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.

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…

Wild West Investing In Frontier Markets

Frontier MarketsTales of the wild west were a glamorized version of reality. Stories told of great wealth of land and opportunity, but forgot to mention the hardship, the risks. Frontier markets are much the same.

Frontier markets are a subset of emerging markets. It’s made up of countries in the very early stages of economic development. But it also includes countries with limited stock markets (small number of stocks, shares, and market cap) and small economic footprints. In total, frontier markets make up a sliver of the global market value. Continue Reading…

Why REITs Performed Great Since 2000

Asset Returns ThumbSome questions and comments popped up about REITs since I introduced the table on asset class returnswhy did REITs perform so well the last 15 years? Others saw REITs on top eight out of fifteen years and concluded it must be the best investment going forward (despite me pointing out the failings of that conclusion). I thought I’d find the answer.

From ’00 to ’14, REITs blew away other asset classes with a 12.9% annual return. Before you start drooling over that number, remember how REITs work. While you get those juicy returns, you also get the tax consequences.

REITs avoid a big chunk of corporate taxes by paying out most of its income through dividends. In return, REITs have their own tax rules which are passed down to you (dividends are taxed as ordinary income). Continue Reading…

15 Year Look At Asset Class, Sector, And Country Returns

Tables comparing investment returns are nothing new. Fund companies and other financial institutions have used them for years to argue for or against different investing ideas. Though, the problem is most tables are either stuck inside a PDF file or quickly become a giant mess of colored tiles that make it hard to read. I thought I’d take the concept, clean it up, and take it a step further.

The idea started about a month ago with an article about contrarian investing. The article took a contrarian look at past performance across three areas – asset class, sectors, and countries. Continue Reading…