Novel Investor • Page 7 of 13 • Compounding investing wisdom...

The Two Sides Of Investment Risk

April 18, 2013

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Jon

There are many different types of investment risk. Most of the time the market does a good job interpreting those risks.

But not always.

As an investor, its your job to keep those investment risks low and decide when the market is right or if it’s wrong.

What is Investment Risk?

Investment risk in the simplest of terms can be defined as a permanent loss or a lower than expected return.

The permanent loss is easy enough. You invest in a stock. That stock drops in price and stays down indefinitely. Or until you sell, making the risk of loss permanent. Continue Reading…
Planning Around Gold And The Weeks Ahead

April 16, 2013

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Jon

Now that the tax deadline is over we can get on with everything else. Enough has happened in the last two weeks to make big waves in the markets. Earnings season, Japan, and falling gold prices all made news. Two matter, one does not, unless you owned gold.

Japan kicked things off with an aggressive monetary policy announcement. It will follow the Feds playbook to jump-start its economy. If you didn’t know, the Bank of Japan has fought deflation for the past two decades and failed.

It’s latest attempt to jump-start inflation will throw 60 to 70 trillion yen at the problem. If it works, it would push more money out of savings accounts and into stocks. Sound familiar?

We can add one more country to the list of long-term debt buyers trying to boost an economy. Continue Reading…
Happy Hour: Fed Email List And IRA Caps

April 12, 2013

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Jon

Welcome to the end of the week and another edition of Happy Hour! Just sit back, relax, and enjoy your end of the week roundup of all things interesting in the land of money.

Fed Email List

The cats out of the bag! The Federal Reserve has a super secret email list that gets the FOMC minutes early. It’s about 100 people to be exact, including Congressional staff and trade groups. While the leak was brushed off as a simple mistake, it doesn’t explain the secret email list.

Why a select group of people are getting FOMC minutes before everyone else is beyond me. It certainly doesn’t erase the “market is rigged” sentiment. Of course, no one would take advantage of said information either. Right?

The idiocy out of Washington continues… Continue Reading…
What Great Investors Look For In A Stock

April 11, 2013

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Jon

A consistent theme emerges when you read the best investment books. While each has their own unique strategy, the main points start to overlap. You get a picture of what the great investors look for in a company. And it’s an easy place to start when doing your own research and learning about stocks.

Consistently Strong Management

Most of the talk about stock selection involves balance sheets and income statements. The people behind the company are too often overlooked as secondary. Yet, they are necessary for long-term success.

Take sports, a team with the best players still needs someone to lead them, build a game plan, and manage the players. The best teams, the ones that consistently win year after year, have the best coaches. The same philosophy works for companies. Find the best coaches in the corporate world and you’ll find the best companies. Continue Reading…
Happy Hour: Lesterland And Monkey Investors

April 5, 2013

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Jon

Welcome to the end of the week and another edition of Happy Hour! Just sit back, relax, and enjoy your end of the week roundup of all things interesting in the land of money.

Lesterland

If you haven’t seen a TED talk video, it’s a platform for sharing ideas from the some of the great thought leaders around the world. Anyways, TED released a new video this week titled Lawrence Lessig: We the People, and the Republic we must reclaim on the corruption in our political system and funding process. Continue Reading…
Best Retirement Plans For The Self-Employed

April 4, 2013

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Jon

As an employee, you’re stuck with whatever retirement plan your company provides. Sure, you can still make regular IRA contributions even with the lower limits. That’s not the case if you have your own business. If you’re self-employed or a small business owner there are several retirement plan choices beyond the basic IRA.

The best self-employed retirement plan will depend on your business plan, how much you want to contribute, how many employees you have or expect to have, and if you get income from a regular job.

Self-Employed Retirement Plans

SEP IRA

The Simplified Employee Pension plan or SEP IRA is one of the easiest retirement plans to set up. You can quickly open a SEP IRA through most brokers with very little paperwork. Continue Reading…