Retail investors are bombarded with investment advice from today’s media of which most relates to before-tax investment returns. We, however, live in an after-tax world. This is why we need to view tax efficiency and investment decisions together. In this post, I touch upon the importance of allocating investments in the most tax-efficient manner. This [...]
'Stay the course' is a phrase used by navigators to encourage maintaining the current direction or plan, especially when faced with challenges or temptations to change. It is rooted in maritime history where maintaining a set course was crucial for reaching a destination safely and efficiently. The phrase has broader applications in life and in [...]
One of the most memorable things I learned in business school is that TIME is the secret sauce to building wealth. A host of factors such as: Your Starting Point Income Growth Financial Literacy Expense Management Tax Planning Risk Management certainly influence wealth creation. The power of time, however, is often overlooked because most people [...]
As a follow up to my How I Identify New Companies to Research post, in this post I address the position sizing conundrum investors face when trying to determine how to properly size a position within an investment portfolio. Dollar versus Percentage Perspective Determining how much weight each particular stock receives in a portfolio is [...]
Every great business is built around a strong moat. - Warren Buffett A company’s moat is an essential concept for investors and business professionals. It refers to a company’s ability to maintain competitive advantages to protect its long-term profits and market share from competing firms. Think of a company's moat as the answer to What [...]
A common question I receive is how I identify new companies to research and whether I use stock screeners. I use the free version of the Finviz stock screener sparingly. Stock screeners are not exclusive to a single user, and therefore, any stock screener output is readily accessible by all paying subscribers. I, therefore, derive [...]
Should you invest in a company with negative or negligible shareholder equity? Calculate shareholders’ equity by subtracting total liabilities from a company's total assets; both are on a company's Balance Sheet. Negative shareholder equity indicates a company's total liabilities exceeds its total assets. In many instances, this is a sign of financial distress. Not everything, [...]
Had I been much more mature when I was younger, I would likely now have a much larger investment portfolio. Alas, my priorities were much different decades ago. Allow me to regale you with some of my high school and undergraduate degree education experiences. Although I enjoyed high school and my undergraduate Economics university program, [...]
Despite the following impressive statistics, equity exchange traded funds have disadvantages. Assets Under Management (AUM): In October 2024, AUM were in excess of ~$13T and had experienced a ~20% cumulative annualized growth rate (CAGR) since 2008. Number of ETFs: Over 12,000 ETFs listed globally. Market share: ETFs have more than doubled their market share relative [...]
Dividends can be a great way to return value to shareholders. They do, however, have drawbacks. Do NOT fixate on dividend metrics. Instead, analyze how companies allocate their capital. They can: reinvest in the business; debt reduction; merge or acquire other businesses; distribute dividends; and/or repurchase shares. Typically, companies employ one or more of the [...]