Always carefully weigh factors before making an investing decision.
Thursday, July 28, 2016
Monday, July 25, 2016
Holding on during rough times represents a true test for the long-term investor. However, due diligence is always recommended. A company or industry might not pull through. Ultimately it is your decision on whether or not to keep shares in a company.
Friday, July 22, 2016
Wednesday, July 20, 2016
Tuesday, July 19, 2016
Monday, July 18, 2016
Friday, July 15, 2016
Thursday, July 14, 2016
Wednesday, July 13, 2016
Once upon a time if you wanted to get a risk free return on your investment, you put cash in a savings account. If you wanted a superior return, you risked at least part of your cash in the stock, bond, and/or commodities market for a shot at superior returns.
Now, in this low to negative interest rate environment, you get almost no risk free return or even have to PAY to keep your savings safe. You need to risk at least part of your cash just for the potential of a return at all.
Tuesday, July 12, 2016
Record low interest rates translate into stock bubbles as investors seek a decent return on their investment. This means that some companies will trade at excessive valuations even though fundamentals may be stagnant or eroding. Do your research before investing and make sure that valuations aren’t too excessive. Also, it may pay to keep some cash on hand to invest during any potential corrections.
Friday, July 8, 2016
Thursday, July 7, 2016
Long-term investors should lament the acquisition of any of their rock solid publicly traded business. That means they will no longer be able to participate in any potential profits in that business. They essentially sell that right for some cash that will need redeployed in some profitable manner.
Wednesday, July 6, 2016
When a company’s stock pays an enticing dividend yield, always make sure that it’s supported by free cash flow. Dividends not supported by free cash flow would need to come from external financing such as a stock sale or debt financing. This could prove detrimental to your publicly traded businesses over the long-term. I prefer to see companies pay out less than 50% of their free cash flow and retain the rest for other purposes.