In the past I've written about the usefulness of applying some math and statistics to sports. The best explanation for such benefits was Michael Lewis' book, Moneyball. The book details the methods employed by Oakland A's general manager Billy Beane to improve the team's performance. Now, Jon Hartley reports on the use of behavioral economics by the Cleveland Browns to improve from 2017's sad 0-16 losing record to 2018's 7-8-1 record, one of the biggest single-season improvements in NFL history. No surprise here, there's a big time Billy Beane connection. Hartley writes: The turnaround was … [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...]
2019: Promise Me You’ll Do this One Thing
Get 2019 off on the right foot and bring some peace of mind to your portfolio. One way to help clear your mind is to get out of the prediction business. Lot’s of words are wasted this time of year with articles predicting the future. Don’t let them mess up your voyage. I want you to imagine that you’re in the midst of a months long Atlantic crossing. Your job is to trim the sails and hold your course, and yes watch the weather. But now is not the time to re-outfit your ship simply because it's January. It's an emotional time of year. Don't let it get the best of you. Take a deep … [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...]
In Retirement Stop Working, Start Earning. Here’s How
Despite the recent market turbulence, there is one group of investors who have so far been insulated by good decisions they made long ago. Dividend investors have collected their payments regularly, as those who invested looking to sell to the "greater fool," in the future have been tossed on a sea of volatility. If you are serious about a retirement portfolio you can count on, making dividends and income a central focus in your investment plan would be a great start. You shouldn't have to work throughout your retirement, and you should have a portfolio of investments that earns year … [Read more...]
Are You Prepared for the New Money Crisis?
Crisis at Vanguard Dear Friend, Hard as it is for me to believe, a massive hoard of over $600 billion (yes, with a B) is clogging Vanguard’s Total Stock Market Index Fund like a grease-trapped drain. What is most worrisome is what happens when public panic selling hits, kicking off a tsunami of sell orders from banks of robotic computers. I do not own Vanguard’s Total Stock Market Index Fund, and I don’t ever expect to own it in the future. The Great Mutual Fund Purge Index Funds across the board have been purged from portfolios at Richard C. Young & Co., Ltd., never to return. … [Read more...]
Wealth Management: Year-End Planning
One of the “must dos” for any serious investor is to make sure your investment house is in order as year-end quickly approaches. Ensuring that you have the best technology is an important way to do that, and I have found through years of experience with different custodians that Fidelity has always been the industry's technology leader (this is not a paid endorsement, just the truth learned from my experience). Fidelity's technology leadership began in its earliest days, pushed on by former Chairman Ned Johnson's passion. I recently wrote about Johnson's focus on technology that "He … [Read more...]
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