1%...this will
be my new income stream"
- Mark S.
Thanks to Mark S. for sharing his
recent experience with the CDx3 Income Engine and welcome to all of the
new CDx3 Newsletter subscribers who signed up during
July. This is your first issue of the CDx3 Newsletter, a free monthly newsletter devoted
to the interests of CDx3 Preferred Stock investors.
To be sure
that you continue to receive the CDx3 Newsletter each
month, please remember to add the following email address to
your email address book safe sender list:
CDx3NotificationService@us.emaildirect.com.
The ten CDx3 Selection Criteria
from Chapter 1 of Preferred Stock Investing eliminate
about 90% of the regular preferred stocks and select out just
the highest quality issues - CDx3 Preferred Stocks. To reduce
risk even further, CDx3 Investors can choose from CDx3 Preferred
Stocks from a variety of business segments. The Last
Month's CDx3 Investor Results article below identifies the
yields being paid by CDx3 Preferred Stocks from eight segments
over the last two months, including the red hot apartment
community segment where occupancy rates are booming.
Preferred Stock Investing
goes to college! While not a textbook, Preferred Stock
Investing is read at many universities and colleges to show
students how the market price of preferred stocks behaves during
different economic conditions and the reasons why. The
Special Announcement article provides a link to a new
back-to-school promotion for Preferred Stock Investing
that is currently being run by Amazon.com.
The CDx3 Company Spotlight
this month shines on Hawaiian Electric Industries, issuer of
CDx3 Preferred Stock. This utility faces a very unique set of
challenges in providing electricity to 95% of the island state's
population and has been paying dividends every quarter to its
shareholders since 1901.
There has never been a case where
a company that issues CDx3 Preferred Stock has suspended
dividend payments to those who own shares - not one, ever.
But that doesn't mean that it cannot or never will happen so,
not being clairvoyant, investors often wonder if there is a way
to tell - in advance - if a company might stop paying the
dividends on their preferred stocks. This month's CDx3
Question Of The Month article describes an early warning
system for CDx3 Investors.
For our new readers, there is a free calculator available
to you that allows you to correctly calculate the effective annual return of
preferred stock investments. The Free Special Offer
article below provides you with a download link. Keep an eye on this monthly CDx3 Newsletter
for announcements of future promotions of CDx3 products and
services.
Has "The Market" overreacted to
the current credit crisis by pulling out of bank stocks more
than the actual risk justifies? If so, the run-for-your-life
attitude of some investors may create the
opportunity-of-a-lifetime for others. And, as it turns out,
there is a way to tell which is which and I will present it to
you in next month's issue of the CDx3 Newsletter.
|
|
 |
|
Diversification
Helps CDx3 Investors Manage Investment Risk
Preferred Stock Bargain List For
August Includes Red Hot Apartment Segment
|
CDx3 Preferred
Stocks* provide an excellent opportunity to not
only earn great dividend and capital gain
income, but also diversity your portfolio at the
same time. The current average annual
dividend rate being paid by CDx3 Preferred
Stocks is 8.875% with yields running even
higher.
Decades ago
preferred stocks were only issued by utilities
(such as Hawaiian Electric), but now many types
of businesses offer them allowing you to salt
your portfolio with holdings from different
segments of our economy.
This type of
investment diversification allows you to take
advantage of boom times and spread your risk
during periods when the economy slows down.
Subscribers to the
CDx3 Notification Service
receive a list each month, called the CDx3
Bargain Table (what's
this?),
that identifies the highest quality preferred
stocks - CDx3 Preferred Stocks - that are ripe
for purchasing.
Last month, the
CDx3 Bargain Table identified CDx3 Preferred
Stocks from six business types producing an
average annual yield of 8.6%.
Throughout July,
CDx3 Investors considered adding CDx3 Preferred
Stocks from these segments of our economy to
their CDx3 Portfolios.
On July 31, 2008,
subscribers to the
CDx3 Notification Service
received the CDx3 Bargain Table for August that
identified CDx3 Preferred Stocks from two more
business segments - hotels and apartments.
The CDx3 Preferred
Stocks from hotel and apartment companies
identified for August are offering CDx3
Investors an average annual yield of 10.9% and
8.7%, respectively.
The credit crisis
and weak home market have fired up the demand
for apartments, with occupancy rates surging.
The U.S. Census Bureau reports that about 3% of
homes in the U.S. are currently vacant - the
highest home vacancy rate in 20 years. |
The
June 2008 issue of the CDx3 Newsletter
introduced you to BRE Properties, a $2.5 billion
issuer of CDx3 Preferred Stock enjoying huge
demand for their apartment communities.
In addition to knowing how to screen, buy and
sell the highest quality preferred stocks, CDx3
Investors are able to diversity their CDx3
Portfolios by using the CDx3 Bargain Table each
month; that is, invest in a number of
different CDx3 Preferred Stocks, issued by a
number of different companies that are in a
number of different businesses.
The CDx3 Bargain
Table that many buyers of CDx3 Preferred Stock
use each month to identify purchase candidates
allows subscribers to the
CDx3 Notification Service
to diversity their CDx3 Portfolios, spreading
investment risk while earning way above average
fixed-dividend income.
* CDx3 Preferred Stock:
CDx3 Investors are only interested in the highest
quality preferred stocks and there are lots of pretenders
to weed out. Applying the CDx3 Selection
Criteria (Preferred Stock Investing,
Chapter 1) will eliminate about 90% of the regular
preferred stocks trading on today's stock
market.
To be
considered a "CDx3 Preferred Stock," regular
preferred stocks must:
1. be rated
"investment grade" by Moodys;
2. be issued by a
company with a perfect record of never having
suspended a dividend on a preferred stock; and
3. have
the "cumulative" dividend requirement,
which means that in the unlikely event that the
issuing company misses a dividend payment to you
(which I have never seen happen with a CDx3
Preferred Stock), they have to make it up to you
later; they still owe you the money.
Having specific
and consistently applied selection criteria
takes the emotion out of your investing
decisions and leaves you with the highest
quality preferred stocks - "CDx3 Preferred
Stocks." |
|
|
 |
|
Amazon Includes Preferred
Stock Investing In Fall Textbook Promotion
Plus $1.99 Off Of Regular Price
|
Amazon has apparently
noticed that Preferred Stock Investing gets a lot
of interest from colleges and universities. As we ramp up
to another school year, Amazon has included Preferred
Stock Investing in their special text book program
(note the "Special Offers Available" link at Amazon.com).
Even though Preferred
Stock Investing is not a text book, many institutions of
higher learning use the book to teach students how the
market price of certain preferred stocks behaves and the
reasons why.
To learn about Amazon's
fall textbook promotion for Preferred Stock Investing,
click here.
And more good news from
Amazon - they have continued the special book pricing of
$17.96 that they started in June.
|
Amazon can end this
special promotion at any time, so if you've been
thinking about picking up a copy of Preferred Stock
Investing at a great price, for yourself or for a
student, now is the time.
Preferred Stock
Investing includes all of the resources that you
need to screen, buy and sell the highest quality
preferred stocks - CDx3 Preferred Stocks.
The book also lists all of
the CDx3 Preferred Stocks issued since January 2001.
Free downloadable updates are also included for book
readers including the most recent update that provides
the newest research regarding how to take advantage of
the current credit crisis using CDx3 Preferred Stocks.
To see Preferred Stock
Investing at various retailers, including Amazon,
click here. |
|
|
 |
|
Who Are
These Companies That Issue CDx3 Preferred
Stocks?
Hawaiian Electric
Industries (NYSE: HE)
CDx3 Preferred Stocks offer
investors an opportunity to
substantially diversify their
portfolios since CDx3 Preferred
Stocks are issued by companies
in a variety of businesses.
Hawaii's electric company faces
some unique challenges while
providing electricity to 95% of
the population. On the
mainland, utilities can obtain
power from each other to meet
varying demand. But on the
Hawaiian islands, the fact that
each county is surrounded by
water prevents such long
distance sharing. Each island
must be able to independently
generate enough electricity to
meet its own demand and has to
be entirely self-reliant. So
each island system is sized to
handle its peak load demand, but
what happens when a plant needs
to go offline for regular or
unplanned maintenance?
|
While
HEI's electricity generation is
primarily oil- based, which all has
to be imported either in crude or
refined form, HEI's power plants are
not the primary user of imported oil
in the islands.
Somewhat uniquely,
the largest single use of the oil
that is imported to the Hawaiian
islands is for air transportation
(jet fuel) at 37%. Electricity
production accounts for 30%.
Hawaiian
Electric has paid a quarterly
dividend on its common stock every
quarter consistently since 1901.
Since preferred stock dividends
always get paid before common stock
dividends, you can see why HEI's CDx3
Preferred Stock is popular with
subscribers to the
CDx3 Notification Service.
|
|
|
 |
|
Is there a way to tell if a
company might stop paying
dividends? -
Rita T.
The more I research CDx3
Preferred Stocks the more I
find aspects of them that are
pretty easy to warm up to. And
I’m not talking about the
obvious things like
above-average dividend income,
monthly income generation, a
spotless dividend track record
or the high degree of market
price predictability. You get
all of those characteristics with CDx3 Preferred Stocks
automatically.
I’m talking about other details and mechanics that make
CDx3 Preferred Stocks very easy
to like. For example, CDx3
Preferred Stocks have a built-in
“early warning system” that lets
you know in advance if your
risk-o-meter should be flashing.
Now remember, there has never
been a case where the issuing
company of a CDx3
Preferred Stock has (a) been
downgraded below ‘investment
grade’ or (b) suspended a
preferred stock dividend, much less (c) gone
bankrupt. That doesn’t mean that
these maladies cannot happen or
that they never will happen; but
historically they never have.
And with CDx3 Preferred Stocks
there is actually a built-in
early warning system that
signals you, in advance, if you
need to start paying closer
attention to a particular issue
in your CDx3 Portfolio. Here’s
how it works:
Got
Cash?:
Companies have a wide variety of
mechanisms that they can use in
order to raise money. For
example, they can issue bonds
(IOUs), preferred stock or
common stock. Don’t get bogged
down in the terminology; this is
really simple. When a company
issues a bond, they are saying
they want you to loan them your
cash. A bond is a piece of paper
that functions as an IOU or a
receipt that you receive from
the issuing company promising to
pay you back, with interest, at
a certain rate and on a certain
schedule. That’s a bond. The
issuing company is now in debt
to you (rather than the other
way around for a change), so on
the company’s books they show
their obligation to you under
the heading “debt” – this is
money they have borrowed from
you and others.
Equity:
Another way a company can raise
money is to issue preferred
stock. When you give a company
your cash in exchange for a
share of preferred stock you are
buying a piece of the company
(you own a piece of the rock).
The company therefore records
your holdings of their preferred
stock under the heading “equity”
on their books. Like a bond, the
preferred stock comes with an
agreement (the prospectus) that
says that the company will pay
you interest (or dividends, but
don’t worry about the
distinction now) at a certain
rate and on a certain schedule.
But if the company runs short of
cash, bond holders are paid
before preferred stock holders,
so there is a certain amount of
risk involved, but preferred
stock dividends are considerably
higher than bonds.
|
That brings us to common stock.
Like preferred stock, when a
company sells their
dividend-paying common stock to
you, your holdings are recorded
as equity on the company’s
books (you own a piece of the
company), but there is no assurance
provided by the company that you
will ever receive any dividend
payments. That is, with common
stock the dividends can be
suspended at any time without
penalty to the issuing company
(i.e. common stock dividends are
at risk at all times). Plus,
holders of common stock get paid
after
preferred stock holders (hence
the name “preferred”).
Early
Warning System: Here’s the cool early warning
system for CDx3 Preferred
Stocks- every quarter, companies
that issue CDx3 Preferred Stocks
have to announce whether or not
they have enough cash to pay the
upcoming dividends to holders of
their common stock. When doing
so, the company may increase
their common stock dividend, decrease it,
eliminate it entirely or leave
it the same. As long as the
issuing company pays a common
stock dividend, even it is
$0.0000001 per share, you, as a
preferred stock holder, know
that you are going be getting
paid your full dividend amount.
In other words, as long as common
stock holders are going to be
getting paid (any amount at
all), preferred stock holders,
by law, are going to be getting
paid first and in full.
So the common stock dividend
announcements that company’s
make act as an early warning
system for preferred stock share
holders.
Companies make these
announcements every quarter a
few weeks before the dividends
actually get paid. So, if you
find yourself concerned about
your next preferred stock
dividend payment, just keep an
eye on the company’s common
stock dividend announcements.
These announcements are made
with the quarterly financial
results that are filed with the
Securities and Exchange
Commission (SEC) and the
schedule for upcoming
announcements is generally
posted on the company’s web site
under Investor Relations.
Thanks to Rita for the great
question. You will receive a
free copy of the CDx3 Special
Report "Dividend Accounting."
Click to submit your question.
|
|
|
 |
Free CDx3
Special Report Also Has Free Companion Excel
Calculator
See How To Correctly Calculate Your
Effective Annual Return - FREE
|
The Preferred Stock Investing Reader's Forum provides a
free special
Excel spreadsheet calculator that you can use to
calculate the effective annual return (EAR) of your
preferred stock investments. The calculator allows
you to just plug in a few parameters from your preferred
stock (such as purchase date, purchase price, sell
price, etc.) and see what your effective annual return
really is, or will be if you sell.
 When
you initially download the EAR calculator, it is set up
using the Series A CDx3 Preferred Stock from Dominion
Re-sources (D-A) as an example. This is the same CDx3
Preferred Stock that is used as an example through-out the CDx3
Special Report titled "Calculating Your Rate Of
Return."
|
As a
recipient of this monthly CDx3 Newsletter,
you are entitled to a FREE copy of "Calculating Your
Rate Of Return." So, get
them both - FREE - and use them together to
learn how to correctly calculate your rate
of return on this type of investment. To download your free copy
of Calculating Your Rate Of Return, just click on
the following email address:
CDx3Newsletter@PreferredStockInvesting.com.
No need to type anything in the body of the
message, just click the Send button.
You will receive an auto-reply email message
with download instructions for your free
CDx3 Special Report.
To see the entire library of useful and
educational CDx3 Special Reports, including
three sample pages from each one,
click here.
|
|
|
 |
Prices Down As 'The Market' Remains Wary Of Banks
How To Tell If The Market Has Overreacted
The economic turmoil that has resulted from the
current credit crisis has made many individual
investors very wary of investing in the country's
banks. As The Market
(you and me)
has shied away, the market price of many
preferred stocks issued by banks has dropped
accordingly.
Every quarter, publicly traded companies are
required to declare how they are doing, financially
speaking. The Market reacts to these declarations by
buying or selling the stocks, both common and
preferred, issued by these companies. By watching
the market price movement of CDx3 Preferred Stocks,
one can get an idea of how The Market views the
investment risk associated with a particular
company's preferred stock issues.
Similarly, the rating agencies (Moody's, Standard &
Poor's, Fitch) comb through the details of these
filings and update, or not, their creditworthiness
ratings of these companies and their CDx3 Preferred
Stocks. The resulting ratings are intended to
quantify the investment risk of the company's common
and preferred stock issues.
In next month's CDx3 Newsletter I will show
you how to answer the question "has The Market
overreacted?" and pushed market prices down farther
than the risk really justifies. Where that is
the case, there could be once-in-a-lifetime
investment opportunities available since many CDx3
Preferred Stocks issued by banks are now paying
yields over 10%.
Opportunity of a lifetime or too good to be true -
I'll report back to you in next month's CDx3
Newsletter.
|
|
Remember, I'm not a stock broker;
I'm not trying to sell preferred
stocks to you; and I don't sell
investment advice. I'm an
investment researcher with an
economics and statistics
background who has developed a
simple way to earn a respectable
return at very low risk. And I've
written it down in
Preferred Stock Investing.
I'm hopeful that you find these
monthly CDx3
Newsletters interesting, and
will consider learning more by
purchasing my book, Preferred
Stock Investing or by subscribing to
the
CDx3 Notification Service.
Please
take a look at
www.PreferredStockInvesting.com. And don't forget
about my
FREE SPECIAL OFFER.
Know
someone who might be interested in simple,
low-risk investing for non-investment
experts? Have them send an email
message to
CDx3Newsletter@PreferredStockInvesting.com and
they will automatically
begin receiving this monthly CDx3
Newsletter
next month (plus a
CDx3 Special Report) - all FREE.
Many Happy Returns,
Doug K. Le Du
|
|
