Always carefully weigh factors before making an investing
decision.
Thursday, July 28, 2016
Monday, July 25, 2016
Navigating Rough Times
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
Look Past Entertainment
A number of financial articles can be geared for
entertainment, especially if they are about politicians. While entertainment is
nice, always focus and do your own research.
Wednesday, July 20, 2016
Don’t Use Just One Metric
Don’t
rely on one single metric such as the P/E ratio. Use a complete analysis to get
an overall picture of your investment.
Tuesday, July 19, 2016
Have you developed an investment philosophy?
Developing an investment philosophy that works enhances your
chances of successful investing over the long-term.
Monday, July 18, 2016
Think for Yourself During Earnings Season
Remember when looking at earnings headlines to dig deeper,
think for yourself and make your own decisions.
Friday, July 15, 2016
Buy and Hold is Best
Finding good quality publicly traded businesses to own over
the long-term allows you to sleep better than utilizing trading strategies that
could turn on you in a dime.
Thursday, July 14, 2016
Wednesday, July 13, 2016
Risking Assets Just to Get a Return at All
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
Beware of Bubbles
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
Doing nothing….
Sometimes the best course of action for long-term investors
is to do nothing. Especially if stock prices are fueled by a bubble brought on
by low interest rates.
Thursday, July 7, 2016
Acquisitions Can Be Depressing for Long-Term Investors
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
Make Sure a Dividend is Solid
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.
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