The Astonishing Impact Of Reinvesting The Dividends On Investment Returns

Suppose you bought one stock (yes 1!) of a fundamentally strong company for $100 that generated an annual dividend yield of 2%.

Let’s assume the the dividend would be growing at 10% CAGR for the next 20 years. In the same period, let’s assume the market value of the stock also grew 10% compounded annually.

Having decided to hold the stock for 20 years, you can either spend the dividend or you can reinvest it.

Let’s look at the two

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The Opportunity Cost Of Buying A Second Home For An Average Home Buyer

Most people do not treat buying their first homes as an investing decision. They buy it mostly for the feeling of satisfaction that comes from being able to live in a place they own.

But when it comes to buying a second home, does the average investor makes a good investment decision?

From purely an investment perspective, the utility of the investment boils down to the opportunity

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The Ultimate Guide To Value A Stock (And Maximizing Your Returns)

Suppose temperament wise, you have all that it takes to be a sound investor. You can wait decades without selling, can remain uninfluenced by market noise, even have the required skills to determine whether the company is fundamentally strong.
Except for one thing.

You didn’t know how to value a company.

So you make a purchase of a stock of a fundamentally strong blue chip company that you realistically hope will grow at 10% CAGR for next 10 or so years.

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10 Books On Money That Will Turn You Into A Financial Genius

How many times in your life did you apply one of the host of mathematical theorems you studied in your high school?

Now think about the number of times you made a choice related to money.

And yet, we spend so much time studying bizarre mathematical theorems that have little implications in life and give so little attention to financial education that we use everyday. We teach our kids to get straight As and rejoice when they do so in subjects like mathematics. But when it comes to teaching them even basics of finances, we

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How To Use Parkinson’s Law To Dramatically Reduce Your Spending (And Shoot Up Your Saving)

So you have decided to kick start your journey to financial freedom?

You are excited, perhaps even amazed at the idea of having your money work for you. You are committed to save more money this month because after all, each dollar you save is going to work hard to produce more dollars. You want to go through the month determined to spend only on the necessary stuffs.

By month’s end, you realize you have spent almost all of your income.

Oops.

If this sounds familiar

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7 Occasions When A Fundamentally Strong Company Become Undervalued

When I first became interested in stocks, I used to believed that it was critical to learn the ins and outs of how stock market works. But As I went through more and more literature on investing, I was able to say with greater certainty, that successful investing comes down to two basics.

Finding the right companies and paying the right price.

By right companies I mean fundamentally strong companies which are poised to deliver superior business returns for years to come.

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Can We Really Trust Efficient Market Theorists

Is it possible to “beat the market” on a consistent basis?

I for one, honestly believe that it is not just possible but very much doable, by just about anyone who is willing to learn.

However, the first condition to beat the market is to get out of this popularized and highly endorsed, yet a completely insane idea that market is efficient.

You need to break from the mass market delusion supported by both financial analysts and market gurus

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Quickly Analyze Investments With These 10 Essential Financial Ratios

Ever wondered how successful investors are able to select just a few winners among gazillion ordinary stocks?

Going through an ocean of financial information of thousands of mediocre companies to find out one or two winners is sure as hell a very daunting task.

Fortunately, this process can be simplified using financial ratios.

Financial Ratios cut through the loads of financial data consisting of large numbers and financial jargons and break it down to what’s most important. They are simple and quick to understand, evaluate and compare.

If it weren’t for the ratios, it would take you hours, if not days to successfully arrive at

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Why The Vast Majority Of Average Investors Never Beat The Averages

Beat the market? The idea is ludicrous. Very few investors manage to beat the market. But in an astonishing triumph of hope over experience, millions of investors keep trying. – Jonathan Clements, author

Yes, it’s counter-intuitive. Our common sense tells us that average investors should at least be making average returns. And yet, nothing could be further from truth.

The fact is that most investors in their (often desperate) attempts to beat the market, get badly beaten by it. They try systems, stories, formulas and what not. The vast academia has spent decades trying to formulate the ultimate system, the one formula that will work. And just when people come to

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How The Most Successful Investing Strategy Is Also Ridiculously Simple

Quick Investing quiz: What is common among following individuals?

They all beat the market average consistently for decades. 

Another common factor is..

All of them, throughout their investing career, followed the same investing principles.

But Why Should You Bother?

Weren’t they all a hell lot smarter than you? Didn’t they have access to knowledge and skills that you simply can’t dream about?  Or worst of all, what if they just got lucky?

While

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