Investing Strategy

  • 10 Nov
    Why You Should Switch To Active Investing Now

    Why You Should Switch To Active Investing Now

    • PE ratios in the S&P 500 are all over the place; 7 of the top 20 stocks have PE ratios below 15, 7 from 20 to 30, and 5 above 30.
    • You can buy stable, growing businesses at PE ratios below 15, so why would you stick to passive investing and buying riskier stocks at PE ratios of above 20?
    • Maybe you think passive investing meets the definition of “boring,” something investors such as Buffett advocated. I don’t wish you the excitement of watching your portfolio fall from a PE ratio of 24 to a PE ratio of 15. Therefore, think about rebalancing now before it’s too late.

    Introduction

    Yesterday we discussed how the economy is doing well but that the market isn’t responding accordingly. This is because of the high valuations where only exceptional catalysts can push the market higher while any kind of negative news easily brings it into negative territory. However, by analyzing recent earnings, we have found large discrepancies among sectors in revenue and earnings growth. We understand this is normal for a well-diversified portfolio, but do we have to own more of the overvalued stocks and less of the undervalued stocks as a market capitalization weighted index fund does? More →

  • 07 Nov
    Why You Should Be Holding Cash Now

    Why You Should Be Holding Cash Now

    • Beware of the financial industry pushing you to invest your cash. They are only doing so because they don’t earn a dime on it.
    • Market circumstances change, so what might be the best option now compared to other assets, might not be the best option in next five years.
    • Cash is a call option and before investing in anything, you should ask yourself what the risks are. Investing in stocks with a 50% potential decline around the corner for a 2% yield isn’t always the best idea.

    Introduction

    In an environment where everyone is looking to find the next best returns boosting investment, an asset that is rarely discussed and often taken for granted is cash.

    Today we’ll discuss the role cash should play in investors’ portfolios, the perspectives we have on cash, and finally, how much cash investors should have in relation to current market circumstances. More →

  • 30 Oct
    Sunday Edition: How High Will Gold Go Over The Coming Decade?

    Sunday Edition: How High Will Gold Go Over The Coming Decade?

    Today we are going to analyze the long-term technical picture in the Gold market and introduce you to another nuance of the Elliott Wave Theory. It’s going to get a bit more technical.

    Up to this point we have primarily discussed the basic A-B-C pattern known as a zig-zag which follows the completion of an impulse or motive wave and looks like this: More →

  • 27 Oct
    A Global Risk Reward Perspective

    A Global Risk Reward Perspective

    • Emerging markets will grow faster than advanced economies, but there are many investing risks.
    • If a currency is at risk of being devalued 50% against the US dollar, over a decade you’d need an additional 7% yearly return to cover for it.
    • It is less risky to invest in emerging markets when there is pessimism than when there is euphoria.

    Introduction

    The World Bank revised its 2016 global economic growth forecast down to 2.4 percent from the 2.9 percent pace projected in January. The main reason for this downward revision came from lower commodity prices globally and soft investments in developed countries. But what’s important here is the divergence between the growth in emerging versus developed economies. More →

  • 26 Oct
    Millennials! Want To Retire Early? This Is How You Do It

    Millennials! Want To Retire Early? This Is How You Do It

    • Millennials are very interested in investing and come along right in time for baby boomers who need to dump their assets in preparation for a comfy retirement.
    • We’ll discuss a few things Millennials need to know before investing that aren’t often publicized due to conflicts of interest.
    • Beware of fees. Following this piece of advice can save you a cool million in your lifetime, and we’ll show you how just below.

    Introduction

    On Monday we discussed the Next 50, a new index that includes stocks in companies whose primary customers are Millennials (the generation born between 1980 and 2000).

    The Next 50 is an index totally focused on growth, but with some questionable fundamentals and uncertain futures for the companies listed. Nevertheless, investing has become a hot topic amongst Millennials. This is of essential importance to the Baby Boomer generation (those born between 1946 and 1964) as they begin to retire and the need for new investors to pick up their stocks arises. More →

  • 23 Oct
    Sunday Edition: Agricultural Grains – A Safe & Potentially Very Profitable Long Term Investment

    Sunday Edition: Agricultural Grains – A Safe & Potentially Very Profitable Long Term Investment

    Today we continue with our series on Elliott Wave patterns and how to use them to identify the end of a bear market and the beginning of a new bull market.

    The market we are going to focus on today is food commodities, specifically grains, and we’ll discuss where prices might be headed over the next several years.

    The chart below is a long term chart of wheat which we will use as our proxy for the entire grain market. However, corn, soybeans, and oats all have similar price patterns on their long term charts as well. More →

  • 21 Oct
    Passive or Active Funds? Neither… Sven Has A Better Option For You

    Passive or Active Funds? Neither… Sven Has A Better Option For You

    Whenever you find yourself on the side of the majority, it is time to pause and reflect. – Mark Twain.

    • The biggest market risk comes from money flows. Everything is good while more money is being invested, but withdrawals will create forced asset sales and another bear market.
    • In the last 10 years, 27% of actively managed funds have outperformed the market, but you can increase your chances by choosing a third option.

    Introduction

    In the everlasting debate between passive and active investing, passive investing is currently winning. More money is flowing into passive than actively invested funds, and many celebrate victory and the death of stock pickers. Stock market movements are influenced by money flows and if more money flows into passive funds, they will clearly outperform the competition.

    In today’s article, we’ll take a look at what is going on in the world of actively and passively managed funds, and will discuss a third option. An option that’s cheaper and one where your returns don’t depend on money market flows all that much. More →

  • 18 Oct
    Investing Advice From John Maynard Keynes

    Investing Advice From John Maynard Keynes

    • It’s good to invest for the long run, but don’t let that be an excuse for investing in overvalued stocks as in the long run, we all die.
    • Often shunned as irrelevant, inflation must be considered when investing.
    • Markets are irrational and get more irrational as people think less. ETFs are the perfect example.

    Introduction

    You probably remember Keynes from Economics 101 as his ideas fundamentally changed the way people looked at economics in the first part of the 20th century. Before Keynes, a laissez-faire (let people do as they choose) economy with low or no government involvement, was the norm.

    By studying the causes of business cycles, Keynes came to the conclusion that government intervention is necessary to moderate boom and bust cycles in an economy. He endorsed the New Deal in a letter to President Franklin D. Roosevelt in 1933, and the New Deal remains a perfect example of his theories. More →

  • 11 Oct
    Under 30? How To Invest Now For Incredible Future Returns

    Under 30? How To Invest Now For Incredible Future Returns

    • This post is essential reading for young investors, while also valuable for investors of any age. If you’re a more mature investor, pass this along to your kids or grandchildren.
    • Investing regularly month after month is going to get you a long way.
    • The younger you start, the better. As life expectancy is getting longer and longer, if you are under 50, you can still grasp the benefits of investing in stocks for the long term.
    • As the current market looks overvalued, don’t be afraid to start dollar cost averaging. Follow along with Investiv Daily for great investment choices.

    Introduction

    An essential concept in investing often shunned by mainstream media is connecting your investment strategy with your specific goals. The majority of the content we see is about one investment type, i.e. stocks, bonds, gold or real estate.

    All investment tools have their pros and cons which are emphasized when we specify the age and goal of the investor. Today we’ll discuss why investing in stocks is essential for young investors, and a low risk way for doing so. More →

  • 09 Oct
    Sunday Edition: The Most Important Pattern In A Bear Market Bottom

    Sunday Edition: The Most Important Pattern In A Bear Market Bottom

    Over the last several months we’ve focused on sharing with you several of the fundamental metrics Thomas Moore uses to identify deeply undervalued companies on which to sell put options to generate income. We hope they’ve been beneficial.

    In today’s Sunday Edition I’m certain to draw a lot of skepticism from those “purists” who believe that markets are both efficient and driven exclusively by the fundamentals.

    On the other hand, if you believe that markets are not only irrational but are driven by psychology and what some like to refer to as “animal spirits,”  then you might appreciate what I share over the next several weeks in these Sunday Editions. More →

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