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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 #85: Avoid Over Diversified Companies

Avoid investing in companies diversifying beyond their core competence. Such companies try to sustain growth through aggressive acquisitions. The acquisitions may dilute your shareholdings if acquisition cost is paid with the issuing of new stocks. If you want to learn more check out these resources: How to Turn Down $3 Billion at 23 Years Old 4 [...]

Investing Tip #84: Stay Away from Hot Stocks in the Hottest Industry

Hot stocks and hot industries are constantly in the news. And everyone talks about them. Peter Lynch tells, “Hot stocks go up fast, usually out of sight of its actual value, but they fall just as quickly”.  Hot stocks are a dime a dozen. If you’re investing for the long term do your homework and go [...]

Investing Tip#83: Read Benjamin Graham’s “Security Analysis”

The classic book “Security Analysis” remains as relevant today as when first published 80 years ago in 1934. It contains teachings of Benjamin Graham, “the father of value investing,” and is applicable to a wide diversity of market conditions, countries, and asset classes. It shows you a road map for investing to follow. If you [...]

Investing Tip #82: Read Peter Lynch’s Book “One Up On Wall Street”

The book “One Up On Wall Street” ranks as one of the best investment primers ever for small investors. Peter Lynch guides you on developing strategies in buying, selling and holding equities with a preference for value investing in companies that have sound fundamentals.  His investing philosophy generally resembles the value investing and is largely [...]

Investing Tip #81: Use Graham’s “Margin of Safety”

Success of value investing largely depends on the correct estimation of the intrinsic value of the stock. Graham’s margin of safety, the difference between a stock’s price and its intrinsic value, provides you cushion against estimation errors. The farther the purchase price is below its intrinsic value, the greater the margin of safety against future [...]

Investing Tip #80: Use Graham’s Magic Multiple

You can use Graham’s Magic multiple to pick stocks. This multiple is just the multiplication of the two most commonly used valuation ratios, PE and PB. Choose stocks with Graham’s multiple that are less than 22.5. If you want to learn more check out these resources: The 5 Minute Summer Portfolio Jump Start The Value [...]

Investing in Cisco and the Tech Giants Gets Growth and Yield

Cisco, Intel and Microsoft Battling it Out for Dividend Yield. Just five years ago the title of this article would have seemed like fiction. At the time Cisco Systems (NASDAQ: CSCO) had no dividend at all and large cap tech was not known as a sector to chase yield.   This has changed after years of [...]

Investing Tip #77: Buy Stock at a Lower Price than its Actual Value

Peter Lynch warns that if you purchase grossly overpriced stock, you won’t make any money even if everything goes right. The key to successful investing is to find the intrinsic values of the stocks and then pick only the ones that are quoting at significant discounts to these values. You buy only when you get [...]

Investing Tip #75: Prefer Bonds with High Ratings

The rating companies, such as Moody’s, Standard & Poor’s and Fitch, provide ratings to the bond issues. The ratings that are dependent on the credibility, stability and financial health of the company, help you to determine the risk associated with the Bond. Buy only investment grade bonds having ratings from Aaa/AAA to Baa/BBB. Avoid high-yield [...]

Investing Tip #74: Target Some Rising Industries

Look for companies in rising industries. Find hi-tech companies and the companies with potential to grow in new sectors. Your investment would grow with the success of such companies. As the new sectors carry higher risk, this should constitute only a small proportion of your portfolio. If you want to learn more check out these [...]

Investing Tip #73: Look Beyond Fixed Deposits

Fixed Deposits with banks provide guaranteed, but modest returns. You may even get negative real interest. Over time, you may find that inflation has eroded most of your wealth. You should keep only a small portion of your savings in fixed deposits and the large portion in other investment alternatives such as stocks, mutual funds [...]

Investing Tip #72: Use Tax-Advantaged Investments

One smart way to invest for growth is to use accounts that let your money grow without generating a tax bill each year. There are Tax-Advantaged Investments that are either exempt from taxation, tax-deferred or offers other types of tax benefits. Several tax-advantaged retirement plan accounts exist such as IRAs and Roth IRAs. If you want [...]

Investing Tip #71:Subscribe to Shares in IPOs Selectively

Securities are initially offered by a company to the public for subscription in the primary market for the purpose of raising capital or funds. These are generally offered at discount to their intrinsic values. You can subscribe to shares in IPOs issued by companies promoted by good promoters. Read their prospectus and other documents carefully. [...]

Investing Tip #70: Use Ratio Analysis

Ratio analysis is a very useful tool to extract the information from financial statements. Financial ratios measure liquidity, activity, leverage, and profitability of a company. Ratio Analysis will help you to screen and pick up stocks consistent with your investment objective. When you’re combing through financial statements be sure to use ratio analysis. If you [...]

Investing Tip #69: Read Financial Statements Carefully

Before investing in a particular company you need to investigate their financial health. You should never invest in a company without going through its Annual Report that comprises the Income Statement, the Balance Sheet, the Cash Flow Statement and Others, such as Management Discussion and Analysis, and the Auditor’s Report. A critical review of the [...]