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I first heard of the book “The Outsiders” in Berkshire Hathaway’s 2012 letter to shareholders. And who is going to ignore a book that Buffett calls “outstanding!”?

 

The book goes in detail on 8 different CEOs who excelled at creating exceptional long term returns for shareholders. In fact, the average returns of these companies’ shares outperformed the S&P 500 by a factor of 20 – every $10,000 invested in these companies was worth $1.5 million twenty five years later.

 

What’s their secret? And how can we use those lessons to find today’s great CEOs?

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Compound Interest Calculator

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How do different growth rates, investment durations, starting values and annual contributions effect your long term investment performance? Now you can find out! With our Interactive Compound Interest Calculator you can compare up to 3 investments, each with different initial values, annual contributions, compound growth rates and time horizons. Check it out:  [click to continue…]

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Happy 4th of July weekend! Hope you are enjoying the weekend and have some extra time to sit back and learn.

This weekend’s readings and watching covers Charlie Munger’s advice to new grads, 4 investing tips from a “mini-Berkshire” investment officer, Greece’s crisis, and more! [click to continue…]

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One of the more famous investment quotes, which represents a mindset that has created one of America’s most valuable companies, from one of the most successful investors of all time:

 

“It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.” – Warren Buffett

 

And that got me thinking…At what price did Buffett purchase some of his “wonderful” businesses and how does that compare to some “wonderful” stocks today? And what is considered a “fair” price?     [click to continue…]

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cotw - buffetts wealth over time

Buffett says that compounding interest is one of the main reasons he is where he is today. In our Chart of the Week, we look at his journey in detail. From his first $120 saved from selling packs of gum and coca colas in 1942 to his $72 billion today. [click to continue…]

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This week we have been looking at one of the fastest growing companies in asset management – Dimensional Fund Advisors (DFA). Our Quote of the Week looked at the CEO’s key principal for successful investing, our Chart of the Week looked at DFA’s outperformance. Today we look and see how they do it. [click to continue…]

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This week we are looking at one fund company with a stellar track record and looking at the ins and outs of their investment philosophy. The company is Dimensional Fund Advisors (DFA for short), which is one of the fastest growing large fund managers out there today.

 

Yesterday we looked at a quote from their founder and CEO about his first key to successful investing.

 

Now today in our chart of the week we look at how his company as applied that philosophy and how they (and their investors) have benefited.  [click to continue…]

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There are many factors that go into creating long term success for investors. Despite what the talking heads on CNBC or your broker or advisor may say, trading in and out of today’s hottest investments is not one.

Investors have struggled in finding out what it takes to succeed for long periods on Wall Street.

Just in the last decade and a half investors have been made to believe they are investing geniuses in 1999, only to be burned by 90% losses in the tech bubble of 2000. Thought they were real estate market wizards only to been stuck holding 5 houses in the real estate bust of 2008. Or, been scared to believe that the only viable investment is a shiny yellow metal, only to see a decline of $600 an ounce in gold since 2011 (this is just to name a few).

 

So when the founder and CEO of one of the most successful fund management companies of the last 30 years opens up about his firm’s investment philosophy, it’s probably in our best interest to listen.

 

His best advice is only one sentence long, simple to implement and takes less effort than pouring a cup of coffee:  [click to continue…]

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shareasimage 9 rules

The latest monthly issue of AAII Journal has a great piece written up by Guy Spier – manager of the Aquamarine Fund and author of the excellent book “The Education of a Value Investor: My Transformative Quest for Wealth, Wisdom, and Enlightenment“.  Here, Guy Spier gives 9 rules for smarter investing. His book goes into more detail on each of these topics (and many more), but this provides a great starting point. [click to continue…]

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shareasimage inheriting volatilty

 

In yesterday’s quote of the week we looked at the findings of numerous studies focusing on the average investors’ underperformance to a stated fund’s annual returns. This underperformance stems from investors trying to time the stock market, attempting to buy and sell multiple times per year in attempt to outperform the general market and chasing returns by buying yesterdays “hot” funds hoping the returns continue. Mr. McNabb, Vanguard’s chairman and CEO, calls this behavior “inheriting volatility”. In this week’s Chart(s) of the Week we are looking at exactly how much investors are hurting themselves over the long run.  [click to continue…]

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quote of the week dollar weighted returns market volatility

This week, we are looking at the effects of volatility on your portfolio. But not in the effect of just how much the value of your portfolio changes – but in how you ACT due to that volatility and how much it hurts your long term performance.

 

Last week, I was reading the annual report for a fund that I own, Vanguard Dividend Appreciation Index Fund (Ticker: VIG), and at the end of the Chairman’s (William McNabb III) letter found this quote:  [click to continue…]

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Investment fees – the bane of every individual investor. Everyone has seen the numbers on how even moderate expense ratios lead to investors losing out on tens of thousands of dollars over the course of their investments. Just yesterday we highlighted a quote from Meb Faber on how just average fees can ruin a successful investment strategy.

 

But these fees seem impossible to avoid for investors looking for any specific concentrations or active forms of management.

 

But for investors in a select number of ETFs and Mutual Funds, there is a simple way to reduce those fees to a level much closer to 0 – Here’s how: [click to continue…]

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ETF.com is out with a really good interview with Meb Faber discussing topics from his new book: Global Asset Allocation: A Survey of the World’s Top Asset Allocation Strategies Topics of the interview include Asset Allocations, the effects of taxes and fees on your investment returns and more.

But what really jumped out to me was his answer to the question:

ETF.com: Would ETFs change that equation if the best-performing portfolio were allocated primarily to low-cost ETFs?

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shareasimage - brk 1964 balance sheet

Warren Buffett’s most recent letter to shareholders (http://www.berkshirehathaway.com/letters/2014ltr.pdf) tells an amazing story of buying Berkshire Hathaway.

 

At the time Warren’s investing style, taught by Ben Graham, was to look for “cigar butt” stocks – stocks that were dirt cheap, but provided a “free puff” to investors willing to make the investment. Berkshire certainly could have filled that criteria, here is how Buffett tells the tale: [click to continue…]

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The release of Warren Buffett’s annual letter to shareholders is always a special occasion, but this year’s is extra special. 2015 marks the 50th year that Warren Buffett has owned Berkshire Hathaway, and in celebration Buffett and his vice chairman, Charlie Munger got together to make sure this year’s letter was stuffed with nuggets for investors. So without wasting any more time, here is the best investing advice you will ever get: [click to continue…]

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Welcome 2015! A new year, which means among many other things, a new year to invest in your IRA, ROTH IRA and/or 401(k). Here are the limits for contributions to IRAs, ROTH IRAs and 401(k)s, and how much you need to be saving each month or each paycheck to reach those limits:

2015 ira_401(k) Contribution limits [click to continue…]

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This week on Begin To Invest, we are all about setting up 2015 to be the best year possible. Here’s one thing you can do tomorrow to improve your long term returns: Contribute to your IRA! (Before April of 2016)

 

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