Introduction: The Investor’s Struggle with Market Timing Even if you are a long term investor who is not concerned with short term price fluctuations, you still want to purchase stocks at low prices and sell at high prices. You do not actively try to time the market, but there is no reason to not take […]
Value Averaging: A Smarter Way to Buy Stocks at a Discount Read More »
I have made a lot of money buying stocks on margin. But I have also lost money. Investing on margin can bring rapid gains to your portfolio, but if you are not careful, it can also blow up your portfolio. We don’t want to blow up our portfolios. Let’s review how we can avoid this.
Secrets of Buying Stocks on Margin Without Blowing Up Your Portfolio Read More »
Most investors believe that once they pick good stocks, their main job is done. This is not true. First, you need to decide how much of your portfolio to allocate to each stock. You may choose to keep it simple and just equal weight everything. Or you may want to use more sophisticated strategies to
Why Portfolio Rebalancing is Critical for Long-Term Investing Success Read More »
Why Stock Returns Aren’t Just About Market Risk A staple of business schools all across the country, Capital Asset Pricing Model, or CAPM, is traditionally considered a model sufficient to explain the stock returns. CAPM tends to paint all stock returns with a single brush – a function of market risk. You probably know the
The Fama and French 3 Factor Model – A Game Changer for Value Investors Read More »
Introduction: Why Every Investor Needs an Investment Policy Statement How do you stay disciplined when markets are unpredictable? An Investment Policy Statement (IPS) serves as your financial roadmap. It guides your investment decisions and keeps you focused on long-term goals. This document provides a framework that helps you manage the emotional and strategic challenges of
Secure Your Financial Future: Create a Winning Investment Policy Statement Read More »
Harry Markowitz said this about diversification in investing: Diversification is the only free lunch in investing. As I write this towards the end of 2024, we have seen a number of years where a very select group of stocks has dominated the market returns. The Magnificent 7 stocks, for example, contribute to a large chunk
Diversification in Investing: Is It a Free Lunch? A Value Investor’s Guide Read More »
I have a new stock candidate to add to my small cap value portfolio (which is part of the Premium membership at my newsletter on Substack). This poses a dilemma. My portfolio is allocated based on Kelly Fractions. This is the Kelly Criterion adjusted for a multi-asset portfolio. The allocation takes the correlations and covariances
You want to buy the best available value stocks in the market today. How do you go about finding them? What you need is a stock screener. This is a software or website that allows you to find stocks based on the criteria that you define. Most people know to look for value stocks using
8 of My Favorite Value Stock Screener Criteria Read More »
Most investors approach long term investment portfolio allocation very casually. Typical processes involve investing whatever cash is available, investing an equal number of shares among all stocks in the portfolio, investing an equal number of dollars among all stocks in the portfolio, or setting some thresholds (I will invest $x to start and if the
Why Strategic Allocation Beats Stock Picking: The Hidden Science of Long-Term Gains Read More »
