Quote of the Week: The Source of Buffett’s Wealth
Quote of the Week: The First Key to Investing
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: [continue reading…]
Quote of the Week: Inheriting Volatility and Your Dollar Weighted Investing Returns
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: [continue reading…]
Quote of the Week: Just Average Investment Fees Can Turn a Top Performing Strategy into a Loser
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?
Our Quote and Chart of the week: Want a free $15,000? The timing of your IRA contribution can make all the difference.
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)
Quote of the Week: Buffett on Black Monday, October 19th 1987
This week marks the anniversary of the 1987 stock market crash, the largest single day percentage drop in history. The Dow Jones Industrial Average dropped 508 points, more than 22% (equivalent to a 3,200 point drop today, with the Dow at about 16,400).
Just how bad was the 1987 crash? If you missed our twitter posts from early this week, here are some screenshots from a few newscasts the night of October 19th, 1987: [continue reading…]
Quote of the Week: Celebrating Stock Market Crashes
The markets have been dealt a small dose of realism this past week. It turns out markets don’t go straight up all the time.
Small Cap Indexes like the Russell 2000 have taken the brunt of the selling and are down about 10% from their highs.
Large cap indexes like the S&P 500 are down about 3% from their record highs.
This “sell off” has already led to the fear inducing headlines from the financial media, as seen below.
But a lot of smart investors would argue that this is exactly the OPPOSITE reaction you should be having. [continue reading…]
Quote of the Week: Why are Consistent Earnings so Important?
All of a sudden it is pretty apparent that the stock market has moved a long ways from the recession of 5 years ago.
Today, OpenTable, with a net income of $33 million is being purchased by Priceline for $2.6 billion. Facebook, is now worth nearly $200 billion, twice the value of McDonalds despite having just one fourth of McDonald’s profits. And Tesla Motors is worth $33 billion – exactly half the value of Ford, despite selling just 22,400 cars in 2013. (To put that in perspective, that is how many F-150 pick up trucks ford sells in about 2 weeks, and is less than 1% of the total number of vehicles that ford sold in 2013).
Investors have one thing in mind when paying these exceedingly high prices – The prospects of future growth.
Neither of the companies mentioned above have the fundamentals to back up their sky high valuations, but that doesn’t seem to be stopping investors from dreaming.
The potential money to be made “finding the next google” will always blur an investor’s vision. Dreams of money to be made are like the beer goggles of the investment world – Investors immediately begin to make assumptions and ignore obvious risks for a chance to get lucky.
But, one day these investors will wake up and ask themselves “What the hell did I invest in?” [continue reading…]
Quote of the Week: Expense Ratios – And Exactly How Much They are Costing Investors
We have heard a ton on the importance of low cost mutual funds and ETFs recently. Here is part of a speech from Jack Bogle, where he reveals exactly just how much investors pay in expense ratio fees. (His answer will surprise you) [continue reading…]