Stocks

04 Jul
Why Yesterday’s Retirement Investing Advice Won’t Work In Today’s Environment
Common retirement investing advice worked ok in the past, but could have been much better.

Why would you sell stocks that you bought a long time ago, and that are still growing and paying dividend, to buy bonds that yield less than inflation?

Over the long term, little differences amount to a huge difference. Take responsibility for your retirement.

Introduction

The common advice on retirement investing is to be overweight stocks when you are far from retirement and then overweight bonds when you are closer to retirement. Some funds offer target date retirement funds that have such a portfolio allocation.

Vanguard’s target retirement funds invest up to 90% in stocks when you are more than 25 years from retirement, and then lower that exposure to about 50% when you retire. 7 years into retirement, you have 70% of your portfolio in bonds. More →
By Sven Carlin Bonds Inflation Investing Strategy Investiv Daily Retirement Stocks U.S. Treasuries
26 Jun
Don’t Follow The Herd: Why The Majority Of Investors Always Get It Wrong
Consider this, the question always remains the same: “What will my return on investment be?” But the answer changes all the time.

Thinking costs energy and humans prefer to let others do the thinking for them. Are you like that?

It’s important to know when to use history as a teacher.

Introduction

“Whenever you find yourself on the side of the majority, it is time to pause and reflect.”

– Mark Twain

When Albert Einstein was teaching at Oxford University, he gave his senior physics students exactly the same exam he had given them the year before. His assistant was disturbed by such a mistake, but before intervening he asked Einstein whether he actually made a mistake. Einstein replied that the exam was exactly the same. The assistant was even more concerned and asked why he would do such a thing. Einstein replied, “Well, the questions are still the same, but the answers have changed.” More →
By Sven Carlin Bank of Japan Bull Market Contrarian ETFs FED Herd Behavior Index Funds Interest Rates Investing Strategy Investiv Daily Stocks US Economy
21 Jun
Diversification vs. Concentration
Index funds and diversification have worked extremely well in the past 35 years, however their success can be thanked to geography, as we hear only about the success in the U.S., and to declining interest rates.

If the S&P 500 had the same earnings yield as when the Vanguard fund gained traction, it would be at 557 points, yes 77% below current levels.

It’s better to wait in cash than buy a diversified index fund now.

Introduction

Some investment gurus advocate spreading your portfolio across various asset classes in order to limit your risks for the same return. On the other hand, others say diversification is for idiots and for those who don’t know what they’re doing. I’ll analyze their arguments and see what the best option is for you. More →
By Sven Carlin Charlie Munger Concentration Diversification Index Funds Interest Rates Investing Strategy Investiv Daily Jack Bogle S&P 500 Stocks Temporal Diversification US Economy Vanguard Warren Buffett
20 Jun
How To Identify Value Traps
Value stocks are tempting, but the vast majority turn out to be value traps.

There are a few things to look at that lower the probability of getting caught in a value trap.

Introduction

Everybody has been talking for the last few days about Amazon’s (NASDAQ: AMZN) buyout of Whole Foods (NASDAQ: WFM), and the negative repercussions that purchase had on competitors like Wal-Mart (NYSE: WMT), Target (NYSE: TGT), Costco (NASDAQ: COST), and Kroger (NYSE: KR). More →
By Sven Carlin Investiv Daily Stocks Value Traps
19 Jun
Stocks VS Real Estate: Bubbles Or Investments?
It could be argued that both stocks and real estate are in a bubble. However, the game is the same, finding a quality stock or piece of real estate at a low price is crucial for long term returns.

Low interest rates have inflated asset values and net household wealth, and a return to the average would be detrimental for the economy. It’s unlikely this would be allowed, but there will be volatility.

In the case of higher inflation, a 30-year fixed-mortgage real estate investment doesn’t look bad at all.

Introduction

I was struck when I read a while ago that the Obamas purchased a home in DC for $8.1 million.

I wasn’t struck by the purchase price as the former president will probably make more than that from speeches in a year, but what struck me was that the same house was previously sold for $5.3 million in 2014. Thus in less than three years, the house appreciated 52%. Also worth mentioning is the fact that the house first sold for $50,000 in 1928. More →
By Sven Carlin Investiv Daily Real Estate Stocks
12 Jun
Stocks, Bonds, & Gold, Oh My! What’s The Safest Asset Class Today?
In his search for safety, the average investor usually does it all wrong.

Stocks, bonds, real estate, gold, and cash will all probably drop more than 70% once in your lifetime.

However, there is an asset class that is much safer and will lead to huge returns, Buffett would call it a “bet on America.”

Introduction

When I talk to people that aren’t as obsessed about investments as I am, a word that I constantly hear is “safety.” Everybody wants to do something with their capital without risk and they are in a constant inner fight related to their money and what to do with it. More →
By Sven Carlin Bonds Commodities Gold Investing Strategy Investiv Daily Stocks
09 Jun
Want To Know About The Current State Of The Market? Read This.
A quick look at the economy points out a few risks, but there are also some positives.

Unfortunately, savers have gotten the short end in this environment, but average investors haven’t done much better either.

It’s important to understand what’s going on and how will it affect your long-term returns. If you only think about the short term, your returns will be below average, thus below 2.3% per year.

Introduction

J.P.Morgan (NYSE: JPM) recently released its Q2 2017 Guide To The Markets. As this report is very long, with a total of 71 slides and a lot of correlation charts, I’ll take out the most important things an investor should know about the current state of the markets and the economy. More →
By Sven Carlin Interest Rates Investiv Daily Stocks US Economy
05 Jun
Why You Should Be Careful When You’re Told To Have A Defensive Portfolio
Defensive investments are usually promoted to those in retirement or close to it. However, we should all always be defensive investors.

Neither bonds nor general stocks are defensive investments, no matter the diversification or quality of the bonds.

Cash is the only defensive investment in this market. Other options are positive asymmetric risk reward investments.

Introduction

Many will say that a portfolio owned by an investor who is about to retire or is retired should be a defensive one. However, I find focusing on age isn’t smart because no matter our age, we have to always protect our portfolio and try to maximize returns. After all, isn’t the first rule of investing to never lose money while the second rule of investing tells us to read rule number one again? More →
By Sven Carlin Bonds Cash Emerging Markets Interest Rates Investiv Daily Stocks
02 Jun
Should You Follow What Hedge Fund Managers Are Doing?
I’ll describe in detail how you can follow hedge fund managers.

It’s very important to understand the risk reward profile of the fund manager.

Following allows us to find great investment ideas, but there are also big traps.

Introduction

Every fund has to disclose its portfolio to the SEC quarterly in a 13F form which allows us to track hedge fund managers’ portfolios. It’s easy to track what George Soros, David Tepper, Seth Klarman, Dan Loeb, Carl Icahn, David Einhorn, Bill Ackman, Warren Buffett, and many, many other interesting investment stars have been doing. The data is usually disclosed 45 days after the end of the quarter, but nevertheless shows what these guys have been doing.

When you see the research power all those funds use, you might think it’s an excellent free lunch. Well, it could be, but there are a few things to be careful of. More →
By Sven Carlin Bill Ackman Carl Icahn George Soros Hedge Funds Investing Strategy Investiv Daily Ray Dalio Seth Klarman Stocks Warren Buffett
25 May
Building The Best Portfolio For The Upcoming Recession
Stocks will be hit badly. Low price earnings and high book values can provide some safety.

Bonds look much better than last year.

Alternative investments can be a jack-pot for your portfolio.

Introduction

Yesterday we discussed how a recession is imminent, especially if the trending down credit growth turns negative.

The most important thing now for investors is to prepare for such an event. Today, we’re going to dig deeper into the recession-related investing risks as different asset classes will be affected differently. More →
By Sven Carlin Bonds Commodities Emerging Markets Gold Investiv Daily Merger Arbitrage Recession REITs S&P 500 Stocks US Economy