Most of my capital is invested in stocks. You can see my portfolio here. I keep some cash as rainy-day fund and also for my dry-powder strategy. In today’s low-rate environment, cash does not return much. Short-duration CDs yield 1% to 1.5%. One-year treasury bonds return … [Read more...] about Get more out of your cash
Complete List of Blog Posts
I use cash as dry powder
Long-term investors face inevitable bear markets. Stocks may go down 20%, 30%, or occasionally even 40% - 50% before recovering. Bear markets last from six months to two years but it takes longer for stocks to recover to their previous peak prices. As an investor, I have gone … [Read more...] about I use cash as dry powder
Real investors don’t fear a recession
Recessions and expansions are normal phases of a business cycle in modern free-market economies. A recession occurs when the economy stops growing – instead, it contracts. This happens from time to time – the economy grows in fits and starts. The normal state of an economy is … [Read more...] about Real investors don’t fear a recession
Nobody’s good at predicting recessions
Various organizations and economists in the USA try their hand in predicting when the next recession might occur – none of them have been very successful. The National Bureau of Economic Research (NBER) is the de facto authority that marks the beginning and the end of each … [Read more...] about Nobody’s good at predicting recessions
It’s not healthy to check stock prices every day
If you check your stock portfolio every minute the market is open, you are setting yourself up for failure. Even every day is not good for your portfolio’s health. Perhaps every week is too frequent. Two reasons why this is so: Every-day price changes are random and carry no … [Read more...] about It’s not healthy to check stock prices every day
My year-end tax moves
I do some tax planning every year – usually in December. It is a yearly ritual that I am accustomed to. Fortunately, my taxes have not been very complicated since, most of my working years, I didn’t have any business income. So, no large business expense deductions, asset … [Read more...] about My year-end tax moves
Most investors underperform the stock market
The bad news is that we, the individual investors, collectively don’t do so well when investing in stocks. The good news is that most of this underperformance is due to our own behavior and therefore can be fixed. Let’s first look at the evidence of our underperformance over … [Read more...] about Most investors underperform the stock market
A deeper look into my portfolio
We take a deeper look at my investment portfolio in this post. A majority of my investments are in stocks or stock index funds. I have been working on my investments for last 20 plus years. These investments have evolved over time – initially all I had were some stock and bond … [Read more...] about A deeper look into my portfolio
Why I stay invested in stocks?
Last week, I heard two of my friends talk about an impending market crash. One of them told me he has been doing well in the stock market since he invested in the beginning of this year. But he does not think that the market will stay at these lofty levels for too long. The other … [Read more...] about Why I stay invested in stocks?
Beware, the markets go down often!
Because we are long-term investors, we will frequently face market downturns. To better prepare ourselves for these unpleasant but inevitable declines, it is good to study the history of the stock market declines. Looking at the US stock market, on average this is what we … [Read more...] about Beware, the markets go down often!