Monthly Archives: February 2011

Investing Essentials – A Primer

Investing Essentials A Primer Essentials-Basics-Fundamentals Dedicated to those investors trying to make sense of it all Introduction Who is writing this primer? I am a self-taught investor who began by learning the basics from other knowledgeable, dedicated investors. I have … Continue reading

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Chapter 1 – Investing Essentials

CHAPTER 1 Investing Essentials There are many directions an investor can take when risking assets for higher returns, but for most of us who are simply trying to get from point A to point B (retirement), the really efficient, and … Continue reading

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Chapter 2 – Understanding Risk and Asset Allocation

Chapter 2. Understanding Risk and Asset Allocation Asset allocation (AA) is a financial term that simply refers to what percentage of money you decide to put into stocks, bonds and cash—the primary asset classes. The purpose is to set the … Continue reading

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Chapter 3 – How Diversification Works

Chapter 3 How Diversification Works Diversification – A simple explanation: Spreading your money into many broad areas is called diversification. It works something like this: Let’s say you are packing for a trip to a place you’ve never been and … Continue reading

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Chapter 4 – Diversifying with Asset Classes

Chapter 4 Diversifying a Portfolio with asset classes A good approach to diversifying with stock asset classes begins with viewing the U.S. equity portion of a portfolio. The total U.S. market profile is about 72% large cap, 19% mid cap, … Continue reading

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Chapter 5 – Costs ARE A Big Deal

Chapter 5 Costs ARE a BIG DEAL Jack Bogle is a giant in the mutual fund industry. He is the founder of the Vanguard Group and the creator of the first universally available S&P 500 index fund. And yet, Mr. … Continue reading

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Chapter 6 – Building Your Portfolio

Chapter 6 Building Your Portfolio—A Look at Fund Options While individual stocks may be an option for some investors who have the skill, time, and interest, they are not the best choice for most investors. Here’s why: When you invest … Continue reading

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Chapter 7 – Rebalancing

Chapter 7 Rebalancing Rebalancing is the rather simple but important process of maintaining risk at the level you have chosen. You do this by resetting your asset levels back to their original percentages (allocations) whenever they drift to far from … Continue reading

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Chapter 8 – Formalize Your Investment Plan

Chapter 8 Formalize Your Investment Plan with an Investment Policy Statement You have already done most of the work in making a plan by developing your asset allocation and  asset class percentages. Now you have to formalize it by writing … Continue reading

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Chapter 9 – Behavioral Mistakes

Chapter 9. Behavioral Mistakes You have now completed the chapters on the mechanics of investing basics, and behavioral mistakes have been mentioned several times. If you wanted to apply the term ‘elephant in the room’ to the reason investors lose … Continue reading

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Chapter 10 – On Your Own or Hire an Advisor

Chapter 10 On Your Own Or Hire An Advisor? Jack Brennan in his book, Straight Talk on Investing says, “Remember, it’s in the interest of many financial services companies to make you think that investing is difficult.” While Mr. Brennan’s … Continue reading

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Chapter 11 – Final Thoughts, References

Chapter 11 Final Thoughts, References, Glossary While this investment primer touches on proper investment fundamentals, it isn’t intended to cover all you need to know. Following up with one of the suggested books will help solidify new concepts. And reading … Continue reading

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