One of the smart ways to diversify globally is to invest in multiple countries. With this approach it is possible to capture the top returns from one equity market and reduce the impact from a poor or worse returns from another market. Just like the return of various individual companies, the equity returns of individual …
Continue reading ‘The Best and Worst Developed Markets From 2001 To 2020: Chart’ »
I have written many time before on the futility of market timing. Since markets tend to go to extreme levels on both the upside and downside trying to get in and out at tops and bottoms will lead to worse outcomes. The wise strategy is to simply stay in the market regardless of volatility and …
Continue reading ‘On the Dangers of Market Timing: An Example’ »
The S&P 500 closed at 4,458 on Friday. The index is up over 20% as of last Friday’s close and has reached 54 records so far this year. The P/E ratio stands at over 34, well above the historic levels at around 20. At current levels, US stocks are expensive indeed. However that does not …
Continue reading ‘The S&P 500 Dividend Yield is at a 20-Year Low’ »
Investing in dividend-paying stocks is an important strategy for success with investment in equities. Stocks that not only pay dividends but also increase them consistently over time are even better for long-term investment. Picking and holding dividend growers and reinvesting dividends automatically can generate excellent total returns if held over a decade or more. I …
Continue reading ‘The Power of Reinvested Dividends: McDonald’s Example’ »
Success with investing in equities depends on many factors such as market conditions, quality of stocks held, dividend reinvestment, buying when stocks are super cheap, holding for the long-term, etc. Of all these factors one of the most important is the ability to identify and avoid common behavioral finance mistakes. Sometimes simply making wise behavioral …