Investing

Whether you're a beginner or a pro, investing is a lifelong process in learning. Here you'll find a range of investing topics for all experience levels along with recommended investing books for additional learning and helpful investment tools to simplify your process.

In between you'll find actionable tips like picking an online broker, finding a financial advisor, or choosing the right fund for your portfolio.

The Argument For International Stocks

International Stocks Annual Returns BreakdownInternational stocks are a great way to diversify away from the U.S. But when a home country bias is alive and well, it’s easy to ignore everything else. U.S. stocks have performed admirably in the past, but international stocks have too.

Since 1970, the S&P 500 performed at a 10.40% annual clip (with dividends). Did you know that during that same time, international stocks practically matched it?

You can try to hand-pick countries based on expected returns or go with a basket of countries that captures all that missed opportunity. The tables below show how international stock returns breakdown. Hopefully, it makes the argument to stop ignoring the big opportunity outside the U.S. Continue Reading…

Look Beyond Dividends To Shareholder Yield

Shareholder YieldDividends are the easiest way to return money to shareholders. This draw a big enough following that there’s a label for it – dividend investing. For investors who proudly wear that label, I’d argue you should look for companies with a different type of yield appropriately called shareholder yield.

For me, a dividend is a nice addition to a great investment not a prerequisite. If you’re searching for great companies, there’s a good chance you’ll find one that pays a dividend now or down the road, because good companies deal with the same question eventually.

What To Do With All That Cash?

Just like people, some companies are better at managing money than others. Those that do it best use the five tools below to efficiently increase shareholder value: Continue Reading…

Index Fund Vs ETF: Does It Matter?

Index Fund vs ETF BattleGiven the choice between two funds – an index fund vs ETF – that meet the same goal, costs are a big deciding factor. The same principle works for the active vs index argument too. Why pay more for something when you get the same results for less somewhere else.

I think we can agree low costs matter. Once you decide on an all index portfolio, the next step is picking between similar index funds and ETFs. Both do the same thing, for the most part. So is one better than the other? Are there other factors to consider?

Index Fund vs ETFs Cost Debate

There are a number of ways to build a portfolio. For this exercise let’s use a sampling of asset classes to build two portfolios around – one with index funds and the other with ETFs. Continue Reading…

Remember Your Investment Horizon

Investment HorizonWhen the markets start acting crazy, remembering your investment horizon puts everything back into perspective. Fears in Europe, the economy, unemployment, and a few hundred other data sets all add to the daily swings of the market. But you can lower your risk to these issues by building your portfolio around a strict investment time horizon.

So are we heading for a repeat of last year? Or are the recent headlines another gut check for every investor out there? More importantly, should it really matter?

All that noise breeds a shortsighted view of your money. What is different today that affects your investment risk? The answer should be “Nothing” if your portfolio is built around your investment horizon. Continue Reading…

Investing Lessons From Ted Williams

Fat PitchBaseball is one of the few sports where you can fail 70% of the time and still have a great year. Players are paid millions who do just that. And the mutual fund industry follows a similar model. But I digress.

Only 13 MLB players have breached the .400 barrier since 1900. In 1941, Ted Williams hit .406 while the league average was .262.  He was the last to do it. He was one of the greatest hitters ever. His tireless work ethic, obsession for hitting knowledge, and discipline got him there.

Over time, Williams simplified his batting process down to only swinging at good pitches he could hit. He stacked the odds in his favor.

First You Need a Good Ball to Hit

Always a fan of analogies, Buffet uses Williams’ process to explain his investment philosophy: Continue Reading…