Overview

Strong dividends offer passive income & some insurance if the stock falls in price.

Dividends are variable; poor dividend returns can follow strong previous dividends.

Analysts involved in projecting future earnings can & will make mistakes.

Make sure you can answer why a stock is tipped to bring strong future dividends.

 

Predefined screeners

For USA

Yahoo! Finance: strong forecasted growth, dogs of the Dow

CNBC screens: high quality high dividends, S&P 500 dogs

MSN Money: dogs of the Dow, SAPI Slugs

Zacks: highest dividend yields

Nasdaq sharp screen: high yield

Reuters select sceens: income stocks

For UK try Digital Look (log in required) & their High Yield screen

For TSX try MSN Money: screener (Shareslink predefined settings)

For ASX try MSN Money: Forecast Finder

For India try ICICI Direct: Highest yielding, high div. yield but low PE

 

Custom screening

Custom screeners offer various parameters. Below is a rough guide, screen for:

Current dividend yields > 3.5%, market cap > $600 mill. (USD),

Expected earnings growth for next yr > 4, debt/equity ratio < 0.5

 

Review Results

The custom or prefined screening should have produced a fair number of results.

Eliminate predefined screen results if current div. yield < 3.5 % & market cap < $600 mill. (USD)

Eliminate results that have 5 year earnings growth rates < 5%.

Chart or screen to ensure results are above 50 day moving averages by at least 2 days.

Get the dividend history through the dividend quote links: USA, UK, Canada, India & Australia

Look for consistent patterns of dividend returns.

Visit company sites and search for news on the companies to gather more info for your decision.

 

Conclusion

Look into the possible future economic conditions & their impact when choosing yield stocks.

Try to pick yield stocks that are sheltered from China's manufacturing boom.

 

Bear Traders

Overview

Bear Traders should have several years experience in markets and trading.

This guide is to find potential bear equities; not to bear trading strategies.

To learn more, try our education links.

Factor in liquidity and volume levels before you trade.

Be careful with risk, try to ensure you can exit positions you make.

 

Winners, losers & volume leaders

Winners can fall from the top & losing stocks may sink further.

High volume means lots of trading action.

Access our links to winners/losers, volume leaders.

 

Screeners that filter for optionable stocks

Zacks Custom Screener

 

Screens & charts

Screeners: USA, UK, Canada, India & Australia

If you do not have any, download trials or purchase charting software.

Purchase real time data. Try online charts: USA, UK, Canada, India & Australia

 

The Big Bear Market

Markets run in cycles and the next global bear market should be big.

Don't be a permabear, look at all of the following for warning signs.

Option buyers are often wrong. Check the CBOE put/call ratio from Schaeffers Research.

If the moving average gets below 0.59 there could be a bear coming.

Watch the VIX, a fearful market brings it above 45. Weekly VIX chart.

NYSE & 50-day moving average; over 70% means a correction is due.

If you can get the data, chart net new highs & lows, corrections start below zero.

Watch for the effect of sharp rises in the yen; the size of the yen carry trade is unknown.

Watch the S&P 500 PE average, 1987 & 2000 crashes after average passed 22.

Keep track of the schedule for future interest rate decisions.

 

Conclusion

Stocks often fall quicker than they grow, a smart trader can do well.

Be careful, if bull markets were rare no one would invest in stocks.