This is the second of several guest posts by Nathan Bush on 12 investing concepts. CONCEPT THREE—EMERGENCY FUND Everybody should have one. This eliminates the necessity of pulling money out of your retirement investment accounts when the stock market may be depressed or in a taxable situation. Size of the emergency fund is debatable. Some say three months; others say up to two years of living … [Read more...]
Clearing Up Four Investing Misconceptions
Warren Buffet says "Investing is simple but it is not easy." There are a lot of misconceptions about investing. Let's look at four big ones. Misconception #1 - Studying the financial statements of individual stocks and learning the techniques of how traders execute will improve my investment returns. This is a surprisingly common idea, that if we just learn enough that we can do better. I … [Read more...]
The Peak of My Delusion
Investing in single stocks can be exciting, but they can also be hazardous to your financial well being. Here is how I learned that lesson the hard way. It was the late 1990s, and the stock market was booming. You had to try not to make money. I was at the peak of delusion, the most extreme point of self-deception. My skill in picking stocks was the catalyst of my good fortune. During this … [Read more...]
Timing Recurring Investments
Investors are always looking for ways to improve returns, including adding steps to determine when to add new investments to a portfolio. This post explores timing strategy, and why the practice of managing the contribution schedule will make improving returns unlikely. One of the basic principles of sound investing is 'do not try to time the stock market.' With that in mind, let's consider … [Read more...]