In 2021 investors poured over $1 trillion into various mutual funds and ETFs. In light of the post-covid boom, it looks like investors raced to capture their fair share of stock market returns. The fees that this has generated are being greatly enjoyed by the investment managers that oversee these funds. In this agreement, investors … More Why Passive Index Fund Investing Beats Any Mutual Fund
When searching for good companies to invest in, it can be difficult to put together a satisfactory portfolio of stocks that meet your well-defined criteria. It’s tempting to copy a famous investor like Warren Buffett and invest in whatever they own. In theory, this would give you the same return as whatever they’re getting, as … More Copying Another Stock Portfolio
A common trap that investors fall into is paying any mind to the price range that a particular stock has sold for in the past. The price-range, like many other metrics of stock “evaluation”, has very little to do with the actual value of a stock. Seeing that a stock is selling at a relatively … More Why the Price-Range is a Useless Metric
A troubling phenomenon that many new investors observe in the stock market is its reactivity and its propensity to move rapidly. This phenomenon wouldn’t be so troubling, of course, if the company’s earnings changed on a whim daily, but obviously, that is not the case as most companies report earnings every three months. So why … More The Neurotic Stock Market
A relatively recent development has taken place in the mutual fund industry. Salesmanship has taken a silent chokehold. There has been an increasing emphasis on marketing rather than management efficiency and results. The industry has replaced performance with publicity in an attempt to increase revenues from fees without engaging in sensible investment policies. It is … More Mutual Funds: Marketers not Managers
Exaggeration Earnings reports, mergers, and management changes. These developments that companies go through almost always give way to exaggeration of their stock price to some degree. While harder to take advantage of and much less common, exaggeration may and will also occur on an aggregate market basis in the event of global developments such as … More The Trifecta of Undervaluation
The average active trader gets beaten by the market most of the time. So what should you do if you don’t want to invest in a simple S&P index fund and/or don’t have enough money to make a meaningful return? The easiest way to beat the market is to simply not play it. When stock market traders … More So You Want to Beat the Market
There exist two types of debt that are different in outcome. One leads to a net loss and one leads to a net profit. Identifying these types of debt let you know what debt to take on more of and what debt you should paydown. The debt you should probably paydown depends mostly on the … More The Two Types of Debt
In the modern financial world, investing can be a confusing and arcane world to traverse through for the small investor who is just starting to get in the game. In fact, most new investors are handicapping their returns because of misconceptions about the stock market. Luckily, a lot of these mistakes can be easily corrected … More 3 Deadly Mistakes Every New Investor Makes