Archive for May, 2005

Movie Theatre Ads

May 4, 2005

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The New York Times reports that the Loews Cineplex movie chain is bowing to public criticism and plans to advice the viewing public that the feature presentation will start 10 to 15 minutes after the posted time. Movie theatre commercials probably rank very high (along with mail-in rebates) among consumer annoyances, so any improvement is welcome.

Personally, I think the commercials are annoying, but I would definitely like to see trailers of upcoming movies. We also tend to go to the theatre at least one-half hour early to get good seats. So, why don’t movie theatres play all the commercials and trailers they want but start the movie exactly at the stated time? What do you think?

S&P Dividend Aristocrats Index

May 3, 2005

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One of the disadvantages of index funds is that the dividend yields on most stock market indices is very low. An investor in index funds has to rely almost entirely on capital gains for their returns. I noted that this was a drawback of my sleepy portfolio.

Noticing the demand for dividend income, S&P has launched a new dividend aristocrats index, which is composed of stocks in the S&P 500 index that have a history of increasing dividends. Currently, there are 57 names in the index.

Any index fund or ETF based on the S&P Dividend Aristocrats Index will be a strong competitor to the existing (and very popular) iShares Dow Jones Select Dividend Index Fund (DVY), which yields about 3.06%.

Recent BusinessWeek stories on Dividend Aristocrats:

  1. Aiming for Royal Returns
  2. Bowing to “Dividend Aristocrats”

Stick with Stocks

May 2, 2005

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Does the market volatility so far this year make you reach for Pepto-Bismol? Don’t Abandon Stocks, says S&P’s Joseph Listani. It is very good advice.

Long-term investors should ignore short-term market volatility, save and invest regularly in a well-diversified portfolio. Prof. Ibbotson estimated in 1999 that over the next 25 years, small-cap stocks would return 12.5%, large-cap stocks 11.6% and govt. bonds 5.4%. He further predicts that the Dow will hit 100,000 in 2024. Now, there will probably be very few years when the markets actually increase by the average return. The vast majority of annual returns will fluctuate wildly. When the market is range-bound, it pays to concentrate on long-term returns.