The only reason to invest in individual stocks is to beat the average, which I’ll define as the S&P 500 index. Otherwise, the index can be bought without having to expend a single ounce of thought and effort. Anybody reading this post is most likely interested in beating the average, and, as I wrote about…
Have you ever delayed selling a stock because you wanted to wait until that stock’s price climbed back up to your purchase price? If so, you’re probably incurring a cost: opportunity cost is forgoing the next best investment. Sometimes that next best investment can be better than the one that you still own. For example,…
You may have heard the phrase “The House Always Wins.” It refers to casino games that are designed so that the casino (a.k.a. “the house”) always turns a profit at the expense of its patrons. It comes down to simple math: the casino games are designed so that the odds are in favor of the…
PREVIOUS RELEVANT POSTS My journey to financial freedom Financial freedom: how to get it The math behind getting financial freedom WHY INVEST IN STOCKS If you read the last post referenced above then you have seen how important the percentage growth rate is to growing your nest egg. Small percentage differences over a long period…
A very concentrated growth stock portfolio can provide superior returns compared to the returns from other types of portfolios. However, since each company constitutes a large percentage of the portfolio’s value, a steep drop in one of the portfolio’s components can be harmful. Therefore, I believe that it’s imperative to possess a depth of knowledge…
There are companies that have been growing and there are companies about which we can say they seem to be completely dominating their market(s) on which they focus. Tinker (aka on Saul’s Investing Discussions on the Motley Fool) has been beating the drum on avoiding companies that are cheap and that it’s ok to invest…