Thursday, July 28, 2016

Hastiness Can Be a Liability

Always carefully weigh factors before making an investing decision.

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

Beware of Euphoria

Delight can turn into disappointment real quick in the stock market.

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.