S&P Boasted 30% gains for 2013; Fundamentals should now be routine.

Written By: Matthew Boysel

As 2014 comes to a close, those who participated in the stock market since the beginning of the year have experienced exceptional returns in this bull market. It’s truly been an exciting year for investors to see the rise in equities – and most importantly in their portfolios.

With the economic outlook looking bright for 2014 according to numerous economists, we expect to see GDP increase, unemployment to fall, increase in consumer confidence and continued improvements in the housing market.

With the S&P 500 boasting 30% gains year-to-date, investors are now being limited in their search to find solid, undervalued stocks. Those who are staying in the market for 2014 should be on the look-out for a few things when searching for bargain buys (there still are a plethora of bargains). I’m going to discuss three of the most valuable fundamental factors everyone should look at on stocks they own currently or would like to own. This is basic fundamental analysis of a stock.

1. Take a look at stocks with lower P/E ratios (Preferably under 15). 

The P/E ratio (price-to-earnings) is a ratio of the price of the stock compared to the earnings per share. This number is a universal measure to show how much per dollar you’re paying per share for a companies’ earnings.

2.  Check-out the price-to-book ratio of a stock

Price to Book = Price per Share/Book Value of Equity. If the stock’s price-to-book ratio is less than three, as an investor, typically it results in one of two things: The stock is selling at a discount to its fair value; this may represent a perfect buying opportunity or something is fundamentally wrong with the company. Be careful when examining the price-to-book ratio and dig around into the balance sheet of the company.

3.  The PEG Ratio

Often overlooked by investors, this is a fundamental ratio you should look out for when looking to value a stock. This ratio is the price to earnings growth ratio, which is different from the P/E ratio because rather than looking at current price to earnings, it compares price to the companies’ historical growth rate. Essentially, the lower the PEG ratio, the better the deal you’re getting on the stock.

The three points above are just three simple tactics you can explore and keep in mind when re-balancing your portfolio for the new year. Personally, I use Google Finance for a lot of my stock analysis and it’s a great resource to find these fundamental indicators. Google even offers a advanced search for various criteria; It’s a great resource and you should put it to use this year! 

Happy Almost 2014 – Cheers!

year-to-date stock performance and 2014 forecast

 

*Year-To-Date Performance of S&P 500*

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Hiring a SEO Expert

The buzz word every small business owner hears about these days is SEO. So what is SEO and why should I even care? Simply put, SEO stands for Search Engine Optimization; A set of tactics used to increase the visibility of your website on search engines, such as Google and Bing organically (without paid advertisements). The reason it is important is also simple; Your business needs to participate in SEO tactics if you wish to be found on the internet organically.

Clearly, there is an abundance of SEO “experts” just by doing a quick Google search. Let me tell you though, there is a significant variance in terms of skills for SEO “experts”. There are definitely SEO experts out there who know their stuff, but in this industry, there is a high percentage of “experts” that can’t even tell you what a meta tag is. The point is, you need to be very selective when hiring a SEO “expert”.

I’m going to walk you through a few key components a small business owner should look out for when hiring a SEO Expert:

  1. First and foremost, your expert should provide you with a list of references they have provided SEO work for. You should get in contact these references and check their results and opinions based on their rankings before and current rankings across the internet.
  2. With so many scammers in the industry, I believe you should look for results-driven fees. There are agencies that will do this (typically with a start-up fee) and you pay them when your rankings on search engines increase! Why have it any other way? *Make sure to put together a contract*
  3. Do your research before you meet with them: Going into a meeting with a SEO expert can be intimidating since most business owners are not familiar with how SEO really works. Grab a book from your local bookstore, read some articles (like my blog). After you feel confident with the industry terms, you will have an edge up over most clients.
  4. Beware of those “experts” who are charging less than $500 a month for their services and promise to deliver results. Often times, these “experts” will take your money and do a little dance and than submit your site to thousands of sites, not adding any real value and possibly getting you blacklisted from search engines.
  5. Before you hire a SEO expert, make sure to check your current rankings with search engines by using the Google Keyword Planner. This is a very important step, many small businesses fail to do before hiring an expert.
  6. Find out what kind of reports they will provide you. If you’re paying money for your expert, you should be receiving updated reports on your site at least monthly, as well as a quick phone call.
  7. Ultimately, the person you hire should be motivated, enthusiastic, be able to explain any industry concepts clearly and concisely, as well as honest.