I tackle tough investing problems, breaking them down into clear and actionable steps.
4M | Investing secrets from the grave..
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Hi Reader, We've all heard the saying, "buy low, sell high". But what if there's a strategy that could give you an edge.. IS IT POSSIBLE TO TIME THE MARKET?Imagine buying stocks on sale, then watching them rise in value just a month later! That's the idea behind the January Effect: Buy stocks that underperform before year-end, because they tend to rebound in January. But, there's a catch: This academic research had the benefit of hindsight - They already knew which stocks would underperform and rebound. In real-world investing, the challenge becomes identifying which stocks will actually follow this pattern. Without a crystal ball, predicting such behaviour is near impossible. That's why consistently timing the market is incredibly difficult, even for professionals. And even then, past patterns aren't guaranteed to repeat. So, what can be done to improve portfolio returns? AVOID THIS STUPID BEHAVIOURFor every winner in the market, there's a loser. As Eugene Fama famously said, "Active investment is a zero-sum game. Passive managers don't play the game." We all want to feel in control of our investments, but here's the cold truth: Excessive trading can backfire. Studies consistently show it often leads to lower profits. Why? Constant tinkering and chasing short-term gains can distract you from the real key to success. THE SECRET TO SUCCESS? LESS IS MOREBelieve it or not, a famous study found something surprising: Some of the best performing accounts belonged to deceased investors. Or those who forgot they even invested! The key isn't fancy tools or complicated charts. THE LONG-TERM INVESTORS TOOLKIT
See you next month, Ozbourne Foreman P.S. Have feedback about today's newsletter? Simply REPLY to this email - I'll surely read it! Disclaimer: I do not provide financial advice. Any views or opinions shared are for informational purposes only and should not be considered as professional advice. Always consult with a qualified financial advisor before making any investment decisions. |
4M | Monthly Investing Newsletter
I tackle tough investing problems, breaking them down into clear and actionable steps.
Hi Reader, The share price might be the first thing you see. But, it's often the last thing you should consider. WHY SHARE PRICE ISN'T EVERYTHING? Picture this: you're in the reduced aisle of a supermarket and you've found a product on sale. Before buying, you'd consider factors like the quality, price and expiration date, right? Investing should be no different. A low share price might appear to be a bargain, but this isn't necessarily the case. For example, imagine two companies in the same...
Hi Reader, As a private investor, I've spent years exploring analysis metrics to find hidden gems. But, there's one widely used investment metric that can be deceiving.. WHAT IS THIS METRIC? Many investors use this ratio to get a quick idea of a stock's value. And I'm willing to bet that you not only know this ratio, but use it regularly: Price-to-Earnings Ratio (PE) = Current Share Price / Earnings per Share A low PE ratio can indicate a 'cheap' stock. But, it's not as simple as it seems....
Hi Reader, As you can imagine, I get a few interesting comments on my YouTube channel. But, there's one investing criticism that I get far more than any other: WHAT IS THIS HATE COMMENT? As you know, I openly share my investing portfolio on YouTube. My stock portfolio: here. You'll notice the similarities of my holdings, they each have: A quality business model. Consistent financial growth. Above average valuations. By investing in these companies for the long-term. I weigh up the stock...