Investing During a Permanent Trade War
In the last year and a half we have looked at the evolving trade war between the US and China and, to a degree, between the US and everyone else. As the situation has evolved, we are now looking at investing during a permanent trade war. Here is how our thinking has evolved. To begin with, we appear to have been overly optimistic. In March of 2018 we asked what can you invest in and not get hurt by a trade war. At that time our belief was that companies in entertainment, like Disney, […]
Annuities Pros and Cons
One of the safest ways to save for retirement is with an annuity. This is a contract offered by an insurance company. You pay them in installments or with a single lump sum and they pay you back on a regular basis, usually starting when you retire. Your investment in the annuity is boosted by interest paid by the insurance company. This investment vehicle usually belongs in our list of choices for how to invest without losing any money. If the idea of annuities appeals to you, you need to know the annuities pros […]
Low Risk High Return Investments
You invest for two reasons. First of all, you want to put money aside for some future need instead of immediately spending it. Secondly, you want that money to make money over the years. You obviously don’t want to get into dumb investments and lose your invested money or you would have had a better time spending it! And, because there are things you want to do with that money eventually, you would prefer to see a healthy return on that invested capital. Many investors choose to split their investments into those with […]
Are Your Investments Safe from Tariffs?
The stock market is falling in response to a step up of the trade war. Negotiations seem to have stalled as both the USA and China refuse to budge over issues that they consider essential to their national interests. We alluded to this sort of situation in our article about what happen if the trade war becomes permanent. The American dominance of the global economy is not an assured thing and neither is the dominance that China wants to achieve. But both nations are squaring off to fight for what they want. The down side for the USA is reduced […]
Dollar Cost Averaging
What is the most cost-efficient and profitable approach to long term investing? Market timing works for some folks. But recently, broad-based ETFs have outperformed many managed funds. Investing in stocks works best when the investor starts early and invests regularly. It helps to buy stocks directly in order to cut out fees and commissions so dividend reinvestment plans are a good idea as well. While there are always opportunities in the stock market, most people in their working years do not have the time, expertise, or interest required to take advantage of them. Thus, the best approach for most investors […]
Best Ways to Invest Your Money
Everyone should be saving money for retirement, a “rainy day” emergency, or for things like putting the kids through college or starting their own business. The best ways to invest your money will have to do with what you are investing for, how long you have before you need the money, and how much risk you are willing to accept. And, the best ways to invest your money have to do with how much time and energy you can personally devote to your investments. You need to know where to invest money to get good returns over the years and […]
Should You Really Sell Your Investments in May?
“Sell in May and go away” is an old investment adage that seems to be true more often than not. Should you really sell your investments in May or simply stop trading stocks? CNBC notes that the recent rally might be a concern because after the previous early year rally stocks plummeted over the summer.
Stocks have surged through April in their best start to a year in 32 years.
But, markets don’t have a good track record of following up on a rally of that size.
“There are four other years since World War II that the S&P was up at least […]
Investing in Canadian Banks
Bank stocks in the USA have been suspect ever since they led us into the financial crisis with their predatory lending practices. However, right next door in Canada, the banks have followed more conservative practices and several are ideal long term investment opportunities. A common practice, among Canadians, is investing in Canadian banks when their stock price falls, dividend percentage rises, and P/E ratio drops. The three Canadian banks we have in mind are these.
Toronto Dominion (TD)
Royal Bank of Canada (RY)
Scotiabank (BNS)
These are the three largest Canadian banks.
New banks are rare in Canada because the regulatory hurdles are so difficult […]
Can You Diversity Your Investments too Much?
It is a good idea to diversify your portfolio of investments. Doing so reduces the risk of loss by spreading out your investments over several vehicles and several sectors of the stock market. But, can you diversify too much? The answer is, yes. There comes a point where adding more stocks, for example, does not improve your risk profile but makes it harder to keep track of your individual investments. And it takes you away from investments that you understand. If you are a dedicated long term investor, you will routinely review your portfolio and assess intrinsic stock value. While […]