Q Does it make sense to sell my low-dividend-yield stocks and buy high-yield ones?

— G.G., Rochester, Minnesota

A It depends. High dividend yields are not always as great as they may seem. Remember that a dividend yield is arrived at by dividing a stock’s annual dividend amount by its current stock price. So if a stock’s price falls, its yield rises — and vice versa. Thus, a high yield may be tied to a stock that has fallen in price, perhaps because the company is struggling. If so, the company might actually reduce or suspend its dividend.

It’s also valuable to consider a dividend’s growth rate. A smallish dividend today can be a fat one in a few years if the company is increasing its payout regularly and significantly, as many do. Imagine a $2 annual dividend and a $3 one. Let’s say the larger one isn’t growing much at all. But if the smaller one is growing at around 8% annually, that $2 dividend will become a $3 one in about five years — and will likely keep growing. So sometimes a smaller dividend can be better than a bigger one.

Q In my IRA, can I switch between different stocks and mutual funds?

— T.L., Houston

A If your IRA is held at a brokerage, you should be able to buy and sell stocks and mutual fund shares within it. You may be charged regular trading commissions for such trades, but you won’t be taxed on any gains while the money is in the account. (Learn about good brokerages at Fool.com/money.)

If your IRA is with a mutual fund company, you should be able to switch between its funds, but you probably can’t invest in any individual stocks.

New investors often assume, incorrectly, that a stock priced at, say, $20 per share is “cheaper” than one priced at $50 per share. That’s absolutely not true because a stock’s price on its own really doesn’t tell you much. (One exception: If the stock price is below about $5, it’s regarded as a “penny stock,” and penny stocks are, as a rule, notoriously risky and problematic.)

To make sense of a stock’s price, you need to look at it in relation to some other numbers. For example, a company’s number of shares outstanding multiplied by the current share price gives you a figure called its market capitalization (“market cap”); you can find this at sites such as Finance.Yahoo.com.

United Parcel Service (UPS) recently sported a share price of $133 and a market cap of $114 billion. FedEx’s stock price of $275 might suggest it’s a bigger company, but its market cap was recently $66 billion.

Which is “cheaper,” or a better investment? Ideally you’d assess lots of measures (“valuation metrics”). Here let’s look at the forward price-to-earnings (P/E) ratio, which divides the current stock price by the expected earnings per share (EPS) over the coming year. (A standard P/E ratio uses the EPS over the past 12 months.) A lower P/E ratio generally reflects a lower valuation. The forward P/E ratios for FedEx and UPS were both around 14 not long ago, suggesting a similar valuation.

Remember that a good stock analyst will assess many other things when evaluating a company as a potential investment, such as revenue and earnings growth rates, growth prospects and competitive advantages. The stock’s price might be related to how much debt the company has, to its revenue and to other numbers.

Based on all those factors, a $500 stock could actually be more of a bargain than a $10 stock. To see some stocks Motley Fool analysts have recommended, try our “Stock Advisor” service at Fool.com/services.

My smartest move in investing was years ago, with a video company that was talking about streaming. I invested thinking that might just work, considering how things were changing as far as being able to watch movies and shows on your phone or tablet, and how convenient that would be. Needless to say, that company was named Netflix, and it just took off. I made a pretty sum, so I’m really happy I was patient.

— R.R., online

The Fool responds >> Netflix has been one of the best-performing stocks over the past 20-plus years, so you certainly did well investing in it. Even more important is that you were patient and hung on through the company’s ups and downs.

Netflix began streaming content for its subscribers back in 2007. If you’d invested in it then, you’d be up by close to 30,000% — or, on an average annual basis, around 37% per year. That’s enough to turn a single $10,000 investment into close to $3 million.

Fortunes have been made by buying shares

of great growth stocks early — and then hanging on. But finding these needles in a haystack isn’t always easy, and many growth stocks eventually flame out. So spread your money across a bunch of contenders — or just stick with the easier, safer and still powerful long-term wealth-building strategy of investing in broad-market index funds.

(Do you have a smart or regrettable investment move to share with us? Email it to TMFShare@fool.com.)

I trace my roots to 1998, when I was founded to help people find things online. By 2015, I offered many other services and products, so I changed my name to reflect that. I bought Motorola Mobility in 2012. Today, with a recent market value of over $2.4 trillion, I’m a tech giant; I offer everything from a cloud computing platform to the Chrome browser to photo management, personal devices, email and YouTube. You’ll find my Investor Relations site at ABC.xyz. My flagship product’s name is a misspelling of a mathematical term. Who am I?

Last week’s trivia answer

I trace my roots back to 1869, when a German immigrant in Manhattan started offering financial services to merchants. I joined the New York Stock Exchange in 1896 and soon had European clients. I got into investment banking in the early 1900s and helped Sears, Roebuck and Co. go public in 1906. I was a pioneer in valuing companies by their earnings prospects instead of their hard assets. With a recent market value of $180 billion, I’m a top global financial services company; I have more than $3 trillion in assets under supervision and more than $50 billion in annual revenue. Who am I? (Answer: Goldman Sachs)

Shares of Amgen (Nasdaq: AMGN) started crashing in early November and didn’t improve when the company released data from a phase 2 clinical trial for its weight-loss candidate MariTide. That plunge has set the stock up for some serious potential gains in 2025.

Amgen’s stock price fell further because its monthly injectable drug helped people lose (on average) only around 20% of their body weight after 52 weeks — as opposed to the 25% that analysts were expecting. Too many investment decisions these days are based on whether something beats expectations — from earnings results to data from clinical trials. Amgen’s data didn’t show that participants’ weight loss had plateaued, suggesting that further weight loss could be attainable over longer periods of use; some patients also took MariTide less frequently than once a month.

The results indicate that MariTide is a promising treatment that could be a more attractive alternative to weekly injections. When the market overreacts like this, it creates an opportunity for investors to jump in and buy into a stock at a discount.

This top health care company recently sported an appealing forward-looking price-to-earnings (P/E) ratio of 13, well below the S&P 500’s recent forward P/E of 24. Amgen has a diverse portfolio of products, and its growing dividend recently yielded 3.5%. Long-term investors should give Amgen a closer look. (The Motley Fool recommends Amgen.)