It’s time for investors to focus on Treasuries. As stocks tumbled 3% yesterday, Sinead Carew wrote at Reuters: NEW YORK (Reuters) - U.S. stocks tumbled on Wednesday, with the S&P 500 marking its biggest daily decline since Feb. 8, and technology stocks led the losses as rising U.S. Treasury yields sent investors fleeing from risky assets. The Dow Jones Industrial Average .DJI fell 831.83 points, or 3.15 percent, and the Nasdaq Composite .IXICdropped 315.97 points, or 4.08 percent, to 7,422.05. Read more here. … [Read more...]
Here’s the Investing Advice I’d Give a Professional Athlete
This is the advice I gave professional athletes and my readers twelve years ago about how to make your retirement dollars last a lifetime. I wrote: I advise you regularly to invest only for dividends or interest. I want you to insist on getting paid, as I do. If you want to speculate with a portion of your capital, that's fine, but do not mess with your primary stash of cash. When you retire, your earning years are over. Kaput. You earn no more. Therefore, every dollar you have the day you retire must be treated with the deepest reverence. Treat each dollar as you would a family member. Would … [Read more...]
You’ll Never Know It All, But Know Enough
Don’t try to be a know-it-all investor. Building a solid foundation on diversification, patience, value, and compound interest, has always worked for me, without having to “know it all.” In 2003 I explained my deliberate method of focusing on dividends and interest to generate compound interest, writing: Invest for Dividends & Interest I’m not a speculator or trader, and I don’t offer strategies for either group. Work hard, invest your hard-earned savings regularly for interest and dividends, and let your investments breathe. Let them take the air. Let them work for you as a … [Read more...]
Emerge from the Investment War a Winner
The simple act of avoiding major losses by diversifying my portfolio and focusing on value and compound interest has allowed me to emerge from the investment war as a winner. It can work for you too if you have the patience and endurance for such a strategy. This method is all about risk management, something I wrote about in December of 2003. Dead Aim… “When the difference between life and death can be counted in milliseconds, you need every advantage you can get. Which is why SureFire developed its Special Operations series to be the best extreme-duty tactical illumination tools in the … [Read more...]
Market Timing: A Long-Odds Loser’s Bet
It can be easy to forget the lessons of the past as the current bull market seems to run infinitely onward. Overextended stock market valuations have a habit of correctly quickly and unexpectedly. Once the crash hits, it’s often too late to rebalance a portfolio into more defensive sectors. Market rebounds have a similar time horizon. Once investors realize markets are on an upward trajectory, many of the best days of returns have been left behind. If you are caught out of the market, waiting for that perfect moment, it’s already gone. To avoid the dangers of market timing, develop a … [Read more...]
The Guru Investment Trap
Over the last few years you have seen just how badly so-called gurus can get a prediction wrong. The complete failure of “experts” to predict Brexit, the election of Donald Trump, and even the economic implications of a Trump Presidency are good examples of how seemingly sound predictions can lead folk astray. Market predictions are the same. In May of 1995 I warned readers away from placing their faith in forecasts with a little set of examples I’ve quoted for you here: Last fall when I told you that 1995 would be a decent year for the stock market, I was not making a prediction. Rather I … [Read more...]
The Three Word Secret to Sound Investing
If you aren’t getting paid regularly for your investment in a company’s stock, you are taking it on faith that someday, at the precise moment you need to sell to generate cash, the price will sit at a gain for you. Buy low, sell high, right? But what happens if there is no “high?” Stock prices can remain depressed for agonizingly long periods of time. From year-end 1965 – 1981, the Dow Jones Industrial Average was down 10%. Investors who were counting on capital appreciation to fund a comfortable retirement were short changed. Meanwhile, those investors who demanded a margin of safety in … [Read more...]
How to Diversify Your Portfolio the Right Way
Diversification is a must, but there is a right way to diversify and a wrong way. Loading your portfolio with eight different stock ETFs may minimize stock-specific risk, but in a nasty bear market, all eight of your ETFs are likely to get bludgeoned. The right way to diversify is to include assets that tend to zig when others zag. Counterbalancing is key here and the all-time counterbalancing champion is Treasury bonds. As a measure of the powerful counterbalancing force of Treasury bonds, consider that in 22 of the 24 bear markets since the 1920s, intermediate Treasuries have risen in … [Read more...]
When You Plan Ahead, Damage Can Be Minimized
Hurricane Florence is bearing down on South Carolina, with some estimates suggesting four FEET of rain could swamp the coastal towns. Even for seasoned hurricane survivors, that’s a mega-monsoon. Debbie and I have encountered many hurricanes in our decades of East Coast living. Most recently our Key West home was visited by Hurricane Irma, which left much of the Keys devastated. Our home was left relatively intact compared to some neighbors. In 2004 I outlined some of the preparations built into our home. My point then was that when you plan ahead, damage can be minimized. My Big … [Read more...]
The 6 Basic Investing Principles That Will Make You a Winner
There are six basic investing principles that, if followed diligently, can make you a winner. I wrote about these principles in the fall of 1991, and if you are one of my long-time readers who has stuck to them, like me you have achieved investment success. If you are a newcomer to the investing philosophy of Dick Young, I can tell you that this is how I operate, and it has worked for me year after year. Here are the six principles that made me a winner in the investment battle: Six Guiding Investment Principles It’s a regimented, slow and steady progression. Not much spinning, but … [Read more...]
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