“Investing is simple, but not easy.” – Warren Buffett There are many factors one has to consider when buying a stock. You must determine the competitive advantage that the company has over its competitors. You must gauge the consistency of their operating history and what the long-term prospects are for the company. It also makes…
How to Create a Disciplined Investment Plan
“With broad asset classes, we want to take advantage of the mathematics of mean reversion. And so when any asset class runs too far ahead, it automatically gets trimmed back. And when it falls too much, it automatically gets bought. It just happens “automatically” through math. Look, we know any individual stock can go to zero. But…
How to Pick Active Mutual Funds (If You Have to)
“Investors should remember that excitement and expenses are their enemies.” – Warren Buffett Index funds and ETFs make the most sense as an investment vehicle for investors for a number of reasons. They have lower expense ratios than active mutual funds. They are more tax efficient. They trade less so they have lower transaction costs.
Lessons From an NBA Legend
“I made mistakes. Plenty of them. In fact, sometimes I wish I could climb into a time machine and go back to shake some sense into that thirty-year-old me.” – Kareem Abdul-Jabaar A wonderful way to figure out where to focus your time and energy for your financial goals when you are younger is to…
What if You Won the Lottery?
“If you really want something in life you have to work for it. Now quiet! They’re about to announce the lottery numbers.” – Homer Simpson The lottery question is one that people love to discuss when the jackpot reaches some astronomical sum in the $300-400 million range. People rush out to buy more lottery tickets….
Lessons from the Wealth Divide
“Every day I get up and look through the Forbes list of richest people in America. If I’m not on there, I go to work.” – Robert Orben The wealth divide in this country has been growing for a number of years as the difference between the haves and the have nots continues to widen….
Other Bull Market Risks
“There are some frauds so well conducted that it would be stupidity not to be deceived by them.” – Charles Cotton With stocks reasonable priced (some say undervalued, some say overvalued, so I’ll take the middle ground) and interest rates on bonds at generational lows we are stuck in a T.I.N.A. market (there is no…
I Have No Retirement Savings. Where Do I Start?
“The reason saving comes before investing is that you need to have seed before you can sow it in anticipation of a harvest.” – Rajen Devadason Common sense reader mailbag: My wife and I are in our 30’s and haven’t started saving for retirement yet. We have no idea where to start. The sheer amount…
Stocks Will Go Down
“Unless you can watch your stock holdings decline by 50% without becoming panic-stricken, you should not be in the stock market.” – Warren Buffett We have had a really nice run up in stocks since the lows of 2009. Most U.S. stock markets are up well over 100% in that time. It hasn’t been easy…
Do Your Mutual Funds Outperform the Market?
Source: Dilbert Do you pick the best active mutual funds? The ones that outperform year after year? If you do, you are probably in the minority. That’s not to say that you have a flawed selection process. On the contrary, you could have a wonderful system in place to choose the best funds. It’s just…
