Avoiding an investment bubble is not as easy as it may seem. If it were, investors would take appropriate steps and the bubble would never be created in the first place.
So what can you do to avoid losing a lot of money quickly? Let us consider some common sense avoidance tips.
Learning how to invest while young is likely the best investment in time you will ever make. You can attempt a variety of strategies on paper. If they succeed, they may be used with real money once you have some to invest. If they do not, you learn a valuable lesson without losing any money.
Today, let us look at ways to practice identifying investment bubbles. (more…)
Following on from “Three Common Investment Mistakes” and the impact of behavioural finance on investing, let’s take a quick look at investment bubbles.
Most of you are familiar with the US housing crash over recent years. Some of you may also remember the dot.com craze in the 1990s. Those would be examples of bubbles breaking.
In his very interesting work, The Ascent of Money, Niall Ferguson lists 5 stages of an investment bubble. The headers are his. The editorializing is all mine. So do not blame Niall. (more…)
Many people think that investing is all about calculations and analysis. Poring through financial statements, expert analysis, and news releases to determine the best investments.
While true to a certain degree, investor behaviour also has a tremendous impact on portfolio returns. At times I think behaviour has more clout than either technical or fundamental analysis. (more…)
Beginning to invest while you are young is a smart thing to do.
It takes self-discipline to consistently set aside a portion of your earnings each month. As you see the total asset growth that a relatively small monthly contribution brings, it will reinforce that discipline to save for the rest of your life. (more…)
Recently we have explored developing investment and business ideas from unusual sources.
Jay Walker uses his library to help stimulate his business creativity. (more…)
In a prior post, “Investment Ideas Come From Everywhere”, we looked at how potential investments can be found pretty much anywhere.
But at the U-haul shop? (more…)
Smart investors find clues for making profitable investments in all sorts of places.
You do not just find good investments by reading the financial pages or watching the business channels. You can uncover investments at work, when shopping, on vacation, or in even stranger places. (more…)
Want to mimic the value investing style of famed investor, Warren Buffett?
This Globe and Mail article examines how to invest like Mr. Buffett.
The article references Validea, a company that allows you to track model portfolios each based on the philosophy of a different investment guru. Not interested in Warren Buffett? There is always Peter Lynch, Martin Zweig, and others to emulate. Subscription cost is a little rich for my taste, but I think it is a creative concept.
As for mirroring Warren Buffett’s moves, replicating his style may not be that simple. (more…)
Christine Benz wrote a good article, “Seven Ways to Simplify Your Investment Life.” It is well worth a read. I have added a few thoughts below to flesh out some points she makes in the article. (more…)
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