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May 20, 2003 - ICLUBcentral News

ICLUBcentral Software News May 20, 2003


Barb's Tips: Keeping the SSG Simple
by Barbara DalMaso, ICLUBcentral

NAIC Classic Plus plots sales and earnings per share data on the SSG Graph (also called a ratio chart or semi-log graph). Those of us who are “mathematically challenged” need not be afraid of these fancy terms.

We simply view the data to see how the sales and EPS are growing. Are the lines trending upward? How smooth are the lines?

We derive the % of growth by measuring the slope of the red trend lines. We do this by placing the lines over the parts of the data we wish to measure. (Sometimes the data is so consistent that we need not change the placement done by NAIC Classic Plus.)

To see the value for a particular year, simply touch the data point with the cursor.

There is no need to become fixated with scale factors and translation into numbers. NAIC Classic Plus keeps it simple for you. Classic Plus chooses scale factors so that the data shown does not overlap. You may alter the placement of data lines by clicking a data point with the right mouse button and choosing ‘move up’ or ‘move down’.

NAIC Classic Plus is a great tool to help you learn the SSG, and a great way to get new club members learning how to contribute to the club. More information on Classic Plus is located here.

MyStockFund: Buying partial shares at a discount

ICLUBcentral customers can now receive a discount off the annual fee when signing up for a MyStockFund brokerage account. MyStockFund ( offers its members the ability to purchase fractional shares from hundreds of companies; exchange traded funds and bond funds; a low annual fee for unlimited monthly purchases; low minimums; free dividend reinvestment; an automatic stock purchase program; and a range of educational and financial services designed to better assist the long-term investor.

What is this dividend tax cut?
by Michael Deemer

The final content of the dividend tax reform proposal has yet to be enacted into law, so the contents of this article are simply a description of ONE of the proposals on the table. The principles espoused by the article are sound, even if the details of the final legislation differ.

There has been a lot of news in the popular press recently regarding the proposed legislation changing the tax treatment of dividends. With a little understanding of the thinking behind these proposals, the investor can better anticipate the possible implications of these changes for dividend paying stocks.

It is generally believed that reducing the effective tax rate will stimulate investment. One thought behind the proposals relates to the practice of double taxation; referring to the fact that corporations may pay a corporate income tax on their earning, while shareholders may pay another round of tax when a portion of these earnings are distributed as dividends. The impetus for these changes is founded on the position that taxes on these earnings should be paid once, not twice.

In order to relieve the application of a double tax, the proposed legislation would exempt dividends paid on those earnings that were taxed at the corporate level. In other words, if a corporation pays tax on a large percentage of their earnings, then a large portion of their dividends would be exempt from a “double” tax. Conversely, for corporations that pay tax on a lower percentage of their earnings, then a lower percentage of their dividends would be tax exempt.

There are several possible implications for investors. First, it is clear that the proposed legislation will not benefit all dividend-paying stocks equally. As you can see from the practice of double taxation, only those dividends that are taxed at the corporate level would qualify for a tax exemption. The result would be that not all dividend-paying stocks will be impacted in the same manner, and the tax payment history of a firm may be a consideration. Second, due to the timing of the tax computations for corporations (deferrals, credits, etc.), the determination of the actual tax paid by a company in any one year may not be resolved for several subsequent years—resulting in both a delay and an averaging impact on the benefit to the individual.

Most recently there have been reports of a reduction in the tax rate applied to dividends, as well as an annual limit on the dollar amount of dividends income that any one individual can exempt from tax. While this information is based on the current thinking as expressed in the popular press, there is no sure thing when it comes to the implementation of legislative changes—if they should happen at all. However, an understanding of the underlying thinking behind any change will benefit the investor.

Michael Deemer is manager of brokerage operations for MyStockFund Securities, Inc. Michael can be reached at 703-620-6050. For more information about MyStockFund Securities, Inc., go to the MyStockFund web site.

CompuFest 2003

Are you getting the most out of your NAIC Software? Does it ever seem like your personal computer is using you -- instead of the other way around? If so, then NAIC CompuFest 2003 in Anaheim, CA, is the place to be June 27-29, 2003!

At NAIC's computerized investing conference, you can learn tips and strategies for using the power of your computer to build and manage a portfolio. Special programs for teens and their families, as well as for investing Newbies, are available, as as seminars geared towards intermediate and experienced investors. ICLUBcentral staffers will be on hand to help you get started or teach you new techniques for your software, including NAIC Classic, Stock Analyst Plus, NAIC Stock Prospector and NAIC Club Accounting. In addition, you'll discover the best financial web sites to help you research stocks -- all using NAIC's time-tested investing methodology. For more information and to register online, visit

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