I’m a reader of Reddit and I found a subreddit that makes me sad. It’s called r/WallStreetBets. Everyone is posting on how much money they make or lose from trading ‘stonks’ using put or call options. I ruminated about this in a video that I’m going to post soon. Everyone get’s making money confused with the real thing, time. You can’t make more time, you can always make more money. ...
The markets have been in a complete freefall over the past few weeks. The likely culprit is Trump’s mishandling of the Covid-19 (aka Coronavirus) response and overinflated prices. Who knows what is the real market contagion here but I think it’s time to make a shopping list. With free falls in some of my favorite holdings (MSFT and AAPL), I can’t but help think it might be time to add to these long term holdings and buy more stuff like ETF’s and Mutual Funds. This is not for speculation but for long term investing so my choices will be based on what I think will do well over the next 5 to 10 years. ...
Right before the New Year I posted an article on Medium titled “Is Passive Investing Going to Kill Us?” It centers around one particular chart where the amount of money flowing into passive investing is staggering. While I’m a big fan of Passive Investing and I’ve been riding its success, I can’t help but wonder if I was just plain lucky. I know that markets love to correct imbalances but the question is when? Perhaps it might be prudent to think of active strategies again. ...
**Disclosure:** Some of the links below are affiliate links and at no additional cost to you, I’ll earn a commission. When you purchase a product or service using one of my affiliate links, the company compensates me, which helps me run this blog and keep my content free of charge to you. I recently picked up the late John Bogle’s book, “The Little Book of Common Sense Investing” and I plan on reading through it despite knowing the basic jist of it. Bogle was famous for creating the low cost index fund and the main thrust of his argument is keep expenses low and diversify into indexes. He started the Vanguard Mutual Funds and is the king of passive investing and many people got rich off his philosophy. ...
I’ve written about this countless times but I’m a big fan of passive investing in the markets. By doing less, I actually gain a lot more in returns. That’s all great and wonderful but currently it’s not ideal for me. What I really want to do is turn that passive investing into passive income. So even in their golden years, they have to budget carefully. Passive Investing != Passive Income What’s the deal with passive investing and what is passive income? Passive investing, or active investing, is just taking a pile of money and putting into some ‘investment vehicle.’ The hope is that this vehicle will appreciate in value in the future so when you sell it, you’ll get your original investment back PLUS more money! It’s considered a good investment that, after adjusting for inflation, your ‘investment’ made a lot of more money for you that just hiding it under your mattress. ...
The r/investing sub cracks me up sometimes. This guy has had enough of the sub because all it spews is how great Buffet is and dollar cost averaging. If you ask me, all the things he complains about are good. ETF’s are good, low cost(ish), and easy to get in and out of. Dollar cost averaging has really helped me build a good size 401k nest egg but it required consistency and time. If you add water with consistency and time, you get the Grand Canyon! ...
My wife owns Dodge & Cox’s Stock Fund (DODGX) and its been a great performer for her account. I just wish they offered it in my 401K! Despite the nice trending chart below, DODGX is not without its risks. I ran a quick Monte Carlo simulation and discovered quite a few nasty negative return outcomes for DODGX. In fact there’s 0.04% chance for a nasty -51% rate of return over the past 10 years. Did it happen? No, but its a possibility! ...