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This archive highlights all of the articles posted on investing, in chronological order. If you want just the highlights of the best investing articles, check out our Investing 101 page for more information.

Investing Tip #146: Don’t Underestimate Liquidity Risks

When there is overall panic, liquidity dries up. Information gaps between traders widen, spread and transaction costs go up. When stocks become illiquid, their prices fall further. Your investments in illiquid stocks may suffer. If you want to learn more check out these resources: Good Vs. Bad Investments The Barbell Investment Strategy

Investing Tip 145: Buy Commodity Stocks at Replacement Price with Margin of Safety

The businesses of commodity companies such as cement and steel are simple to replicate. No company can make significantly higher returns than its peers.  Compare its market capitalization with the replacement capital cost for plants with matching capacity and buy as and when available with adequate margin of safety. If you want to learn more [...]

Investing Tip #144: Identify Good Commodity Companies for Long Term Investments

The commodity sector is cyclic in nature. The business cycle is long. Pick up stocks when the industry is coming out of a weak phase. While investing in commodity companies, look for market leaders. Their performance depends on their capacity and the efficiency of their plants. Make a comparative analysis before investing. Avoid companies with [...]

Investing Tip #143: Management Qualities – First Criteria for Stock Picking

The quality of management is the single most important criteria in choosing a company. When you  buy a stock,  you are buying a participating interest in the company run by its management. Its performance depends on the people behind it. If you want to learn more check out these resources: Key Value Fundamentals for Screening [...]

Investing Tip #139: Gradually Expand Your Portfolio

Once you have acquired a feel for the market through blue chips, you can explore the mid-cap and small caps. Do your home work to pick up some good growth companies. Once you understand the investing process better, you can gradually expand your portfolio to include other categories. If you want to learn more check [...]

Investing Tip #138: Start with DIJA Index Shares

A new entrant should start with stable and quality companies. Pick up some blue chip companies in the DJIA Index. Stick to blue-chip stocks that are known to be consistent performers.  Blue-chip stocks are likely to fetch you capital appreciation with a steady stream of dividends. You should not adventure in volatile stocks at the [...]

Investing Tip #134: Invest in Government Bonds when Yields are High

Bond yields and its market price move in opposite directions. High inflation and a high interest rate pushes bond yields up and brings down the bond price in the market. Investments in Government Bonds are free from default and provide reasonable returns, especially if invested when Bond Yields are high. If you want to learn [...]

Investing Tip #133: Substitute Fixed Deposits with Fixed Maturity Funds

Fixed Maturity Funds are closed-ended debt funds with a fixed maturity date. The Fund is parked in corporate debts, government securities and money market instruments with matching duration. Your final returns are not impacted by fluctuations. If you want to learn more check out these resources: How to Avoid Financial Loss from Rising Interest Rates [...]

Investing Tip #132: Invest in Balanced Funds for Moderate Returns with Lower Risk

If you want some regular income and also capital appreciation along with safety, you may keep a Balanced Fund in your portfolio. The strategy of this fund is to balance the fund’s portfolio. To balance the fund, money is invested in both bonds and equities with the predetermined weights allotted to the asset class; say [...]

Investing Tip #130: Invest 10% of Your Portfolio in TIPS

Historically inflation is a reality and erodes your savings especially if invested in bonds and other fixed securities.  The Treasury inflation-protected securities (TIPS) protects you investment against inflation and has the guarantee of the US treasury. Maturity value and interest rate are linked to Consumer Price Index (CPI). You can have a small percentage; say [...]

Investing Tip #128: Ignore Short Term Under-Performance

Sometimes your portfolio may pass through periods of under-performance compared to the overall market. It happens with great investors too! Practice patience. If you want to learn more check out these resources: Why You Need Patience for Personal Finance Warren Buffett’s Top Five Tips for investors

Investing Tip #126: Don’t Reallocate your Retirement Account Frequently

Make a retirement plan and stick to it. Avoid frequently reallocating the funds. Reallocating your retirement account frequently in an attempt to maximize yields may not only cause you to lose your way as it relates to retirement savings, but it can also cause you to unwittingly expose your savings to much higher risks than [...]

Residual Income: 7 Super Smart Ways to Build It

You’ve thought about it before: creating several streams of passive income to live off. But it just sounds too good to be true. I mean, how can a regular person like you create residual income? Obviously you know it can be done or people wouldn’t be buzzing about it all over the internet. Or are [...]

Investing Tip #124: Don’t Try to Time the Market

It is very difficult to predict and catch extreme peaks or troughs in the market. The investors who attempt to time the market are generally guided by emotion. If you want to be a successful investor, avoid emotional behavior. If you want to learn more check out these resources: Is It Every Okay to Time [...]

Investing Tip #122: Ignore Short Term Predictions

If you are a long term investor, your investment decisions should not be guided by short term forecasts. It is very difficult to predict tomorrow’s market. Stick with your chosen investment strategy and ignore short term predictions. If you want to learn more check out the following resources: What Do You Tell the Successful Stock [...]

Investing Tip #120: A Stock at a 52-week Low is Not Necessarily a Bargain Buy

A stock at a 52-week low not is not necessarily cheap and you shouldn’t automatically add it to your portfolio. Buy a stock only if it qualifies criteria set under your investing strategy. Invest only if the company’s fundamentals are intact. Hefty discounts do not mean a good buy. If you want to learn more check [...]

Investing Tip #118: Keep the Winners

Do not sell stocks after they have increased by a certain percentage. Instead, keep your top performing stocks forever. Peter Lynch says much of his overall success was due to a small number of stocks in his portfolio that returned big. If you want to learn more check out these resources: Investing for Millennials The Neatest [...]

The Easiest Way To Find Great Companies To Invest In

Thinking and finding companies to invest in can be hard.  That’s why I wanted to share with you the best way to find great companies that you can invest in right now.  It doesn’t require diligent research; it doesn’t require vast investment knowledge; and it doesn’t require any special skills.  All it requires is a [...]