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Princeton professor Buton Malkiel argued that best strategy as an investor is to buy the entire stock market through a traditional s & p 500 index fund.
Warren Buffet recommends investors buy low cost s & P 500 index funds and stay in them for the long term.
Investor make decision based on emotion rather than on the rational assessment of underlying value.
In chess, a few high level players will win almost all of the games. In investing, a few top traders will constantly outperform the markets.
In both cases, the participants have the same information. But the high level participants interpret this same information differently from the majority.
In chess, mistakes are driven by emotion. You can say the same for investing. It is emotion that causes mistaken and irrational behavior. That is how market prices can get so far out of line.
If you are a casual investor, take Buffett advice and invest all your money in an S & P 500 index fund. Reduce your risk and boost your long term returns.
Warren Buffet’s performance was due to the skill in pricking stocks.
The money managers seen to do a decent job of protecting investors only during a bear market. During a bull market the money managers failed miserable to keep up with the S & P.
Buffet’s investment company outperformed the index in seven out of 10 years.
Buffett has warned his shareholder that his conglomerate firm is too big to beat market, so and index fund is more suitable.
What is your favorite book in investing Warren Buffett’s favorite book called intelligent investor?
It is not believe that any unique investment strategy works all the time. Each strategy has its day in the run. You can invest with it instantly through an ETF.
O’ Neil examined more than 130 years of US stock market history. He found that year after year, the top performing stocks display common seven common straits.
O’ Neil does not believe in investing in only cheap stocks. Cheap stocks are cheap for a reason. He does not mind paying a premium for stock with good prospects. His philosophy is to invest in the best of the best.
Best keep this mind. The IBD 50 ETF is chock full of highly volatile growth stocks. The kinds of stock where you are like to see the most significant gains in the final innings of a bull market. IBD 50 ETF get hammed when the bull gets mauled by the bear. But on the IBD 50 ETF and enjoy the ride.
The ratio to be look at for growth for the stock 1. Earnings per share (EPS) 2. Price to Earning (P/E) 3. Debt to Equity 4. Free cash flow per share growth. 5. Profit Margins. 6. Return on Equity.
