The Motley Fool: Shrink your travel bills
Memories of travels can be priceless, but the traveling itself is a financial undertaking. If you spend a little time looking around and learning, you can save a lot of money on your next trip. Gather lots of tips at www.fool.com/travel — and below.
“Take advantage of online resources. You can comparison shop and make reservations at sites such as www.travelocity.com, www.expedia.com, www.sidestep.com, www.qixo.com, www.kayak.com and www.orbitz.com. Check several, since many airlines are featured on some but not all search engines. Some airlines, such as Southwest and JetBlue, prefer that you visit their own Web sites for fares. You can also make reservations through the Web sites of airlines and hotel chains. Visit www.farecast.com for predictions on whether a fare you’re considering is likely to rise or fall in the near future.
“You’ll find plenty of facts, tips and deals at www.lonelyplanet.com, www.roughguides.com, www.fodors.com, www.frommers.com, www.cruise.com, www.amtrak.com, http://travel.yahoo.com, www.airfarewatchdog.com and www.lastminutetravel.com.
“Gather many valuable pieces of advice at sites such as www.freetraveltips.com and www.internettraveltips.com. (Examples: Earlier airline flights are less likely to be delayed, and hotel rooms above the first floor tend to be safer.)
Bon voyage!
Ask the Fool
Q: How is “the Dow” calculated? — T.K., Bakersfield, Calif.
A. The 110-year-old Dow Jones industrial average (DJIA), the oldest continuing U.S. market index, essentially represents the average stock price of its 30 component companies. (The companies include Walt Disney, General Electric, Microsoft, Boeing, McDonald’s, Coca-Cola, ExxonMobil, IBM, Merck, Procter & Gamble and American Express, among others.) It probably seems like an unlikely average, though, at its recent 12,000, since none of the stocks is selling for anywhere near $12,000 per share.
On average, though, the shares actually would trade in the neighborhood of $12,000 — if they had never been split, issued dividends, or undergone major changes such as spin-offs or mergers during the time they were listed in the index. To get from current stock price levels to the larger index number, a number called the “divisor” is used.
The overall average is calculated by adding up the stock prices of the 30 stocks, and then dividing by the divisor (which is adjusted frequently and was 0.12493117 last time we checked).
Q: What does “today’s volume” mean for a stock? — C.S., Winona, Minn.
A: Imagine International Alphabet Co. (ticker: ABCDE), whose slogan is, “We supply letters for languages around the world.” If its current volume is 14,300,000, that just means that so far today, 14.3 million shares of the stock have changed hands. Volume can vary widely — Microsoft averages around 54 million shares per day, vs. 19 million for AT&T, 28 million for Apple, and 4 million for Boeing and PepsiCo.
My dumbest investment
I bought Philip Morris (now Altria Group) at $18 per share with very little due diligence, and then I sold at $24 for all the wrong reasons. I was up 33 percent in about six months and figured I should take my money and run. Two years later, I bought back in at $36 and have held on. It has been my best investment since then. I say it was my dumbest because it taught me the most. I didn’t really know why I was buying; I just bought because I liked the dividend and the low P/E ratio. I knew the stock was undervalued, but I had no idea what it should be worth. I also didn’t have a plan for what I would do after I bought. So I ended up selling way too early. With dividend reinvestment, it could have been a five-bagger for me, quintupling my investment. — D.K., Portland, Ore.
The Fool Responds: After hitting $18 in 2000, the stock passed $80 this year. The dividend yield, recently north of 4 percent, is still attractive to many investors.