From advice to diversify investments to index fund criteria to choosing a bank, this month we found seven articles that discussed various investing ideas.
1. Similarities between Golf and Investing:
Dave @ Excess Return presents Truly Diversified Investments or Fourteen Similar Golf Clubs? posted at Excess Return.
“Golf and investing have many parallels. Winning at either requires discipline, hard work, focus, patience, a long-term mindset, cutting your losses, staying in your comfort zone, and emotional control.
One equally important parallel that is often overlooked is diversification.”
2. For-Profit vs. Non-profit banks:
Sean presents Credit Unions vs Banks – Which is Best for You? posted at One Smart Dollar.
Sean says a lot of people don’t know the difference between credit unions and banks. Here is a guide to helping you pick the right institution.
3. It pays to do a little research even if the fund is an index fund:
J.P. presents All Index Funds Are NOT Created Equal posted at Novel Investor.
J.P. warns that we might want to put some time into researching index funds before investing in them. Similar index funds are not equal when it comes to performance.
4. Dividend Stocks pay even when markets are down:
Dividend Growth Investor presents Dividend Stocks For Long Term Wealth Accumulation posted at Dividend Growth Investor.
Dividend Growth Investor says, “Companies that pay dividends are typically mature enterprises, with a proven business model that generates enormous amounts of free cash flow. These companies do not need to reinvest all of their profits in order to maintain and grow their business. In essence they ‘spend’ less than what they earn, and share the excess with shareholders in the form of dividend payments.”
5. Puts: Protection from the Market’s downside:
Investor Junkie presents What Is a Protective Put? posted at Investor Junkie.
Investor Junkie tells us “Protective puts are used to put in a “floor” for how much an investor can lose on any given position. A protective put strategy locks in gains and limits losses, but it also reduces slightly the total return for the investor should a stock advance higher.”
6. Returns: Mutual Fund Managers < Hedge Fund Managers?
Teacher Man presents Mutual Fund Managers = Minor Leagues posted at Young And Thrifty.
Teacher Man thinks mutual fund managers don’t hold a candle to hedge fund managers. Hedge fund managers make tons of money, which is almost impossible to replicate.
7. Don’t watch market fluctuations; have a dividend stream:
Pierre presents Beating The Market? Who Cares When You Have Dividends posted at Intelligent Speculator.
Pierre explains why he believes investing in dividend paying stocks is a logical choice (versus non-dividend paying stocks).
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I think older people need to watch out with #7. Too many retirees are fleeing to dividend paying stocks right now because of the low interest rate environment. The problem arises when they are banking on the dividend yields based on unpredictable stock prices. So when an uninformed invester sees the current yield on ATT @ 4.8%, they need to realize that the yield isn’t going to make a difference if the stock price is cut in half like in ’08.