Equity mutual funds pool together money from many investors and invest in a group of stocks. This process in theory is supposed reduce risk to investors especially the risk of owing individual stocks which can blow up. However that is not always the case. Mutual funds also have high risks and they are not necessarily …
Continue reading ‘10 Reasons Why Individual Stocks Are Better Than Mutual Funds’ »
Dollar Cost Averaging (DCA) is an investment strategy by which you invest little by little in each period instead of a lump sum in one shot. By investing small amounts say each month over many years one can reduce volatility and also the risk of heavy losses. Over time small amounts tend to benefit from …
Continue reading ‘How NOT to Demonstrate the Power of Dollar Cost Averaging’ »
On of the simplest and easiest ways to reduce risk in a portfolio is diversification. Holding assets spread across different types, classes, countries, etc. not only reduces risks but also provides a cushion to a portfolio when markets head south as we witnessed in December 2018. The following chart shows the importance of diversification as …
Continue reading ‘Asset Class Performance Chart 2005 Thru 2018’ »
The bull market in U.S. stocks turns 10 years old today according to a Journal article. However most investors don’t care because unlike the previous bull runs this one doesn’t have the same feel. In March 2009, stocks reached their bear market trough and investors felt like a depression was on the horizon. But the …
Continue reading ‘On The Decade Old US Equity Bull Market’ »
Biotech stocks are the ultimate speculator stocks. Companies in this industry can soar to astonishing levels in a short period of time or vice versa. It is not uncommon for biotech equities to shoot up by 50% or 100% in a single day. Of course, they are also the other way around where these stocks …
Continue reading ‘Biotech Stocks Can Skyrocket: An Example’ »