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...]
How to Invest Like a Hall of Famer
Those of you who have been with me for many decades may remember back in 1991 when I wrote about investing like Wade Boggs played baseball. Consistency was my focus for you then, and it remains so today. I emphasized Boggs’ ability to get on base. He led the league in on-base percentage six times during his career. Boggs’ career strike out record was a miniscule 6.9%. I wrote: Ever hear of Wade Boggs? Boggs is a pretty dull guy on the baseball field (not off the field, however). He doesn’t light up the sky with home runs (although he gets his share), and he’s one of the slowest guys on the … [Read more...]
Don’t Miss it All
Emotionalism in the market is too damaging to your portfolio. It’s too easy to miss all the rewards of the market by making bad decisions trying to time the market. In February of 1992 I used this example to explain to readers just how badly they could lose out by jumping in and out of the market. It’s Too Easy to Miss It All Here’s another stunning analysis on why trading in and out is not for you. Analysis of stock market returns from 1946 through 1990 by Ibbotson Associates shows the following: One dollar invested in stocks in 1946 grew to $130.52 in 1990. If you take out just the best … [Read more...]
Why a Balanced Portfolio is a Winner
Back in October of 1998 American markets were recovering from the Long Term Capital Management crisis. The Fed had organized a bailout, and things were getting back to normal. It felt like a good time then to remind investors of the benefits of a balanced portfolio. I wrote then: Why a Balanced Portfolio is a Winner As I have written often, my own target and my goal for you is a long-term total return of 10% to 11% (after fees and taxes). This target may sound conservative, but trust me, it is aggressive and not easily achieved. To have any shot at achieving this target, expenses and taxes … [Read more...]
Why Are Investors Buying a Hedge Fund Strategy that Isn’t Working?
Despite evidence that the strategy isn't working today, investors have plowed $300 billion into hedge funds using "trend-following." Laurence Fletcher writes about the phenomenon at The Wall Street Journal: Performance among the roughly $300 billion in hedge funds that largely use so-called trend-following strategies has been abysmal. An investor buying into these funds at the start of 2011, for instance, and holding through July this year would have lost 3.4% on average, according to HFR. Over the same period the S&P 500 is up 124%. “It’s like a lot of industries,” said Matthew … [Read more...]
My 3 Step Portfolio Check Up Plan
Back in August of 1993 I laid out a three step portfolio check up plan for investors. If you answer these three questions, it should give you a decent idea of how your portfolio should be positioned at the moment. I wrote: Few investors realize that you can keep your portfolio in shape simply by asking (1) Are short-term interest rates moving up or down on a trend basis? (2) Is inflation advancing or declining on a trend basis? (3) Is the economy expanding or contracting? You don’t need to go beyond these questions for help in balancing your investments portfolio in any cycle. The answers to … [Read more...]
Avoid the Horror: Stick to Your Plan
The underlying value of a company isn’t always fairly reflected in its share price. Some stocks carry stratospheric price multiples when compared to their peers. And some trade at rock-bottom discounts. There doesn’t always seem to be a ready answer for why companies with similar assets, similar business plans and similar potential carry such varying valuations. You can rest assured however, that there is one thing driving all of these discrepancies, supply and demand. Twenty years ago, I wrote that there are short, medium and long-term influences on share prices that have little to do … [Read more...]
Has the Time Come for Defensive Stocks to Drive the Market?
"Valuation concerns have already crept into the market, some investors said, as defensive stocks that tend to post lower growth than companies like Amazon and Facebook have outperformed," reports the WSJ. "The top five performing S&P 500 sectors the past three months are all defensive, Bank of America Merrill Lynch said in a recent note, including consumer staples, utilities and health care." Defensive stocks tend to be the ones paying dividends, and dividends are the backbone supporting our Retirement Compounders®. Originally posted on Yoursurvivalguy.com. … [Read more...]
What Waylon Jennings can Teach You About Investing
Waylon Jennings can teach you a lot about being a successful investor. The most important part of Jennings’ success was his go-it-alone, do-it-yourself strategy. Jennings didn’t attempt to sound like anyone else. He charted a musical course that was unique to him. He avoided the herd by making his own decisions. That’s how I want you to invest. In 1995, I wrote of Waylon and his success: “Well, I Nearly Got Caught at a Burger King.” “And a couple of times on a plane./I thought I was safe from detection with all of the weight I had gained./But walking around in a jumpsuit—that didn’t work … [Read more...]
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