Life teaches us what is not taught in school. I learned very quickly that inflation erodes the value of money and that your investment strategy should account for inflation's impact! I vividly recollect some things and then there are other things about which I have no recollection. For example, a former co-worker retired a few [...]
In my recent Two Questions I Ask Before Investing Money post I touched upon the Return versus Risk aspect of an investment. I followed up that article with my Buying Stocks When Valuations Are High where I discussed three possible approaches to investing; I indicated the Valuation approach is my preferred method. Sometimes, however, you [...]
Several existing holdings, or companies on my watch-list, are trading at forward-adjusted diluted PE levels above the upper-20s. These companies with lofty valuations, however, have hundreds of thousands and millions of shares trading hands daily. This has me wondering what type of investors are buying stocks when valuations are high. Before I delve into this, [...]
In my recent The Secret to Making Money – Positive Cash Flow article I indicated the simple secret to making money is positive cash flow. In this article, I lay out the two questions I ask before investing money. These questions are: Will this investment generate a level of return commensurate with its level of [...]
Most people complicate the process to generate wealth when the simple secret to making money is positive cash flow. The secret to generating positive cash flow is the extent to which you pull two levers. Lever 1 - Increase your total cash inflow (income) Lever 2 - Decrease your total cash outflow (expenses). It is [...]
Many investors ignore total return to their detriment. Instead, they focus heavily/exclusively on a stock's dividend yield. The dividend yield, however, is only one component of an investment's potential overall return. Rather than mistakenly focus on dividend yield, focus on total return to better manage your investments. The goal of total return is to tell [...]
My guest NIKE - Currently Unreasonably Valued post at Engineer My Freedom explains why I think the company's share price is overvalued. I also provide examples of a conservative option strategy I use to boost my investment return on my NIKE exposure. I have had several inquiries as to the low dividend yield on some [...]
Investors have so many companies in which they can deploy their hard-earned income yet many investors invest in terrible companies. This is truly unfortunate. My recommendation is that investors look to invest in wide-moat, rapid growth, and reasonably/attractively valued high-quality companies. I believe Thermo Fisher Scientific Inc. (TMO) is a rapidly growing wide-moat company worthy [...]
CorporateFinanceInstitute.com Reduce Unsystematic Risk Through Proper Diversification It is all well and good to assess an investment's potential return. The problem is, however, many investors neglect to assess the risk aspect of their investments. It is important investors reduce Unsystematic Risk through proper diversification otherwise they may get a ‘rude awakening’. In my [...]
CorporateFinanceInstitute.com Be Aware of Systematic Risk It is all well and good to assess an investment's potential return. The problem is, however, many investors neglect to assess the risk aspect of their investments. It is important investors be aware of Systematic Risk and Unsystematic Risk otherwise they may get a ‘rude awakening’. In [...]