Since we earn money each month, it is extremely tempting to increase the investment amount monthly. Probably this should be done until a minimal qualifying investment amount (maybe 50,000 USD or 150,000 USD) is reached. The benefits of flexible amounts are clear: 1. Ability to use new opportunities each month 2. Natural growth of the …
Long term predictions
While trend following is good for mid-term investment, fundamental analysis enables some long-term predictions. 1. The power of demographics. Young people generate inflation and growth, aging population is causing deflation and stagnation. By following nations’ demographic it is possible to predict roughly the long term growth trajectory. 2. Diffusion. In healthy economy there is diffusion …
Is there a good reason to invest worldwide?
This article shows that US accounts for 52% of total world stocks. With Japan at 7%, UK at 7% and EU at 7% trailing behind. Investing in any non-US market is of higher risk, especially monetary risk, but also growth of developed markets and market manipulation risks come to mind. With highly differentiated monetary politics, …
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Picking oil stocks
This article shows several interesting points regarding picking oil stocks. MLPs may be interesting like YMLP. Alternatively high risk PBR or low risk XOM can be considered. Even RUSL comes to mind as a possible revenue generator. There will be several good deals, but oil production needs to fall first.
No-brainer investment strategies
For the last several years simple investment in S&P was a winning strategy. While we advocate smart investing strategies with portfolio rebalancing, there are assets that will usually work for you. Each of these strategies removes you from making active decisions, and places the responsibility on fund managers: 1. Buy BRK.B or IEP or APO …
Leveraged ETFs
We discuss using leveraged ETFs for timing and momentum rebalancing. To this end we choose ETFs over low-volatility indices. In high volatility environment leveraged ETFs can be risky as explained here. Defensive sectors and large indices as well as some commodities are suitable for this approach.
Annually rebalance stocks/bonds
Usually we prefer more active hands-on approach, but sometimes all we can do is balance stocks/bonds. This strategy still is better then choosing only one of them.
Stop losses
This article recommends to issue put options for the assets (commodities) we invest in, as protection against market changes. In a similar way one may invest in stock market and volatility. Either one or the other will go up… If timed properly (buy low sell high) this method may work. Occasionally (very rare) market and …
Picking stocks
The best way to pick stocks is using screener of undervalued stocks. Unfortunately, screener access costs around 400USD per year. We will try to recreate the tools for free. This article describes a decent method for choosing large cap stocks, and here mid cap are addressed. And these stocks are probably too risky right now. …
Using sector rotation model
Most indexes are biased to the large-cap assets. Each month some assets perform better than others. Sector rotation model assumes that from every index we invest say 60%-80% into leading industries and 20%-40% into lagging industry, where within each sector we weight the assets equally [independent of cap]. The rebalancing can probably be performed each …