Target Investor

Style:

We use a proprietary mathematical formula to assign a Style to each company offered in the First Share program. The assigned Style takes into account a company’s dividend payment history, its relative dividend yield and its 5-year projected earnings growth rate. We then assign that company a numerical value (1-5) which are represented by the number of dark grey blocks in our style graphic. Companies that are more income-oriented -- that is, pay higher-than-average dividend yields, but are expected to grow earnings below average over the next five years -- are assigned lower values, while growth-oriented companies are assigned higher values. Growth-oriented investors should focus on companies with higher Style values, while income-oriented investors should focus on companies with lower Style values.

Risk:

To assign a particular risk value to a company’s stock, we consider each company’s 52-week average Beta. Beta is simply a statistical calculation that compares the volatility of a particular company’s stock to the market as a whole. Companies with a Beta greater than 1.0 are typically considered to be more volatile that the market as a whole. For instance, if a stock has a Beta of 1.5, it is 1.5x more volatile, on average, that the overall stock market. So, if the stock market is in a general uptrend, a stock with a Beta of 1.5x could be expected to perform better than the market. On the other hand, when the stock market is in a general downtrend, this same stock could be expected to perform worse than the market.

In our Risk rating, stocks with higher 52-week Betas are assigned a higher value and, therefore, will have more green colored blocks.


Don’t know what type of investor you are? Take our Investor Questionnaire for FREE to determine if you are more income-oriented or growth-oriented in nature. First Share Pro members can use the results of this questionnaire along with our new Growth and Income model portfolio tool for specific stock suggestions.


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