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3 Essential Investment Rules

On 04/09/2013, in Investment Strategies, by Jordan Wilson

StreetAuthority looks at three essential investment rules of master investor, Peter Lynch.

Excellent investment advice for those wishing to invest in individual equities.

Unfortunately, I do not know any non-professional investors who could actually follow two of the three keys. Ah, the joys of investment advice.

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Investment Analyst Reports

On 04/07/2013, in Equities, Investment Concepts, by Jordan Wilson

I do not believe small investors should invest in individual stocks.

Limited capital makes it difficult to diversify portfolios and increases transaction costs.

Smaller investors typically lack the investment expertise, experience, and tools to successfully analyze stocks or time markets.

Stick with low-cost, well-diversified exchange traded and open-ended index mutual funds.

The reality though is that many smaller investors do invest in individual stocks. A high percentage rely on analyst reports to help them select which equities to buy.

This post is for you. 

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Statistics

On 07/18/2011, in Career, Informal Education, by Jordan Wilson

Whenever I see statistics used in support of an argument I get a little suspicious.

And I am often reminded of a quote attributed to Benjamin Disraeli: “There are three kinds of lies: lies, damned lies, and statistics.”

Now I am not saying that statistics are necessarily false. But I am saying that data can often be manipulated to meet the needs of its user. 

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Growth Investing

On 09/13/2010, in Investment Strategies, by Jordan Wilson

Following a growth strategy is another common method of investing in equities. You will also see many mutual funds that utilize this style.

Today we will take a look at growth investing.

What it is. How it compares to value investing. And some areas to watch out for when trading in growth stocks.

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Dividend Yield

On 09/03/2010, in Equities, Investment Strategies, by Jordan Wilson

Another ratio used by value investors, as well as seekers of cash flow, is the dividend yield.

Whereas value investors seek companies with relatively low price-to-earnings (P/E) and price-to-book (P/B) ratios, they desire companies with high dividend yields.

Today we will look at the dividend yield.

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Price-to-Book Ratio

On 09/01/2010, in Equities, Investment Strategies, by Jordan Wilson

Another common analytical calculation is the price-to-book (P/B) ratio.

This is popular among value investors.

While price-to-earnings considers a company’s future earnings potential as a way to determine share price, P/B incorporates what the company owns.

Not a ratio that I find very useful, but many others do, so you shall not suffer for my biases.

We will cover how to calculate and use P/B ratios, followed by limitations in the ratio’s effectiveness. Then I will show you how to make the P/B ratio a little more practical. 

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Price-to-Earnings Ratio

On 08/30/2010, in Equities, Investment Strategies, by Jordan Wilson

Within equity analysis, the price-to earnings ratio is the most common calculation.

Key to any analytical style, it is one of the cornerstones for value investing.

Today we will look at the concept and its uses. We will also review some of the limitations of the price-to-earnings ratio.

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Value Investing

On 08/27/2010, in Equities, Investment Strategies, by Jordan Wilson

Equities are often viewed through the prism of being either value or growth stocks.

This is especially true when reviewing different investment styles for equity funds.

Today we will take a look at value investing.

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Nonsystematic and Systematic Risk

On 05/18/2010, in Investment Concepts, by Jordan Wilson

When making investment decisions, one should always perform both quantitative and qualitative analysis.

By investment decisions, I include financial instruments such as stocks and bonds. But it also refers to any decisions you make when operating a business.

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