34

The one that I have heard of (others may be different) is a form of capital protection investment. The basic premise was that you receive a percentage of positive returns, and lose nothing if there was a negative return. So if, say, the S&P 500 was up 20% over 5 years, then you'd earn 15% on your original investment. If it goes down, you lose nothing. ...


26

I would call that strategy "waste of time": Your individual purchase decisions are not meaningful for the bottom line of the company. A single individual (you) simply isn't representative enough of the market as a whole. As the Canon example shows, how a company behaves depends of a lot more than consumer products, and many of those factors are difficult to ...


19

I've heard similar radio commercials in multiple states now. A guy says he can teach you how to invest where you'll "get the full return in the good years, but be protected from crashes" (paraphrased). Does anyone know what type of "system" is being hawked right now, or is this not specific enough a question? The system is: I will give you a ...


17

Your investments are an attempt at hedging your consumer price risks. You are trying to choose stocks that will help fund your planned consumption, such that if the prices of your favorite products spike, your investment returns will roughly compensate. If you plan to consume N widgets per year, you are buying up-front your own "little factory" (small share ...


12

If you have the option of a high deductible health plan you might consider using a High deductible plan with a Health Savings Account (HSA) in the years before the first child is born. You can contribute the maximum into the HSA but don't use the money. You may decide that in the year the child is born to pick a non-high deductible plan, but because the ...


11

There aren't any. Of these significant, relatively predictable expenses I would not necessarily classify child birth cost as either significant or predictable. Depending on your health insurance a healthy baby birth will cost very little out of pocket. Even with crummy insurance, many children can be birthed for less than $1,000. Often prenatal ...


10

You miss a 3rd scenario - what if the price bumps up to $12.05, and then drops back down to $11.50? If you wait to do this yourself, and don't have a standing sell order, you could likely miss the window of opportunity. But deeper than that, let's address the hidden psychology in what you're suggesting: "If I personally see the price rise quickly to $13, I ...


10

No, it is not even close to index investing. From Investopedia, with my emphasis: Index investing is a passive strategy that attempts to generate similar returns as a broad market index. Investors use index investing to replicate the performance of a specific index – generally an equity or fixed-income index – by purchasing exchange-traded funds (...


8

I'm sure there are hundreds of similar ads at any given time; for the most part, these people sell advice (through seminars, books, or management fees) that gives them more profit than if they simply invested their own money using their own systems. One conclusion you could come to from that fact, is that the systems may not be as surefire as they are ...


7

The idea is the same as how you treat money in a non-HSA account: "What are the pros and cons of investing money in my personal checking account?" The answer is in the long run you'll likely have much higher returns, and in the short run you have a much higher risk of losing a large chunk of your money. Similar to how you probably wouldn't invest your ...


6

You can achieve both outcomes by having a portion of your portfolio allocated to fixed income, this will lower the volatility of your total holdings without sacrificing too much expected return. When the inevitable dip occurs you can/should rebalance your portfolio to it's target weightings by exchanging fixed income for stocks on sale.


6

You are focusing on market-beating ("irregular") returns. The biggest problem most investors have had is that they lag the market, not even achieving the "regular" (and quite good) long-term returns that it offers. Matching the market has become easier with low-cost index funds and ETFs. Doing so should be viewed as winning, not losing. Beating the market ...


5

The "equity" in return on equity (ROE) is based on book value -- an accounting construct that does not represent the economic or market value of the company. You do not have the opportunity to invest or reinvest in Apple at book value. Based on the current price-to-book ratio, you have to pay 9.3 times book value. This means the market has already recognized ...


5

1.3^20 = 190. Apple's current market cap is $1T today. $190T is a bit more than Total US wealth, just passing $100T. Even adjusting for inflation won't work. edit, to respond to OP’s comment. Instead of looking at Apple’s share price, I observe that the market cap, the total value of all shares, is over $1T, a trillion dollars. You ask, I believe, if the ...


5

In your 529 example, you account for the 10% penalty, but not the tax on withdrawal. The gains, $190,290 are taxed, at ordinary (not cap gain) rate. Since that's on top of your income, I'd assume 22%, at today's rates. $41,864. Canceling out the entire amount you show as extra on the 529 choice.


5

I agree with the other answers recommending a low ER index fund, purchased through a low-cost well-respected (not "discount"!) brokerage, preferably one with a good selection of commission-free ETFs. If you think think it likely you will retire in the US, you can take advantage of your employer's retirement plan. Laws make it really expensive to move ...


5

How can I balance these two risks? Risk is a tradeoff. A Systematic Investment Plan (SIP) reduces risk but also reduces expected return. Since the market moves up more often than it moves down, statistically you're more likely to be better off investing the lump sum and letting it grow over time. Being better off investing regular amounts over time when ...


4

I have been investing towards multiple goals, like Retirement, House, Car, Vacation etc What if the stock market drops 10% or even 20% just before you are ready to buy a car or go on vacation? You're up a very malodorous, very toxic creek and lack a paddle, that's what. Thus, short term goals like "Car" and "Vacation" should be saved for in on or more of: ...


4

I think Bob Baerker did a good summary of your questions. So, along those lines: 1. Do you want to own a home? Only you can answer that question. It is definitely more things to take care of, and more trouble moving to a different city. That being said, if you stay in your location for decades, you usually end up paying less compared to renting. There ...


4

Despite your wariness of stocks, take a look at preferred stocks. Investment grade issues currently offer about a 6% return. Like all securities, they are not risk free but if you pay attention to the external factors (financial health of the issuer and long term interest rates), they are less risky than other securities. A good book on this is: PREFERRED ...


4

FWIW, this is called a Good-Til-Cancelled Order. It lasts until the order is completed or cancelled. However, brokerage firms tend to limit the length of time that a GTC order can be open. If share price is $10 and there's the potential for a very promising result from a drug trial or a public takeover, why would you ever put in a sell order at $12 ...


4

You could invest into a bidet. A bidet is a shower which allows you to clean your nether-regions after using the toilet. When you use a bidet, you can use a lot less toilet paper. But you will of course slightly increase your warm water consumption. They are available in form of a stand-alone installation which looks like a cross-breed between a toilet ...


3

Harry Browne Permanent Portfolio (HBPP) is indeed easily implemented using four index-tracking ETFs. Here's a bogleheads article which suggests (I assume you're in the USA): 25% iShares Core S&P Total Market ETF 25% iShares Gold Trust ETF 25% iShares 1-3 yr. Treasury Bond ETF 25% iShares 20+ yr.Treasury Bond ETF and there's a seekingalpha article here ...


3

Buy an index fund. This ticks both the boxes. You don't need to pay much attention to it, because it's an index fund, and historically the rate of return is likely to be better than saving all the money in a bank. Pick an index fund. Choose something that tacks as much of the market as possible (so you don't have to pay attention to the investment). ...


3

A proper answer to this would require knowing about your short and long term financial goals. Will you need this money to spend on something such as a house in the next 5-10 years? Do you plan to maximize your 403(b) contributions from your new salary or would your basic expenses be too high to manage that? Not knowing those, the best advice you can get is ...


3

The question doesn't ask for long-term growth set against fluctuation and volatility but asks for something better than a bank. Well, there are several internet banks that the current bank account can link-to that pay almost as much as a three-month Treasury Bill. Also, there are Treasury Direct accounts that link to the current bank account with non-hedge-...


3

ROE is NOT a measure of stock price increase. It is simple a measure of net income as a percentage of total equity (meaning assets - liabilities on the balance sheet, not market cap). What the company does with that income has an influence on stock price (does it use the money to grow, or just pay dividends), but there is not necessarily a direct correlation....


3

The basic argument against purchasing life insurance that isn't term insurance is that you are mixing two very different products that don't need to be mixed. Decide how much life insurance you need. Base this on who needs money if your were to die. Look at their ages, their needs such as college or long term care if any have a disability, and the income ...


3

“There are no magic numbers in trend following", written by Norman Fosback wayyy back when. Moving averages (MA) are just lines on a chart based on arbitrarily chosen numbers. The longer the MA, the less noise and the fewer the number of whipsaws. In return for that benefit, your trade execution will be late and by the time you act, your position may ...


3

Don't play the "roulette". This means you're trying to determine which funds are going to be the winners (outperforming the market) or losers (underperforming the market), which is so hard, not even professionals can do this consistently. The simplest ETF that I can recommend (for stocks only) is VT, a Vanguard ETF that covers the entire world. You ...


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