I am concerned about the recent rapid increase in stock valuations. My concern started in mid-2016 and has accelerated subsequent to the US Presidential Election.
For the last several months I have become increasingly concerned that stock valuations are too high for many publicly listed companies on North American stock exchanges. In fact, the last time I made equity investments of any significance, valuations were much, much more favorable.
I admit it has been increasingly frustrating to watch stock prices repeatedly set new highs while I sit on the sidelines. Whenever I find myself thinking “This time it is different”, however, I remind myself of Warren Buffett’s following pearl of wisdom:
“The stock market is a no-called-strike game. You don’t have to swing at everything. You can wait for your pitch.” Continue reading “Stock Valuations are Too High. I Would Exercise Caution.”
The purpose of this post is to explain why I think low or no dividend yield companies belong in your portfolio.
In today’s post I would like to highlight the importance of four investing principles to make your money work for you. You must:
- Invest in good solid companies;
- Practice patience;
- Not panic when making investment decisions;
- Relish major market corrections as they provide opportunities in which to acquire shares at more reasonable valuations.
Investing in equities does not need to be complicated. This is something you can do yourself.
There is no reason to invest through expensive actively managed mutual funds. In fact, few actively managed funds have an enviable track record.
On December 5, 1996, Federal Reserve Chairman Alan Greenspan made his famous speech wherein he asked if “Irrational Exuberance” had begun to play a role in the increase of certain asset prices. Looking at Netflix’s current stock valuation I spell Irrational Exuberance: NETFLIX. Continue reading “I Spell Irrational Exuberance: NETFLIX”
Years ago I came to the realization that proper money management means allocating money into “3 Buckets”.