Are you a trader or speculator? Or are you long term investor saving for a comfortable retirement? What’s your field of play? In December of 2011 I wrote to readers explaining that each sport is dependent on the field of play. Coaches and players enter the game with a clear understanding of what they are trying to achieve, and the area within which they are trying to achieve it. Does that describe your current investment planning picture? If not, your first step is understanding your field of play. I wrote: Football, baseball, soccer, hockey—each has something in common that can be … [Read more...]
The Surest Way to Win in Equities
When it comes to your investments, you must develop a plan that is more than just reliance on rising stock prices. Share prices can remain depressed for agonizingly long periods of time. A decade or more of no return with a regular retirement draw, can quickly decimate a life-time worth of savings. Regular dividend payments offer a refreshing stream of income to help you navigate long dry spells in the stock market. If you haven’t yet been convinced of the power of dividends, read what I wrote back in April of 1992 below: Dividends Are Key to Your Stock Investing Success Now what about … [Read more...]
Like a Loaded Shotgun, Capital Protection is Your Best Defense
The adage “defense wins championships,” is perhaps as true in investing and personal security as it is in football. In April of 2012 I explained to readers that investors who understand two critical points about their investment strategy will be better prepared to defend their capital. I wrote: What’s your competitive advantage? It does not matter what your endeavor, if you do not have a competitive advantage, you must expect, at best, a mediocre outcome. A surgeon who performs a given operation many times a week will always enjoy a competitive advantage over a surgeon who performs that same … [Read more...]
Risk Analysis for Consistent, Positive, Prudent Returns
Through the years, I have been relentless in my efforts to alert investors of the dangers of taking on too much risk. It may seem redundant, but investor minds have been proven to be easily distracted, especially when it comes to matters of prudence. In August 2014 I explained my policy of risk avoidance, writing: One of the most important investment steps you can take is to look at the big picture—that is, get high above street level so you can actually see the parade. Big risks are always big ideas, loaded with complexity and controversy. In most cases, the media is geared to work against … [Read more...]
Nine Ways to Powerfully Boost Your Investment Performance
Even after the recent correction there are a lot of overpriced, overhyped stocks in the market, but you can still chart your way to success. Here are nine rules you can use to guide your way. I first listed these back in August of 1996, but they work just as well today as they did then. Investment success hinges on a handful of time-tested principles: As Albert Einstein pointed out, compound interest is the greatest mathematical discovery of all time. I write every issue with a compound interest table at hand. Investment results are inversely proportional over time to trading … [Read more...]
R.I.P. Jack Bogle.
Vanguard’s founder Jack Bogle contributed so much to each of us in the investment industry that it is impossible for me to know where to begin. In my case, it is perhaps a little easier to understand Jack’s importance in the investment industry because I was there when Jack founded Vanguard. In the Summer of 1971, Jack was still with his former employer, Wellington Management. Wellington was then, and remains today, based in Boston. And Jack’s firm was my favorite institutional research and trading client. Today, nearly 50 years later, I deal with a Jack Bogle firm nearly every … [Read more...]
Be the Master Chef of Your Own Unique Investment Recipe
Back in June of 1992 and today, I stress to my readers the importance of balance and diversity in their portfolios. Back then I wrote: Fine Balance From a Master Chef Did you happen to see the McIlhenny & Co. recent advertisement for the company’s Tabasco brand pepper sauce? The ad caught my eye because it ran a photo and culinary commentary from Susan Spicer, chef/owner of Bayona, a New Orleans restaurant most deserving of the recognition it is receiving. In the ad, Susan tells readers, “In my approach to creating dishes, balance is a primary concern. I love playing with the palette … [Read more...]
Remember This to Survive 2019 Market Turmoil
The new year is here, and America’s stock markets are weathering some turmoil after ending 2018 mired in volatility. There are some concerns about the future earnings potential of companies currently making up big parts of the major stock indexes. Apple’s current trouble is just the most recent example. Back in September of 2012, I reminded readers of one simple fact that can help them through hard times in the markets. I wrote “In the majority of cases, the price of common stocks has been influenced more markedly by the dividend rate than by the reported earnings.” I … [Read more...]
In 2019, Give Me Cash
That’s my investment creed. I don’t mind when markets are down as long as I’m still getting paid. Regular dividends and interest are succor to any investor when capital appreciation is wiped out at the whim of the markets. In January of 2012, I explained my investment creed, writing: So the investment environment today is cloudy and laced with sinkholes and other entrapments. Your mandate is armadillo-like self-protection both on the portfolio front and the personal security front. I invest a substantial portion of my personal wealth in liquid portfolio assets I can jockey around at a … [Read more...]
The Winning Investment Technique Used by Queen Elizabeth I
Two years ago I told readers the story of John Maynard Keynes' lectures on compound interest in the late 20s. Keynes told the story then of Queen Elizabeth I and her impetuous and insightful use of compounding to build the British Empire. I wrote: Compound Interest, the Foundation of an Empire In a series of lectures and papers in 1928, John Maynard Keynes traced England’s success from the late 16th century, starting with a treasure Francis Drake had stolen from the Spaniards in 1580. Keynes was writing at the height of the British Empire, and he chalked England’s success up to … [Read more...]
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