Investing

Investing in bonds can be a stable and reliable way to protect your wealth over time while earning enough along the way to offset inflation. However, the intricacies of bond returns, particularly how interest rate changes affect bond prices and the dynamics of bond funds, can be confusing for many investors. This article aims to demystify these concepts, providing a clear understanding of how bond returns work and what to expect when holding individual bonds or investing in bond funds. What is a Bond? At their core, bonds are debt securities issued by governments, municipalities, or corporations to raise capital…

Presidential election years often bring a whirlwind of emotions and uncertainties, not only in the political landscape but also in the realm of financial markets. Investors are frequently caught in a conundrum, grappling with the dilemma of whether to alter their investment strategies amid the volatility that accompanies these pivotal periods. Historically, the relationship between presidential elections and market performance has been a topic of intense scrutiny and debate. While it's tempting to make knee-jerk reactions or adjust investment portfolios based on the political climate, it's crucial to approach this with a clear understanding and a long-term perspective. A Caution…

The stock market is a dynamic entity, subject to the ebb and flow of various events and crises that span the globe. News headlines and banners from the largest news outlets to the smallest Youtuber discuss the events of the day and how to react to the latest news that is sure to change the markets. As a long-term investor, it is important to cut through the turmoil and emotional rollercoaster and look at the historic context of crisis events. From political upheavals to economic recessions, geopolitical tensions to natural disasters, the market has weathered an array of challenges since 1970…

Investing in financial markets involves a blend of strategy, timing, and risk management. Among the various decisions investors make, selling at a loss can be a bitter pill to swallow. Afterall, one of the fundamental principles of investing is "Buy Low, Sell High" not the other way around. While this is ultimately the goal of investing and I would to always have a portfolio consisting of 100% winners, in reality, a diversified portfolio will have some positions that win and some that lose. In these cases, there are circumstances where selling an investment at a loss can actually be a smart…

Compound interest has an extraordinary power to grow your money over time. This infographic from Visual Capitalist provides a powerful visualization of the power of compound interest.

Two popular choices for long-term investing are mutual funds and exchange-traded funds (ETFs). Mutual funds have been around for much longer than ETFs but ETFs have rapidly grown in popularity. Which should you choose? Is there are better option? In this comprehensive comparison, we will delve into the differences between these two common investment vehicles to help you better understand what you own and the implications of each. The 30,000 Foot View The core function of mutual funds and ETF's are the same: to provide a means by which investors with limited capital can obtain diversification in the markets.  Investment…

When it comes to investing, market index funds have emerged as a popular and strategic choice for many investors. These funds offer an avenue to gain exposure to a diversified collection of assets while mirroring the performance of a specific market index. When choosing index funds, it is important to understand how the index is constructed as the rules behind the index will impact how the index performs. Before we dive into the intricacies, let's establish what a market index fund is. A market index fund is a type of mutual fund or exchange-traded fund (ETF) that is designed to…

To become a better investor, you must understand the basics of investments. If you are a beginner investor, it may be confusing on how to get started with investing. There are three primary decisions to make when investing:What investments should you own?How should you go about buying them?What accounts should the investment be held?This article covers the first two questions, and a later article will cover the third.  What is an Investment An investment is an asset whose purpose is to generate income or appreciation. Income could be in the form of dividends, interest, rent payments received, or business distributions.…

The stock market has a rich history of fluctuating between periods of bullish and bearish sentiment, shaping the overall trajectory of long-term returns. Understanding the dynamics of these market cycles is essential for investors seeking to capitalize on opportunities and navigate the ever-changing landscape. In this article, we will explore the significance of historic bull and bear markets and how their interplay has contributed to the overall growth of the market over time. What is a Bull Market and a Bear Market? A bear market is marked by a prolonged period of declining stock prices, often accompanied by investor pessimism,…