Last week, I wrote that from a modern portfolio theory perspective, stocks actually become more risky with time (Obi-Wan Kenobi was right).  Because even small differences in returns can have monumental consequences to the eventual size of your nest egg, every little bit counts.  Mutual funds with high expense ratios are an unnecessary and outright harmful [...]

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Do stocks get less risky with time?  That’s actually an interesting question and the answer, as with most things, is “it depends.”  For most of our investing lives, it’s been beat into our head by the more responsible financial gurus that stocks are for the long term.  That is, if you value your wealth you [...]

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Legendary value investor Benjamin Graham once said “You are neither right nor wrong because the crowd disagrees with you. You are right because your data and reasoning are right.”  Now more than ever, Benjamin Graham’s wise words must be remembered.  Just because a stock goes down after you buy it doesn’t mean you made a [...]

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Every once in a while, the Dow takes a dive.  The latest example was last friday when the Dow fell 395 points, or about 3.13%, which was its largest drop in 15 months all the while oil rose $10 to $138 per barrel.  A 3.3% loss in just one day is no laughing matter.  If [...]

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For centuries, mankind has been obsessed with shiny pieces of metal known as gold.  Even today, investors the globe over often flee to gold in times of economic instability because it has often functioned well as a hedge against inflation and a falling currency.  True to form, gold has been on a tear of late, [...]

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Last week, Morningstar writer Christine Benz wrote a piece entitled Four Investment Rules To Ignore in which she details investment “rules” that may seem logical at first glance but are actually counterproductive.  It’s all pretty standard advice except for the third point.  According to Christine,
“…an individual’s assessment of his or her risk tolerance should play second [...]

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Nobody questions Warren Buffett’s investment ability.  He is a singularly talented investor, business man, and one of the most respected men in the world.  When Buffett talks, people listen.  There are plenty of Buffet-mimickers out there.  When he buys Bank of America, they buy Bank of America.  When he buys railroads, they buy railroads.  That doesn’t [...]

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Free Cash Flow is a firm’s net income plus depreciation/amortization and all other non-cash charges - minus changes in working capital and capital expenditures.  It may sound complicated at first glance, but all that really means is that free cash flow is the amount of cash left over after paying the bills and making new investments [...]

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Often when speaking of relations with the Soviet Union, Ronald Reagan would toss out the phrase “trust, but verify“.  Reagan reportedly repeated this old Russian proverb (Russian:  Доверяй, но проверяй) at the signing of the INF treaty to which his counterpart Mikhail Gorbachev responded “you repeat this phrase every time we meet”.  Not to be outdone, Reagan replied, “I [...]

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Welcome to part III of my series examining the attributes of good dividend stocks.   When buying a stock for income, the safety of the dividend is of utmost importance.  Dividend cuts are frowned upon because they amount to an admission of defeat by management and show a lack of confidence in the executive suite about [...]

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