There are two ways to make money on a stock. You can buy it and hope it goes up. Then you can sell it and pocket the difference (after paying capital gains tax, of course). Or you can buy a stock that pays a dividend. Every quarter, the company will send you a check equivalent to the latest dividend per share multiplied by the number of shares you own.
For instance, let’s say you own 100 share of Ford Motor Company, whose most recent dividend for the 4th quarter of 2017. The company declared a dividend of $0.15 per share, so you will get a check in the mail for $15.00. Assuming you own Ford for the entire year and the dividend is the same every quarter, you will receive $60.00 during the year. Divide that by the amount you paid for the stock to determine your return on investment for the year.
According to TheStreet.com, “The automobile industry is going through incredible amounts of change as electric cars are encroaching upon the dominance of internal combustion engine powered ones and autonomous cars are set to hit the roads in just a few years. Experts believe that as much as 8% of all vehicles sold by 2020 will be electric and perhaps as many as 21 million autonomous cars by 2035.
As the pace of change — from Detroit to Silicon Valley and everywhere in between — rapidly increases, investors in the space can see outsized returns, provided they know where to look.
Several nations and many countries are proposing plans to prohibit the sale of conventional cars with internal combustion engines beginning in 2030. That just over a decade from now. Every year, nearly 100 million new cars are sold throughout the world.
If they are all going to be electric or plug-in hybrids in a few short years, the upheaval in the marketplace will be enormous. And that will create tremendous opportunities for savvy investors.
The Street recommends three stocks it thinks will lead the parade: Tesla, Nvidia, and MobilEye. Everyone is familiar with the Tesla, the company that Elon Musk says will worth a trillion dollars in years to come. It is focused on making electric cars and trucks that have the ability to drive themselves once the software is perfected.
Nvidia and MobilEye provide the hardware that makes self driving cars possible. That includes sensors like cameras, Lidar, radar, and ultrasonic devices. They also make the computers that process all the data collected in real time to guide the cars safely down the road. Nvidia’s latest “supercomputer in a box” is so powerful, it actually has to be connected to the car’s cooling system to keep it from overheating.
For smart investors, CMC Markets offers a variety of sophisticated investment tools that permit them to do more than just buy a stock and hold it. For instance, there is spread betting, a tax-efficient way of speculating on the price movement of thousands of global financial instruments, including indices, shares, currency pairs, commodities and treasuries.
There are major changes coming to the automobile business both in the US and globally as companies transition to making plug-in hybrid and battery electric cars. Some old line companies may falter while new companies may appear. Change creates new opportunities for making money in the stock market.
This post is supported by CMC Markets; images from StockSnap