Chris

Phil Town & INVESTools

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I’ve become very interested recently in fellow investment blogger Phil Town’s site, and so I’ve been reading it from start to finish. After reading much of his site, I’ve come to enjoy his style of writing and investing. Ever the skeptic though, I wanted to make sure he’s not just some shill on the web hawking his wares to an unsuspecting public. Everything I found has been good, and I was even able to find a new resource that he recommends frequently called the INVESTools Investor Toolbox.

About Phil Town

It’s important when investing to pick your advisors carefully. I have kind of a rating system for investment advice.

Poor – Any guy on the web. Pay little attention.
Fair – What he says passes the reason test. I’ll listen skeptically.
Good – Good track record, good advice. I’m listening, but still fact checking.

Chris

What are Bonds?

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In The Intelligent Investor, Benjamin Graham encourages investors to divide their holdings among two broad types of investment: bonds and stocks. He recommends dividing an investors’ portfolio between them from 25% to 75%, depending on the investors’ financial goals. Because stocks provide all the glitz and glamour of Hollywood the most investors understand how they work (or at least they think so). However, bonds are the ugly understudy and as a result can be misunderstood.

Because bonds are supposed to play such an important role in our portfolios, this series of articles on bonds will take us through the basics of bonds, describe the type of bonds available, provide links to resources and lay the groundwork for us to begin investing in them. To begin the series we’ll start at the beginning: what are bonds? We’ll go over what they are, how they make money, and basic pricing considerations.

Chris

ETF Index Funds

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Relatively new investors may have heard about ETFs but are still unsure what they are. Well, ETFs, or Exchange Traded Funds, are a type of investment fund that is traded like a stock on the open markets, but typically track an index such as the Nasdaq-100 or S&P 500. First introduced in 1989, ETFs have grown in popularity over the last decade because of their ease to buy and sell, and low expense ratios. However, like any investment, there are pros and cons that the prospective owner should be aware of.

Over the long-term, the S&P 500 beats 80% of actively managed mutual funds (before tax benefits). Because of this fact, prominent investors such as Warren Buffett and Benjamin Graham recommend index funds for defensive investors and those looking to diversify their portfolio. Not only do they provide instant diversification, they also offer the benefit of being simple to own, as it represents owning an already established group of securities selected by finance companies such as Standard & Poor’s, Dow Jones and Nasdaq.

Chris

Big Mother Mutual Funds

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The Real Returns posted an interesting list of the 20 largest mutual funds, and I thought it was interesting, so let me just mention some things about mutual funds.

A larger mutual fund is typically an indication that the fund is perceived as more desirable, and as a result investors put more and more money into the fund. However, this trend can produce some undesirable side effects.

Chris

The Importance of Buying What You Know

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Frank, Jason and I were having dinner this past Saturday and we were discussing future markets. Jason brought up Biotech and was talking about some of the possibilities for future advances, and how they may affect the industry. Now, Biotech is something I know very little about — in fact, I know almost nothing about it. As a result I probably am not going to invest in Biotech in the near future.

Chris

Turkey Holiday

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We’ll be on vacation the rest of the week for Thanksgiving, so there will be no posts Thursday or Friday. Stop by next Tuesday for our next article. Happy Thanksgiving!

Chris

Goal Setting & Wealth

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To be successful in this life, either personally, financially or otherwise, you have to have goals. It’s not just something our parents and counselors have been babbling about our whole lives; it’s a fact. Even those who aspire to be successfully lazy must set a goal to be adequately lazy each and every day! So as in any other endeavor, being an investor requires a little goal setting.

“If goals are imperative, then what goals shall I have?” you may be asking yourself. Whatever the goal may be, it must have some purpose, and it must have smaller sub-goals so you can consistently have small victories (a very real morale boost). I often run across people who choose $1 million dollars as a goal because they want to be a millionaire. But really what does that mean? A millionaire today is not the same as a millionaire in 1905, and will not mean the same thing in 2055. With an annual inflation rate of 3.5% for the last 80 or so years, a million dollars looses half its value every 20.2 years.

It’s frustrating to see such a purposeless goal — floating about without any foundation — because without a purpose a goal is just an arbitrary target that is too easily changed at a whim. A goal must have meaning and a foundation on something real. Fear not though, for I am here. I present, for your consideration, my milestones…

My Milestones
1. Total Investments of $150,000
2. Total Investments of $500,000
3. Total Investments of $1,000,000
4. Every-day Wealth
5. Uncommon Wealth

Chris

The Princes of Digital Media

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With growing legions of users watching TV programming on their own schedules, and ultra-high bandwidth soon being pumped to every home, the dawn of digital media convergence will soon arrive, and Yahoo! and Microsoft are well positioned (and priced) to give investors a real bang for their buck.

What’s this convergence thing?
So imagine this: you’re at work and you just realized that you missed your favorite show last night. But you’re not worried. You log onto the web and download last night’s episode in digital quality for under a couple bucks. Within minutes it’s on your media player, and after you get home, you plug your media player into your home TV, and are watching it without the need to sit through all those darn commercials.

Chris

Why we’re here

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I don’t believe it is our job to just provide stock picks.

What I do believe:

  • I believe it is our mission to help educate a generation of geeks on how to build wealth and secure a worry-free retirement for themselves through investment and personal finance. No compromises, no apologies, no holds bar.
  • I believe every investor should practice discipline, research, and a dialectic (dialouge based) approach to choosing investments. Wealth is built over a lifetime and I believe every investor should have the courage to encourage others to supress their desires to gamble.
  • I believe that we must walk before we run and in the same manner we should expect lower returns as we learn how to successfully invest.

There are thousands of investments out there, from bonds, to stocks, to starting your own business. I want to cover all of them on this site, and every investor should think carefully about his full range of options. Every investors’ circumstances are different and every investor has a personality — a certain ability to take on risk, and a certain lifestyle he would like to lead. Not every investment is suitable for each investor, and it is every person’s duty to himself to figure out what kind of risk and effort he’s willing to make with his investments.

Chris

Welcome!

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Welcome to our new site, where those who know come to find out about the latest trends in investments in the US and abroad. The three creators of this site, Chris Welch, Frank Sanders, and Jason Coleman, all novices in high finance, have come together to create the most forward looking investment picks any three (more…)