As money-wise millennials, we have a lot of goals in mind as we graduate from school, get started with our careers and think about what we want our finances to look like in the coming years. One financial consideration that often gets pushed to the periphery is life insurance. You may be asking isn’t life […]
Archives for June 2014
Investing Tip #61: Know Your Risk Tolerance
Always remember investments in securities are subject to market risks. You may even lose your capital. The level of risk investors can take varies from investor to investor which mainly depends on the individual’s risk tolerance. Ascertain your loss bearing capacity and limit your investments accordingly. Understanding your risk tolerance will help you come up […]
Investing Tip #60: Focus on EPS Growth
EPS, or earnings per share, is a metric that you need to pay attention to. Invest in a company whose aggregate earnings are growing together with increasing earnings per-share. Ensure the company has not reduced them through dilution on a per share basis. Buffett explains company’s goal should not be simply growing earnings, but also […]
Investing Tip #59: A Company’s Growth in Areas of its Core Competence Pays
If you lean on the side of growth investing be sure to look at the core competency in companies that you want to invest in. Core competency provides sustainable competitive advantage and the company benefits from the growth. Graham considers value of potential growth only if the growth is within the core competence or franchise […]
Investing Tip #58: Avoid a Company That Buys Back Its Own Shares at a High Price
Be on the look out for companies that buy back their own shares at a high price. A repurchase at high level reduces continuing shareholders’ wealth because per-share intrinsic value decreases. Sometimes management goes for buying back shares at inflated prices just to jack up the share price in the market. Avoid companies that do this. […]
The Value Investing Cheat Sheet
Value investing is the investing idea that you can buy a company that is “under-valued” relative to its true value. The reason that its stock is undervalued relative to its fundamentals could be market movements or other outside trends. However, you want to make sure that you avoid value traps, which could mean the company […]
Investing Tip #57: Look at the Economy as a Whole
A company’s performance is influenced by both global economy and domestic economy. The surrounding factors also have an impact on the company, these factors are relating to the industry and the economy. The Economic Indicators such as GDP, unemployment, Inflation, Interest Rates, Budget Deficit, etc. reveal the health of domestic economy which influences company’s performance. […]
How To Get a Student Loan with Bad Credit
Sometimes the early choices we make with money come back to bite us in the ass. Say you get a credit card at 18, and then don’t pay your bills. This can damage your credit score early on, and make it hard to get other loans later. And while you’ve learned the error of your […]
Investing Tip #56: Invest 90% in S&P 500 Index ETFs
Warren Buffett has come out with a very simple rule for startup investors like you. He suggests that you invest 90% in S&P 500 Index ETFs and 10% in short term U.S. government bond funds. While selecting index ETFs, look at their management expenses and go for low cost ETFs. This simple rule can help guide […]
Investing Tip #55: Win Over Emotions
When it comes to investing for the long term you need to stick to a systematic approach. Greed, fear, excitement and frustration are your enemy in stock market. Don’t allow the emotions to make your investing decisions. Always maintain a disciplined approach to investing. If you want to learn more check out these resources: Key […]
Creative Ways to Use Your Student Loan Money
Are you currently in college and receiving student loan money? Have you ever thought about using some of that money in another way? Did you even know this was an option? To be frank, since the government cannot possibly track what exactly you are doing with the student loan money, you could (in theory) spend […]
Investing Tip #54: Have Realistic Expectations
You need to have realistic expectations when you’re investing. The stock market is not a gambling place. Don’t expect to become a millionaire overnight. You may earn reasonable returns on your investment. You can grow your money by investing but it will take time. If you want to learn more check out these resources: Cash […]
Investing Tip #53: Avoid a Company with Management Having Doubtful Integrity
Remember, when you buy a stock you’re buying part of a company. Therefore, you need to avoid investing in companies that are run in a way you don’t approve of. If a company’s management has dubious past or lacks sense of trusteeship for stakeholders, you should never invest in any of its group companies. You […]
Investing Tip #52: Invest Small Amounts Regularly
One common misconception is that you have to be rich to begin investing. This simply isn’t true. The wise way to build up a good portfolio is to first select a few good companies and buy small quantities regularly over a period of time. Don’t invest a large amount all at a time. Start small, […]
TimkenSteel Spinoff May Create an Opportunity for Investors
The Timken Company announced earlier this year that it would split itself into two companies. For years investors have advocated for spinning off Timken’s steel business to benefit shareholders and unlock value. The steel business is different than its bearings and power transmission businesses. It is also valued differently by investors and likely depressed the […]
How Do Private Student Loans Work?
Private students loans are the #1 way that student loan borrowers get into trouble. Hands down. The reason is that the Federal government has limits on the amount that you can borrow for Federal Student Loans. And there is a reason for those limits – so that you don’t get in debt over your head. […]
Investing Tip #51: Invest in the Company with New Products or Services
A good way to pick winning investments is to be on the look for company’s that are leaders in their field. Identify the companies which are developing new products or discovered new markets. Before new competitors enter into the market, the company may establish its dominance and the value of your investment will grow. Keep […]
Key Value Stock Fundamentals for Screening Stocks
The hardest part of deciding where to invest is actually deciding what criteria you want to look for in a company. I am a huge value investor, and look for solid companies that can be purchased at a discounted price (maybe due to bad short-term news). The trick to finding these companies is to use a stock screener. Most online brokerages have them, as does Yahoo! Finance or Money.com. What I highlight below are some key fundamentals you may want to look at when investing in a company. Remember, a number or ratio may look good, but it is important to understand why that number looks good, or if it looks “too” good.
Investing Tip #50: Buy Closed-End Funds Only at Discounts to Net Asset Value
In order to diversify your portfolio you may want to add a few closed-end funds. Many closed-end funds are offered at a discount. You can add some such closed-end funds. If the fund performs well over time, the discount shrinks and you earn a profit. If you want to learn more check out these resources: […]
The Pros and Cons of a Roth 401k
This year, my employer started offering a Roth 401k for the first time. Although they’ve been around for a couple of years, only recently have more and more employers started offering them. I’ve been contributing to my traditional 401k since I was first able to, so I wasn’t sure about switching over to a Roth […]
Investing Tip #49: Don’t Buy Illiquid Shares
Trading Liquidity, a ratio of the average daily trading volume and the shares outstanding, indicates demand and supply of the stock. While blue chips shares have generally high trading liquidity, shares of companies with small capital or small free float has low liquidity. You may not find buyers or correct price when you need to […]
Investing Tip #48: Target Superior Investment Results
Would you rather have average investing results or superior investing results? You probably chose the latter. Remember Graham’s quote, “To achieve satisfactory investment results is easier than most people realize. To achieve superior results is harder than it looks.” Work harder to achieve it. There is no short-term. Keep working on your investment strategy and […]